Slide 1: PPG Industries at Citi 2012 Basic Materials Symposium
PPG Industries, Inc. David B. Navikas, Senior Vice President Finance and Chief Finance Officer Citi - 2012 Basic Materials Symposium Information current as of November 27, 2012
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements contained herein relating to matters that are not historical facts are forward-looking statements reflecting PPG’s current view with respect to future events and financial performance. These matters within the meaning of Section 27A of the Securities Act of 1933
Slide 3: PPG's Transformation
PPG’s Transformation Coatings & Optical and Specialty Materials = 60% 3 8% 73% 12% 7% Optical and Specialty Materials Coatings Chemicals Glass 6% 54% 13% 27% Coatings & Optical and Specialty Materials = 91% 2011 - $14.9B 2001 - $8.2B Portfolio Transformation: • Coatings and specialty materials sales
Slide 4: Pro Forma - Commodity Chemicals Separation
Pro Forma - Commodity Chemicals Separation 9% 83% 8% Optical and Specialty Materials Coatings Glass 8% 73% 12% 7% Pro Forma 2011 - $13.2B 2011 - $14.9B PPG Pro Forma: Includes impact from announced separation of PPG’s Commodity Chemical business and merger with a subsidiary of Georgia Gulf Corp via
Slide 5: Consideration for PPG Commodity Chemicals Business
Consideration for PPG Commodity Chemicals Business Immediate benefits for PPG and PPG Shareholders; Value of consideration increased by $500MM (24%) since deal announcement Related Liabilities (OPEB, Environmental and Other) Pension Liabilities Pension Assets -230 -466 466 Value of Georgia Gulf Shar
Slide 6: Spin-off Transaction vs Split-off Transaction
Spin-off Transaction Split-off Transaction Process: Shares in Spinco are distributed pro-rata to all PPG shareholders, which shares would then be converted into Georgia Gulf shares in the merger. • Each PPG shareholder would ultimately receive approximately .23 shares in Georgia Gulf (~35.2 Georgia
Slide 7: Commodity Chemical Transaction Status
Commodity Chemical Transaction Status Completed: • Competition clearance – U.S. and Canada Underway/Pending: • SEC filings • Tax rulings • Georgia Gulf shareholder vote • Split-off exchange/tender offer Transaction remains on track for completion by early 2013 7
Slide 8: Global Coatings Industry Competitive Landscape
Akzo Nobel PPG Sherwin- Williams DuPont BASF Valspar RPM Nippon Kansai Jotun Others Source: Orr & Boss, SRI, & Company Annual Reports Global Coatings Industry (~$95B) Protective & Marine 13% Aerospace 2% Packaging 3% Architectural 43% Industrial 26% Refinish 7% Auto OEM 6% 8 PPG has solid competitiv
Slide 9: PPG Coatings Businesses Competitive Position by Vertical
U.S. & Canada, 32% Western Europe, 33% Eastern Europe, 8% Asia, 21% Latin America, 6% Global Position Arch. ~$42B Industrial ~$25B Protective & Marine ~$12B Refinish/ Collision ~$6B Auto OEM ~$6B Packaging ~$3B Aerospace ~$1B PPG #2 Akzo #1 Sherwin #3 DuPont #4 Valspar #5 BASF #6 Source: PPG estimat
Slide 10: PPG Remains a Margin Leader in the Coatings Sector
Coatings Peers EBITDA % EBITDA from continuing operations as percent of sales as reported in company annual reports (excluding unusual items); See Appendix for reconciliations. PPG Remains a Margin Leader in the Coatings Sector 14.2% 14.3% 13.0% 12.3% 11.3% 11.0% 8.7% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0%
Slide 11: Sales Volume Trends – Coatings Segments
Sales Volume Trends – Coatings Segments PPG Coatings Y-O-Y Regional Volume Trends (excludes price, currency and acquisition impacts) 2% 10% -4% 2% 0% 9% -8% 3% 0% 5% -4% 0% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% Total PPG Coatings U.S. / Canada Europe Asia & Lat. Am. 1Q, 2012 2Q, 2012 3Q, 2012
Slide 12: Regional Pre-tax Segment Earnings
Regional Pre-tax Segment Earnings* 0 200 400 600 800 1,000 1,200 U.S. and Canada Europe Emerging Regions 3Q'12 3Q '11 YTD '12 YTD '11 +15% +1% +3% *Excluding Specials Improved results in all regions despite varied regional economic conditions and weaker foreign currencies 12 +7% +10% +6% Millions of
Slide 13: PPG Restructuring Details
PPG Restructuring Details (Announced April, 2012) PPG Restructuring Anticipated 2H12 Pre-tax Savings Incremental Year 2013 Pre-tax Savings Grand Total Total PPG $40MM -to- $50MM $70MM -to- $80MM (increasing throughout year) $140MM (Upon full completion) Approximate split by PPG reporting segment: Pe
Slide 14: Adjusted Earnings Per Share Growth
0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 2009 EPS Q1 2010 Q2 Q3 Q4 2010 EPS Q1 2011 Q2 Q3 Q4 2011 EPS Q1 2012 Q2 Q3 $ per share Adjusted Earnings Per Share Growth * 14 Strong earnings growth - 9 consecutive quarters with record EPS * Reconciliations to reported EPS in the presentation appendix E
Slide 15: Cash and Cash from Operations
Cash $898 $936 $1,338 $2,011 $0 $250 $500 $750 $1,000 $1,250 $1,500 $1,750 $2,000 $2,250 3Q'09 3Q'10 3Q'11 3Q'12 3Q Cash & Short-Term Investments Millions of USD Excellent cash generation up more than 33 percent Y-T-D; Financial flexibility for EPS growth based on record level of cash and short-term
Slide 16: Balanced Cash Deployment
Balanced Cash Deployment Cash Use Comments 1) Capital Spending 2.0% - 2.5% of sales 2) Dividend 40 consecutive years of increases 3) Debt / Pension $600MM term debt due in 1Q’13 4) Acquisitions First priority for excess cash 5) Share Repurchases Cumulative ~$1.5B in 2010 and 2011 Cash Use Summary: G
Slide 17: Appendix
Appendix PPG) Bringing innovation to the surface”
Slide 18: PPG Commodity Chemicals Business Financials and EBITDA Reconciliation
PPG Commodity Chemicals Business Financials and EBITDA Reconciliation 2009 2010 2011 3-Year Average Total Net Sales $1,282 $1,441 $1,741 $1,488 Earnings Before Interest and Taxes (EBIT) 152 189 370 237 Depreciation & Amortization (DA) 40 39 41 40 EBITDA (EBIT + DA) 192 228 411 277 EBITDA % of Sales
Slide 19: Calculation Details - Consideration For PPG Commodity Chemicals Business
Calculation Details - Consideration For PPG Commodity Chemicals Business EBITDA Multiple Calculations: Total PPG Shareholder Value - Pre-Synergies EBITDA (Last Year - 2011) $2,098 411 EBITDA Multiple 5.1x Total PPG Shareholder Value - Pre-Synergies EBITDA (Prior 3-Year Average) $2,098 277 EBITDA Mul
Slide 20: Adjusted EPS Reconciliation First Quarter
Adjusted EPS Reconciliation First Quarter 2012 2011 2010 2009 2008 $ EPS $ EPS $ EPS $ EPS $ EPS Net Income/(Loss) Attributable to PPG as Reported $13 $0.08 $228 $1.40 $30 $0.18 $(111) $(0.68) $100 $0.61 Business Restructuring 163 1.06 - - - - 141 0.86 - - Acquisition-Related Costs 4 0.03 - - -
Slide 21: Adjusted EPS Reconciliation Second Quarter
Adjusted EPS Reconciliation Second Quarter 2012 2011 2010 2009 2008 $ EPS $ EPS $ EPS $ EPS $ EPS Net Income/(Loss) Attributable to PPG as Reported $362 $2.34 $340 $2.12 $272 $1.63 $146 $0.89 $250 $1.51 Auto Glass & Services Depreciation Catch-up - - - - - - - - 11 0.07 Auto Glass & Services Di
Slide 22: Adjusted EPS Reconciliation Third Quarter
Adjusted EPS Reconciliation Third Quarter 2012 2011 2010 2009 2008 $ EPS $ EPS $ EPS $ EPS $ EPS Net Income Attributable to PPG as Reported $339 $2.18 $311 $1.96 $262 $1.58 $159 $0.96 $117 $0.70 Business Restructuring Charge - - - - - - - - 110 0.67 Gain on Divestiture of Auto Glass and Service
Slide 23: Adjusted EPS Reconciliation Fourth Quarter
2011 2010 2009 2008 $ EPS $ EPS $ EPS $ EPS Net Income Attributable to PPG as Reported $216 $1.39 $205 $1.24 $142 $0.85 $71 $0.43 Memo: No Adjustments - - - - - - - - Adjusted Net Income $216 $1.39 $205 $1.24 $142 $0.85 $71 $0.43 Fourth Quarter Amounts in Millions of USD except EPS Adjusted EPS
Slide 24: 2011 EBITDA Reconciliation
Total PPG PPG Coatings Segments Total Sherwin Williams Total Valspar Dupont Perf. Coatings Total Akzo * Akzo Paints & Coatings Currency USD USD USD USD USD Euro Euro Sales 14,885 10,888 8,766 3,952 4,281 15,697 10,466 Segment/Net Income * 1,095 1,234 442 (139) 268 645 725 Unusual Charges -- -- 5 457
Slide 25: Thank you for your interest in PPG Industries, Inc.
www.ppg.com Thank you for your interest in PPG Industries, Inc. Contact Information: Investors: Vince Morales (412) 434-3740 Media; Jeremy Neuhart (412) 434-3046 25