Ppg Industries, Inc. · NYSE:PPG
Ppg Industries — Q4 2021 Earnings Presentation
20 slides from Ppg Industries's earnings presentation, Jan 20, 2022
Slide 1: Fourth Quarter 2021 Financial Results
Fourth Quarter 2021 Financial Results Michael H. McGarry, Chairman and Chief Executive Officer Vincent J. Morales, Senior Vice President and Chief Financial Officer John Bruno, Vice President, Investor Relations All content within is proprietary to PPG. Information current as of January 20, 2022.
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: Fourth Quarter 2021 Financial Highlights
Fourth Quarter 2021 Financial Highlights Net sales • Sales volumes decreased ~4%; remained 6% below 4Q 2019 up ~12% • Supply chain disruptions constrained sales by ~$150 million • Selling prices +8%; acquisition-related sales +9% • Supply and COVID-19 related disruptions impacted operating costs Adj
Slide 4: PPG Fourth Quarter Net Sales
PPG Fourth Quarter Net Sales ($ in millions) $4,400 $4,200 +9% 4,190 +8% -4% $4,000 -1% $3,800 3,757 $3,600 $3,400 4Q'20 Price Volume Currency Acquisitions 4Q'21 PPG Y-O-Y Net Sales Trend Selling Price Increase Progression (excluding currency impacts)* vs Last Inflation Cycle 38.5% This Cycle Sellin
Slide 5: Performance Coatings 4th Quarter Highlights
Performance Coatings 4th Quarter Highlights $MM (USD) 4Q21 4Q20 Chg % • Sales impacted by raw material shortages / logistics bottlenecks; impacting all businesses Net Sales 2,507 2,167 +340 +16% • Architectural businesses: softening DIY sales from elevated prior year levels Segment Income 243 299 -5
Slide 6: Industrial Coatings
Industrial Coatings $MM (USD) 4Q21 4Q20 Chg % 4th Quarter Highlights Net Sales 1,683 1,590 +93 +6% • Elevated operating costs due to various disruptions (supply, COVID-19, logistics) Segment Income 105 282 -177 -63% • Automotive OEM production levels remain significantly below prior year levels (chi
Slide 7: PPG End-Use Market Volume Recovery
PPG End-Use Market Volume Recovery PPG Sales Volume Indexed to FY 2019 Commentary Automotive OEM, Refinish and Aerospace sales 105% ~60% of sales* volumes down mid-teens percent vs. 2019 100% • Global automotive industry builds • 2021 down ~15% vs. 2019 and down 95% ~20% vs. peak production ~40% of
Slide 8: Balance Sheet and Cash
Balance Sheet and Cash Fourth Quarter 2021 Activity and Liquidity Fourth Quarter Cash and Debt 4Q Liquidity ($ in billions) • ~$1.1 billion cash and short-term investments $7 6.6 • ~$1.8 billion undrawn credit facility and bank loan $6 5.7 5.5 Total net debt: $5.5 billion; $350 million lower than 2Q
Slide 9: PPG Full-Year Net Sales
PPG Full-Year Net Sales ($ in millions) $20,000 +5% +9% 16,802 13,834 +5% +2% $15,000 $10,000 $5,000 $0 FY 2020 Price Volume Currency Acq./Div. FY 2021 2021 Net Sales by Major Region PPG Currency Exposure Latin Currency ~2021 % America PPG Net Sales 10% Euro 20% Asia- China RMB 10% 18% Pacific 40% M
Slide 10: 2021 Full-Year Summary
2021 Full-Year Summary Financial and operational performance • Record full year sales of about $16.8 billion, aided by about 10% organic growth • Net sales higher by 19% in constant currencies, including selling price increases of 5% • Sales volumes were favorably impacted by recovery of certain end
Slide 11: PPG Has Delivered Significant Cost Savings
PPG Has Delivered Significant Cost Savings SG&A % of Sales Restructuring Programs 25.6%* Cumulative expected savings of ~$380MM Peer Average1 Included in both SG&A and Cost of Sales (LTM ending 9/30) • April ’18 – savings ~$85MM: largely centered around the 24.2% U.S. architectural coatings DIY busi
Slide 12: Increasing Acquisition Synergy Earnings Targets
Increasing Acquisition Synergy Earnings Targets Cumulative Synergies by Year Original Target ($) Revised Target Range ($) Acquisitions $MM Original Synergies % of Sales Revised Synergies % of Sales 160 10% 9% 140 8% 120 7% 100 6% 80 5% 4% 60 3% 40 2% 20 1% - 0% 2021 2022 Run Rate Targeting $150 mill
Slide 13: First Quarter 2022 Financial Projections
First Quarter 2022 Financial Projections ($ in millions unless otherwise stated) Category Projection Total company sales volumes (Y-O-Y) Lower by a mid-single-digit percentage *1Q adjusted earnings-per-diluted share $1.02 - $1.20 1Q acquisition-related sales ~$270 (EBIT positive; below segment margi
Slide 14: PPG ESG: Framework for Board oversight
PPG ESG: Framework for Board oversight Environmental Social Governance Sustainability and Innovation Committee PPG Board Audit Committee of Directors Employee health and safety Enterprise risk management Environmental programs Cybersecurity Product stewardship Data privacy Remediation activities ESG
Slide 15: Additional materials and appendix
Additional materials and appendix
Slide 16: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation $ in millions, except EPS Total PPG Fourth Quarter 2021 Net Income EPS(a) Net Income from Continuing Operations, As Reported $ 267 $ 1.12 Acquisition-related amortization expense 35 0.15 Acquisition-related costs, net(b) 4 0.02 Pension settlement charges 36 0.15 Environme
Slide 17: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation $ in millions, except EPS Total PPG Full Year 2021 Net Income EPS(a) Net Income from Continuing Operations, As Reported $ 1,420 $ 5.93 Acquisition-related amortization expense 130 0.55 Acquisition-related costs, net(b) 69 0.29 Pension settlement charges 36 0.15 Environmen
Slide 18: Historical ROS Segment Margin and Adjusted EPS Excluding Amortization
Historical ROS* Segment Margin and Adjusted EPS Excluding Amortization $ in millions, except ROS % 2019 2020 2021 Performance Segment Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY ROS Margin, As Reported 14.1% 17.5% 16.4% 14.1% 15.6% 13.5% 17.5% 18.9% 13.8% 16.0% 16.6% 16.5% 14.8% 9.7% 14.4% Amortiza
Slide 19: Historical Seasonality of New Acquisitions Compared to PPG
Historical Seasonality of New Acquisitions Compared to PPG Acquired Sales ($MM) Sales Seasonality 550 40.0% 500 35.0% 450 30.0% 400 25.0% 350 20.0% 300 15.0% 250 10.0% Q1 Q2 Q3 Q4 200 Q1 Q2 Q3 Q4 PPG Sales Curve Acquired Sales Curve Five recent acquisitions annualized sales of $1.7B 19 Not reflectiv
Slide 20: 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 20