Decorative Architectural...

Decorative Architectural ProductsJeff Filley / President Masco Coatings Group

Safe Harbor Statement

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This presentation contains statements that reflect our views about our future performance and constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “believe,” “anticipate,” “appear,” “may,” “will,” “should,” “intend,” “plan,” “estimate,” “expect,” “assume,” “seek,” “forecast,” and similar references to future periods. Our views about future performance involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements. We caution you against relying on any of these forward-looking statements.

Our future performance may be affected by the levels of home improvement activity and new home construction, our ability to maintain our strong brands and to develop and introduce new and improved products, our ability to maintain our competitive position in our industries, our reliance on key customers, our ability to achieve the anticipated benefits of our strategic initiatives, our ability to improve our under-performing U.S. window business, the cost and availability of raw materials, our dependence on third party suppliers, and risks associated with international operations and global strategies. These and other factors are discussed in detail in Item 1A, “Risk Factors” in our most recent Annual Report on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and in other filings we make with the Securities and Exchange Commission. The forward-looking statements in this presentation speak only as of the date of this presentation. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Unless required by law, we undertake no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise.

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Agenda

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The Business Today

Growth Plan

Future Outlook

Decorative Architectural Products Segment Overview

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Revenue $2.1B

Margin 20.6%

% of Masco Operating Profit, as Adjusted* 36%

% Revenue in N. America 100%

Masco Corp.(Breakdown of 2016 Revenue)

72%

12/31/2016

Currency Exposure USD/CAD/MX

Commodity Exposure TiO2 / Resins/ Zinc

% Repair & Remodel Sales 99%

28%Rest of Masco

Decorative Architectural

Products Segment

* Total Masco adjusted operating profit excludes $22M of rationalization charges and before general corp expense.

Well Positioned in Large U.S. Paint Market

5Source: 2007-2010 US Census, various annual reports, and internal estimates.

Mascoa leader

Masco opportunity

PRO$7.2B

DIY $4.6B

Total U.S. Architectural Coatings Market (2016) $11.8B

Our Brands are Industry Leaders

6Source: Reader’s Digest, Consumer Reports, JD Power (2017), GFK, and Traqline.

• #1 U.S. primer brand• 25,000 outlets• Most preferred and

highest loyalty consumer primer brand

• Strong PRO/DIY following

• DIY leader• #1 quality ranking• Innovation leader• #1 paint brand in

awareness, consideration, purchase, and conversion

• Most trusted paint brand in Canada

Leading provider of:

• Decorative hardware

• Bath hardware

• Cabinet hardware

• Shower doors

Initiated partnership with The Home Depot

Premium Plus® Paint &

Computer Color Matching

ColorSmart®digital color tool

Premium Plus Ultra® -

1st paint & primer in one

Creation of PRO business strategy

Behr DeckOver®

Stain

Behr Marquee®

Paint

Company formed

Long Track Record of Innovation and Leadership

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Granite Grip™ Coating

& PRO Hub Stores

1947

1978

1986

2003

2009

2010

2013

2014

2016

Solid Segment Operating Profit Performance

8* Excludes rationalization charges for 2013 of $2M.

$329 $353 $360

$403 $430

18.1% 18.3% 18.0%

20.0%20.6%

2012 2013 2014 2015 2016

7%CAGR

$M

Operating Profit

Operating Profit Margin

Agenda

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The Business Today

Growth Plan

Future Outlook

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Extend our DIY leadership position

Grow share in the PRO paint segments

Leverage the KILZ® and Liberty® Brands

Three Key Growth Strategies

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U.S. DIY Market – $4.6B

Leader in DIY Paint

11Source: Various annual reports and internal estimates.

Masco

DIY$4.6B

Aging U.S. housing stock

Favorable Trends Positioned to Drive Gallon Growth

12Source: US Census Bureau, National Association of Realtors, Home Depot annual reports, Home Improvement Research Institute, internal estimates.

First time home buyers

Big box revenue growth

Home improvement market

Increasing median homesales price

Existing home sales

Gallon Growth

Partnership and Innovation is a Behr Differentiator

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1978

2016

#1#1

S I N C E

Quality ranking:interior paint, exterior paint and exterior stain

J.D. Power & Associates: paint brand awareness, brand considered, brand purchased, conversion rate

Supplier to The Home Depot

The Home Depot Innovation Award winner

The Home Depot Partner of the Year

4T I M E S

Why is The Home Depot Partnering with Behr….

Video from The Home

Depot

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Well Positioned to Take Share in DIY

Drive traffic to 2,200 The Home Depot locations– Maintain industry leading quality and value proposition– Accelerate media advertising

Improving Shopping Experience– Consumer research/insight (> 6,000 mystery shops)– Understanding key drivers to customer satisfaction– New training curriculum developed and deployed

Grow DIY Share

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Key Execution Initiatives

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Leverage Behr® Brand

Estimated Sales Opportunity:

~$100M-$140M over the next three years

Continued innovation andquality leadership

Improve the shopping experience

+

+


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123




Masco

U.S. PRO Market – $7.2B

PRO Represents a Large Opportunity


5%

Pro$7.2B

2014 2015 2016

Partnering with The Home Depot to Capture Significant Segments of the U.S. PRO Market


Property Management

Residential Repaint

U.S. PRO Market$7.2B

25%

25%

Near Term Focus Future Potential

New HomeConstruction

Commercial

39%

11%

Strong Behr Sales GrowthIn PRO Segments

19%CAGR

Penetrating PRO Segments by Creating a Compelling Offering

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Product Service

Store Footprint Competitive Advantage

• Rebranded paint line• Extended PRO product offering• New, competitive price points• Formulations tailored

for the pro

• PRO Hub stores (~200)• PRO discounts • Flexible credit options• Robust CRM system• Job site deliveries• Purchase / color history• Outside sales reps (~150)

• Sherwin Williams ~4,200• The Home Depot ~2,200• PPG ~900• Kelly Moore ~145• Dunn Edwards ~130

• Convenience (The Home Depot Stores)• “One Stop” shopping• Value proposition (Quality + Price)• Leverage Interline Brands


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Leverage Behr® & Kilz® brands and The Home Depot’s national scale



Enhance PRO service offerings

New customer acquisition

+

+

Grow share of wallet

+


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123




Kilz® Brand: Well Positioned for Growth

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Leverage Kilz® Brand equity

Core Products Extend into New Areas• #1 market share in

U.S. primers• 25,000 outlets• Strong brand equity

• Paint and specialty coatings• New distribution channels

Liberty Hardware’s Competitive Strengths are Enablers to Growth

LEVERAGE STRENGTHS GOAL

Consumer insights

Finish and design expertise

High service level capability

Expand category breadth

Create shopper inspiration

Expand with partners in E-commerce

Enhance channel partner performance


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Grow core Kilz® & Liberty® business



Extend Kilz® to paint & specialty coatings

Fully leverage retail outlets & pursue alternative channels / retailers

& categories

+

+

Inorganic growth

+

Agenda

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The Business Today

Growth Plan

Future Outlook

Decorative Architectural Products (DAP) 3 Year Sales Outlook

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DAP is expected to generate 18-20% operating margins with sales growing at 4-6% CAGR during the next 3 years

2016 2019

$2,092M$150M-$180M

$100M-$140M$50M-$80M

~$2,400M-~$2,500M

Core Sales Growth (DIY)

PRO GrowthDiversified Products

(incl. Liberty Hardware)

Decorative Architectural Products (DAP) Net Sales

Recognized Leader with Multiple Levers for Growth

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• Behr’s track record – market leader with long record of innovation

• Behr’s strategy – clear growth strategies in DIY, PRO segments

• Expand Kilz and Liberty Hardware into new product categories, channels and geographies

Sales growing: 4-6% Margins: 18-20%2019 Targets:

Decorative Architectural...

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