PPG Industries, Inc. · NYSE:PPG
PPG Industries — Q3 2022 Earnings Presentation
15 slides from PPG Industries's earnings presentation, Oct 19, 2022
Slide 1: Third Quarter 2022 Financial Results
PPG employees transform 36 schools worldwide in July and August PPG INNOVEL® PRO coating launches Investment to double powder coatings capacity in San Juan del Rio Third Quarter 2022 Financial Results Michael H. McGarry, Chairman and CEO Tim M. Knavish, COO Vince J. Morales, CFO John Bruno, VP Inves
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. You can identify forward-looking statements by the fact that they do not relate strictly to current or historic facts. Fo
Slide 3: Third Quarter 2022 Financial Highlights
Third Quarter 2022 Financial Highlights Net sales • Selling prices +12% (~18% 2-year stack); foreign currency -6% up 2% • Sales volumes decreased 3%; slowing demand in Europe & China • Order backlogs continue ~$200 million: aerospace & auto refinish Adjusted earnings • Raw material cost inflation pe
Slide 4: PPG Third Quarter Net Sales
PPG Third Quarter Net Sales ($ in millions) $5,000 +12% -3% -6% -1% 4,468 $4,500 4,372 $4,000 3Q'21 Price Volume Currency Divestitures and 3Q'22 Russia wind down PPG Y-O-Y Net Sales Trend Selling Price Increase Progression (excluding currency impacts)* vs Last Inflation Cycle 2 Year Stack* Last Cycl
Slide 5: Supply chain and manufacturing disruption trends
Supply chain and manufacturing disruption trends 4Q 21 2Q 22 3Q 22 RM Inflation 2021 – Q3 2022 vs Prior Year 1.0B Raw material Ongoing Continued Severe shortages Cumulative YTD ‘22 availability improvement improvement Logistics Minimal Continued 0.9B Severe shortages (Truck availability) improvement
Slide 6: Performance Coatings 3rd Quarter Highlights
Performance Coatings 3rd Quarter Highlights $MM (USD) 3Q22 3Q21 Chg % • Selling price increases of about 11%; and 15% on a two-year stacked basis Net Sales 2,705 2,758 -53 -2% • As forecast, lower Architectural DIY (destock) & protective & marine (China restrictions) demand Segment Income 362 408 -4
Slide 7: Industrial Coatings 3rd Quarter Highlights
Industrial Coatings 3rd Quarter Highlights $MM (USD) 3Q22 3Q21 Chg % • Selling price increases of about 14% and ~20% on a two-year stacked basis Net Sales 1,763 1,614 +149 +9% • Segment margins improved 200 basis points sequentially Segment Income 192 140 +52 +37% • Auto OEM production levels remain
Slide 8: PPG Comex – strong organic growth trends
PPG Comex – strong organic growth trends PPG Comex EBITDA Growth 2017 – 2022E Commentary • Organic sales growth of 40% since 2017 350.0 6000.0 • Expanded footprint (low-cost base) 300.0 12% CAGR • 3,700 locations pre–acquisition to >5,000 in 2022 5500.0 250.0 200.0 5000.0 • Leadership in brands & in
Slide 9: Balance Sheet and Cash
Balance Sheet and Cash Third Quarter Cash and Debt ($ in billions) Third Quarter 2022 Activity and Liquidity 3Q 2022 approximate cash uses $8 • Sequential working capital decrease of ~$100 million; ongoing focus to $7 6.8 6.8 reduce inventory levels • Capital spending: ~$100 million $6 5.5 5.7 • Div
Slide 10: Fourth Quarter 2022 Financial Projections
Fourth Quarter 2022 Financial Projections ($ in millions unless otherwise stated) Category Projection Total company sales volumes (YOY) Down a mid-single-digit percentage *Adjusted earnings-per-diluted share $1.05 - $1.20 Divesture-related net sales and Russia net sales ~$75 (recent asset sales and
Slide 11: Tikkurila Acquisition: Delivering Sustainably Advantaged Solutions
Tikkurila Acqusition: Delivering Sustainably Advantaged Solutions The share of waterborne paints as a % of PPG Tikkurila’s net sales from architectural paints Percenatge of 89% ecolabeled products 48% (2021) 84% 83% 83% 82% 78% Percentage of waterborne paints 89% (2021) Over 350 third party certifie
Slide 12: Additional materials and appendix
Additional materials and appendix
Slide 13: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation $ in millions, except EPS Total PPG Third Quarter 2022 Net Income EPS(a) Net Income from Continuing Operations, As Reported $ 329 $ 1.39 Business restructuring-related costs, net(b) 34 0.14 Acquisition-related amortization expense 30 0.13 Adjusted Net Income Attributable
Slide 14: Historical ROS Segment Margin and Adjusted EPS Excluding Amortization
Historical ROS* Segment Margin and Adjusted EPS Excluding Amortization $ in millions, except ROS % 2020 2021 2022 Performance Segment Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 ROS Margin, As Reported 13.5% 17.5% 18.9% 13.8% 16.0% 16.6% 16.5% 14.8% 9.7% 14.4% 12.4% 15.2% 13.4% Amortization 26 21 22 23 9
Slide 15: Thank You For Your Interest In PPG
Thank You For Your Interest In PPG Contact Information: INVESTORS: John Bruno phone: +1.412.434.3466 email: jbruno@ppg.com MEDIA: Mark Silvey phone: +1.412.434.3046 email: silvey@ppg.com 15