PPG Industries, Inc. · NYSE:PPG
PPG Industries — Investor Presentation (June 2023)
41 slides from PPG Industries's investor presentation, Jun 1, 2023
Slide 1: PPG Investor Overview
We protect and beautify the world® PPG Investor Overview June 1, 2023
Slide 2: Forward-looking statements
Forward-looking statements The Private Securities Litigation Reform Act of materially from the Company’s forward-looking unpredictability of existing and possible future 1995 provides a safe harbor for forward-looking statements. litigation. statements made by or on behalf of the Such factors includ
Slide 3: Content Overview
Content Overview PPG Overview and Competitive Advantages Innovation and Growth Opportunities PPG Segment, Business Unit, and Other Information Appendix 3
Slide 4: PPG: Industry leading global coatings company
PPG: Industry leading global coatings company 1883 Globally Diverse Portfolio Founded 2022 Net Sales Performance Coatings 70+ 11% Countries Architectural LA Aerospace ~60% 52,000 16% Refinish / AP Employees Collision Industrial Coatings General 42% Protective Industrial US & & Marine $17.7B Automoti
Slide 5: Attractive coatings industry
Attractive coatings industry Large Industry; Consolidation Opportunities Diverse End-Use Applications Traffic Solutions Packaging TAM ~$185B Specialty Coatings & Materials Aerospace Refinish Architectural Auto OEM Others Protective 54% & Marine Industrial Strong Fundamentals and Attractive Growth Op
Slide 6: PPG: A compelling long-term value creation
Scaling Leading Positions in Attractive Markets PPG: A compelling Innovating to Enable Customer Productivity and Sustainability long-term Accelerating Margin Expansion Accelerated investment Value Creation Driving Operational Improvement off a Low-Cost Structure Purposeful Profitable Growth Continui
Slide 7: Framework to deliver Purposeful Profitable Growth
Framework to deliver Purposeful Profitable Growth To be the first-choice partner to meet customers’ evolving needs Vision for innovative paints, coatings and surface solutions Portfolio Poised Industry-Leading Operations as Disciplined for Growth Innovation Core Advantage Capital Allocation Focusing
Slide 8: PPG well positioned for recovery to deliver above-market growth
PPG well positioned for recovery to deliver above-market growth Segments Regions PPG #1 #2 #3+ Position Aero Auto US Traffic Refinish General Decorative Packaging Protective US & EMEA LA AP OEM Solutions Collision Industrial & Marine Canada Size ($B) $4B $15B $1B $6B $41B $92B $4B $21B $38B $49B $13
Slide 9: Balanced cash deployment
Balanced cash deployment $190 18% Capital Spending* 28% $520 Acquisitions Approximate Dividends Past 10 2022 Years (~$25B) Cash Uses Share (2013 – 2022) Repurchases $570 18% 36% 10-Year Cash Use Summary: $110 Grow Business ~54% Return to Shareholders ~46% Legacy of consistent, accretive and prudent
Slide 10: Acquisitions contribute to sales growth
Acquisitions contribute to sales growth Notable Acquisitions: *Acquisition Sales (USD MM) Growth Versus Prior Year 2014/5: Partial years $1,600 $1,400 2021: $1,200 $1,000 2021: $800 $600 $400 $200 $0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Acquisitions supplement organic growth; ~4% annual
Slide 11: Acquisition synergy earnings targets of $150 million remain on track
Acquisition synergy earnings targets of $150 million remain on track Cumulative Synergies by Year Original Target ($) Revised Target Range ($) Acquisitions $MM Original Synergies % of Sales Revised Synergies % of Sales 160 10% 140 9% 8% 120 7% 100 6% 80 5% 60 4% 3% 40 2% 20 1% - 0% 2021 2022 Run Rat
Slide 12: PPG has delivered significant cost savings
PPG has delivered significant cost savings SG&A % of Sales Restructuring Programs Cumulative expected savings of ~$450MM ~25%* Included in both SG&A and Cost of Sales ~24% Peer Average Completed April ’18 – savings ~$85MM Nearly Complete Sales +20% ~22% June ’19 – savings ~$125MM: comprehensive inte
Slide 13: PPG global end-use positions
PPG global end-use positions Position by Coatings Vertical Global Architectural General Protective Automotive Refinish / Packaging Aerospace Pavement Position Industrial & Marine OEM Collision Markings PPG #2 #2 #2 #3 #1 #2 #2 #1 #1 Sherwin- #1 Williams AkzoNobel #3 Nippon #4 RPM #5 Axalta #6 BASF #
Slide 14: PPG is well positioned in attractive coatings segments
PPG is well positioned in attractive coatings segments % of PPG outside net sales ’22 to ’25 growth indicators Growth Drivers* 33% Architectural +3% Global total construction spending1 Automotive PPG segments +4% Global light vehicle production2 OEM poised for GDP+ Refinish / growth 38% +2% Global i
Slide 15: PPG is positioned to drive margin expansion
PPG is positioned to drive margin expansion Drivers: Opportunity to expand segment margins above prior peak levels 1• Price / cost normalization 4 3 2• ~50% (including China) of the business portfolio poised Prior peak ~17%* for recovery – higher margin businesses 2 1 3• Lower cost structure, enabli
Slide 16: Innovation levers at PPG
Innovation levers at PPG Driving innovation across all aspects of coatings technology Customer Application Functionality Environmental Functionality Experience Innovation Levers Premium Powercron® 160 PPG BFP-SE Anti-viral and Overspray Free Compact Anodic Epoxy Battery Fire anti-bacterial Paint App
Slide 17: Coatings Deliver Needed Benefits for EV Manufacturers
Coatings Deliver Needed Benefits for EV Manufacturers Challenges Value / Benefits: • Automotive OEM ENHANCED BATTERY • Manufacturing at scale PERFORMANCE Fire Protection • Customizable solutions • Lower applied cost IMPROVED BATTERY SAFETY • Battery performance Dielectric • Occupant safety Isolation
Slide 18: PPG's Demonstrated Commitment to ESG Priorities
PPG’s Demonstrated Commitment to ESG Priorities Environmental Social Strong Governance Resilience Responsibility Reduced 160,000 MT CO2e Continued to invest $20 million by 2025 to address Secured shareholder approval Scope 1 & 2 emissions since racial equity in the U.S. via to declassify board and 2
Slide 19: 2022 Inaugural Diversity, Equity & Inclusion (DE&I) Report
2022 Inaugural Diversity, Equity & Inclusion (DE&I) Report Key Goals & Progress Achieve 34% to 36% representation Increase headcount of Black, Latinx • Conclusion Nexttotal Achieve Steps global(2022) employee and Asian employees by 45% to 55% of non-frontline, global female across non-frontline, U.S
Slide 20: PPG ESG: framework for board oversight
PPG ESG: framework for board oversight Environmental Social Governance Sustainability and Nominating and Innovation Committee PPG Board Governance Committee of Directors Employee health and safety Corporate governance oversight Environmental programs Government affairs and political activities Produ
Slide 21: Clear roadmap to drive strong results and create shareholder value
Clear roadmap to drive strong results and create shareholder value Deliver 8% to 12% Annual Adjusted EPS Growth through 2026 Portfolio Poised Industry-Leading Operations as Disciplined for Growth Innovation Core Advantage Capital Allocation Operating Cash Flow ~3% of Net Sales R&D Conversion of >80%
Slide 22: PPG's portfolio reporting through two segments
PPG’s portfolio reporting through two segments Aerospace Coatings Architectural Coatings* Automotive Refinish Coatings Protective & Marine Coatings Performance Coatings ~60% Traffic Solutions Automotive OEM Coatings Industrial Coatings Packaging Coatings Specialty Coatings & Materials ~40% Industria
Slide 23: Performance Coatings segment
Performance Coatings segment Automotive Aerospace Protective and Architectural Traffic Solutions Refinish Coatings Coatings Marine Coatings Coatings* Segment Traits 2022 Net Sales by Geography • Distribution focus • After-market and maintenance component • Consistent cash generation • Stable industr
Slide 24: Automotive Refinish Coatings
Automotive Refinish Coatings Industry trends PPG competitive advantages and ESG highlights 1) Body-shop efficiency PPG’s Platinum program, digital and service offerings 2) Emerging region: growing car parc Leading products and positions in China and India 3) Continuing technology shift to waterborne
Slide 25: Aerospace
Aerospace Industry trends PPG competitive advantages and ESG highlights 1) Recovery continues – leisure travel to recover first PPG advantaged technology and global footprint Industry leader in tailoring products to optimize customer 2) Single-aisle aircraft driving near-term growth application and
Slide 26: Architectural Coatings
Architectural Coatings* Industry trends PPG competitive advantages and ESG highlights Employing digital solutions; rapidly increasing omni-channel 1) Increasing adoption of digital tools / e-commerce engagement Leading water-based product portfolio with adoption of recycled 2) Strong focus on sustai
Slide 27: Architectural Coatings is diversified globally and well positioned
Architectural Coatings is diversified globally and well positioned Region Strength / Focus Brands • Optimized Pro offering & distribution U.S. • Digitalization and Canada • Services / Delivery • Strong local brands EMEA • Leading positions in many countries • Optimize footprint • Leading brand recog
Slide 28: Architectural Coatings
Architectural Coatings* PPG approximate sales mix 2022 net sales by geography Company Independent National Region Stores Dealers Retailers USCA 45% 15% 40% LA ~1% 90% 10% AP 15% 35% 50% EMEA 45% 30% 25% USCA EMEA LA AP Stores Worldwide 35% 35% 30% 34% 42% 20% 4% ~800 ~700 ~5,100** ~50 * Architectura
Slide 29: Traffic Solutions
Traffic Solutions Industry trends PPG competitive advantages and ESG highlights 1) Increasing road safety concerns R&D capabilities 2) Government initiatives supporting infrastructure USCA regional leader: strong footprint and capabilities 3) Safety for non-vehicular road users, e.g. bicyclists Glob
Slide 30: Protective and Marine Coatings
Protective and Marine Coatings Industry trends PPG competitive advantages and ESG highlights Comprehensive portfolio to address infrastructure segment 1) Significant infrastructure investments in many countries enhanced by VersaFlex acquisition 2) Investment shifting to renewable energy Leverage lon
Slide 31: Industrial Coatings segment
Industrial Coatings segment Automotive Industrial Packaging Specialty Coatings OEM Coatings Coatings Coatings & Materials Segment traits 2022 Net Sales by Geography • Technology-advantaged products • High quality product performance • Mix of global and local customers • Customers seeking sustainable
Slide 32: Automotive OEM Coatings
Automotive OEM Coatings Industry trends PPG competitive advantages and ESG highlights Leading position in China and the largest breadth of coatings 1) Transition to electric vehicles / mobility for battery pack 2) Sustainable solutions Low-temperature cure / lower water and energy utilization 3) Aut
Slide 33: Industrial Coatings
Industrial Coatings Industry trends PPG competitive advantages and ESG highlights 1) Large fragmented industry; many sub-sectors Broad geographic coverage and strong service capabilities 2) Shift toward waterborne liquid and powder technologies Global leader in waterborne coatings; investing in powd
Slide 34: Packaging Coatings
Packaging Coatings Industry trends PPG competitive advantages and ESG highlights Intensifying regulatory landscape: regional regulations of PPG products exceed international food contact regulation 1) coatings’ composition creates complexity for the few producers requirements which helps establish P
Slide 35: Specialty Coatings & Materials
Specialty Coatings & Materials Industry trends PPG competitive advantages and ESG highlights Customers expect increased fuel efficiency, sustainability 1) Silica products support more fuel efficient and durable tires requirements, and increased durability for EV’s 2) LCD to OLED shift in mobile, TV
Slide 36: Raw material coatings cost comparison
Raw material coatings cost comparison Spend averages about two-thirds of cost of goods sold Average Average Performance Coatings Industrial Coatings Packaging Packaging Additives Additives Solvents and Pigments Sovents and Pigments Sovents and Solvents and Pigments Pigments Resins and Latex Resins a
Slide 37: Strong and growing presence in emerging regions
Strong and growing presence in emerging regions PPG Comex continues strong growth and expansion in Latin America 350.0 EBITDA Growth 2017 - 2022 6000.0 • Organic sales growth of 40% since 2017 300.0 250.0 5500.0 • Added 1,300 stores since acquisition and adding traffic 200.0 5000.0 markings to produ
Slide 38: PPG financial hallmarks
PPG financial hallmarks Capital Spending as % of Sales Long-Term Debt Maturity Schedule (As originally reported, not adjusted for $ in millions business divestitures) Last 5 years 1500 EUR Notes Average = ~2.5% 4% 3% USD Notes 3% 1000 3% 3% 3% 2% 2% 2% Term Loan 500 0 '06 '08 '10 '12 '14 '16 '18 '20
Slide 39: Additional materials and appendix
Additional materials and appendix
Slide 40: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation $ in millions, except EPS Total PPG Full Year 2022 Net Income EPS(a) Net Income from Continuing Operations, As Reported $ 1,028 $ 4.33 Impairment and other related charges, net(b) 214 0.90 Acquisition-related amortization expense 126 0.53 Business restructuring-related co
Slide 41: We protect and beautify the world
We protect and beautify the world®