PPG Industries, Inc. · NYSE:PPG
PPG Industries — Investor Presentation (February 2023)
41 slides from PPG Industries's investor presentation, February 2023
Slide 1: PPG Investor Overview
We Protect and Beautify the World PPG Investor Overview February, 2023 1
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 maker of paints, coatings and specialty materials
PPG: industry-leading, global maker of paints, coatings and specialty materials Diverse Portfolio *Sales *Adj. EPS *Cash Flow $17.7B $6.05 ~$1.0B Aerospace Architectural $1.7B of Continuing to Strong cash Auto Refinish Protective & Marine acquired lead in new generation: annual sales product deploye
Slide 5: PPG provides attractive investment fundamentals
PPG provides attractive investment fundamentals Attractive positioning Global footprint 1 (specialty chemicals) 2 and capabilities 3 Innovative • Customer reach across every • Commitment to investment; R&D • High functional value products major region spend ~3% of sales • Stable earnings/cash flow •
Slide 6: 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 7: 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 8: 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 9: 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 ~22% June ’19 – savings ~$125MM: comprehensive internal operat
Slide 10: 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+ 38% Refinish / growth Global indus
Slide 11: 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 12: 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 13: Coatings Deliver Needed Benefits for EV Manufacturers
Coatings Deliver Needed Benefits for EV Manufacturers Challenges Value / Benefits: • Automotive OEM ENHANCED BATTERY • Manufacturing at scale Fire Protection PERFORMANCE • Customizable solutions • Lower applied cost IMPROVED BATTERY SAFETY • Battery performance Dielectric • Occupant safety Isolation
Slide 14: 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 15: 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 Stepsglobal(2022) employee and Asian employees by 45% to 55% of non-frontline, global female across non-frontline, U.S.
Slide 16: 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 17: Global paint and coatings industry
Global paint and coatings industry Strong fundamentals • Stable earnings/cash • Growth potential • Low capital intensity • Technology and service • Consolidating industry Competitive Landscape PPG has completed ~30 strategic acquisitions since the beginning of 2015 Others 54% 17 Source: Orr & Boss,
Slide 18: Coatings geographic mix
Coatings geographic mix 7% 11% 19% PPG opportunities to expand 16% 42% in Asia and globally 47% 27% 31% U.S. and Canada Europe, Middle East Asia-Pacific Latin America (USCA) and Africa (EMEA) (AP) (LA) Coatings Industry PPG Coatings Geographic Geographic Sales Mix Net Sales Mix PPG data is for full
Slide 19: Coatings end-uses
Coatings end-uses Architectural Automotive Refinish / General Packaging Protective & Pavement Aerospace OEM Collision Industrial Marine Markings 13% 38% 38% 29% Industry End- PPG is in line with the PPG Coatings Use Demand global coatings End-Use (~$190B* Sales Value) industry end-use mix Net Sales
Slide 20: 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 #3 #3 #1 #2 #2 #1 #1 Sherwin- #1 Williams AkzoNobel #3 Nippon #4 RPM #5 Axalta #6 BASF #
Slide 21: 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 ~40% & Materials Industria
Slide 22: 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 23: 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 24: 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 25: 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 26: 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 27: 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 28: 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 29: 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 30: 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 31: 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 32: 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 33: 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 34: 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 35: 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 36: 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 • Organic sales growth of 40% since 2017 300.0 2017 - 2022 6000.0 • Added 1,300 stores since acquisition and adding traffic 5500.0 250.0 200.0 5000.0 markings to produ
Slide 37: 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 38: Additional materials and appendix
Additional materials and appendix
Slide 39: 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 40: Notes
Notes 40
Slide 41: We protect and beautify the world
PPc We protect and beautify the world”
PPG Industries — Investor Presentation (February 2023) on 6ix