Ppg Industries, Inc. · NYSE:PPG
Ppg Industries — Investor Day (June 2019)
57 slides from Ppg Industries's investor day presentation, Jun 4, 2019
Slide 1: PPG's Aerospace Business – Information Session
PPG’s Aerospace Business – Information Session Montreal, Canada June 4, 2019
Slide 2: Forward-looking statements
Forward-looking statements The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company. This presentation contains forward-looking statements that reflect the Company’s current views with respect to future events and
Slide 3: PPG Investor Relations "Deep Dive" Program
PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace PPG aerospace facility Huntsville, AL 2008 SigmaKalon Acquisition Overview Offsite 2010 PPG Asia and PPG Auto OEM Coatings BMW facility Greenville, SC 2011 PPG Automotive Refinish Penske Racing facility Charlotte, N
Slide 4: No financial updates will be provided during today's presentation
No financial updates will be provided during today’s presentation. 4
Slide 5: Today's presentation agenda
Today’s presentation agenda 8:30 AM PPG’s Aerospace Business Information Session Corporate and Business Overview Technology and Capabilities Aerospace Industry Dynamics Growth Opportunities Conclusion Additional Q&A / Wrap Up 11:30 AM Plant Tour
Slide 6: PPG speakers and attendees
PPG speakers and attendees Daniel G. Korte Vincent J. Morales John Bruno Global Vice President, Senior Vice President Director Aerospace & CFO Investor Relations 6
Slide 7: PPG executive profiles
PPG executive profiles Dan Korte Global Vice President, Aerospace Dan Korte is global vice president, aerospace, PPG. He joined PPG in May 2018 with more than 30 years of aerospace and defense industry leadership experience in design and systems engineering, integrated product team leadership, suppl
Slide 8: PPG executive profiles
PPG executive profiles Vincent J. Morales John Bruno Senior Vice President and Chief Financial Officer Director, Investor Relations Vince Morales is senior vice president and chief financial officer Since July 1, 2017, John Bruno has served as director, of PPG. He serves on the company’s executive a
Slide 9: Corporate and Business Overview
Corporate and Business Overview
Slide 10: PPG Operations: 47,000 employees protecting and beautifying our world
47,000 employees protecting and beautifying our world A global maker of paints, coatings, and specialty materials. A leader in all our businesses: construction, consumer products, industrial and transportation, and aftermarkets. $15.4B PPG Operations In net sales from Founded in 1883 and 47,000 empl
Slide 11: PPG's Aerospace Business
PPG’s Aerospace Business Advanced Glass Transparencies Coatings, Sealants, & Packaging Plastic Transparencies Aerospace supplier since 1927 1927 1999 2006 The Segments We Serve Commercial Aviation General Aviation Military Lightweight Reliability Efficiency An Industry Driven By Innovation Sustainab
Slide 12: An industry that's driven by the ability to meet specifications
An industry that’s driven by the ability to meet specifications Lockheed C-130: Flying with PPG specified products since 1954 OEM & PPG Collaborative Development Steps Development Supply Specify Requirements Develop Product 3,000 Certify / Qualify Fleet Size Manufacturing Site and Process Approval F
Slide 13: PPG is trusted by the world's largest aviation programs
PPG is trusted by the world’s largest aviation programs PPG Content Industry Backlog Value 2019 $US-B Airbus A320/Neo $608 Boeing 737NG/MAX $567 Airbus 350XWB $206 Boeing 787 $178 Boeing 777X $150 Airbus A330NEO $87 Airbus A220 $41 Lockheed Martin F-35 $36 Boeing 767/KC46 $23 Gulfstream G500/600 $11
Slide 14: A broad range of products & services
A broad range of products & services Adhesives & Coatings Sealants Transparencies Packaging CMS PPG 3M Akzo Nobel BASF GKN HB Fuller Henkel Mankiewicz Nordson EFD Saint Gobain Sully Sherwin Williams Wesco 14 Note: Selected competitors - not representative of entire industry
Slide 15: Technology and Capabilities
Technology and Capabilities
Slide 16: PPG's products cover the entire airframe
PPG’s products cover the entire airframe Engine High Temperature Coatings Coatings Top Coat Transparencies Aesthetics Primer Cabin Anti-Corrosion Dimmable, Scratch Resistant Flight Deck Anti-Ice, Bird Strike Protection, UV Blockage Aerofaring Aerodynamic Smoothing Fasteners Radome Corrosion Protecti
Slide 17: Our coatings provide color…
Our coatings provide color… Standard High Solid Exterior Commercial Topcoat System PPG Desothane® HS Topcoat Basecoat Clearcoat (BCCC) Chromated Exterior Primer Chrome Free Exterior Primer • Corrosion Protection Structural Primer • Aesthetics Surface Pretreatment • Solar Heat Management Chrome Free
Slide 18: Our technology improves product performance
Our technology improves product performance Brand Differentiation Heat Reflective PPG Andaro® coatings add vibrancy Solar heat management coatings allow darker colors Traditional coating system Coated with PPG Andaro® special-effect pigments Photo by Mikhail Okrochkov Our coating innovations enhance
Slide 19: Creating / capturing value – levering PPG capability
Creating / capturing value – levering PPG capability PPG Aerocron™ Electrocoat primer and coating system Automotive Aerospace PPG Pioneer (Steel) PPG Pioneer 2010’s (Aluminum) • Chrome & metal free • 90-95% material usage – no overspray • Uniformly coats complex parts (weight control) • Eliminates p
Slide 20: Our sealants provide a critical barrier…
Our sealants provide a critical barrier… Products Designed To Save Time, Reduce Rework, and Improve Quality • Vapor Barrier PPG PRC® Seal Caps PPG Seafoam™ Sealants • Pressure Barrier • Lightning Protection • Aerodynamic Smoothing • Corrosion Protection • Electrical Conduction PPG Semplug™ Sealants
Slide 21: Creating / capturing value – improving aircraft performance
Creating / capturing value – improving aircraft performance Lightweight sealant technology (PR-2870) Weight Savings on Wide Body Aircraft • Extends range and improve operating efficiency 4,500 • The Next Gen Corrosive Inhibitive Sealant 4,000 • REACh Compliant & Chrome-Free Gen I 3,500 • Environment
Slide 22: Creating / capturing value – customer manufacturing performance
Creating / capturing value – customer manufacturing performance Airframe Assembly Speed PPG products decrease customer cycle time to support increasing build rates UV cure sealants reduce assembly line cure time Pre-molded seal caps speed the assembly process • “Infinite” application time • Fast ins
Slide 23: Our transparencies provide a clear view…
Our transparencies provide a clear view… Windshield Aerodynamic Laminate Sealant Aluminum Frame • Critical Aerostructure • Crew & Passenger Protection Structural Ply – Glass or Plastic • Anti-Ice Interlayer – Vinyl or Urethane • Optics & Visibility Electrical heater film • Solar Protection & Control
Slide 24: Creating / capturing value – improving aircraft performance
Creating / capturing value – improving aircraft performance Lightweight Predictable Extend range and improve operating efficiency Reduce aircraft maintenance costs Composite windshields reduce PPG WinLogic™ sensors minimize aircraft weight by more than 100 lbs unscheduled windshield removals Our tra
Slide 25: Creating / capturing value – improving product performance
Creating / capturing value – improving product performance Current Blockage Solaron Blue Protection™ ~100% blockage ~100% blockage UVB Increased blockage over a greater range ~75% blockage ~100% blockage UVA ~40% blockage ~80% blockage HE V PPG’s Solaron Blue Protection™ outperforms current technolo
Slide 26: Creating / capturing value – levering PPG capability
Creating / capturing value – levering PPG capability PPG Opticor™ advanced transparency material PPG’s Specialty Coatings & Materials PPG’s Aerospace Optical Products Flight Deck and Passenger Windows • Reduced weight versus acrylic • Improved scratch resistance • Improved chemical resistance • Impr
Slide 27: Our packaging systems simplify manufacturing…
Our packaging systems simplify manufacturing… Packaging Mixing Dispensing Application Removal • Process Efficiency • Right Sizing • Foreign Object Debris Reduction • Contaminant Containment …and provide customized solutions that ‘right-size’ product delivery to reduce waste 27
Slide 28: Creating / capturing value – application packaging
Creating / capturing value – application packaging Semco® Glow-in-the-Dark Applicators • Reduces orphaned debris during final assembly • Made from proprietary GID formula • Excellent for use in any area where limited light is available UV Blocking Packaging • Blocks UV light, preventing UV-activated
Slide 29: Our chemical management services help customers optimize supply chain…
Our chemical management services help customers optimize supply chain… • Just-In-Time • Waste Elimination • Shop Floor Control • Critical Documentation Management Customer site shop • Hazardous Material Management floor control using RFID and PPG smartphone app to manage inventory movements 29 …and
Slide 30: PPG technology: adding value to the aerospace industry for nearly 100 years
PPG technology: adding value to the aerospace industry for nearly 100 years Investment in technology to create mutual value with customers Improving aircraft performance and operations • Lightweight and aerodynamic products • Continuous reliability improvement Enhancing product performance • Additio
Slide 31: It's a global industry
It’s a global industry LA LA AP AP USCA USCA Industry EMEA EMEA PPG supports the aerospace industry around the entire globe 31
Slide 32: It's a diversified industry…
It’s a diversified industry… OEM Aftermarket …supported by a global PPG network 32
Slide 33: That values sustainability
That values sustainability Dedicated to protecting We value our employees We value our communities the environment $3.7 million committed to the 5.6% decline in total Record low number of COLORFUL COMMUNITITES® waste in 2018 injury cases in 2018 program through 2018 33
Slide 34: Aerospace Industry Dynamics
Aerospace Industry Dynamics
Slide 35: The industry is defined by three principle types of customers
The industry is defined by three principle types of customers Commercial Aviation Military Commercial Aviation General General Aviation & Business Jets Aviation Military Fighters & Transports • Aircraft build rate dependent • Aftermarket / maintenance activity Aircraft build rates and fleet maintena
Slide 36: What's driving military growth?
What’s driving military growth? • Heightened geopolitical tension • Military spending increasing • Replacing aging fleets • Advanced aircraft Military Build Rates • Maintenance intensity 2,000 1,500 1,071 1,040 1,017 Builds 937 931 976 1,027 983 1,000 853 500 0 2014 2015 2016 2017 2018 2019 2020 202
Slide 37: What's driving business aviation growth?
What’s driving business aviation growth? • Growing / aging fleet • High utilization • Low used inventory • Higher maintenance spending 2,000 Business Jet Build Rates 1,500 Builds 1,000 800 741 689 750 693 661 667 616 655 500 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 Private & Business Aircraft
Slide 38: Commercial aviation is the biggest growth driver
Commercial aviation is the biggest growth driver Commercial Build Rates 2,500 2,064 2,164 2,164 2,190 • High backlog for new aircraft 2,000 1,761 1,839 1,627 1,669 1,724 Builds • Demand for new, more efficient aircraft 1,500 26,540 • Demand for greater passenger capacity 1,000 Growth 500 xx% • Traff
Slide 39: What's driving commercial growth?
What’s driving commercial growth? ….doubling the global commercial fleet by 2037 50,000 47,990 CAGR: 4.1% It’s less expensive than ever to fly….. 40,000 Global Fleet Size • More efficient aircraft 26,540 Growth • Favorable interest rates 30,000 71% 37,390 21,450 • Stable fuel prices 20,000 10,850 •
Slide 40: More of the world can afford to fly
More of the world can afford to fly Airplane Deliveries By Region Next 20 Years Russia & Central Asia 3% Africa 3% Latin America 6% Asia Pacific • Global GDP Middle East 42% 11% • Emerging region traffic • More cities connected together than ever before Europe 18% North America 17% Source: SpeedNews
Slide 41: And more of the world is flying
And more of the world is flying 18 million passengers in 1946…over 4 billion today 4,500 4 billion 4,000 3,500 3 billion • Growth in air travel continues in all regions Annual Passengers 3,000 • Emerging regions sustaining higher growth with 2 billion population of new flyers 2,500 2,000 1,500 1 bil
Slide 42: Giving the industry a global reach
Giving the industry a global reach Annual Fleet Size North America vs Rest of the World North America Fleet Growth 30,000 2006-2019 CAGR Rest of the World: 4.9% • Mature flying population 25,000 North America: 0.3% • Low growth in fleet size Fleet Size 20,000 4.7% ‘Rest of World’ Fleet Growth 15,000
Slide 43: The industry is more geographically diversified
The industry is more geographically diversified Commercial Aircraft Backlog 15,000 4,000 3,500 12,500 Recessions before 2008 Backlog at Year End 3,000 • Aircraft backlog reduced 10,000 Net Orders 2,500 • Aircraft deliveries reduced 7,500 2,000 2008 Recession 1,500 • Global backlog supported build ra
Slide 44: Growth Opportunities
Growth Opportunities
Slide 45: An integrated vision to growth
An integrated vision to growth Best-in-class service Focused Acquisition Process 2012-2018 growth driven by broader customer reach and increased adoption of new technologies Voice of customer innovation Aerospace delivers consistent growth 45
Slide 46: PPG acquisition history
PPG acquisition history Cuming Microwave Corp. (CMC) Specialty Coatings Sierracin PRC-DeSoto Lightweight Deft PPG Aerospace Advanced Coatings transparencies and Military primers and Le Joint Français (LJF) Complex Glass and Sealants thin film technology topcoats Sealants 1927 1999 2006 2013 2015 Tra
Slide 47: Our aerospace research centers
Our aerospace research centers Harmarville, PA Allison Park, PA Shildon, UK Bezons, France Gonfreville, France Sylmar, CA Burbank, CA Transparencies Coatings & Sealants Coatings Sealants 47
Slide 48: Our aerospace manufacturing locations
Our aerospace manufacturing locations Shildon, UK Bezons, France Gonfreville, France Boston, MA Sylmar, CA Mojave, CA Transparencies Coatings & Sealants Coatings Sealants Milan, Italy Huntsville, AL Strong Operational Excellence and Customer Qualification, AS9000 and NADCAP certified 48
Slide 49: Adding value with integrated solutions and service
Adding value with integrated solutions and service Application Support Center (ASC) • Fast response time • Supply chain management • Local support staff • Hazardous material reporting • Sales and customer support • Customer inventory optimization • Technical specialists • Designated source delegatio
Slide 50: Supporting Future Growth in Asia
Supporting Future Growth in Asia Application Support Center (ASC) • Supports COMAC ARJ & C919 builds • Supports Boeing 737 & Airbus 320 final assembly • Support region airlines Suzhou, China Tianjin, China New Singapore ASC • Support SEA region growth • Coatings and Sealants Packaging Center • Chemi
Slide 51: Our aerospace customers
Our aerospace customers USCA EMEA OEM ~28 OEM ~22 Sub-Tiers ~360 Sub-Tiers ~150 Airlines ~52 Airlines ~69 MRO ~40 MRO ~50 Latin America Asia Pacific OEM ~4 OEM ~10 Sub-Tiers ~80 Sub-Tiers ~70 Airlines ~16 Airlines ~71 MRO ~12 MRO ~45 Global Customer Profile OEM: Airplane Manufacturers Sub-Tiers: Cri
Slide 52: Summary
Summary • Nearly 100 years in aerospace • Close alignment and long history with OEMs • Technology leader with broad range of materials/products/qualifications • Continuous investment in technology, innovation, and operations • Technology incubated by cross pollination with other PPG businesses • Glo
Slide 53: 2019 Investor Deep Dive
2019 Investor Deep Dive Image Courtesy of Bombardier
Slide 54: Notes
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Slide 55: Notes
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Slide 56: Notes
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Slide 57: Notes
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