Executive Summary
RPM International delivered a resilient QQ4 2024 performance with a record level of adjusted EBIT driven by MAP 2025 initiatives, even as end-market headwinds persisted in certain segments. Consolidated organic sales grew 0.4% year over year, while gross margins expanded and operating margins rose meaningfully, reflecting the structural benefits of MAP 2025 and a leaner SG&A posture. The year culminated in a robust cash flow generation profile, with operating cash flow of $1.12 billion for fiscal 2024, debt repayment of approximately $557 million, and a free cash flow of $105.3 million. RPM issued guidance signaling a modest topline expansion for fiscal 2025 and mid-single-digit to low-double-digit EBIT growth as MAP 25 benefits continue to compound, with volume sensitivity creating a wide EBIT range depending on demand trajectories.
Segment highlights were mixed: Construction Products Group (CPG) was the growth driver with strength in roofing and turnkey offerings; Consumer delivered market-share gains and higher-margin mix even as DIY softness persisted; Performance Coatings Group (PCG) faced tougher year-over-year comparisons and project timing headwinds; Specialty Products Group (SPG) remained challenged by softer end-markets. Geographically, North America, Africa, and the Middle East posted gains, while Europe faced FX headwinds and the divestiture of noncore European service businesses dampened PCG. Management emphasized MAP 25’s role in margin and working-capital improvements and underscored the need for volume recovery to fully realize the cost-structure benefits. The company also highlighted ongoing innovations (e.g., Nudura and Reptilion) and the potential for selective M&A as cash flow and balance sheet strength improve.
Key Performance Indicators
QoQ: 187.44% | YoY:12.80%
QoQ: 195.12% | YoY:19.33%
QoQ: 193.75% | YoY:19.49%
Key Insights
Revenue: $2.009B for Q4 2024; YoY -0.4%, QoQ +31.86% (four-quarter basis). Gross Profit: $830.6M; YoY +7.15%, QoQ +36.80%. Operating Income: $273.39M; YoY +12.80%, QoQ +187.44%. Net Income: $180.61M; YoY +19.33%, QoQ +195.12%. EPS (GAAP): $1.41; Diluted: $1.40; YoY +19.49%, QoQ +193.75%. EBITDA: $318.0M; EBITDA Margin: 15.83%. Operating Margin: 13.61%. Net Income Margin: 8.99%. Adjusted EPS: $1.56 for the quarter; a record. Cash Flow: Operating cash flow of $181.16M for the year; Free cash flow:...
Financial Highlights
Revenue: $2.009B for Q4 2024; YoY -0.4%, QoQ +31.86% (four-quarter basis). Gross Profit: $830.6M; YoY +7.15%, QoQ +36.80%. Operating Income: $273.39M; YoY +12.80%, QoQ +187.44%. Net Income: $180.61M; YoY +19.33%, QoQ +195.12%. EPS (GAAP): $1.41; Diluted: $1.40; YoY +19.49%, QoQ +193.75%. EBITDA: $318.0M; EBITDA Margin: 15.83%. Operating Margin: 13.61%. Net Income Margin: 8.99%. Adjusted EPS: $1.56 for the quarter; a record. Cash Flow: Operating cash flow of $181.16M for the year; Free cash flow: $105.28M. Net cash provided by operating activities: $1.12B for fiscal 2024; debt repayment: ~$557M; cash at end of period: ~$237.38M. Leverage and liquidity: Total debt $2.41B; Net Debt $2.17B; Cash & equivalents $237.38M; Debt/Capital approx. 0.496; Debt/Equity ~0.986. Payout and yield: Dividend payout ratio ~32.8%; dividend yield ~0.414%. Valuation benchmarks: Price/earnings ~19.8x; Price/Book ~5.7x; Price/Sales ~7.13x.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.01B |
-0.40% |
31.86% |
| Gross Profit |
830.58M |
7.15% |
36.80% |
| Operating Income |
273.39M |
12.80% |
187.44% |
| Net Income |
180.61M |
19.33% |
195.12% |
| EPS |
1.41 |
19.49% |
193.75% |
Key Financial Ratios
operatingProfitMargin
13.6%
operatingCashFlowPerShare
$1.42
freeCashFlowPerShare
$0.83
dividendPayoutRatio
32.8%
Management Commentary
Key management takeaways from the QQ4 2024 earnings call, organized by theme:
- Strategy and MAP 2025 execution: Frank Sullivan highlighted that “MAP 2025 improvements [enabled RPM] to generate our 10th consecutive quarter of record adjusted EBIT,” and that MAP 25 has “played a critical role in our ability to structurally improve working capital throughout the entire year.” He also noted record cash flow from operating activities and debt reduction supporting EPS growth.
- Margin and SG&A optimization: Mike Laroche confirmed that consolidated organic sales were flat on a mix of pricing and volumes, with EBIT margins expanded by ~90 basis points due to MAP 2025 benefits and fixed-cost leverage; SG&A reductions tied to MAP 2025 were expected to realize in fiscal 2025.
- Segment dynamics: CPG showed broad-based strength, especially roofing and wall systems; Consumer gained market share and benefited from better product mix and MAP 25, while PCG faced tougher year-over-year comparisons and project timing headwinds; SPG remained pressured by soft end-markets.
- Cash flow and capital allocation: RPM generated $1.12B in operating cash flow in fiscal 2024, repaid $557M of debt, and increased shareholder returns via dividends and buybacks; management highlighted the Ali Industries/Gator brand and the Reptilion line as examples of innovation fueling organic growth.
- Outlook and risk: The team signaled a cautious, low-growth environment in early fiscal 2025 with an expected consolidated sales increase of low single digits and EBIT growth in the mid-single to low-double digits driven by MAP 2025, with volume a key variable that could materially alter the earnings trajectory. They also discussed ongoing plant consolidations (e.g., 12 facilities consolidated) as a source of cost efficiency.
MAP 2025 improvements to generate our 10th consecutive quarter of record adjusted EBIT.
— Frank Sullivan, RPM Chairman & CEO
MAP 25 has played a critical role in our ability to structurally improve working capital throughout the entire year.
— Frank Sullivan, RPM Chairman & CEO
Forward Guidance
Management provided explicit guidance for fiscal 2025: total sales expected to be up in the low single digits, and adjusted EBIT expected to be up mid-single digits to low-double digits. The top-line outlook assumes continued moderate pricing power (roughly 1% pricing in aggregate) and modest raw material inflation in the second half of the year. Volume growth remains uncertain given macro and housing cycle dynamics, with potential for outsized EBITDA gains if volumes improve. Segment guidance implies: CPG outgrowing its markets but facing tougher year-over-year comparisons; PCG flat to slightly higher as infrastructure and reshoring activity persists but with project timing lags; SPG and Consumer benefitting from cost actions and new products, with Consumer expected to see return-to-growth in later periods thanks to market share gains and product innovations. Key catalysts include ongoing MAP 25 plant consolidations (12 facilities already consolidated or in progress; projected annual MAP savings of $185 million in wave 3 for fiscal 2025) and strategic capital allocation toward accretive bolt-on acquisitions, especially smaller to midsize targets. Investors should monitor: (1) volume progression and project timing in PCG/CPG, (2) raw material cost trajectory and wage/benefit inflation, (3) SG&A efficiency realization timing, (4) currency headwinds in Europe, and (5) any meaningful M&A activity that could alter the near-term cost structure or growth profile.