Heidi G. Petz
President, Chief Executive Officer & Director at Sherwin-Williams
Thank you, Jim, and Happy New Year to all of those that are listening. I hope you had a wonderful holiday season and are geared up for the year ahead. I know you're eager to get to our 2025 outlook, but first, I want to take a moment to reflect on what our 64,000 dedicated global employees have achieved over the last year. I am proud of what our team has delivered in 2024.
We entered the year amidst an extremely choppy demand environment that quite frankly, never improved meaningfully. We knew this was a possible scenario and we doubled down on controlling what we could control. We stayed true to our strategy. We made targeted investments, focused on share gains and executed on our enterprise priorities. We continue to deliver innovative solutions for our customers and in a disruptive competitive environment, Sherwin-Williams stood out by being a consistent, reliable and dependable partner. In addition to the strong margin expansion and earnings growth that Jim described a moment ago.
It was another very good year of cash generation, which was $3.2 billion or 13.7% of sales. We continued to execute our disciplined approach to capital allocation during the year, including $2.5 billion, which we returned to shareholders for share repurchases and dividends. In terms of capex, we invested $1.1 billion, including approximately $532 million for our new headquarters and R&D centers, which we expect to begin occupying this year. We ended 2024 with a net-debt to adjusted EBITDA ratio of 2.2 times.
Looking at our reportable segments on a full-year basis, paint stores grew by a low single-digit percentage. Residential repaint drove the segment growth and increased by a mid-single-digit percentage. This was strong performance given anemic existing home sales and is the clearest example of a return on our prior investments. New residential and commercial both increased by low single-digit percentages in a challenging rate environment. Flattish year-over-year segment margin reflects our continued growth investments, which we are confident will continue to drive above-market sales over the long-term.
Consumer Brands had a challenging year-on the top-line with lower sales resulting from soft DIY demand and unfavorable FX. Adjusted segment margin expanded back to our target level due to higher fixed-cost absorption in the manufacturing and distribution operations within the segments. At the same time, we maintained our investment to support our customers despite weaker-than-expected volume in North-America. Performance coating sales varied by division and geography. Acquisitions added a low single-digit percentage in the year, but was offset by unfavorable price-mix and FX. Coyle was the strongest performer driven by new account wins. We're also pleased with packaging, which returned to growth as we won new accounts and recaptured the majority of previously lost share, just as we indicated we would. Industrial wood was up mid-single digits, driven by an acquisition. Accelerated share gains in auto refinish were not enough to overcome softness in core accounts, driven by lower insurance claims.
General industrial, our largest division remained under the most pressure during the year with softness in heavy equipment demand. Adjusted segment margin expanded to 18%, the highest-level since the Valspar acquisition in 2017. Throughout 2024, we continued to operate from a position of strength. In fact, our confidence in our strategy, along with our team's ability to execute led us to increase several of our midterm financial targets at our Investor Day this past August. I am confident we will achieve those targets over-time given a more consistent demand environment. As we begin 2025, I am also highly confident that nobody is better-positioned than Sherwin-Williams.
During our October earnings call, we were among the first to describe the demand environment as softer for longer with an expectation that the first-half of 2025 would likely remain choppy. Three months later, we have seen little evidence to change that view. And given the indicators that we do see, several end-markets may not improve until 2026. On the architectural side of the business, residential repaint demand has become slightly more encouraging as existing home sales have begun to show modest signs of recovery and Harvard's LIRA Index shows a return to very slight growth.
Residential repaint remains our single largest share gain opportunity and we significantly outperformed the market in 2024 given our targeted investments in sales reps, training and digital tools, just to name a few. We would expect similar outperformance in 2025. Looking at new residential, year-over-year growth in single-family starts has been choppy over the last several months. Rate cuts have had little impact and mortgage rates remain well-above 6%. We would expect to continue strengthening our homebuilder customer relationships to outperform the market.
In commercial, we've been clear that we expect completions to be soft in 2025 as year-over-year multifamily starts have been mostly down by double-digit percentages since the middle of 2023. Even if commercial starts do pick-up in 2025, which seems unlikely given a consistently soft architectural billing index. They won't turn into painting and completions until well into 2026. Property maintenance spending still appears to be idling and neutral. On the DIY side, we do not currently see a macroeconomic catalyst driving meaningful improvement in consumer demand.
On the industrial side, the PMI numbers for manufacturing in the US and Europe have been negative for multiple months, with Brazil and China being slightly positive. We expect coil to grow again, driven by significant new account wins over the past year and a continued focus on new accounts this year. We're also confident in packaging growth as we gain share and support customers' conversion to our industry-leading non-BECA coatings by 2026 to comply with European Commission mandates.
In Protective and Marine, the project pipeline remains solid, though the timing of starts remains variable. We expect auto refinish demand to remain choppy, driven by continued softness of insurance claims, so our share gains should become more evident. Industrial wood will likely track with new residential given the furniture, flooring and cabetry end-markets it serves. We expect general industrial demand to remain soft throughout the year. In summary, the market is not going to give us a lot of help this year. We'll continue to remain very aggressive with a focus on helping our existing customers grow as well as focusing on targeted share gains. Against this backdrop, we are providing guidance that we believe is very realistic. Should the market be better than we are currently assuming, we would expect to outperform the guidance we are providing to start the year.
Moving on to our specific outlook, the slide deck issued with this morning's press release includes our expectations for consolidated and segment sales for the first-quarter of 2025. The deck also includes our expectations for the full-year, where consolidated sales are expected to be up a low-single digit percentage and diluted net income per share is expected to be in the range of $10.70 to $11.10 per share. Excluding acquisition-related amortization expense of approximately $0.80 per share and restructuring expense of approximately $0.15 per share. Adjusted diluted net income per share is expected in the range of $11.65 to $12.05. This is a mid-single-digit percent increase at the midpoint compared to 2024's adjusted diluted net income per share of $11.33. We provided a GAAP reconciliation in the REG G table within our press release.
Our slide deck contains several additional data points that provide important context that I'd like to touch on here. Any comparisons described are year-over-year. From a sales perspective, I'll remind you that the Paint Stores Group implemented a 5% price increase effective January 6. We would expect this to ramp-up to typical 50% to 60% effectiveness over the next quarter. We also are implementing very targeted price increases in specific areas within our other two reportable segments. We expect the market basket of raw materials to be up a low-single digit percentage in 2025. We expect to overcome these raw-material headwinds and deliver full-year gross margin expansion. Driven by incremental 2025 pricing simplification efforts across our supply-chain as well as our Paint Stores Group, which is our largest and highest gross margin segment, growing sales faster than the other two segments. We expect SG&A dollars to grow by a low single-digit percentage in 2025. This is a more typical level for us and less than last year's 5% increase.
This year's increase includes $80 million of operating expenses for our new buildings, which will be weighted to our second-half. We'll also continue to have some operating expense for our current buildings until we have fully completed our move. As always, we plan to control costs tightly in non-customer facing functions and we have a variety of levers that we can pull depending on a material change to our outlook up or down. As we've previously described, interest expense will be up this year. This increase includes $40 million related to refinancing of debt at higher rates, including $850 million in 2024 and approximately $1 billion expected to be refinanced in 2025. It also includes $20 million of interest-related to financing activities of our newbuilding. We expect to-end the year within our current long-term target debt-to-EBITDA leverage ratio of 2 to 2.5 times.
Other general expense items are expected to return to more historic levels in 2025 and increase approximately $75 million due to a gain on-sale or disposition of assets of approximately $50 million in 2024 that we do not expect to repeat in 2025 and an increase in our environmental provision of $25 million. We expect to open 80 to 100 new stores in the US and Canada in 2025. We'll also be focused on-sales reps, capacity and productivity improvements, systems and product innovation.
Next month, at our Board of Directors meeting, we will recommend an annual dividend increase of 10.5% to $3.16 per share, up from $2.86 last year. If approved, this will mark the 47th consecutive year that we've increased our dividend. We expect to continue making opportunistic share repurchases. We'll also continue to evaluate acquisitions that fit into our strategy. In addition, our slide deck provides guidance on our expectations for currency exchange, effective tax-rate, capex, depreciation and amortization.
Finally, I'll remind you that our first-quarter is a seasonally smaller one. For that reason, we will not be making any updates to full-year guidance up or down until our second-quarter is completed and we have a better view of how the paint and coating season is unfolding. Our team is operating with great confidence and accountability as we begin 2025. As we have consistently said, it is only a matter of when the demand environment returns to greater strength, not if. And when that shift occurs, we expect to significantly outperform the market. In the meantime, we are not waiting. We often talk about how we operate, success by design. We have a clear and winning strategy.
We have the best team in the industry and we've made the right investments targeting specific markets and sub-segments. We know how to deliver solutions for our customers that will make them more productive and more profitable. We continue to have significant new account and share of wallet opportunities in every business and region. We expect to continue winning more than our fair share of these opportunities. I also am highly confident that our enterprise-wide efforts related to talent, simplification, digitization, supply-chain responsiveness and sustainability will continue to deliver above-market growth. We get rewarded by overcoming obstacles, finding solutions for our customers and delivering results. We are extremely well-positioned to continue delivering shareholder value, and that's exactly what we intend to do in 2025. This concludes our prepared remarks. With that, I'd like to thank you all for joining us this morning and we'll be happy to take your questions.
