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RPM International (RPM) Announces MAP 2025 Operational Plan
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RPM International Inc.’s (RPM - Free Report) stock moved up 0.92% in after-hours trading on Aug 24, after it unveiled a MAP 2025 (Margin Achievement Plan) operational improvement initiative.
After successfully completing the 2020 MAP to Growth Plan, RPM International expects to accelerate growth, maximize operational efficiencies and generate a superior value for its customers, associates and shareholders via MAP 2025. By May 2025 end, RPM projects to achieve $8.5 billion of annual revenues, 42% gross margin and 16% adjusted EBIT margin.
RPM’s chairman and CEO Frank C. Sullivan stated, “MAP 2025 builds upon the successes we achieved with our previous MAP to Growth program. These new initiatives are designed to amplify the strengths of RPM’s entrepreneurial culture and accelerate our transformation into a more connected and efficient company.”
Successful Completion of MAP 2020
In fiscal 2018, RPM International adopted the 2020 Margin Acceleration Plan (2020 MAP to Growth), a multi-year restructuring plan, to maintain a balance between its segments’ performance and its growth expansion. On May 31, 2021, RPM formally concluded the MAP to Growth improvement program.
From 2018 through 2021, RPM transformed its business into a center-led operational approach. Management implemented four center-led functional areas: manufacturing and operations, procurement and supply chain, information technology, and accounting and finance. The MAP to Growth plan optimized RPM’s manufacturing facilities, providing more efficient plant and distribution capabilities. In line with the MAP to Growth objective, RPM International completed the planned closure of 31 plants and 28 warehouses. In fiscal 2022, SG&A declined 120 basis points on increased sale revenues and the incremental MAP to Growth savings.
Backed by the solid outcome of this initiative, RPM developed plans for the MAP 2.0 program during the fiscal fourth quarter.
Share Price Performance
Shares of RPM have gained 9.5% against the Zacks Paints and Related Products industry’s 6.6% fall. RPM International benefited from a strategic business operation and the successful completion of the MAP to Growth initiative. Robust construction and industrial maintenance activity, a rebound in the energy markets and its focus on investments in the fastest-growing areas of its business are commendable.
In fourth-quarter fiscal 2022, RPM’s adjusted earnings increased 10.9% from the year-ago quarter’s figure. Net sales also increased 13.7% from the prior-year level. The upside was driven by strong contributions from all the operating segments. Adjusted EBIT for the quarter rose 11.7% year over year.
For first-quarter fiscal 2023, RPM International expects sales growth in the mid-teens for all its operating segments. Particularly, the Consumer Group is likely to generate maximum growth in the four segments, backed by higher selling prices, an improved alkyd resin supply and heavy investments in operations. Consolidated adjusted EBIT is expected to increase 20-25%.
Other top-ranked stocks, which warrant a look in the Construction sector, include Arcosa (ACA - Free Report) , United Rentals (URI - Free Report) and Primoris Services Corporation (PRIM - Free Report) .
Arcosa, currently sporting a Zacks Rank #1, is a manufacturer of infrastructure-related products and services, serving construction, energy and transportation markets.
ACA’s expected earnings growth rate for fiscal 2022 is 7.8%. The Zacks Consensus Estimate for current-year earnings has improved 13.7% over the past 30 days.
United Rentals, currently flaunting a Zacks Rank of 1, is the largest equipment rental company in the world.
URI’s expected earnings growth rate for 2022 is 43.8%. The Zacks Consensus Estimate for current-year earnings has improved 6.6% over the past 30 days.
Primoris, a Zacks Rank #2 company, is a specialty contractor company operating in the United States and Canada. A robust backlog of more than $4 billion and solid contract awards in the Energy/Renewables and Utilities segments imply incredible momentum in the future despite supply-chain and permitting challenges. Utility-scale solar projects continued to drive progress in the Energy/Renewables segment.
PRIM’s earnings for 2022 are expected to grow 18.4%.
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RPM International (RPM) Announces MAP 2025 Operational Plan
RPM International Inc.’s (RPM - Free Report) stock moved up 0.92% in after-hours trading on Aug 24, after it unveiled a MAP 2025 (Margin Achievement Plan) operational improvement initiative.
After successfully completing the 2020 MAP to Growth Plan, RPM International expects to accelerate growth, maximize operational efficiencies and generate a superior value for its customers, associates and shareholders via MAP 2025. By May 2025 end, RPM projects to achieve $8.5 billion of annual revenues, 42% gross margin and 16% adjusted EBIT margin.
RPM’s chairman and CEO Frank C. Sullivan stated, “MAP 2025 builds upon the successes we achieved with our previous MAP to Growth program. These new initiatives are designed to amplify the strengths of RPM’s entrepreneurial culture and accelerate our transformation into a more connected and efficient company.”
Successful Completion of MAP 2020
In fiscal 2018, RPM International adopted the 2020 Margin Acceleration Plan (2020 MAP to Growth), a multi-year restructuring plan, to maintain a balance between its segments’ performance and its growth expansion. On May 31, 2021, RPM formally concluded the MAP to Growth improvement program.
From 2018 through 2021, RPM transformed its business into a center-led operational approach. Management implemented four center-led functional areas: manufacturing and operations, procurement and supply chain, information technology, and accounting and finance. The MAP to Growth plan optimized RPM’s manufacturing facilities, providing more efficient plant and distribution capabilities. In line with the MAP to Growth objective, RPM International completed the planned closure of 31 plants and 28 warehouses. In fiscal 2022, SG&A declined 120 basis points on increased sale revenues and the incremental MAP to Growth savings.
Backed by the solid outcome of this initiative, RPM developed plans for the MAP 2.0 program during the fiscal fourth quarter.
Share Price Performance
Shares of RPM have gained 9.5% against the Zacks Paints and Related Products industry’s 6.6% fall. RPM International benefited from a strategic business operation and the successful completion of the MAP to Growth initiative. Robust construction and industrial maintenance activity, a rebound in the energy markets and its focus on investments in the fastest-growing areas of its business are commendable.
In fourth-quarter fiscal 2022, RPM’s adjusted earnings increased 10.9% from the year-ago quarter’s figure. Net sales also increased 13.7% from the prior-year level. The upside was driven by strong contributions from all the operating segments. Adjusted EBIT for the quarter rose 11.7% year over year.
For first-quarter fiscal 2023, RPM International expects sales growth in the mid-teens for all its operating segments. Particularly, the Consumer Group is likely to generate maximum growth in the four segments, backed by higher selling prices, an improved alkyd resin supply and heavy investments in operations. Consolidated adjusted EBIT is expected to increase 20-25%.
Zacks Rank & Other Key Picks
Currently, RPM carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other top-ranked stocks, which warrant a look in the Construction sector, include Arcosa (ACA - Free Report) , United Rentals (URI - Free Report) and Primoris Services Corporation (PRIM - Free Report) .
Arcosa, currently sporting a Zacks Rank #1, is a manufacturer of infrastructure-related products and services, serving construction, energy and transportation markets.
ACA’s expected earnings growth rate for fiscal 2022 is 7.8%. The Zacks Consensus Estimate for current-year earnings has improved 13.7% over the past 30 days.
United Rentals, currently flaunting a Zacks Rank of 1, is the largest equipment rental company in the world.
URI’s expected earnings growth rate for 2022 is 43.8%. The Zacks Consensus Estimate for current-year earnings has improved 6.6% over the past 30 days.
Primoris, a Zacks Rank #2 company, is a specialty contractor company operating in the United States and Canada. A robust backlog of more than $4 billion and solid contract awards in the Energy/Renewables and Utilities segments imply incredible momentum in the future despite supply-chain and permitting challenges. Utility-scale solar projects continued to drive progress in the Energy/Renewables segment.
PRIM’s earnings for 2022 are expected to grow 18.4%.