What changed in this filing

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Item 1. Business

2025-02-20 compared with 2024-02-20 · 73 added, 77 removed, 97 unchanged (61% of the section changed)

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Our principal executive offices are located at 101 West Prospect Avenue, Cleveland, Ohio 44115-1075, telephone (216) 566-2000.

As used in this report, the terms “Sherwin-Williams,” “Company,” “we”, “us” and “our” mean The Sherwin-Williams Company and its consolidated subsidiaries unless the context indicates otherwise.

As used in this report, the terms “Sherwin-Williams,” “Company,” “we”, “us” and “our” mean The Sherwin-Williams Company and its consolidated subsidiaries.

Available Information

We make available free of charge on or through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange Commission (SEC).

We make available free of charge on or through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange Commission (SEC).

You may access these documents on our Investor Relations website, investors.sherwin.com.

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Paint Stores Group, Consumer Brands Group and Performance Coatings Group (individually, a Reportable Segment and collectively, the Reportable Segments).

The Company reports all other business activities and immaterial operating segments that are not reportable in the Administrative segment.

The Company reports all other business activities and immaterial operating segments that are not reportable in the Administrative function.

For more information about the Reportable Segments, see Note 22 to the consolidated financial statements in Item 8.

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Paint Stores Group consisted of 4,773 company-operated specialty paint stores in the United States, Canada and the Caribbean region at December 31, 2024.

Each store in this segment is engaged in servicing the needs of architectural and industrial paint contractors and do-it-yourself homeowners.

Each store is engaged in servicing the needs of architectural and industrial paint contractors and do-it-yourself homeowners.

These stores market and sell Sherwin-Williams ® and other controlled brand architectural paint and coatings, protective and marine products, OEM product finishes and related products.

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The Consumer Brands Group manufactures and distributes a broad portfolio of branded and private-label architectural paint, stains, varnishes, industrial products, wood finishes products, wood preservatives, applicators, corrosion inhibitors, aerosols, caulks and adhesives to retailers, including home centers and hardware stores, dedicated dealers and distributors throughout North America, Latin America and Europe.

During 2023, the Company divested a non-core domestic aerosol business and the China architectural business, both part of the Consumer Brands Group.

See Note 3 to the Consolidated Financial Statements in Item 8 for more information.

Sales and marketing of certain controlled brand and private-label products is performed by a direct sales staff.

Sales and marketing of certain controlled brand and private-label products are performed by a direct sales staff.

The products distributed through third-party customers are intended for resale to the ultimate end-user of the product.

The Consumer Brands Group also consisted of 334 company-operated specialty paint stores in Latin America at December 31, 2024.

Each store in this segment is engaged in servicing the needs of home, commercial and industrial projects to contractors and do-it-yourself customers in Latin America.

Each store is engaged in servicing the needs of home, commercial and industrial projects to contractors and do-it-yourself customers in Latin America.

These stores market and sell Sherwin-Williams ® and other controlled brand architectural paint and coatings, protective and marine products, OEM product finishes and related products which are branded for the Latin America market.

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This segment licenses certain technology and trade names worldwide.

During 2023, the Company acquired German-based SIC Holding GmbH which is part of the Performance Coatings Group.

See Note 3 to the Consolidated Financial Statements in Item 8 for more information.

Sherwin-Williams ® and other controlled brand products are distributed through the Paint Stores Group, this segment’s 324 company-operated branches, a direct sales staff and outside sales representatives to retailers, dealers, jobbers, licensees and other third-party distributors.

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However, the loss of any single customer would not have a material adverse effect on the overall profitability of the segment.

Administrative Segment

The Administrative segment includes the administrative expenses of the Company’s corporate headquarters site.

Also included in the Administrative segment is interest expense, interest and investment income, certain expenses related to closed facilities and environmental-related matters and other expenses which are not directly associated with the Reportable Segments.

The Administrative segment does not include any significant foreign operations.

Also included in the Administrative segment is the operations of a real estate management unit that is responsible for the ownership, management and leasing of non-retail properties held primarily for use by the Company and disposal of idle facilities.

Sales of this segment represent external leasing revenue.

Material gains and losses from the sale of property are infrequent and not a significant operating factor in determining the performance of the Administrative segment.

Administrative Function

The Administrative function includes the administrative expenses and assets of the Company’s new global headquarters and research and development center, both currently under construction.

In addition, it includes the operations of a real estate management unit that is responsible for the ownership, management and leasing of non-retail properties held primarily for use by the Company, including the Company’s current global headquarters and research and development center and disposal of idle facilities.

The Administrative function’s remaining assets consist primarily of cash and cash equivalents, investments and deferred pension assets.

Also included in the Administrative function was interest expense, interest and investment income, certain expenses related to closed facilities and environmental-related matters and other expenses that were not directly associated with the Reportable Segments.

Sales of this function represented external leasing revenue.

The Administrative function did not include any significant foreign operations.

Gains and losses from the sale of property were not a significant operating factor in determining the performance of the Administrative function.

Raw Materials and Products Purchased for Resale

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We attempt, if feasible, to mitigate our potential risk associated with the sourcing of our raw materials and other products through inventory management, strategic relationships with key suppliers, alternative sourcing strategies and long-term investments to expand our manufacturing capabilities.

See Item 1A Risk Factors for more information regarding cost and sourcing of raw materials.

The majority of the sales for the Reportable Segments traditionally occur during the second and third quarters.

Periods of economic downturn, however, can alter these seasonal patterns.

There is no significant seasonality in sales for the Administrative segment.

There is no significant seasonality in sales for the Administrative function.

Working Capital

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Campbell®, Octoral®, Oskar Nolte™, PermaClad®, Polane®, Powdura®, Sayerlack®, Sher-Wood®, Sumaré®, Ultra 9K®, Ultra 7000®, ValPure®, Valspar®

Although patents and licenses are not of material importance to our business as a whole or any segment, the Performance Coatings Group derives a portion of its income from the licensing of technology, trademarks and trade names to foreign companies.

Although patents and licenses are not of material importance to our business as a whole or any segment, each segment derives a portion of its income from the licensing of technology, trademarks and trade names to foreign companies.

Backlog and Productive Capacity

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In the Consumer Brands Group, domestic and foreign competitors include manufacturers and distributors of branded and private-label paint and coatings products as well as other paint and wallpaper stores, mass merchandisers, home centers, independent hardware stores, hardware chains and manufacturer-operated direct outlets.

Technology, product quality, product innovation, breadth of product line, technical expertise, distribution, service and price are the key competitive factors for this segment.

Technology, product quality, product innovation, breadth of product line, technical expertise, distribution, service and price are key competitive factors for this segment.

The Performance Coatings Group has numerous competitors in its domestic and foreign markets with broad product offerings and several others with niche products.

Key competitive factors for this segment include technology, product quality, product innovation, breadth of product line, technical expertise, distribution, service and price.

The Administrative segment has many competitors consisting of other real estate owners, developers and managers in areas in which this segment owns property.

The Administrative function has many competitors consisting of other real estate owners, developers and managers in areas in which this segment owns property.

The main competitive factors are the availability of property and price.

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The Company’s seven guiding values — integrity, people, service, quality, performance, innovation and growth — drive how we fulfill our purpose, emphasize the importance of our global workforce and serve as the foundation of our culture of excellence.

At December 31, 2023, we employed 64,088 people worldwide, of which approximately 75% were in the United States and 25% were in other global regions.

The success of our business and our ability to execute on our strategy depend in large part on our ability to attract, retain, develop and progress qualified employees with diverse skills, experiences and perspectives at all levels of our organization.

To deliver on these objectives, we have developed key programs, policies and initiatives focused on belonging and culture, talent acquisition and employee engagement, occupational health and safety and total rewards, which includes compensation and benefits programs and practices.

At December 31, 2024, we employed 63,890 people worldwide, of which approximately 75% were in the United States.

The success of our business and our ability to execute on our strategy depend in large part on our ability to attract, retain, develop and progress qualified employees with a broad range of skills, experiences and perspectives at all levels of our organization.

Belonging and Culture.

We strive to foster a culture of belonging to drive employee engagement and performance while attracting, retaining, developing and progressing a diverse pipeline of talent that reflects the communities in which we operate.

As reflected in our Code of Conduct and reinforced through our actions, training and attitudes, fostering an inclusive culture is a moral and business imperative.

The building blocks of our culture include:

We strive to foster a strong workplace culture that drives belonging, employee engagement, performance and above market growth while attracting, retaining, developing and progressing a pipeline of talent ready to serve the communities in which we operate.

As reflected in our Code of Conduct and reinforced through our values, fostering a strong culture and a positive employee experience is imperative for long-term sustainable growth.

The building blocks of our culture of belonging include:

• Communicating impact :

Sharing the Company story, goals and priorities at all levels, and educating our workforce on allyship and belonging.

• Leading with inclusion:

Creating a culture where we are open and leverage the unique contributions of each employee to positively impact our people and business results.

Sharing the Company story, goals and priorities at all levels and supporting our employees in life, career and connections.

• Leading with intention :

Creating a culture where we inspire employees to Create Your Possible and leverage the unique contributions of each employee to foster a positive employee experience for all and drive above-market growth.

• Empowering everyone :

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• Committing to action :

Empowering and engaging leaders to use tools and resources to take meaningful action to foster a culture of belonging for all employees.

While our commitment starts at the top, with a Board of Directors with diverse skills, backgrounds and experiences, creating a supportive, welcoming environment across our global footprint is the shared responsibility of all of our employees, including our senior leaders.

We strive to ensure our senior leaders have the resources they need to foster inclusion and belonging and ultimately leverage the diversity of our workforce to deliver customer-focused differentiated products, services and solutions.

Our senior leaders attend an education and training session every year, and we hold CEO Forums on Inclusion, led by our CEO and other senior leaders, designed to encourage open discussions with employees about opportunities to advance our culture of belonging.

In 2023, we also continued our focus on driving allyship and empathy through conscious inclusion training and elevating the visibility and prominence of our Employee Resource Groups (ERGs).

These are voluntary, employee-led communities with a shared purpose of developing connections between and among employees and allies with diverse backgrounds.

We have over 300 chapters globally that bring together employees from various groups, divisions and functional teams to foster more inclusive workplaces, create greater synergy around business objectives and serve as a hub for professional development and mentorship opportunities that enable our employees to thrive and find long-term success at Sherwin-Williams.

Empowering and engaging leaders at all levels to use tools and resources to take meaningful action to foster a culture of belonging for all employees.

While our commitment starts at the top, with a Board of Directors with a broad range of skills, backgrounds and experiences, creating a supportive, welcoming environment across our global footprint is the shared responsibility of all of our employees, including our senior leaders.

We strive to ensure our senior leaders have the resources they need to foster a positive employee experience for all and ultimately leverage our workforce to deliver customer-focused differentiated products, services and solutions.

In 2024, we continued supporting employees in life, career and connection.

Our employee-led communities have served as champions of the employee value proposition, Create Your Possible, a framework for initiatives with a shared purpose of driving professional development, employee engagement and business results.

We have over 400 employee-led communities that bring together employees from various groups, divisions and functional teams to create greater synergy around business objectives and serve as a hub for innovation, professional development and mentorship opportunities that enable our employees to thrive and find long-term success at Sherwin-Williams.

Talent Acquisition and Employee Engagement.

We strive to attract, retain, develop and progress a workforce that embraces our culture of inclusion through an integrated talent management strategy.

This strategy connects major milestones in the employee journey, including talent acquisition, onboarding, performance management, leadership and management development, succession and career progression, and is supported by our focus on employee engagement, culture, workforce analytics and information technology governance.

The Company’s early talent programs, including our management trainee program and similar programs across our global business, play a critical role in attracting, developing and advancing a pipeline of talent with diverse skills, backgrounds and experiences.

During 2023, we hired approximately 1,400 college graduates through our management trainee program as part of our long-term growth initiatives.

We also collaborate with various colleges and universities to continue to broaden our talent pipeline with qualified women, underrepresented racial or ethnic groups, individuals with disabilities, veterans and other candidates.

We invest in our people by providing learning and employee networking opportunities, including through our ERGs, to drive retention, development and engagement and help employees excel in their current and future roles.

During 2023, our employees completed thousands of hours of online and instructor-led courses across a broad range of categories, including leadership, professional skills, technical skills and compliance.

We measure our progress toward creating a culture of belonging that empowers employees to learn, grow and achieve their aspirations by conducting periodic pulse surveys and a global engagement survey, which we conducted in 2023 and expect to conduct every other year.

We strive to attract, retain, develop and progress a workforce that embraces our culture through an integrated talent management strategy.

During 2024, we hired approximately 1,500 professionals through our management trainee program as part of our long-term growth initiatives.

We invest in our people by providing learning and employee networking opportunities to drive retention, development and engagement and help employees excel in their current and future roles.

During 2024, our employees collectively completed thousands of hours of online and instructor-led courses across a broad range of categories, including leadership, professional skills, technical skills and compliance.

We measure our progress toward creating a culture of excellence that empowers employees to learn, grow and achieve their aspirations by conducting periodic pulse surveys and a global engagement survey, which we conducted in 2023 and expect to conduct every other year.

We are focused on using these survey results to drive continued progress with our efforts.

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We have a consistent focus on Environmental, Health and Safety excellence that promotes employee health and safety, process safety and occupational health, including evaluation and implementation of preventative measures to reduce workplace injuries and illness.

We strive for incident-free workplaces and are continuously assessing and improving the programs that are in place to help keep our employees, customers and communities safe, including by improving our global management systems, standards and performance measures.

We strive for incident-free workplaces and are continuously seeking to improve the programs that are in place to help keep our employees, customers and communities safe, including by regularly re-evaluating our global management systems, standards and performance measures.

Total Rewards.

We prioritize the fair, consistent and equitable treatment of our employees in relation to working conditions, wages, benefits, policies and procedures.

We prioritize the fair and consistent treatment of our employees in relation to working conditions, wages, benefits, policies and procedures.

The Company’s policies and programs are designed to respond to the needs of our employees in a manner that provides a safe, professional, efficient and rewarding workplace.

Our total rewards programs are designed to offer competitive compensation, comprehensive benefits and other programs to support employees’ growth, both personally and professionally, and the diverse needs and well-being of our employees worldwide.

Over the past few years, we have enhanced certain of the Company’s benefits and practices to support the health and well-being of our employees.

Our enhanced benefits have included tele-health, paid sick leave, family leave and voluntary leave of absence policies and programs.

We also have rewarded our employees’ resiliency and hard work and made changes in our business to encourage retention, including through wage increases, reduced store hours and employee benefits enhancements.

Additionally, in 2023, we continued to permit remote, alternate and flexible work arrangements where possible to promote increased flexibility and support employee health and well-being, while maintaining our focus on collaboration and engagement.

Our enhanced benefits have included paid sick leave, family leave and voluntary leave of absence policies and programs.

In 2024, we introduced a new education benefit that offers bachelors’ degrees, associates’ degrees and certificates for in-demand fields, with tuition fully paid by our Company.

More recently, in 2025 we added a new backup child and elder care benefit.

We continue to permit remote, alternate and flexible work arrangements where possible to promote increased flexibility and support employee health and well-being, while maintaining our focus on collaboration and engagement.

Regulatory Compliance

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Letter to Shareholders” and elsewhere in this report constitute “forward-looking statements” within the meaning of federal securities laws.

These forward-looking statements are based upon management’s current expectations, predictions, estimates, assumptions and beliefs concerning future events and conditions and may discuss, among other things, anticipated future performance (including sales and earnings), expected growth, future business plans and the costs and potential liability for environmental-related matters and the lead pigment and lead-based paint litigation.

Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases such as “believe,” “expect,” “estimate,” “project,” “plan,” “goal,” “target,” “potential,” “intend,” “aspire,” “strive,” “may,” “will,” “should,” “could,” “would,” “seek,” or “anticipate” or the negative thereof or comparable terminology.

Certain statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report constitute “forward-looking statements” within the meaning of federal securities laws.

Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases such as “anticipate,” “aspire,” “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “potential,” “project,” “seek,” “should,” “strive,” “target,” “will,” or “would” or the negative thereof or comparable terminology.

Readers are cautioned not to place undue reliance on any forward-looking statements.

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These risks, uncertainties and other factors include such things as:

• general business conditions, including the strength of retail and manufacturing economies and growth in the coatings industry;

• changes in general domestic and international economic conditions, including due to changes in inflation rates, interest rates, tax rates, unemployment rates, labor costs, healthcare costs, recessionary conditions, geopolitical conditions, government policies, laws and regulations;

• weakening of global credit markets and our ability to generate cash to service our indebtedness;

• fluctuations in foreign currency exchange rates, including as a result of inflation, central bank monetary policies, currency controls and other exchange restrictions;

• any disruption in the availability of, or increases in the price of, raw material and energy supplies;

• disruptions in the supply chain, including those related to industry capacity constraints, raw material availability, transportation and logistics delays and constraints, political instability or civil unrest;

• catastrophic events, adverse weather conditions and natural disasters, including those that may be related to climate change or otherwise;

• losses of or changes in our relationships with customers and suppliers;

• competitive factors, including pricing pressures and product innovation and quality;

• our ability to successfully integrate past and future acquisitions into our existing operations, as well as the performance of the businesses acquired;

• risks and uncertainties associated with our expansion into and our operations in Asia, Europe, South America and other foreign markets, including general economic conditions, policy changes affecting international trade, political instability, inflation rates, recessions, sanctions, foreign currency exchange rates and controls, foreign investment and repatriation restrictions, legal and regulatory constraints, civil unrest, armed conflicts and wars (including the ongoing conflict between Russia and Ukraine and the Israel-Hamas war) and other economic and political factors;

• cybersecurity incidents and other disruptions to our information technology systems, and our reliance on information technology systems;

• general business and economic conditions in the United States and worldwide;

• inflation rates, interest rates, unemployment rates, labor costs, healthcare costs, recessionary conditions, geopolitical conditions, terrorist activity, armed conflicts and wars, public health crises, pandemics, outbreaks of disease and supply chain disruptions;

• shifts in consumer behavior driven by economic downturns in cyclical segments of the economy;

• shortages and increases in the cost of raw materials and energy;

• catastrophic events, adverse weather conditions and natural disasters (including those that may be related to climate change);

• the loss of any of our largest customers;

• increased competition or failure to keep pace with developments in key competitive areas of our business;

• disruptions to our information technology systems, including due to digitization efforts or cybersecurity incidents;

• our ability to attract, retain, develop and progress a qualified global workforce;

• our ability to execute on our business strategies related to sustainability matters, and achieve related expectations, including as a result of evolving regulatory and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs and the availability of requisite financing, and changes in carbon markets;

• our ability to successfully integrate past and future acquisitions into our existing operations;

• risks and uncertainties associated with our expansion into and our operations in South America, Asia, Europe and other foreign markets;

• policy changes affecting international trade, including import/export restrictions and tariffs;

• our ability to achieve our strategies or expectations relating to sustainability considerations, including as a result of evolving legal, regulatory and other standards, processes and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite suppliers, energy sources, or financing and changes in carbon markets;

• damage to our business, reputation, image or brands due to negative publicity;

• our ability to protect or enforce our material trademarks and other intellectual property rights;

• our ability to comply with numerous and evolving U.S.

laws, rules, and regulations and the effectiveness of our compliance efforts;

• adverse changes to our tax positions in U.S.

jurisdictions, including as a result of new or revised tax laws or interpretations;

• increasingly stringent domestic and foreign governmental regulations, including those affecting health, safety and the environment;

• inherent uncertainties involved in assessing our potential liability for environmental-related activities;

• other changes in governmental policies, laws and regulations, including changes in tariff policies, accounting policies and standards;

• the nature, cost, quantity and outcome of pending and future litigation and other claims, including the lead pigment and lead-based paint litigation, and the effect of any legislation and administrative regulations relating thereto.

• the infringement or loss of our intellectual property rights or the theft or unauthorized use of our trade secrets or other confidential business information;

• a weakening of global credit markets or changes to our credit ratings;

• our ability to generate cash to service our indebtedness;

• fluctuations in foreign currency exchange rates and changing monetary policies;

• our ability to comply with a variety of complex U.S.

laws, rules and regulations;

• increases in tax rates, or changes in tax laws or regulations;

• our ability to comply with numerous, complex and increasingly stringent domestic and foreign health, safety and environmental laws, regulations and requirements;

• our liability related to environmental investigation and remediation activities at some of our currently- and formerly-owned sites;

• the nature, cost, quantity and outcome of pending and future litigation, including lead pigment and lead-based paint litigation;

• the other risk factors discussed in Item 1A of this Annual Report on Form 10-K and our other reports filed with the SEC.

Readers are cautioned that it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results and that the above list should not be considered a complete list.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business