PPG - Earnings call transcript Q4 2024

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Operator

Good morning. My name is Brika, and I will be your conference operator today. At this time, I would like to welcome everyone to the fourth quarter PPG's Earnings Conference Call. [Operator Instructions]. Thank you, I would now like to turn the call over to Alex Lopez, Director of Investor Relations. sir. ahead, go Please

Alex Lopez

full and Relations. everyone. interest We you quarter and Brika, conference Lopez, in is Director, welcome and fourth our Investor appreciate to XXXX good you, earnings This call. morning, Alex PPG year Thank your continued

today Tim Knavish, from Officer; Chief Chairman and President are Senior Morales, Vince Vice PPG Chief me and Executive Joining and Financial Officer.

January the financial equity on Thursday, U.S. information markets after to XX, released relate comments Our XXXX. closed

being accompanying We ppg.com. this shown have are detailed slides posted Center website, on the on our presentation Investor and the webcast which commentary of

management's we the a Following and perspective during forward-looking move on and current commentary the results, the this Both events will view session. reflecting may future contain company's statements Q&A and The company updates discussion call under provide to prepared on These which to company's statements. their performance. these risks, and to operating statements is differ. cause uncertainties potential actual to forward-looking subsequent may effect financial no obligation results involve PPG's of

non-GAAP website, The our in directly financial materials, on presentation available the also contains measures non-GAAP which are to the measures. financial measures. appendix financial GAAP of the most company of presentation these provided reconciliations comparable has The certain

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

let Now Knavish. PPG CEO, and Tim introduce me Chairman

Timothy Knavish

Alex, XXXX quarter everyone. earnings Thanks, and Welcome year morning, fourth and call. full good to our

in Before I lives collision those terrible yesterday's start, their I'd like lost air to Washington, offer to prayers and who condolences in D.C.

any ones. ones friends, a that I family, prayers tragedy, loved of and It's none affected. are loved their with had Our pray hope terrible . you and

structure a financials, of to inflection and move critical for and reporting is also basis financial of to for positive year few performance, the the our on like recasting And this. on I'd this quarter reflect behalf XXXX we fourth by go-forward changes, our new wanted to company, the to a begin Now outlook. providing full a of volume apologize our structure. point I'll and the then I'll and But guide PPG, and segmentation highlights of

Canada result divestiture, been a As as and in provided information requirements. recast U.S. earnings U.S. a has this discontinued with financial the all reflect business to Coatings of the operation consistent GAAP Architectural material

driving EPS input a continuing In XXXX, challenging operations costs. of by and team from resilience in EBITDA, led sales adjusted demonstrated aggregate in macro actions our cost products, advantage growth moderated and segment the by structural technology

We single-digit by certain gains Latin of record Coatings, share our Coatings, overall including driven Refinish strong America. sales several results in macros. percentage businesses, businesses, year-over-year Aerospace weak in Automotive and Coatings Despite low a organic delivered declined Architectural

and by and However, growth as declines we architectural Mexico solutions EMEA delivered in growth in industry China businesses, traffic packaging, OEM, industrial offset and protective our auto as coatings business. in well marine, aerospace,

Coatings U.S. which and growth. margins Architectural Canada organic a our results completed for step including to of and significant financial more and divestitures our these forward our focused higher in we the sustainable as Silica This $X.XX as year-over-year portfolio businesses. further a excludes of of For U.S. grew the was that year, operations. to $X.XX, been results allocated and which EPS full X% business fourth and optimized architectural reclassified the EPS during Strategically, certain the costs. exception the discontinued the divestiture with our of Canada reflected quarter, has divestitures operating improve Products deliver company organization, we It profile, adjusted the is company, of positions

on business we financial past and you now solutions, combine the and improvement with year across the transactions global have to When our portfolio our coatings will As our note our these that we company's impact well the margins value profile. the strong portfolio. delivered technology strengthened advantage This positions top-tier the services, in our margins. we've EBITDA of that businesses, brands, remaining our achieved performance moves said, our verticals have assign products the this trusted our cross organic reflects you of synergies customers

and this our actions that PPG. margin great are both of believe enterprise We future catalysts growth profile value for creation the

our all as we a and Given segment of of Performance reporting we'll have Coatings the Industrial Global The now the businesses the the same. report of Architectural segment the expanded our separate Coatings. remain and structure, Architectural remainder Coatings will businesses revised within portfolio, reporting segment, Coatings

This the drive as performance. expanded segmentation we provides investors growth with and enhanced company's visibility,

or Performance the positions of Our technologies reflecting Coatings and have differential Coatings strong various EBITDA year segments, at and our businesses. both Architectural Global now above full margins brand XX%

drive of weak exceptional Our us Industrial value has Each unique our macro Coatings global leveraging the technology characteristics to segment innovation, By our and increase and profitable delivered environment. deliver margin that while of customers. despite a to to segments industrial operating positioned allow deliver our XX% increasing advantage are EBITDA businesses, demand to our returns for our products growth we shareholders. distinct sustainable strengths

world-class with #X In a more XX Coatings Global strong we our in excellent position #X distribution and countries. have Architectural or well-recognized than and brands segment,

Performance base. fragmented are Coatings a focused aftermarkets traditionally customer and more is Our on various have stable segment that more

and this our digital specified Within differentiated and productivity. offer highly product customers' we segment, enable solutions that

allows our segment highly for relationships and products of expand service us understanding to their they Also, we technical as Coatings and field delivers world. customers around operate needs. our teams in with customers' services grow We our customers. facilities, deep the develop typically Industrial global Our BXB productivity which strong

environment, Marine margin XXX approximately we sales & ninth cumulative of the since We adjusted Traffic delivered of In the and Protective foreign quarter, EPS improvement margin translation. unfavorable by points XXXX. Solutions. segment and our basis This our currency was fourth have Coatings in consecutive impact quarter improvement Aerospace organic X% excluding strong of grew Coatings, despite delivered growth year-over-year, the choppy aggregate

quarter confidence currency declined In coatings the from weak net segment, market. due sales unfavorable volumes Coatings fourth architectural significantly Mexican impacted Architectural the Global foreign to primarily European consumer were in peso. Sales by translation,

services. benefited we and where in Mexico, strong our our However, from for robust is products network concessionaire demand

cost net price year. improved segment basis the volumes offset during margin year, EBITDA control full by lower and by as points For actions XX impact the our were

In the grew sales X%, Coatings quarter price organic segment, volume and with Performance fourth sales both improvements.

and performance growth. and technology strong dynamics. strong Despite approximately increased productivity Coatings demand for record backlog double-digit to the Aerospace products our as segment, $XXX other capacity sales sales order quarter with fourth continued demonstrating as million, industry gains, production improved advantage the organic the demonstrated excellent percentage well Within

of the Auto claims. in In gains a by demand added our subscription company the share lower services. gains installations XXX declined than now X,XXX adding are volumes revenue. These additional our industry with the and than that Moonwalk more than world, sales grew Refinish, technology to offset the In of benefits from XXXX, and advantage product subscriptions around linked more U.S. products for services collision more the number share total

we quarter, positive supported increasing Protective strong our & our quarter year-over-year impact. sales global in strong Segment recent in the volume growth Coatings and positive to momentum due margin volume continue. consecutive technologies to the expect and of Marine both gains. This net positive share quarter seventh fourth by and growth, EBITDA with the and fourth price demand improved was demonstrated full the year

segment, weak industry production In demand and constrained industrial soft by global was automotive production. OEM the Industrial Coatings

Europe. by forecasted lower was auto expected As and in industry production U.S. the year-over-year and OEM industry consultants,

followed the gains in that to America results partially with decline share volumes and sales were offset Latin lower and Our we demand in able trend, China.

declines anniversaries volume This declined Europe XXXX. the business. was which those is volume the in impact stability resulted Latin the raw due material moderate raw were U.S., America. declined latter will and to sales and lower based part to in the of as Industrial reached year-over-year costs Industrial reset lower their index-based Coatings on in strong material selling in production pricing. be in by XXXX Sales prices have in as offset expected regions in in Industrial Coatings recent most growth sluggish also segments in Prices partially

margin basis were lower a points and Segment control for $X.X the XXX offset partially reduced with billion. fourth cost of strong was volumes quarter actions. quarter as We EBITDA by the year the about basis full ended on cash slightly lower

$XXX repurchased which of $XXX a dividends. During X% of represented repurchases approximately outstanding million paid $XXX basis, million stock, share million and we completed our the approximately approximately we in in shares. On year-to-date quarter,

returned We in honored to return pledge dividend, combined shareholders shareholders to billion our XXXX. with we've $X.X our our cash and to

to million and remain we're creation. to strong, us we about committed driving value remains sheet continues towards Thus, share flexibility, of provide $XXX XXXX. during first repurchases balance Our with deploying financial shareholder quarter which the

slow anticipate a challenged. we demand in in global to ahead, XXXX and Europe markets end-use start Looking as remains industrial

expect production as stabilization some and indicators additional a we aircraft as key deliveries. well of basis like industrial However, vehicle on light economic global full builds year

of XXXX. macro material In economic quarter of year. expected percentage XXXX, costs this the a while already single-digit landscape macro of see in challenging about enacted inflation result tariffs, a low optimistic the flat I'm impacts slow begin in inflation material start raw we'll quarter is XXXX, and which fourth was the in raw to to for and Despite first genuinely

We expect to single-digit to growth quarter growth the slightly organic sales flat down. of first percentage for the organic year, deliver low with

than Stronger the annual results share year million segment. half more Coatings the in $XXX Industrial the of in second supported realization in of gains by our

with execution $XXX strategy manufacturing enter excellence including people, enterprise we for consolidations. and fully once million actions organic taking and Building capabilities upon decisive PPG our XXXX. implemented, commercial program savings on costs As $XX costs, with of chapter focus, approximately processes, reduce global right and the new of next a progressing with tools self-help our the elements million further growth the several further deliver growth incentives; we're include: that European will sharper in on portfolio This including to structural

will appropriate; operational investing a selective cash our M&A, excellence Execution growth; general returning to more cash and disciplined inflation. of will offset also deploy that if manufacturing deliver shareholders. for than productivity programs We'll manner, in

deliver strengthened sales these X%, adjusted half U.S. and $X.XX, XXXX year $X.XX the half expect per actions, of of XXXX. Consistent result weighted of of growth an the demand second tax. foreign in for we a EPS weakened EPS higher with full be of which will growth the our as in and As in growth, range at the second the midpoint the to industrial global represents to dollar share impact XXXX, towards currency of excluding earnings

about and excited I'm beyond. XXXX

have growth We more margin profile and sharper, higher portfolio a and future-facing focused company.

to of both returns ability driving tomorrow the and their and reinforces and productivity We For for today our growth both for improved The margins PPG success. success cost and heritage to their maintain our management to our be innovating our will profitable customers, that result organic and ensure improve committed remain we're solutions momentum growth. that higher their earnings strong productivity owners. in shareholder delivering

successful XXXX possible have would our without been the divestitures and not dedication performance of These employees. solid in

for you driving the on around world our teams continued more strong in who margins. Thank purpose organization a it every day. PPG our We ongoing Thank and to growth with to are make your now deliver much dedicated focused happen confidence PPG. you

And questions? would this concludes open And now prepared line you please remarks. the our for

Operator

[Operator lines Instructions] The with first phone John question comes we from the from have Mizuho. Roberts

John Roberts

talk win that? about major back something a new the that else Is Could to for Industrial? related or you million driving competitor is $XXX pulling

Timothy Knavish

Thanks slightly our Industrial a X for our America. I'd got time that, segments of Coatings need is and between the the et major question. are of our auto Packaging know, kind part of time, a number because wins . Coatings the as that. factories is half one piece South are Certainly than exit but wins in other of And conversion over lag businesses. the those But than OEM when a of exit that change in competitors BXB as We've the South of in other businesses, American the as Industrial segment, is an of our cetera. it spread significant longer you to big across say less well these

Operator

with We now Panjabi Baird. have Ghansham

Ghansham Panjabi

you across -- whatever more just given the the increase how in in tariffs the any to are prices on else. context just rate Can pricing just price-cost on XXXX XXXX give specifics reduce portfolio tariffs? mismatches comments this Tim, and uncertainty risk your of you slight all on unfold for us of sort adjusting of

Timothy Knavish

Ghansham. Sure,

have on basket, is based materials, which year our TiOX pretty is up which digits So tariffs and the raw inflation been that single what's throughout in enacted already is guide almost our much low epoxies. the for entirely basically in

So well as guide. our we've as those of got mitigation our efforts already that baked into

for material the -- we'll for . in standpoint calendars pricing, on index businesses raw pricing prices, expecting a single-digit to pricing low QX quarter. that's pricing, on a I'm Industrial and from flattish the be see sorry, carryover year. traditional first for scattered year, raise raw our slightly positive you'll what throughout positive company months positive of as pricing of few board. think bit have little segment, will to I material the as still full the of across when are some But is they So we're the the first then the

need and do from the flexible Now into do other we'll but or we there's baked a tariffs standpoint if and need competitive to remain in to agile that's what what's we remain to our market, things do guidance. competition

Vincent Morales

And Ghansham, Vince. is this

XX,XXX back the market to supply chain, it's loose still beyond you pull a tariffs. and feet supply at If look still chain, commodities for coatings buyer's a the

Operator

Bank. We now have with Begleiter Deutsche David

Unknown Analyst

expect It's here ] Dave. full guess to QX. XX [ for guess, Huang trend, I to to expecting segment bps bps margins QX I How you're and up margins XXX David be do you down year from in QX?

Vincent Morales

some I'll let Tim Vince. color. start and I'll add is This

tariffs those in and the As Tim, noted, our in we we QX. our just Pricing materials is coming enacted noted around have also on quarter. -- raw throughout QX, some inflation in material in

a flat year, performance in our low single-digit -- decline progress And We through also gets the volume volumes. to you have expect better. as

QX that's terms differential between of in the progression. So year and a full margin

Timothy Knavish

of Yes. margin. leverage bit of with particularly little point standpoint I a a segment. That's volume-sensitive just in add because that margin the from would color, at get on you Industrial this little uptick segment our a most the Coatings

have like half segment Industrial in, the we soft kicking very a the in second QX, of see with the volume much that the pretty you'll as So look year. in more QX,

Operator

Chris We Wolfe have with Parkinson Research.

Christopher Parkinson

outperformance? a everything was or Tim, no end back you X, about is. first how perceptions now share your When helpful? that framework, guessing, about X points represents out what those in of respective and for. getting new segments, excited is one Slide the of you've terms than macro fit gain, I'm kind just thinking because markets the would to I rates we look X been ability take just of that of growth the get step would in anything at on it it to the new particularly -- can just you PPG's into can give working on Just half market teams obviously you and But one talk more buy-side understand the grow potentially be you the are X

Timothy Knavish

Chris. Sure, Yes.

have where use business you those refined right So positions, that housing, where Architectural Coatings, good, our now a strength but Global win got we countries, in to strong could to we've we've really got -- we position, the share for growth our incremental because the you that. top then rate can GDP kind as proxies construction, of gain base on add of end of markets, the of of

the at more look And now aftermarket there that's Coatings, additional you lot our If standpoint you average. for Performance largely like an a from the got up pretty that business things on refinish a business. as launched we know, steady is advantage demand differentiated and strong to pick feel example, the for technology marine aftermarket, that we've Performance Coatings new share. in we've And

tied more Coatings, with to much industrial that's Industrial And production.

as then share follow the that. from beyond industrial production our the technologies of automotive, just So market; will baseline gains that's follow we'll fields; top the on easiest, all that and

think X different those we about how that's segments. So

Vincent Morales

if here. just Chris, couple Yes, I color of Yes. bits a add could of

technologies, picked powder, X share mentioned that including Tim our the on in industrial side, As in inorganically. Certainly, differential specified the share over in years. certain market end given past we globally, some industrial the up markets, packaging our growing position grown of we've or

that we've customer tools, some subscription digital area, segment, a in refinish recognizing And our the talked the tools brings. of in intimacy tools. digital the Coatings you if revenue addition look those the at we're And Performance lot to on about especially

rates. I the the those advantage us, differential an market that think, will So for of items some are give

Timothy Knavish

Yes. color, Chris. X of I more piece just add could If

-- And good the single example. in in down were high Claim Coatings, and claims collision far you in XXXX. shops. outperformed If that new we net U.S. refinish won digits X,XXX Performance about

think So plus about that's those should advantage our each market we how think you of in -- about drivers segments. the differentiated

Operator

have Duffy from Fischer now We a with Goldman Sachs. question

Patrick Fischer

-- So last year. your But the when look the -- for that me other right? year the you of each of year, at of this came you top year if basically XXX does this about how last number midpoint that on is guide the was for you I for year. help can shape was look XXX, hoping published look how XXX,

So it, EPS can year-over-year, you way the can us in at kind in shape of us EBIT, half, with you're but to the it second you the with the help sounds you to either of just half, X going whichever of the shape kind help look year-over-year or first numbers? want behind like more beating those be probably

Timothy Knavish

to the little darn the in in you above how behind it gave pretty first in we'll last considering then last close. new we be half, the you're Duffy, We'll comment. Well, numbers, be That's digest particularly and your these quarter all time second first half. nicely year

then it. EPS at that, of half, it's top full big the CFO in my same it it quarter, there's EPS one below of If with first second high EPS FX. And first about And the you being a especially look the of X% you net-net, the will strong the about half then for growth. operationally, Y-o-Y; weaker operational down that give details of year. biggest X% all couple gain level to operational level, But $X.XX things bring on

Vincent Morales

we night. Yes. of a Tim mentioned, flurry information provided, as Duffy, last

to years on that of pieces last is a One to the the we EPS basis. our recast for want add quarterly X

you those could Alex, numbers? So give

Alex Lopez

Yes.

$X.XX. for of adjusted Duffy, activity, XXXX, it's $X.XX; QX, QX, your as adjusted QX, QX, year, QX you QX, In last the $X.XX; $X.XX; of a $X.XX; our For QX, $X.XX, in $X.XX; the year full $X.XX $X.XX. EPS, QX, $X.XX, reference, EPS; saw year with full

Vincent Morales

we this earlier you question, at the the about talked on year, an look Duffy. if Then of shape

volumes grow shape tariffs the progress in and in as year. because at the also back QX is quarter. get some negative those look the talked and year, of of some we restructuring benefit self-help additional more interject benefit the that about see We year. flatten through were pricing enacted that in the will will volumes that actions, half and through QX the we We'll but the the as QX of cost later year. affect We'll QX. you the our in drive slightly light, we'll again, If first go

Operator

Frank Mitsch We Fermium now Research. have with

Frank Mitsch

all North So neutral indicated case? curious being accretive up think, cash, XQ, sale of that's I buyback you wind last cetera, that on with or in million et the EPS. the the the moves $XXX would Vince, on to architectural American call, the still if your I'm

And in XQ terms on almost there's of that not of the M&A right things your powder seeing the might buyback have thought that dry. in side $XXX because one would million you keep now that much indicates you're

companies have they and portfolio are coatings moves the and divestitures forth. of Some at indicated looking so that

done comments of with terms any and said is accretive, when So to of American final uses dilutive? neutral, the respect in -- the architectural and cash of when all divestiture North

Vincent Morales

you M&A? putting do operations the immediately they'll cash in again, which, in this to Yes, work -- And did They're take discontinued our that cash Tim, put those Frank, we put didn't Vince. not the reflects to divestiture. flow XXXX. receive that. take and in million in the I'll night Certainly, we're want is XX-K late a proceeds when appearing be out last those out the file committed We million. we quarter do to in $XXX we proceeds fourth the from as in $XXX the because QX, statement item, proceeds but we

Timothy Knavish

Sure.

So let be me clear. just very

consolidation the for And on there building question not industry absolutely me out targets on this add clear, of in the evaluate but May assets First what first believe the the -- tip we're but from would growth strategy some in has job $XXX an there I when we let accretive? I it of changed into that of that still on and organic us spear be shareholder you was to M&A, because machine, not happen XXXX we all, the still M&A the I and good told all part your million, And yes. answer would it's of there our are came focused is very think on very is value. that any

said that and And has there told buy of a I then So long time debt, XXXX, that we early, not back targeted first buying time $XXX million. did for started selective changed. down 'XX. you that we and was net in we back in bought QX if look we no shares back shares, the M&A XXXX, we everybody paid I

QX come expect buying good As into fully generation to shares. have we this year, cash starting another year. off We we're

leverage good or already of assets we've optionality, are right There on couple So our a especially coming now. where got is also to with market market.

enterprise of said our already One them I've growth strategy. not fit does

So not interested.

being would strong that good the the them, asset asset. our to Brazilian asset. a decide good a But we only or strong of is attractive of have It's draw were we fit a ones an #X. One conclusion. -- #X to It's not that strategy either

of So and deliver anything stock growth we look so if returns to our believe do, want a asset do that to of or assets do organic come have we're is the we and it, by to we shareholders' buying take that it we the undervalued, if decide right best right but is make price, right doesn't generating cash, can other if we whatever distract want the now, we use do building time. from Because shares. our may that we that back it cash? machine, on sure at We acquisitions any

the organization. So finally, of And it'll so all to come down time, distract the as is course, it of best not asset, use right price, the cash. right right

Operator

question comes Bank Stephen from Byrne with of Your America. next

Steve Byrne

Yes.

et cetera, to you more businesses it to, move here? what sustainable think So of rate out your growth segments do on down the as have share target do XX to and now normalized, Tim, what you road transparency you earnings X you slower get a with divested you markets and a needs you've focus and multiple? gains, growth And end

Timothy Knavish

in on that to EPS I've commitments, is to deliver this what my as of And growth X% been X-plus years we saying where it be Yes. XX% company. each now is with Steve, falls is I'll in that our consistent on range dependent macros. start first

going at X, a macros XXXX, that in you a good now we're of pretty right I to are to number. everybody front If -- be the is think, look a robust operationally, which Compared

all said on the portfolio. We growth been in company muscle. have focused of a we've drag things by exactly that ambitions. forward, distracted investing going beginning that the was you fit don't a underperforming not Now didn't the question the more organic in your from CapEx the are business high business And our right, we're

And so we're still confident that this is an X% to XX% EPS growth company.

Vincent Morales

can of Yes, at above couple if add just is segment, Vince. by Steve, X I got a look bits you XX% color. Again, or margins. This we've segments EBITDA

in So X-year obviously, has Industrial that mix as globally. grow, they segment, The -- been enforce our recession which been we've industrial will benefits. a

we as to a close most segment Tim of trough mentioned that or So our And itself hopefully trough terms that business by in earlier, that's is in volumes. think segment. volume-sensitive

go-forward differential and a we there, to back margin a at should as incrementals see So any come enhanced on it get EBITDA volume basis. return

Operator

question next with from comes Your Kevin McCarthy VRP.

Kevin McCarthy

industrial in you the this to you X-year expect improvement think of been progression the recession mentioned quarter, to out you potential that to would My be to down. And how through macro trend do uplift, the much how in Yes. of the be first of I volume Tim, question balance year? the we've volume in? implied that flat relates expect getting would

about volume your that asked relates of can us and such and what sense level give parse out of controllables to like? company-specific balance here growth kind much John as in $XXX Maybe a you how Industrial? that pickup confidence that million looks of in And the restoring share

Timothy Knavish

just quarter will be So challenge, multiple and said the a we've first reinforced. as you times

similar negative what we're trend a in QX. saw we So to volume, expecting

single expect we to full what start year, expecting year it basis a we mid-single are for the then of the certainly half. All volume is low digits, digits. low- rest about for flattish that in, positive digits we single low positive then the get -- in see second at to and You'll to on as

are the European hockey you in expecting stabilization of expecting as example, -- none Europe. we're we segments, architectural kind at far as breakdown Europe, components, stabilization -- look but are in the of not in frankly. refinish, if a not for in demand, we stabilization, the in excluding Now recovery. of frankly, recovery, Stabilization stick We're

IHS flat year. builds, Auto the for them has essentially

that the not we're It's Global in ongoing have Architectural we to those hope plus then the our runs triples and like end industrial segment big are of get key the side. about in million-or-so stabilization in a So the and share as this singles -- the Coatings and prayer some got you share not gains $XXX it's on home into we've Performance and Coatings, industrial of build opposed that. lot markets gains that

in, year all QX So in we're expecting positive the up negative in low digits, volume there. single ramping from to be then and

Vincent Morales

single-digit growth QX China. a QX. couple especially China, this in Kevin, in in Vince. points color strong I'll Yes. have of high add of is very about We did a XXXX, -- strong

So that. against comping we're

packaging. growth double-digit in had a businesses, of also We couple including

of related So some is the to year-over-year comp QX comparables. just the hard

We in second half. line Tim really second the in as just saw decline the the XXXX. half trend industrial mentioned, again, in And business continuing our globally activity of

of again, stick that the in we're hockey XXXX, So first half. half the back significant not expecting as anniversary we in

Operator

question the with now We have next Wells Sison Fargo. from Michael

Michael Sison

U.S. units and there businesses Coating, ones Industrial that? Coatings the the Performance all the to when look you For architecture, there similar run want are within of at exited I maybe think Coatings that you exit? you in business XX% or why goal what's in your you Industrial and left businesses longer you said growing, Coatings us -- your term to what's support Just that, they want are thoughts can Performance to -- for to X% on give Are PPG?

Timothy Knavish

right believe to now. in in Mike, portfolio we recipe divestiture divestitures any But that got Yes. We basis. here We other to Tim. a our win [indiscernible] out. longer-term the sit it's we've a strong business stay on no right coming right in portfolio. don't strong like additional all have as to businesses of has there's our position, today, have. announcements We we Every

about of heard to position got crushed you've a and our -- PMC, frankly, X it's it's performing. we've quarters really really refinish, those in straight We've all business got position got it. strong strong Coatings, now We've you've where Aerospace, America, traffic in prune North growth. Performance heard about businesses. a

and -- business or it's is aftermarket. -- So this almost that segment all

So we're that happy with portfolio. really

at might If those and And is lot up is as right look which X as our our high look self-help to the snuff mentioned, frankly, technology lot wheelhouse. XX-plus leverage are not today a directed industrial, segment percent you "Oh, But well, you with come at at segments. delivering with that say, trough to the Vince margin EBITDA businesses businesses, well. other volume it's at, of of and as recover a we're the things in

as index there. opportunistic All pricing, margin. X, we'll XXX Also, top have the think we up I stabilizes, and start in if anniversary -- moved actions it's in, took we Slide opportunities to you us Mike, tier that that EBITDA bps -- now

from the really with of So where standpoint. macro have we we businesses like are upside a blend we given

Operator

Your next with question Citigroup. comes from Patrick Cunningham

Patrick Cunningham

On be the Architectural on your confidence. consumer weak Coatings seems demand EMEA business, to

you but here? you a bottom some here? see for gives declines consumer of in some the as be Europe. the Central that demand share can Are impact? price Is but what stick a stable confidence And not what calling you just you're get confidence here? said some I mostly experienced wondering do catalysts you hockey recovery, to growth off know some all and had You we in gains Eastern regions, that making

Timothy Knavish

Yes.

Ireland. the performed QX, full east most if north really Poland. But in well the at business, year south to frankly, really pretty we our west, weak well, was right, quarter. of you're U.K. you look performance We to and in performed a in So basis,

were for very us. Nordics So very weak we of and was France for us, pockets the had strength. weak

then So is an for level the your We that's to both. This input by products to of appropriately a how job offset from outstanding done need or -- kind last has and being performance our space. the decade shelf we country, when appropriately at pricing costs, share statement sub of the pricing of pricing street by breakdown about region. fighting the price? outperformance driven win differentiated on team It's

those in gained are where countries management. So have And the job team a price-volume does we share we great of performing. some

as or stabilizes call of Ukraine in I not central consumer like the broadly, the of in more some banks would certainly help. as a that confidence, war recovery, anything far we're Europe increases expecting that, As begin what other not would baking stabilization we end direction, whenever more journey but but as again, in the inflation are

stick. just factors we enough X years out there then last then there's We from high rates believe not hockey and there, high COVID down that there's the enough far war we've easing and and the stabilize inflation, believe and so over to interest that but come

Vincent Morales

And Patrick, Vince here.

of Europe, a XXXX. the from half back look perspective is to were in XXXX the were in were confidence low of down, some mid-single if first say, this business, you in we half We mid- down Just XXXX. Architectural roughly flat digits. at pace let's We

we forward So know again, let's that's stabilization. And into, it, and pull a activity even had did -- we the had we 'XX. COVID, of when early COVID, we 'XX call

type cycle maintenance a is this -- on business. is This

that Tim maintenance of and we price well benefit that as be our from back, some maintenance, come volume to that of will of 'XX in which that some forward see we and 'XX And accordingly, we able numbers. was reflected So as to said. we'll pulled stabilizes start volume as as in terms

Operator

We line. now Research Seaport Mike Harrison Partners on have the with

Michael Harrison

that wanted so X regions into mentioned far. go I detail more a you've to about different little or countries

sounds where solid. are and Latin architectural First like is it pretty industrial America

businesses some without Second, demand some as give you you or thinking key then just trade think, finally, your China, an prepared on us about was your mentioned remarks there? Maybe shifts? you how policy hoping forward, how maybe India, thoughts with going I a growth update you're give on trends in us And opportunity. position could I

Timothy Knavish

sure. Yes,

continues stores has GDPs concessionaire their us, performer stronger and for fantastic. been our the of our the LatAm from Mexico, owners and of we're back and which some the rockstar be across in the GDPs. is to meeting, I just came So world sellout just outperforming X,XXX

confidence and near-shoring but GDP. And strong consumer them, they're just bullish going helps forward. also the The

America business outperformed South automotive our last in businesses year, industrial business. Our

we'll big we share, and course, additional fundamentals earlier Mexico, pick as up of not call. as some but So there, down then mentioned on as good this

next distribute network unit we to business use Latin performance Comex of we take to the chapter where start So to continue, products. that other business will our as America particularly

a that's we India, India. venture performance joint industrial got of joint have side, and all specifications, India, global all unique and we've a but paint very the essentially the the covers more to we venture run standpoint #X the those expertise, technology that we application bring businesses overall the things. there deco where from game company have a Asian situation products, #X Paints. they in where with a player, Obviously, deco

and that we their strength and outgrowing brands in footprint their Asian and us. leverage paints so been a market the of we've growth and people, technologies reputation kind country nice the our complement and And for with and their what's very our of been

China. China. many the is tying locally. make And million unlike ship product. China, are business billion-dollar for question many make industrials, We paint in we our other We product and Then and billion or up or don't

right auto, So within construction. with real that, anything right really aero, the segments. estate -- even in the like segments we're We're industrial, and in not and PMC associated

right local, for about local some and macros others, we're low-single challenging heard despite grew mid-single 'XX So of and in digits digits. between really somewhere from quarter the the segments us every you've that and we throughout

recovery think a of where opposed a so decade recovery. not elongated it's very the progression And but as stick not kind had the China, to China pleased had definitely ourselves reprogram -- hockey low-double we of digits, you of growth, high-single it's of an to once with ago to we're digits

keeps helps another it's has the equation it elongated, that But favor us really favorable for on materials favorable supply or -- in side situation recovery it that in drive because our to for in on buyers. elongated benefit raw that a supply-demand

about celebration we're a to with in So forward of we're we're not and results hockey China, looking parties stick 'XX. the recovery 'XX, but big pleased having a good

Operator

Your with [indiscernible]. next question Aleksey comes from Yefremov

Ryan Weis

wanted and during increase This curtain is a on little 'XX. exports overall pull in autos. Aleksey just back Obviously, improvement Ryan bit you to the the discussed in on XQ China for mentioned Just

stage is from here you're this what wondering XXXX? customers in hearing at So and expectation kind of what your

Timothy Knavish

Yes. thank this us for morning. you Ryan, joining

remember, -- out cars most an portion one in domestic X for of the the data world. X China Here's -- And for produces consumption. business is points in export exciting the all, is approximately manufactured our auto every of of but that us China yes, more of of most first there's that, China the

Great data sales up is were that retail point QX XX% China on autos.

So But that employment. economy -- and critical this know. to we China and is an problems as the has this China China economic and is is very an its certainly industry overall all industry

And that and 'XX from confident it's in government help and helped going forward, as the toward 'XX. into one government so I will And activity. I'm from stimulus we the there that additional gets be believe China through move

teams our ground, are well. China domestic the on us is market the telling doing So

gaining share players. with are We the domestic

the with had years, domestics. really we've over gain So nice And we've everybody companies mix couple historically, one had this Western and of a the including nice of China domestics, really, Chinese a JVs about. of that the share talks last

And local this China auto. the got us so gain winners ground with of share in good you've consumption combined of the pretty effect being and on

the car is EVs of China of last the piece the are XX% XXXX, Shine just story But China. as in end of Ryan, globally. to at every built now that, certainly in one come off and Yes, has EV

the for we a world what and and as and yes, EV growth companies U.S. But won't China, so many within see that's years everybody market as more parts X the Europe big ago. in sales here content thought of And PPG. other like still it's

Operator

have Capital with Markets. now John McNulty BMO We

John McNulty

quick a on question Comex. Just

platform, risk out platform? versus given the color much us that about to around give to tariff a just in bit you of the little product for it Mexico help Just is us broadened to how they're tied terms think potential potential export of how Mexico on selling can of you've that

Timothy Knavish

domestic a right, I points be the that immaterial. maybe metal it some XXX% border, Within of way and but may we is decimal Comex. to distribute of small use piece from I what comes it's the through painted really gets couple mean Yes. missing across

that for of that are collisions now data plants, Mexico, concessionaires distributing of for Mexico It's refinish even industrial parts the to for construction business through that near-shoring centers, the or our a our -- in those started automotive in obviously business we've for now cars. Mexican we're running traffic we're networks run plants, through roads is PMC Mexico for Mexico into

it. of a nothing So can't of can -- us I shipped end I a I up think being may of that fraction concessionaire but missing U.S. the But to for again, maybe back decimal distribute Comex would that somewhere, I be think

Vincent Morales

middle up X program an more started grow want concessionnaires of pick it I 'XX, network. mentioned. growth on last and and through things, of that those is through product are the engines the will our world-class 'XX active John, in distribution pulling We just X to And Tim in

amount to that I we capital structure built talked the being quarter third Coatings, on think call, around includes, due about again, and really in the Protective near-shoring. of Mexico

we're Our through with those Traffic now world-class, Solutions products are same network, pushing and the concessionaire Refinish.

X,XXX have points. We distribution

all 'XX that for and refinish product, are frankly, platforms us these in beyond. growth So

Operator

next We Morgan with Haynes from the Stanley. question have Steven

Steven Haynes

step I higher, would about but some Just in a guiding a guess, it midpoint, growth $XXX or next how the fund kind there's of expect number historically would bit that catch-up down or And of here? I of there, to. we on would over the million of you be quick think X be up thinking kind kind initiatives this the the couple at to help right CapEx CapEx, range step than Is evolving years? from you what to

Timothy Knavish

Thanks, level at Steven. aspiration not I'm CapEx is It to and be it. glad you asked be. our spending forward, it won't going this

times get did in X% we we stopped frankly, a think what which rate as then is spending, us, very a reasons. for long will And our normal to of We CapEx kind -- about of obvious for some back you for COVID sales time. normal run should

because orders some see building key CapEx we've you'll Mexico, we've -- fill. new what a we in there because couple organic we We've capacity we that And of catch-up can have 'XX than growth call need a it, so because for there do let's some down CapEx some in we do got growth resin areas. and 'XX there. in some incremental -- grown But it Aero got is, on for spend kind of that incremental era. of honestly, COVID much. elevated seeing So you're CapEx, the transitory both more

over our of Refinish, Refinish there. CapEx in a digital $X.X we sales. more billion We've digitally CapEx spent in now U.S. capabilities, been We've -- us. growing business for enabled we're spent even our factory, and investing

So we've had some incremental there.

then And will but far impact in us -- 'XX. as didn't wasn't one last in it 'XX, this as

that some our other to down As ready some subregion, the to we've And particularly coming of you to capacity part spend higher-cost receive X. volume some in X the CapEx X program, factories a we the go as exiting from surplus Europe. say, get regions, at to we're self-help got it have from, in X particular

it's growth you of up red a So for to it's for because of believe use it's and we number, and catch as spend drive money, not a we number shareholder organic us, forward. a but good move what to years; question a the couple for for we didn't margin two, thank one,

Operator

Your Parabas. next question comes Laurent from with Favre BNP

Laurent Favre

have questions answered. been my Sorry,

and thanks, a day. great So have a

Operator

with Jefferies. Alexander We now Laurence have

Daniel Rizzo

newly segment, to recovery we Performance? the Rizzo about should kind margins it compares and formed Dan architectural think Laurence. Industrial If is for think This how how we about a and of in incremental

Timothy Knavish

Yes.

maybe Vince small in quantification of try can is estimate get global right? some good Europe, particularly -- recovery, a business the good it, some get as Because leverage, our our to we'll So Mexico we'll but and architecture small. leverage a other but decent a very in and all to relative X, quite almost the presence small almost China, -- Australia, have We now. Mexico presence it's right? #X negligible and Europe in position in a

talk Europe. let's So

get not will ]. uptick, Dan of stabilization course, would we that within self-help stabilization John then, uptick, would of [ We a leverage, get of as just because win. last great incremental view any and we couple leverage pricing And fairly (sic) volume just the -- done we've over a the years, volume volume significant of

utilized be well bottom the to the side, On there. just we're gross because dropping approximation really, it of Mexico pretty down would margin line the

variable of It's amount leverage. to line. tremendous cost bottom a dropping fixed not just there's mostly So the the margin

Vincent Morales

Dan, Yes, is Vince. this

have If on et put you businesses, margin, the support SG&A feet a they look some architectural at street, the and have a to higher they the and Tim's point, teams, cetera. portfolio, typically higher to it our you gross numbers sales to the

of any in We any our Europe, of certainly are we businesses, don't need countries. SG&A add our underutilized, to any for

come will out. which through on to And mid-XXs as said, sold Mexico, the margin, that to close mid-XXs. country, is gross are So depending we at Tim

of add to most cost, on some and cost the have do but commensurate we by dime, is borne the concessionaires they get growth their the So that. for

the we're talking again, incrementals to high company average. relative So

Operator

comes Your Spector Josh next UBS. with question from

Unknown Analyst

I is about This [indiscernible] to on for ask Josh. pricing. just wanted

X% about us structure, you the 'XX. segment Could So pricing the the X% give up X% legacy in in new looking in at is was last years. 'XX, performance X That segments? splits me on the new if performance new there above the and the Architectural, architecture So contribution be 'XX assume in but would and correct I'd 'XX wrong. Performance from I'm

in reach we And for assuming what but you And lastly, I then history just upside like, you in Industrial have just 'XX, are for kind assuming mean, are 'XX? there in the or of what down? Industrial,

Vincent Morales

Yes. This Vince. is

by So business. we're give specifics not to going

that segments, -- past, above when the in differential the typically on pricing certainly That's we segment, the then you a material get there's for comes look inflation. we've and we lag, get some, Just get said technology. it as we'll if some Industrial pricing at raw

a segments and business for this there customers' a They remarks, segment, paid of said in recurring get get heavily paid typically for We our basis. productivity. Performance we that. pricing it's opening Tim our that. The We his one where see better impact on

of Some perennial that's pricing.

have differential and where and what's typically we service time more mean to and distribution where differential by we price that. I capability it's real capabilities, products Architectural, market, competitively. really happening have We above we it have the offset market depends Global inflation

we best depends but pricing; industrial, Performance the them, and environment. rack and is pricing, if good typically it on is stack steady, So Architectural the

Operator

The final RBC. from Arun with the question is on line Viswanathan

Arun Viswanathan

got I questions. guess, couple of I a

in inflation of was couple we and last lot you that kind of go you growth thought but volatility we've of years, many then a if mentioned. of So and things interest back of the often the cards, over form single-digit seen maybe the low think have in the organic rates I

see reflected would of risks you look EPS have first -- that you? rate guys doesn't in in a say that some still you look prevent look and be growth into to the are that are to do of would softer follow-up, like industrial. from as you some single on 'XX, impediments looks would a a It million-or-so And kind guiding an of SG&A lot you well. risks that achieving digits? your is what So you But as into X% What as 'XX, that and you that But I to It front gains of if the do are any recovery like half $XXX outlook. of there organic growth? low then share you of the of see those. keeping across you're you achieving know XX% one eye

Timothy Knavish

me We mentioned we you history, let Arun. So year. the hit low this single-digit growth didn't -- and organic start,

we organic includes hit if remember year, and X%, think I all is minus all correctly, and I FX X%, that. things like this in but about XXXX; minus in X% in,

side we a hope as So about are growth and to of was single organic X%. project that's year, we've won. talked low digits not those that . that prayer, deals that minus million a the organic that we've -- This those earlier, $XXX

of of variability confident execution about Now and timing that. that. be we our could some in things customers' launches there But like feel

results. and that last of businesses of our growth building amount over tremendous of starting across years muscle is a X the done all have to deliver work We the organic

within control. So full for the year everything I about feel our good guide that's

-- strange United is we scenarios, environment event have 'XX what with countries in potential elections for full know and of Europe. of have plans between those plans what States risks good day, what happen both with we to today, committed But other at we contingency achieving I everything really in good to launch stressors we be can't our all of and guide, we and the the pipeline. 'XX, post commercial the would year about and going countries, other in what's our and are to the various the countries, we end just a in do geopolitical with many this you tell can but the feel

Operator

session, the I conclude question-and-answer turn Alex over it Lopez. will and back does to now That

Alex Lopez

for morning. Thank joining us thank interest you, confidence concludes earnings in this everyone, PPG. and your Brika, We and you, call. appreciate quarter fourth This our

Operator

conclude today's This you. Thank does call.

now disconnect. may You

PPG Industries (PPG) 31 Jan 252024 Q4 Earnings call transcript