Inside RPM International’s Revenue Segments

RPM International (RPM) classifies its revenue into the following three segments:

• Industrial
• Consumer
• Specialty

These three segments constitute the total revenues of RPM International. Until the first quarter of fiscal 2016, RPM International was reporting only under its Consumer and Industrial segments. In fiscal 1Q16, it combined its former RPM2 Industrial Operating segment and the SPHC Operating segment into a single group and began to report under the Specialty segment.

This segment includes products like construction sealants and chemicals, roofing system, flooring system, corrosion control coatings, fireproofing coatings, and many other coatings. The segment has more than 30 brands. (We’ll discuss these in detail later in this series.)

The Consumer segment serves primarily end-users, and the segment’s brands are sold mostly in North America, though its presence is growing in the UK and Europe. This segment has a wide range of product categories, including hobby and craft products, specialty paints, rust-preventive paints, wood stains and finishes, and garage and basement floor coatings.

This segment operates in niche business where the traditional players like AkzoNobel, Sherwin-Williams(SHW), PPG Industries (PPG), and Valspar (VAL) are not present. It caters to industries like packaging, apparel, safety equipment, cleaning and restoration, commercial construction, marine, furniture, food, confectionery, and pharmaceutical.

Investors can hold RPM International indirectly by investing in the SPDR S&P Dividend ETF (SDY), which had 0.95% of its total holdings in RPM International on September 28, 2016.

In the next part, we’ll take a closer look at RPM’s Industrial segment.