Masco Corporation Deutsche Bank’s Chicago Industrials Summit

Yeah. Good morning, everybody, thanks for joining. It is good to be here at the Deutsche Bank Global Industrials, Materials & Building Products Conference here in Chicago. Colin, as you mentioned, we laid out some pretty specific goals for our 2028 expectations in terms of growth and margin expansion. It is really underpinned by our focus on driving both top line and bottom line growth, driven by a consumer-driven strategy, leveraging our industry leading brands, expanded commercial capabilities, enhanced operational excellence. As you articulated, we laid out some specific objectives. What I would say is, in terms of how we are approaching that, it is really investing in growth and looking at areas that we can expand our top line, even despite a tough environment as we have all been faced with, as well as driving operational efficiencies in terms of our bottom line.

That includes leveraging our Masco Operating System, as well as some of the restructuring activities that we announced earlier this year in terms of driving that. Although those are objectives that we have laid out for a couple of years from now, I think in terms of seeing progress towards those is really what we are focused on doing. So seeing some growth this year, low single digits is our expectation in terms of top line growth, as well as some margin expansion. Our underlying performance, putting aside the tariff refunds for a moment, seeing a margin expansion there as well. So making that incremental progress this year, particularly as we move into 2027.

Yeah. I would say we've got a pretty strong track record with regards to delivering operational performance in terms of bottom line, both in terms of EPS as well as margin and margin expansion. That's been through a cyclical environment. I mean, challenges in terms of commodity inflation, tariffs, and a number of challenges in the industry. We've been able to deliver growth, and we've continued to deliver really strong cash flows as well. So I think those are, I think, appreciated by the Street in terms of how we've been able to manage through and deliver performance through those challenging environments. I think in terms of opportunities would be growth. I think that's been one of the challenges, particularly in this environment where we've been faced with a down R&R market for really the fourth year in a row.

We continue to drive market share performance, but really pivoting to growth. I think that's something that you'll see more of us in terms of not only the narrative, but also delivering in terms of investments and reaping the benefits of those investments and growth.

Yeah. As I already mentioned, and I think it's pretty well appreciated that the overall R&R industry, including the plumbing sub-segment of that, has been under pressure from an overall growth perspective. It's been down really from a volume standpoint. Really, I think this will be our fourth year in a row in terms of the sector being down. That said, we're disciplined on cost, but we also continue to focus on continuing to make investments where we see opportunities for growth, both in terms of categories as well as in terms of market share. And we'll continue to do that. And I think we're really well positioned to capitalize on the market as it comes back. There's some calculations that indicate there's over $20 billion of pent-up demand in terms of the R&R space, and we don't expect there to be a hockey stick.

Obviously, the continued macroeconomic and geopolitical environment remains dynamic, and so we're not expecting an inflection in the immediate future. But as the long-term fundamentals of the industry improve, including leveraging the continued strength in the housing market as it pertains to equity values as well as aging of the housing stock, I think as we get some turn in some of the other metrics, we'll be well positioned to leverage our growth, not only to continue to drive market share performance, but also ride the benefit of the industry recovery as well.

Yeah. I think it's been humbling the last few years in terms of the crystal ball analogy, because I think the expectation has been a recovery here each of the last number of years. And we're continuing to invest. I think as it pertains to the metrics, I think it's probably not particularly unique. The fundamentals, I would say, Colin, the fundamentals of the industry, of the R&R market are strong. As I mentioned, strong home equity values, near record levels, aging housing stocks. So the fundamentals are there. I think what will be catalyst for change are things such as existing home sales. I know existing home sales came out this morning, and they remained tepid. So that's still something that we keep a close eye on, as well as consumer confidence.

And so I think there's the equity value out there, but in terms of the confidence of consumers to invest in their homes and to make that move, is still something that we're waiting to see. Again, we're not predicting a hockey stick type of recovery, but as those other type of leading indicators manifest themselves over time, we see a gradual improvement towards a longer-term range of R&R growth, which is more in the 2%-4% range.