PPG - Earnings call transcript Q3 2021

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Operator

Good morning. My name is Jason and I will be your conference operator today. At this time, I would like to welcome everyone to the PPG Third Quarter 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. now turn would to conference I Bruno. John Instructions] like the to over [Operator

your conference. begin may You

John Bruno

Thank and to interest in XXXX you, your results PPG appreciate Jason financial and good morning welcome call. you conference our quarter We third everyone. continued

call Morales, Joining Vince Michael McGarry, Officer; Vice President and PPG Chairman me from are Chief and on Executive Officer. the Senior and Chief Financial

on relate Wednesday, released markets after comments US information to financial XX, October closed the XXXX. Our equity

the commentary on opening and additional of accompanying for We Investor have on slides available Center the comments website, slides also this posted shortly. make the The ppg.com. brief detailed will support to provide our presentation site Michael call are and webcast

GAAP a actual Q&A Both commentary cause perspective performance. under this comparable to may their discussion These to statements non-GAAP of prepared has is on measures. reconciliations financial updates in company subsequent call operating This measures. the of may no forward-looking appendix these session. during uncertainties company’s presentation on materials, and risk, and events directly financial financial management’s view forward-looking most potential available company’s the current the effect differ. financial the are which on the results the our to statements. PPG’s and non-GAAP statements, quarter, future provide reflecting also contain these for The presentation provided obligation The the which of Following contains to certain move company results website, measures to we involve will and

PPG’s filings For with additional the to information, please refer SEC.

CEO, and introduce Now, Michael PPG Chairman let McGarry. me

Michael McGarry

quarter some earnings you everyone. we supplement I detailed comments call. last financial to and I good our like would Thank provide morning to evening. you, released the results to will welcome XXXX third John

operations sales net billion For share continuing our from per nearly record $X.X third quarter, we $X.XX. and were adjusted achieved earnings of diluted the

and impacted As chain by sales we cost inflation. significantly were adjusted and disruptions worsening increasing our communicated raw September, supply EPS in material early

raw XX% inflated the costs by material in about Our quarter year-over-year.

coatings we than history. We're higher also For these in context, have three level high than realization more selling the previous this of inflation to material due increases. is mitigation rapid are peak incurring inflation with price Commercially, our realization costs and outages. times reporting efforts nature of any X%, due logistics In sporadic significant our taken the is raw in experiencing costs elevated increased manufacturing segment. to about structural through aggregate, recent Industrial selling price price about X% implementation

than the have faster inflationary underway. disruptions further expect Our customer our Coming production $XXX about impact we supply million. that chain initiatives price much pace cycles and and capture would pricing by previous into is quarter, sales we the

was actual than more impact However, $XXX this million.

in markets. depleted inventory Additionally, from and our strong many completely this prevented us further order of retail our end-use books fulfilling

below XX% about coatings peak above-market performance, strong businesses, strong and service current automotive delivered several our our and be to much of in lows will a the We recovery. deferred conditions in this OEM situation current US had expect into OEM range. And challenges, technology. prior capabilities protective of expected To in packaging will is our driven XXXX, and elongate record And Despite be global mid-XX-day the automotive XXXX. industry demand put this inventories refinish, the these in marine, historic levels. in production by global dealer perspective, particular, automotive the advantaged including

year-over-year quarter sales XX%. organic Our than of Comex business more achieved sales record with growth PPG third

We levels improving base. new continue returned base More with XXXX architectural XX% demand In expand sales experience many third generally, coatings our impacts. savings to sales business addition, total our home XXXX. than as $XX state by wins continue trade about notable the the management, by structural delivered our growth XXX cost DIY lower closer US This sales ongoing percent our of being globally last growth a on in million remain quarter. of architectural points digital is we incremental driven sales delivered cost programs customer quarter by our a we savings SG&A basis the increase and we as an focused on our was as evidenced is to coatings as painter which and year percentage to supported third execution same-store our being sales of after

also savings target to progress our make good year for quarter. about XXXX acquisitions the on quarter, for continue overall We million. to contributing of full recent integrating track the five we our In continued $XXX our earnings and to

supply top delivered line larger good challenging and two acquisitions, the results despite Our constraints. Tikkurila Ennis-Flint

deliver maintain expect strong about net We multiyear including delivered and We million. our management we operating and quarter million by debt end, of sequential full reduction to $X.X billion year on cash our the basis. percentage continuing during last cash achieved change of year step equivalents supported about the are of for synergies continue had of XXXX. cash at to capital positive $XXX our once flow improvement and as a again $XX them This strong the working at lows an was by of aggregate quarter of sales

we'll continue stock deals debt reduction. While continue are to we evaluate we to in accretive our initiating repurchases in will fourth quarter, focus the pipeline, M&A and on

the quarter the quarter to power Carrollton, happy Also Texas cash our enhancing generation seasonality announce an with renewable based is of As we with Constellation year. support in businesses, of to manufacturing fourth on our typically were our of our the agreement during quarter, ESG Energy energy. the XXX% strongest further facility program, a reminder, solar

meet science-based we diversity communicate is PPG's which Equally XXXX. to important report very of to in our will continue market-leading We sustainable products enable their our climate customers are also working and developing ever sustainability goals. on both targets, respective first

provide will quarters. on updates to We initiatives continue on subsequent these

the growth thermal importantly, Envirocron, the for plus that battery electric R&D innovations BFP vehicle XXX SC innovative awards Extreme in In fire with and XXX of the recognized The battery Magazine R&D year over the addition, I'm Protection including Even packs, XXXX. pleased vehicles, thermally we services the protection past events are initiatives yesterday, that more dielectric dielectric providing PPG which technologies honors three runaway powder conductive coating, XXX fire announce three earned conductivity. to and for protection extremely World thermal awards. protects R&D most and occupants from were mitigate two

Our makers. maker dielectric car powder has fire already commercialized been a and in product battery launch world's of leading our the by by will one EV largest protection XXXX

have demand modest to we've Moving improvements in disruptions to experiencing. levels. customers Many order anticipate continue to indicate of our In are and evidence been the than we supply normal books only that are that solid outlook, inventory levels the to we aggregate. at lower near-term, high our their continuing

fourth availability Our both compared China be the issue estimate XXXX. $XXX to for shortage by about curtailments incremental fourth chronic semiconductor of chip approach add quarter unfavorably our sales operational $XXX the inflation are is our in may that pressures to and in supplier capabilities. production expect expected we the million and million and to to Recent XX% inflation, quarter, impacted to

of As inflation we early securing offset price in additional our businesses are a cost now result, all part the selling expect material fully increases, XXXX. raw to and

to commodity believe rapidly assurance strongly consistent normalize. supply further by chains more our sufficient raw continue across normally groupings. procurement qualifying a We continue as there year's in of conditions supply to supply more operating and chain supported to are global expect a disruption, regional capacity by operate we end, Absent available any normal forward, our and further we material seasonality additional, suppliers trends. To going provide assistance key variety is

supply the coupled product these continued increases expect in existing early supply beginning in in with chain, availability, improvement provide ample We will XXXX.

I predict, XXXX. very remains While optimistic to catalyst the current specific environment growth about our remain difficult for

we where about we supported of and coatings, which by have expect pre-pandemic Technologies. sales in refinish, automotive Specifically, aerospace broad recovery global continued account our Advantage collectively for XX% OEM businesses

make growth to us to the world, happen We expect Thank our in acquisitions. for This remarks. dedication year-over-year rebuild reasons our thanks are continue stakeholders but protect in capture prepared measurable to dynamic in our our XX,XXX to end-use closing, is synergy the recent Specific today further our more markets. many count than from beautify future. employees commitment in your XXXX and and our Their be are world. PPG. why our customers, to many of you due we who concludes around can of In these times, it PPG confidence a well earnings and continued on communities and positioned and the inventories

Now open Jason, please the would you line questions. for

Operator

Thank from go you. comes Chris [Operator Our question Parkinson Instructions] Please first Mizuho. from ahead.

Chris Parkinson

segment there industry, are be the raw in the start much. obviously, what going are we you. in very as at of material input on these then well terms affecting XXXX? been of So If just months, we it, you Thank as as can but also, on how Thank any aspect Great. shortages appreciated. And you the approach there, changed in views offers a there's anything particularly shortages. lot general level? differences offer would Michael, your results the past variables confidence? XX of What's greatly inflation

Michael McGarry

would traffic our our chips are surprisingly, like Well, like some there our solutions materials, and, more Industrial and are people say, OEM than business, levels, appliances that. in I heavy-duty the these of because realize of equipment, starting the course, architectural, things most with impacted, Chris, a electronic quite segment automotive other Coatings, things lot

quarter their interest were sort supply see suppliers' to And most in though best weak the I adequate fourth those businesses obviously, do to should give to time that. them it's What is, impacted. So our seasonally chains. out continue

Now right of the now. an flip extremely demand side large is we backlog have

in that the anything fourth to going they we're can ship. So make quarter,

very feel good we about So that.

bit more chain we've As supply been and issues. about a you probably the right know, little pessimistic

in, the quarter. have fourth challenges of on the put we we an so, further And in expectation like said call,

Chris Parkinson

building how the touch And That's step obviously, also is of XXXX much. chain and and just the sustainability fairly own When look topic, in can creating volume you recovery Thank perhaps your you perhaps thinking noise on and a on customers' demand very maybe both in the own take you order refinish on of aspects touch a second into within books, are staying industrial lot supply terms strong seems helpful. momentum job outlook, XXXX kind just disruptions, packaging. even of one it on and in kind at your of just for XXXX the about the of you're half. And back, the very quickly the and aero? then general auto,

Michael McGarry

mouthful. Well, a Okay. that's

you are the cars OEM. as in million month the probably less typical auto is. we're Clearly, in Inventories inventory in if than with range. from Let's U.S., X.X where look well. down XX-day They're start about one the at China

fleets, to XX as you not they typically just in think fleets, able what supplement need. about short that's fleets Europe has rental So well. they not been days general, have. less but And than when they're

every in out OEM refinish significant because up up would the from in, that also demand come you, I the tell driving we when comes there's can inventory up. there. collisions in the tell side, little very standpoint. and And demand country, and So always comes lockdown's chain from there's

that guess, And strong also strong small see being I order would so, a see tell finally, aerospace, then, And we I you positive. the on from books we plane.

you builds to Once And planes. now travel, better. and bigger some MRO get I XXX is we up. going are Europe that improve building more open, will to start come and is bit little to expect Boeing AXXXs getting monthly. the see Airbus So MRO to expect international back even a then improving

and So even on XXXs our XXXX better. of XXXX for catalysts you get if building top strong our start then catalyst are that, for then

Operator

Ghansham from go The comes question from next Baird. Panjabi Please ahead.

Ghansham Panjabi

a China I guess a out of led macro was slowdown. COVID, year. the recent everybody. data sort economic of the of Good some morning first China recovery past back, over in, bit global from are also headlines first stepping the Subsequently, and you. the of quite out confirming Thank

I you. So, do next these how first that thinking in impacting real-time cost quarters? region inflation Second, to couple current you broadly, off, of Thank of you recovery what next guess, the bear the see more years evolving about are expected occurred? couple over Michael, increases? And consumers massive you will all are your cycle have given on over ultimately just how a China the seeing basis the

Michael McGarry

first. Well, start with Ghansham, let's China

think I the maybe aren't. of aware maybe other on folks this, call So, some you're of but the

Our plants today, shifts in typically them, are not most of all China them three. two running run

issue energy per to We're position the well that's where control consume And good to trying very the energy off hours. as a dual so amount to run of hours able consumed China they're in cheaper reduce energy and the unit. be as happening in the off

helps demand us that from as down that is from lack raw it is from right in materials China So, but standpoint. much of now, as Industrial demand. it's

project the in big, fact, we're negligible for market almost very say, As I not you would architectural. know, in

So, the and Electronic challenges are business shape Bakeware Kitchen business, not But Automotive us Materials business, in all in good standpoint. from that Industrial market going to our our hurt are there. our really over that

double-digit business, demand. kind Packaging Our of

with, short-term think are So, the there. about manage I the higher I I long-term team you both prices us think and has say, help It oil if it's the would $XX $XX. a and feel is good can about what over high start let's higher. first China, we average, not challenges that $XX Well, When number. marginally -- say only through would have been that be is, today, historically I the say I is

a think to our consumers have strong continue I to be able from structural demand. cost going So, perspective, to are

about worried not I'm So, that.

Operator

go ahead. comes Our next question from UBS. from Roberts John Please

John Roberts

are, bigger changes than comment a increases Because the price a little large so your by it price it's key Maybe companies. some the getting you. by or the you bit and is Thank where just Michael, so prices? the we're on region between normal of different year-over-year these differences or happening different timing resulting and differences, in maybe are peers application divergence quickly, between

Michael McGarry

let -- peer report our for and We price with reported me all our way just businesses. John, the Yes. it works. basic start we

you account. when one the at that's mix, thing into take look business so And to

The geography. other thing is the mix by

if So, for impact going you. that's quarter increases. a our row a percentage geography a of and that large importantly in price has have more to us, But on in are we XXth hyperinflation, you

increases we're top So, increases. stacking on of

is well ultimate make is inflation catch this where great I might are thing about thing. we a not important I the would reported as job. you at that's end probably to up I is margins. and trying somebody say sure be our think look to us, you procurement as And way one or So, the And most whether And the margins. think might other goal doing think for is team

have qualify to raw people hired us We help materials from additional that standpoint.

good competition a so pretty shape, I a And think, from in we're wise.

Operator

Koort The go next Bob from Please question ahead. Goldman Sachs. from comes

Bob Koort

go I’m elevation Michael. you the chain mentioned run but as Thanks through rate issues curious, cost the you the on supply side. some still quarter, that in could moderate obviously,

seeing that you you're tangible starting majeures improves is seeing? it see or that are that force what hope quarters, you there it some anecdotes lessened, to So through maybe gives already is some the some you're

Michael McGarry

in IDA had then majeures. ones two. QX, way all quarter. XX quarter answer fourth that due I XX we early, would two three was And to the question Well, Bob, been there's is, And in had the then in And only only added quarter force one have all we we issues. That right? the new in the added

know industry; they suppliers the pace I've sell, win. the know at on we're a force they And I would majeures continue to going number commodity of know And we of has chain. consolidate they these out are going is them smoothing can to So our to you and supply improved. levels, the what focused tell I know to we're talked

within limits And out force protecting of there as much can they majeures. the PPG the been so as they've

force these majeures the fourth decline see starting I in So to quarter.

think starting going so XXXX. in a we're And much, much early place to be I better

Vince Morales

this And opening Vince. is see downturn demand Bob, Michael for Seasonally, in commodity significant comments. mentioned Mike we in raw a materials. the

will rebuilding allow this catch-up maintenance, in in terms to some of So inventory. do terms of them

a we entering tangible well So as has XXXX. feel that benefit do

Operator

Please Fargo. go Wells from Sison Michael from comes question next The ahead.

Michael Sison

confident are And it do do Hey looks think and you add billion, materials time? do think to so up place the it revenue back get supply get curious, impact in like long guys. you'll curious $X to that just will the about and on how you Halloween? how When I raw you that nearing disruptions, it's over take how

Michael McGarry

Is Cleveland what Was you're… that Browns reference? that a

Vince Morales

Vince. Mike, it's

degree accurate. I think Michael Two here one, impacting automotive lesser and big our to your the math as industrial our components chip really business. is mentioned, semiconductor a

that quarters. expect to next of couple the We continue over rectify

then half more So really, back in of of XXXX. half the we hope of and would the improvement first through now back the normalcy half in --

of part the beginning that the alluded side is largely expecting majeures force equation XXXX. to supplier in of to. commodity the other that Michael -- We're rectify The just supplier

able piece missing which be equation will and importantly, of the here. rebuild inventories customers that's supply We a to is our more

we're go XXXX. So customer in the we'll seeing throughout that back year of -- those into XXXX, inventories shortages our

and runability the So in resolved demand and around be coming we're constraints should confident chips is quarters. the issues there supply the

Michael McGarry

Mike, And I it after guess, a see surprise you jersey once Halloween. gold again black I'd finished won't saying and by us that to in

Operator

of America. go Stephen Our Byrne ahead. from Bank from next comes Please question

Stephen Byrne

Thank Yes. you.

a string quarters you're than higher? trend up of assumption in So higher a hit something a ago, than you have And a our you're it that quite even the pushed mid-single-digit be just going potentially hear like four here or Does on able about increases. be price XX% decade different on did this about reasonable here year-over-year offset whether And and mid-single-digit talking to increases? repeatable same a to of you five talking in just are decade price XX% a of ago put increases going quarter. situation view from Or your XXXX. might could a some X% about had that get being that that like end price you -- they given string I would with a or those early seem you to with raws

Michael McGarry

expecting Stephen, essentially did And higher published say quarter. than we a the the to last increase have convey we third quarter that in place. tried We're night. is we in already in would fourth I that to slides the in that

And XQ. quarter, increases matter it's be will the it the of price higher in additional as than to, in to posted going that be So, but a just there we well. rounds it's X% what first

increases is the inflation. of but the amount magnitude historic, are the of so So

this. about good very feel teams Our

of They're challenges. They we to product. customers need facing going buy raw they material facing that understand what's well number also do, and a also aware Our that but the They're level the on. it. maybe buy, challenges, not of things are also logistics they we

so up a help growth us when And confident increase historical continue I raw earnings moderate. will to put catalyst going forward. we're going continued This very price to numbers that for significant that be materials feel will

Operator

from comes ahead. BMO. Our John McNulty from go question next Please

John McNulty

dynamics. question. the versus Maybe raws another price on my just Taking one

I relief expect Is of do guess of so or to And related M&A So get up in early of of XXXX. that, working. pricing, you're worth guess takes quarter raw $XXX the some I sometimes looking material a the to about XXXX? somewhat to to of into on you the you've wheel you it all an kind first asset premise acquired start quarter. sales catch that get or to got pricing the tied third million of little time bit in as

guess, of pricing that lot. you I there's we seeing the in you to that speak phase if that a acquired the a So you're Thanks XXXX? to look maybe catch-up as can and businesses

Vince Morales

take first of Michael I'll acquisitions. position handle crusting. in a We're question, John, now the believe Yes. the are where let the levels inflation the on second part we part I'll

the XX% to constraints, we We we as are targeted inflation supply in have QX, going alluded think, to somewhat. abate earlier,

of get this again, to is high And level offset pricing goal inflation. so our to up

signs of see in given of percentages, to are certain will tightness And coming the we abating. starting in through moderate, but materials, we are now, absolute But some some starting not moderation. it's some of right the raw see, again, chain this supply and to

is most in Almost in structural gone think after majority of price increases. we've the that nature. QX. what's important is that structural I all For pricing of to, the The alluded us, vast Michael though,

We will to that XXXX. will we're that's the throughout we pricing structural and opposed those head of proper as XXXX increases changing -- unit into remain so duration as do So surcharges. to price think

Vince Morales

basis. acquisitions, The And a John, real-time increases on X%. highest price structured to going not what get program prior ever they And the a with a did analyze price structured to our achieved and have, would in regard out Ennis-Flint. to what call, to they'd program was was acquisition I

acquiring better Tim excited now increase. the significantly second improved leader was we their agenda, top and also process within days catching have first and that with already running I the but ahead put we've closed. material our up. that thing done further PPG to price feel Europe market the were quarter we in will on now, with first increase. in but we're a and legacy that We increases the We with new have on are fourth to quarter pricing. They announced we technology. And of are comfortable not also like much future us to only Knavish a not really to holds. legacy prior Tikkurila in increase come. about on Tikkurila. that They new the just architectural that, Europe, our raw increases very have Tikkurila the value when in the place We've business are Myself That processes in we were position, They creation the allow for inflation, first bring what and that good that, was the price are were them products, that

Operator

comes Kevin Please go from next question Vertical from ahead. Research Partners. Our McCarthy

Kevin McCarthy

Good morning.

Given me environment the minus your $X.XX. quarter the plus we've EPS at it was fourth that that struck in of range quite dislocations discussing, narrow all been external or

we on talk material the it think what risks if better about context, did so wondering results when or January. you you be, you those drivers could variances I you materially based or could if turns downside What And worse upside see was that potential the do today? in in that of see out

Vince Morales

XX at Kevin, a due to to We've large of Vince. couple of We've the read weeks, or year, We're we're on three so the ability the earnings into the October is earlier, least, is good weeks Hey, our read a due way good month on quarter and a fourth to got got for the fell October. this days, just most demand calendar a announcing week coatings very companies supply. in typically seasonality. quarter. but next this

said, on the That down, the that today of make of or we could some waits quarter, Michael confidence. sell. level it given again, first things can it plus being up month have as everything to just could as earlier, alluded the push we So size we

more So, raw we fourth the do to a positive be more, if get that able manufacture quarter. materials, would we are for

could logistics would Kevin, things As like that a to, raw But that materials have still there think we get there on. and some all you a be the variables, be suppress ability alluded could negative. good the we out fairly handle to other

Operator

The Laurent comes Exane next from from go question Favre ahead. Please BNP.

Laurent Favre

good on I've Yes, allocation. Nippon just capital got question the announced morning. a Cromology deal this week.

you in just resuming talked think I about buybacks QX.

So, you I sense is months? you've us can that was envelope pipeline assume the you wondering thin? for M&A in mind getting of can the buyback a overall next give for XX And got the the

Michael McGarry

Laurent. Yes,

I first So, the of slowed down. has pipeline all, say M&A not would

I the sound the that We undervalued up is buy have structurally high there. first, fact, What PPG a picked shares we paid, of would we to is, so PPG and because think there's that tell more has think company. we're In interest some about you out so price current back. prices is the been that, buyback on said going

So, that's first thing. the

also The our cash fourth cash. of quarter the is in generated lot a second we quarter. strongest for That's thing

And the -- going we're pipeline down in at acquisitions. we're buy as well pay as back we as shape good So, debt to look stock. to for

so. more than think don't complicated that, it's any I So,

Operator

comes question go Gazieva Aziza Please Next Research. ahead. Fermium from from

Aziza Gazieva

Hi guys.

your a abating, Thank on calling are for of that the into XXXX? raws but some XXXX? mentioned which in So, inflation you. concern particular XXXX XX% estimate fourth current But for the inflation for read an put products Vince could versus are you're quarter. still you

Vince Morales

let feel Yes. QX the material some We'll basket some Michael inflation at last because have I'll just look me. But talk about -- year, we have in excuse year macro, handle it's in raw this and year-over-year again, aggregate, the I'll when didn't do specifics. or we we crusting.

raws, So, hold some you talked some on the as absolute into go please? specific, XXXX. comparisons. will But year-over-year there'll we Michael, can we feel, be prices

Michael McGarry

the a in were and run their there that. would couple have I as I'm than raw more been epoxies, particular you Aziza, because purely items Emulsions, inability was to due are impacted month isocyanates. three a suppliers the attention particular, of emulsions, Ida suppliers that elevated the plants. paying to material by to Yes. down to impacted that of It due well tell

anticipating on we And that get will into rates, in that seasonality, I'm isocyanates, to one. The the so they're quarter force fourth the That to the some especially from as majeures be down demand back moderate once and some in we have pricing normal that stress I come they and very will pricing, epoxy, will so of back start think, relief. think, that's some off, with in And the provide will near-term. did I coming an China, area.

those the are to. ones paying attention So, I'm

Operator

is Markets. next Arun Viswanathan The from go question ahead. RBC Capital from Please

Arun Viswanathan

Great. for my question. Thanks taking

here. question Just a two-part

first So margins. on

next year? I there that on wondering, how Just a from about there, those call And have two there's out structural a know recovery reduction and But was disrupted disruptions Is EVs chain could robust. volatility, be that raws. versus should areas I just we special and demand, on as transitory? as secondly, you or or then curious your is impacted? buckets but been supply comments been specific anything called depend that anything Have out? think some have you obviously, it lot of margin that far you been beverage on would standpoint to it's those cost Thanks. going have just cans, on price that capture

Vince Morales

the Michael side here. handle commercial margin I'll the question, and I'll do Yes, let

in to through XXXX, January out that number expect that have in we'll call. savings the savings active would range. do a fourth And our the have that. are give give that on them outlined additional XXXX look execute for you part in more earnings way restructuring we we'll program. we're that at we actions -- quarter previously January. in an against on $XXX We million numbers again, of projecting obviously But the continue we If on -- program. as We're

number importantly the synergies. additional to More give XX base. to and opportunities synergy out acquisition. in are months year, we capture do a We elements idiosyncratic an expansion typically But on next two have Again, margin the structural start after cost realize to those January. for PPG, XX we'll

Michael McGarry

then, you night in projections improving at expect And want of don't this are. virtually XX% And than one company by obviously, says government the I performed Tesla if it producers though would XX% on be rate a the I tell dead there's how they XXXX, you EVs, what about even last I'd largest particular to their yesterday, Arun, they tell the serious very all when said you, they know global it saw you are EV faster current the EV guys reported. by saw of China, XXXX.

is in the that So there's up to continues actually in build. I've From plants. EV continue momentum of beverage, double-digits number We're and strong. of to be the going count lost the to beverages, --

I fair plants or in think And process coatings. plants space. being that winning in our those the are than new And we share there's of XX are built. a will of new either beverage XX our -- more need lot that

So plastic beverage I people containers. strong away continue recyclable single-use from shift be anticipate beverage to as into to

to be play. for sustainable a long-term So looking I'm that

Operator

Our Bank. question comes ahead. go Please from next Deutsche from David Begleiter

Unidentified Analyst

impact how the IHS for talk Hi. Thanks. much below This you is from forecast? about Can of in why EPS auto is David that build forecast Dave. an lower here QX? And Horn you're [ph]

John Bruno

Yes, thanks. Bruno. is John This

forecast, and the velocity accuracy. don't recovery do fourth just the XQ come into going things been into for has of in IHS forecasting everybody, think see remind We I more quarter. improving. IHS out XXXX. improvement the we've We of ahead terms see gradual that see PPG of I So We is a XQ, below and

Operator

The question Please Northcoast Kevin Research. Hocevar from go ahead. comes next from

Kevin Hocevar

Hey, good morning everybody.

type paint levels. demand being DIY mentioned You XXXX to back

And -- is been think think that of because -- what's or forward paint? to do there has forward. been going you chain were you issues back, robust XXXX your there So, supply for and mean, is do so you yes, demand how the see there of DIY underlying I to just it thoughts are curious And things pull I'm holding demand? that that the back

Michael McGarry

more and just see still not that like it. bare have you'll for Yes, shelves into moving than you a Kevin, it's But It's back challenge getting paint enough are. XXXX. a go Home a if is Depot, toward there right would I our they're mean to above lot now. how paint actually, Certainly the partners. out there's

working big needs. box meet our to we're hard customer So, try to

there's more So, I chain actually think the potential there as that upward normalizes. do supply

Operator

Seaport Harrison from Partners. ahead. Please comes go next from question Our Mike Research

Mike Harrison

I morning. us give OEM if the space. update you could within on competitive was an good environment Hi, wondering the auto

see discipline can OEM All share market? of you are auto shift do industry talk and about this And customers suppliers any you you hurting, are coatings environment? on the into pricing maybe going Thanks. in that hurting,

Michael McGarry

Yes.

in more guys US in the place, better tell the plus Asia. That So, Mike, a there's still car historically America, Latin a is than bit and Europe surprise and is challenged little and XX discipline I would us. Asia. it's difficult you that doesn't China in

there's So, we new locals time competitive little us, the for what tell any plus get all a the hyper and out is, there's that an global bit and the might more roll from I finest quickly would in lose raising competitive all so because appearance out price, performance standpoint. very the because the some we market attention. But programs that to punished for programs you technology share, there as they they put have back newest to compete it on get

about that. doing. worried price and not to been much team that's too what I'm continue the pushing raise to appropriately We've we're So,

Operator

Morgan go The next Please ahead. Steven from comes Stanley. question Haynes from

Steven Haynes

Industrial I my double-digits. potentially pretty seems It into could if for bit wondering Hey was thanks market. your packaging strong, was question. maybe go by you taking on segment detail pricing in more end a like the

So, be just there any additional helpful. would color

Michael McGarry

sure Steven. as Automotive, it as with to is tell would more we've -- positive in Packaging. Industrial strong And not detail, posted you I level want than positive these the price should one-on-one, I our had X% in that What the into are conversations Industrial. We remain. well I'm that's way of get think I and customers

Operator

comes Fischer question Please Barclays. ahead. next from from go Our Duffy

Duffy Fischer

get the Maybe been Chart to What businesses difference it buckets? the look X, your the that's two margins XX% Hey that that revenue. acquisitions, it if saw the out harder the seasonality of of XX% and talk on And has in you the margins lower struggled three chart good morning would XX% between on PPG, one those of you lower where questions, you is volumes? volumetrically. Then about your can I On has seasonality sneak those price Can break the been volumes, of kind what like? the that in PPG because chart guys. you off the in. showed that

Vince Morales

Duffy, Let that's think with just, me now. start I'll I start the The relevant right first -- well, because question. XX-XX with the more question,

that the up of that it, seen let's are the businesses volume They as by We've businesses. If Two of versus big performance. these is the in are in pricing. look typically are low for very -- They're XXXX, teens value X%. the XX% segment the of terms evidenced technology. down technology-rich pricing at the good you businesses. down, pricing fall call Performance very businesses businesses the command question, these XX-XX

automotive have is impact they're So segment. The biggest business to going business industrial. an the on in our

again, have, on it's impact pricing. aggregate the So an going to outsized

it's but capturing differential we're again, not portfolio, across So the pricing -- XX-XX. collectively and on the based

Michael McGarry

fact say, the not getting down And would prevented us they're has Yes. I that Duffy, price. listen, from

So we Refinish, price. had historically we've know, price than This in more increase as one were Refinish. year, annual an in you

on get as business that So so can would it’s get price so side, clearly of coating that prevented aerospace spec-driven and actually Hilo to pretty MRO the is side would very to from not it's definitely good. a very has know, provide, guys we more. a ability The not our like then Automotive they And technology-driven prevented you every would it. it. – so automotive has and and business the like

impacted either. been that has So been not

going for in a be look these year. XXXX, I contributor the strong next certainly businesses when to catalyst to earnings the are increase at for So,

Vince Morales

see we from this seasonality. of the sales the put of last terms in the we the In evening, acquisitions, distributed appendix did materials seasonality

You would a have cost expect are and especially fixed it's accurate more that that pronounced. architectural. base, These the is earnings seasonality businesses even

the of end So peak. there's sales the do -- peak And less either leverage get the quarters leverage quarters. more on on more on sales certainly you there's leverage

more next didn't we'll QX definitely that XXXX, So we'll Tikkurila QX pronounced portion Duffy, see And earnings for of year. impact that, leverage. positive And see of in in We QX in have XXXX. reciprocal the QX. QX the vast and

Operator

next On ahead. from Research. Please Field Pandya question go Investment The from comes Jaideep

Jaideep Pandya

Thanks. I have questions. two

it Firstly, periphery next to think business sort kick we some the on European like industry, of that That's the sort for about construction wave adhesives or in growth, renovation into green for building volume think the materials. actually Europe, materials first deco around businesses paint as raw of that you speak of increased adhesives second compare you few trajectory, and and the of sort or the Do question. And of these insulation actually. think materials industry building and the of question undergrow the wave in think that the demand? penetration higher When paint of lot similar the the context building sort because is other you materials will in years. growth do slightly in of is a and really my will materials, light

in that a seeing? a think to the and Uri remain acrylic enough because So, a support other your this Ida supply lot. Thanks words, or invested year. normalizes, and utilization remain industry like have always step bit you of therefore, probably a in In you guess, other two? things guys if speaking, will issues have to basket is if your even think do acid storm growth all will suppliers you you XX% I high that these supply the products epoxy, to Fundamentally and do your lost you across take of XX% back, susceptible

Michael McGarry

Hey Jaideep, suppliers. the first is Michael. is which I'll one, this the take

I the and maintenance. think pandemic, not they the got postponed did short hampered caught year think because clearly this some they they're do required They things, the I in recovery. by

deliver we to are that wanted. has as postponed maintenance underspent, so a And impacted what their ability

would tell above interested in and now making right up they're money were good at very they're obviously, where that, that, all they reliability So, you all or pre-XXXX. their getting I

So, and cover I'll for sealants versus I to anticipate let paying this better. Europe Vince get the adhesives questions.

Vince Morales

heart capabilities, to people's when was coatings, typically, same term, these an act reduce And which opportunities think enabler as typically environmental I think of ESG like products I adhesive, longer the longer footprint. provide we question, about sealants, the think better aftermarkets the ESG, provide to Yes, your just lasting.

performance. change, the that coatings to needed So, typically technology We change and for we we're seeing to every In is. the time improvements to them case, provide in it's technology content the adhesives been it a are order EVs. able industry, environmental industry, whatever there's this typically in make get more functionality technology cover better

Operator

go Jefferies. Edlain from comes question next from Rodriguez The Please ahead.

Edlain Rodriguez

Good Thank you. morning guys.

materials materials was it question all of of addressed you've availability Like hurricanes like again, because quarter, or mostly Just you in it one seen that. the apologies the if in raw and, the concentrated in raw regions? on broad-based issues quick US already terms different was this the

Michael McGarry

Yes.

US, So, US. quarter The I'd okay? in Edlain, Ida. they from the was tell challenged what was the things you over that obviously with was buy because some is the do impacted So, worst next the most Hurricane Europe,

issue people especially were there supposed because our that edicts, the track goals. then the goals, lot to quarterly late were were was meaningful dual over September meet a got somewhat business control to on impacted but their they of in architectural So, last, in the has one government And quarterly and meet China there. that impacted, that started not

the there on they're rest get mid-September, assured those of they to to about underway starting when in target. pressure was China, lot So, almost and targets, initiatives targets. And set you going hit a control dual can

They no but So that's -- to the America. able there US, of through challenges out in material most was manage we the way were of real Latin came those.

Edlain Rodriguez

you. Thank

Operator

is Citi. from The Instructions] next Eric [Operator question go from ahead. Petrie Please

Eric Petrie

markets. Been aluminum alloys into for construction morning, good for goes producing guys. about shortages, magnesium potential which reading auto, end aerospace, Hi,

inventory still at levels in you in all China low are there worried Europe? control with So and

Michael McGarry

tell Yes. customers. Eric, you EV our our have have that now aerospace of guys I nor right out about magnesium none concerns big any put would

screen. far now, has its that head. look to so always right not raised So one that is that corner, not We're radar the currently the on trying around is but

Operator

call There are time. John to back no at turn Bruno, further I questions the over this Mr. you.

John Bruno

This interest you, Thank to our third call. for today, the thank your everyone quarter we'd for Jason, PPG. and in like earnings time call joining concludes and

Operator

today's call. concludes conference This

You disconnect. now may

PPG Industries (PPG) 21 Oct 212021 Q3 Earnings call transcript