Fourth quarter highlights:
- Completed divestitures of silica products and architectural
coatings U.S. and Canada businesses, improving company margin and
growth profile
- Recast financials to reflect architectural coatings U.S. and
Canada as discontinued operations
- Net sales from continuing operations of $3.7 billion
- Reported earnings per diluted share from continuing operations
(EPS) of $0.01 and adjusted EPS of $1.61, an increase of 3% year
over year
- Delivered ninth consecutive quarter of segment margin and
segment EBITDA margin expansion
- Share repurchases of approximately $250 million in the
quarter
Full-year 2024 highlights:
- Full-year financials reflect architectural coatings U.S. and
Canada as discontinued operations
- Net sales from continuing operations of $15.8 billion
- Reported EPS of $5.72 and adjusted EPS of $7.87, an increase of
6% year over year
- Segment margin of 17.1% and segment EBITDA margin of 19.9%, an
increase of 70 basis points year over year
- Company net income margin of 8.5% and adjusted EBITDA margin of
18.1%, an increase of 100 basis points year over year
- Operating cash flow of $1.4 billion; share repurchases and
dividends of $1.4 billion
PPG (NYSE:PPG) today reported financial results for the fourth
quarter and full-year 2024.
Fourth Quarter Consolidated Results
$ in millions, except EPS
4Q 2024
4Q 2023
YOY change
Net sales (a)
$3,729
$3,912
(5)%
Net income (a)
$2
$103
(98)%
Adjusted net income (a)(b)
$375
$372
+1%
EPS (a)
$0.01
$0.43
(98)%
EPS from discontinued operations (c)
$(1.21)
$(0.05)
Adjusted EPS (a)(b)
$1.61
$1.56
+3%
(a) From continuing operations
(b) Reconciliations of reported to
adjusted figures are included below
(c) Discontinued operations includes the
loss on sale of the architectural coatings U.S. and Canada business
of $285 million, representing an EPS impact of $1.22
The company’s financial results for all
periods presented have been recast to reflect the divested U.S. and
Canada architectural coatings business as discontinued
operations.
Chairman and CEO Comments
Tim Knavish, PPG chairman and chief executive officer, commented
on the year and quarter:
Throughout 2024, we demonstrated resilience in a challenging
macro environment by growing our adjusted EPS by 6%, improving
aggregate segment margins and generating $1.4 billion in operating
cash flow which we returned to shareholders. During the quarter, we
repurchased approximately $250 million of stock, and about $750
million for the full year, which represented approximately 3% of
our outstanding shares. Combined with our dividend, we have
returned $1.4 billion to our shareholders throughout the year.
In 2024, we took significant steps to optimize our business
portfolio through the divestitures of both our silica products and
our architectural coatings U.S. and Canada businesses. These
divestitures strengthen our financial profile, including an
improvement in our adjusted EBITDA margin to 18.1%, and results in
a more focused organization which positions the company to deliver
sustainable organic growth.
In both the fourth quarter and full-year 2024, organic sales
declined a low single-digit percentage year over year with growth
in Mexico, China and India as well as growth in the aerospace,
protective and marine, and traffic solutions businesses offset by
declines in the automotive original equipment manufacturer (OEM),
industrial and architectural EMEA coatings businesses. Despite
lower organic sales, adjusted EPS and aggregate segment EBITDA
margin improved in both comparison periods driven by sales of our
technology-advantaged products, moderated input costs and
structural cost actions.
Fourth quarter adjusted EPS was $1.61, including an unfavorable
foreign currency translation impact of $0.05 as many currencies
weakened versus the U.S. dollar during the quarter. Our full-year
2024 adjusted EPS was $7.87 which grew 6% year over year and
excludes $0.27 of EPS that have been reclassified to discontinued
operations, which reflects the results of the divested U.S and
Canada architectural business absent certain allocated costs,
consistent with U.S. GAAP requirements.
Given the revised portfolio, we have expanded our segment
reporting structure and will now report all our architectural
coatings businesses as a separate segment, Global Architectural
Coatings. The reporting of the remainder of the businesses within
the Performance Coatings and Industrial Coatings segments will
remain the same. This expanded segmentation will provide investors
with enhanced visibility as we drive the company’s growth and
performance.
Looking ahead, I am excited about 2025 and beyond. We anticipate
a slow start to 2025 as demand in Europe and in global industrial
end-use markets remains challenged. Despite the macroeconomic
environment, we expect to deliver organic sales growth of a low
single-digit percentage for the year, with first quarter organic
growth flat to slightly down and stronger results in the second
half of the year driven by share gains. As we announced in October,
we are taking decisive actions to reduce costs, including global
structural costs and European manufacturing consolidations. Our
balance sheet remains strong, which continues to provide us with
financial flexibility, and we remain committed to driving
shareholder value creation. Thus, we are deploying about $400
million toward share repurchases during the first quarter of
2025.
The successful divestitures and solid performance this year
would not be possible without the dedication of our employees. We
are now a much more focused organization dedicated to driving
sustainable organic growth. Thank you to our PPG team around the
world who make it happen and deliver on our purpose every day: We
protect and beautify the world®.
Fourth Quarter 2024 Reportable Segment Financial
Results
Global Architectural Coatings
segment
$ in millions
4Q 2024
4Q 2023
YOY change
Net sales (a)
$881
$943
(7)%
Sales volumes
(2)%
Selling prices
—%
Foreign currency translation
(5)%
Segment income
$118
$131
(10)%
Segment income %
13.4%
13.9%
Segment EBITDA (b)
$144
$156
(8)%
Segment EBITDA %
16.3%
16.5%
(a) From continuing operations
(b) Reconciliations of reported to
adjusted figures are included below
The Global Architectural Coatings segment, which was previously
reported as part of the Performance Coatings segment, is comprised
of architectural coatings Europe, Middle East and Africa (EMEA) and
architectural coatings Latin America and Asia Pacific. Net sales
were lower compared to the fourth quarter 2023, primarily driven by
unfavorable foreign currency translation.
Organic sales for architectural coatings EMEA declined by a low
single-digit percentage, driven by lower sales volumes as demand
was lower year-over-year across the region. Year-over-year organic
sales for architectural coatings Latin America and Asia Pacific
were flat but slightly positive.
Segment EBITDA decreased by 8% versus the prior year driven by
unfavorable foreign currency translation, primarily the Mexican
peso, and lower sales volumes, partially offset by cost control
actions and positive net price.
Performance Coatings
segment
$ in millions
4Q 2024
4Q 2023
YOY change
Net sales (a)
$1,262
$1,233
+2%
Sales volumes
+1%
Selling prices
+3%
Divestitures and other
(2)%
Segment income
$259
$218
+19%
Segment income %
20.5%
17.7%
Segment EBITDA (b)
$292
$253
+15%
Segment EBITDA %
23.1%
20.5%
(a) From continuing operations
(b) Reconciliations of reported to
adjusted figures are included below
The Performance Coatings segment, which is now comprised of
aerospace coatings, automotive refinish coatings, protective and
marine coatings, and traffic solutions delivered 4% organic sales
growth. This growth was partially offset by the divestitures of the
non-North American portion of the traffic solutions business.
Sales volumes increased 1% year over year with growth led by
aerospace coatings, protective and marine coatings, and traffic
solutions. PPG’s aerospace order backlog increased to about $300
million despite the business delivering double-digit percentage
organic sales growth in the quarter reflecting further
strengthening of demand for our technologies in this end-use
market. Organic sales in automotive refinish coatings declined by a
low single-digit percentage with share gains more than offset by
lower industry collision claims. Protective and marine coatings
organic sales increased by a mid-single-digit percentage compared
to the prior year, driven by share gains in Europe and Asia.
Traffic solutions benefited from share gains across North America
coupled with favorable weather in the fourth quarter.
Segment EBITDA increased by 15% versus the prior year, and
segment EBITDA margin improved 260 basis points year over year to
23.1%, driven by price increases stemming from our advantaged
products and digital-technology subscriptions, along with
cost-control actions partially offset by general cost
inflation.
Industrial Coatings
segment
$ in millions
4Q 2024
4Q 2023
YOY change
Net sales (a)
$1,586
$1,736
(9)%
Sales volumes
(4)%
Selling prices
(2)%
Foreign currency translation
(1)%
Divestitures and other
(2)%
Segment income
$185
$231
(20)%
Segment income %
11.7%
13.3%
Segment EBITDA (b)
$234
$285
(18)%
Segment EBITDA %
14.8%
16.4%
(a) From continuing operations
(b) Reconciliations of reported to
adjusted figures are included below
Industrial Coatings segment net sales declined compared to the
fourth quarter 2023 primarily due to lower sales volumes and lower
selling prices from certain index-based customer contracts.
Automotive OEM coatings organic sales decreased as expected,
declining by a high single-digit percentage due to lower U.S. and
European industry build rates, partly offset by PPG growth in China
and Mexico. Industrial production in the U.S. and Europe continued
the trend of year-over-year declines. As a result, industrial
coatings organic sales declined by a mid-single-digit percentage,
more than offsetting solid growth in Mexico. Packaging coatings
organic sales decreased by a low single-digit percentage year over
year with growth in Europe and Latin America offset by lower sales
volume in the U.S., in comparison to strong growth in the prior
year period.
Segment EBITDA decreased 18%, and segment EBITDA margin declined
by 160 basis points compared to the fourth quarter 2023 driven by
lower sales volumes and lower selling prices due to certain
index-based pricing contracts.
Full-Year 2024 Financial Results
$ in millions, except EPS
2024
2023
YOY change
Net sales (a)
$15,845
$16,242
(2)%
Net income (a)
$1,344
$1,223
+10%
Net income margin (a)
8.5%
7.5%
Adjusted net income (a)(b)
$1,848
$1,762
+5%
EPS (a)
$5.72
$5.16
+11%
EPS from discontinued operations (c)
$(0.97)
$0.19
Adjusted EPS (a)(b)
$7.87
$7.42
+6%
Adjusted EBITDA margin (a)(b)
18.1%
17.1%
(a) From continuing operations
(b) Reconciliations of reported to
adjusted figures are included below
(c) Discontinued operations includes the
loss on sale of the architectural coatings U.S. and Canada business
of $285 million, representing an EPS impact of $1.22
Full-year 2024 net sales were $15.8 billion, down 2% versus the
prior year, with sales volumes declining 1% and the combination of
unfavorable foreign currency translation and divestitures reducing
net sales by 1%. Despite decreased organic sales due to lower
industry demand in automotive OEM coatings, industrial coatings and
architectural coatings in Europe, results were supported by record
sales in aerospace coatings and growth in several other key
technology-driven businesses.
In a challenging macro environment, the company delivered strong
adjusted EPS growth of 6%, supported by favorable business mix,
driven by sales of our technology-advantaged products and strong
brands, as we delivered record results in several of our businesses
including aerospace coatings, automotive refinish coatings and
architectural coatings Latin America.
In 2024, the company paid approximately $620 million in
dividends. The company repurchased $750 million of stock in 2024
and ended the year with approximately $2.8 billion remaining on its
current share repurchase authorization. Capital expenditures
totaled about $720 million.
Additional Financial Information
- At quarter end, the company had cash and short-term investments
totaling $1.4 billion.
- Net debt was $4.5 billion, down approximately $30 million year
over year.
- Corporate expenses were $87 million in the fourth quarter,
which was $27 million lower than the prior year due to lower
incentive-based compensation and cost savings actions.
- Net interest expense was $15 million in the fourth
quarter.
- The reported effective tax rate on continuing operations was
86% for the fourth quarter, as certain business
restructuring-related costs and portfolio optimization items did
not have a tax benefit. The adjusted effective tax rate was 22% for
the fourth quarter.
Outlook
The company anticipates that adjusted earnings per share for the
full year 2025 will be in the range of $7.75 to $8.05, which at the
mid-point represents EPS growth of 7% excluding the impact of
foreign currency translation and a higher tax rate. This range is
based on current global economic activity and foreign exchange
rates, ongoing soft global industrial production, and mixed demand
across the various regions in which we operate. The company expects
that annual EPS growth will be weighted toward the second half of
2025 as global industrial demand weakened and the U.S. dollar
strengthened in the second half of 2024. Additionally, we expect to
realize more than $100 million in annualized share gains in our
Industrial Coatings segment beginning in the second half of the
year.
Additional information related to 2025 financial projections is
posted within the slides and prepared commentary associated with
the fourth quarter earnings documents on the Investors section of
PPG.com.
The term organic sales as used in this press release is defined
as net sales excluding the impact of currency, acquisitions and
divestitures.
PPG: WE PROTECT AND BEAUTIFY THE WORLD®
At PPG (NYSE:PPG), we work every day to develop and deliver the
paints, coatings and specialty materials that our customers have
trusted for more than 140 years. Through dedication and creativity,
we solve our customers’ biggest challenges, collaborating closely
to find the right path forward. With headquarters in Pittsburgh, we
operate and innovate in more than 70 countries and reported net
sales of $15.8 billion in 2024. We serve customers in construction,
consumer products, industrial and transportation markets and
aftermarkets. To learn more, visit www.ppg.com.
The PPG Logo and We protect and beautify the world are
registered trademarks of PPG Industries Ohio, Inc.
Additional Information
PPG will provide detailed commentary regarding its financial
performance, including presentation-slide content, on the PPG
Investor Center at www.ppg.com at about 4:30 p.m. ET today, January
30. The company will hold a conference call to review its fourth
quarter and full year 2024 financial performance on January 31, at
8:00 a.m. ET. Participants can pre-register for the conference by
navigating to
https://www.netroadshow.com/events/login?show=000510c7&confId=75486.
The conference call also will be available in listen-only mode via
Internet broadcast from the PPG Investor Center at www.ppg.com. A
telephone replay will be available January 31, beginning at
approximately 11:00 a.m. ET, through February 14, at 11:59 p.m. ET.
The dial-in numbers for the replay are: in the United States,
1-866-813-9403; Canada, 1-226-828-7578; UK (Local), 0204-525-0658;
international, +44-204-525-0658; passcode 864382. A web replay also
will be available shortly after the call on the PPG Investor Center
at www.ppg.com, and will remain through Wednesday, January 29,
2026.
Forward-Looking Statements
Statements contained herein relating to matters that are not
historical facts are forward-looking statements reflecting PPG’s
current view with respect to future events and financial
performance. These matters within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, involve risks and
uncertainties that may affect PPG’s operations, as discussed in the
company’s filings with the Securities and Exchange Commission
pursuant to Sections 13(a), 13(c) or 15(d) of the Exchange Act, and
the rules and regulations promulgated thereunder. Accordingly, many
factors could cause actual results to differ materially from the
forward-looking statements contained herein. Such factors include
statements related to global economic conditions, geopolitical
issues, the amount of future share repurchases, increasing price
and product competition by our competitors, fluctuations in cost
and availability of raw materials, energy, labor and logistics, the
ability to achieve selling price increases, the ability to recover
margins, customer inventory levels, PPG inventory levels, the
ability to maintain favorable supplier relationships and
arrangements, the timing of realization of anticipated cost savings
from restructuring and other initiatives, the ability to identify
additional cost savings opportunities, the timing and expected
benefits of potential future and completed acquisitions,
difficulties in integrating acquired businesses and achieving
expected synergies therefrom, economic and political conditions in
international markets, the ability to penetrate existing,
developing and emerging foreign and domestic markets, foreign
exchange rates and fluctuations in such rates, fluctuations in tax
rates, the impact of future legislation, the impact of
environmental regulations, unexpected business disruptions, global
human health issues, the unpredictability of existing and possible
future litigation, including asbestos litigation, and governmental
investigations. However, it is not possible to predict or identify
all such factors. Consequently, while the list of factors presented
here and in our 2023 Annual Report on Form 10-K are considered
representative, no such list should be considered to be a complete
statement of all potential risks and uncertainties. Unlisted
factors may present significant additional obstacles to the
realization of forward-looking statements. Consequences of material
differences in results compared with those anticipated in the
forward-looking statements could include, among other things, lower
sales or earnings, business disruption, operational problems,
financial loss, legal liability to third parties and similar risks,
any of which could have a material adverse effect on PPG’s
consolidated financial condition, results of operations or
liquidity.
All information in this release speaks only as of January 30,
2025, and any distribution of this release after that date is not
intended and will not be construed as updating or confirming such
information. PPG undertakes no obligation to update any
forward-looking statement, except as otherwise required by
applicable law.
Regulation G Reconciliation
PPG believes investors’ understanding of the company’s
performance is enhanced by the disclosure of net income, earnings
per diluted share from continuing operations PPG’s effective tax
rate adjusted for certain items, earnings before interest, taxes,
depreciation and amortization ("EBITDA"), adjusted EBITDA and
segment EBITDA. PPG’s management considers this information useful
in providing insight into the company’s ongoing performance because
it excludes the impact of items that cannot reasonably be expected
to recur on a quarterly basis or that are not attributable to our
primary operations. Net income, earnings per diluted share from
continuing operations and the effective tax rate adjusted for these
items, EBITDA, adjusted EBITDA and segment EBITDA are not
recognized financial measures determined in accordance with U.S.
generally accepted accounting principles (“U.S. GAAP”) and should
not be considered a substitute for net income, earnings per diluted
share, the effective tax rate, segment income or other financial
measures as computed in accordance with U.S. GAAP. In addition,
adjusted net income, adjusted earnings per diluted share, the
adjusted effective tax rate, EBITDA, adjusted EBITDA and segment
EBITDA may not be comparable to similarly titled measures as
reported by other companies. PPG is not able to provide a
reconciliation of full-year 2025 expected adjusted earnings per
diluted share to the most directly comparable GAAP financial
measure without unreasonable effort because certain items that
impact such measure are uncertain or cannot be reasonably predicted
at this time.
Regulation G Reconciliation - Net
Income, Earnings per Diluted Share, Effective Tax Rate and Segment
Income
($ in millions, except per-share
amounts)
Fourth Quarter
2024
Fourth Quarter
2023
$
EPS(a)
$
EPS(a)
Reported net income from continuing
operations
$2
$0.01
$103
$0.43
Acquisition-related amortization expense
(b)
24
0.10
32
0.13
Business restructuring-related costs, net
(c)
314
1.35
13
0.06
Portfolio optimization (d)
35
0.15
28
0.12
Legacy environmental remediation charges
(e)
3
0.01
17
0.07
Insurance recoveries (f)
(3
)
(0.01
)
(5
)
(0.02
)
Impairment and other related charges
(g)
—
—
160
0.67
Currency valuation loss (h)
—
—
24
0.10
Adjusted net income from continuing
operations, excluding certain items
$375
$1.61
$372
$1.56
Full Year 2024
Full Year 2023
$
EPS(a)
$
EPS(a)
Reported net income from continuing
operations
$1,344
$5.72
$1,223
$5.16
Acquisition-related amortization expense
(b)
100
0.42
115
0.48
Business restructuring-related costs, net
(c)
324
1.39
33
0.14
Portfolio optimization (d)
65
0.28
58
0.24
Legacy environmental remediation charges
(e)
18
0.07
17
0.07
Insurance recoveries (f)
(3
)
(0.01
)
(12
)
(0.05
)
Impairment and other related charges
(g)
—
—
160
0.67
Currency valuation loss (h)
—
—
24
0.10
Pension settlement charge (i)
—
—
144
0.61
Adjusted net income from continuing
operations, excluding certain items
$1,848
$7.87
$1,762
$7.42
Fourth Quarter
2024
Fourth Quarter
2023
Income Before Income
Taxes
Tax Expense
Effective Tax Rate
Income Before Income
Taxes
Tax Expense
Effective Tax Rate
Effective tax rate, continuing
operations
$81
$70
86.4
%
$209
$94
45.0
%
Acquisition-related amortization expense
(b)
32
8
24.4
%
44
12
27.3
%
Business restructuring-related costs, net
(c)
362
48
13.2
%
16
3
18.8
%
Portfolio optimization (d)
17
(18
)
(104.1
)%
31
3
9.7
%
Legacy environmental remediation charges
(e)
4
1
24.3
%
24
7
29.2
%
Insurance recoveries (f)
(4
)
(1
)
24.3
%
(7
)
(2
)
28.6
%
Impairment and other related charges
(g)
—
—
—
%
160
—
—
%
Currency valuation loss (h)
—
—
—
%
20
(4
)
(20.0
)%
Adjusted effective tax rate, continuing
operations, excluding certain items
$492
$108
22.0
%
$497
$113
22.7
%
Full Year
2024
Full Year
2023
Income Before Income
Taxes
Tax Expense
Effective Tax Rate
Income Before Income
Taxes
Tax Expense
Effective Tax Rate
Effective tax rate, continuing
operations
$1,852
$475
25.6
%
$1,690
$428
25.3
%
Acquisition-related amortization expense
(b)
132
32
24.2
%
154
39
25.3
%
Business restructuring-related costs, net
(c)
377
53
14.1
%
41
8
19.5
%
Portfolio optimization (d)
59
(6
)
(10.2
)%
53
(7
)
(13.2
)%
Legacy environmental remediation
charges(e)
24
6
25.0
%
24
7
29.2
%
Insurance recoveries (f)
(4
)
(1
)
25.0
%
(16
)
(4
)
25.0
%
Impairment and other related charges
(g)
—
—
—
%
160
—
—
%
Currency valuation loss (h)
—
—
—
%
20
(4
)
(20.0
)%
Pension settlement charge (i)
—
—
—
%
190
46
24.2
%
Adjusted effective tax rate, continuing
operations, excluding certain items
$2,440
$559
22.9
%
$2,316
$513
22.2
%
Fourth Quarter
Full Year
2024
2023
2024
2023
Reported net income from continuing
operations
$2
$103
$1,344
$1,223
Interest expense, net of interest
income
15
13
64
107
Income tax expense
70
94
475
428
Depreciation
87
96
360
360
Amortization
32
44
132
154
Net income attributable to noncontrolling
interests
9
12
33
39
EBITDA
$215
$362
$2,408
$2,311
Business restructuring-related costs, net
(c)
362
16
377
41
Portfolio optimization (d)
17
31
59
53
Legacy environmental remediation
charges(e)
4
24
24
24
Insurance recoveries (f)
(4
)
(7
)
(4
)
(16
)
Impairment and other related charges
(g)
—
160
—
160
Currency valuation loss (h)
—
20
—
20
Pension settlement charge (i)
—
—
—
190
Adjusted EBITDA
$594
$606
$2,864
$2,783
Net sales
$3,729
$3,912
$15,845
$16,242
Net income margin
0.1
%
2.6
%
8.5
%
7.5
%
Adjusted EBITDA margin
15.9
%
15.5
%
18.1
%
17.1
%
(a)
Earnings per diluted share is
calculated based on unrounded numbers. Figures in the table may not
recalculate due to rounding.
(b)
Acquisition-related amortization
expense is excluded from adjusted net income from operations,
excluding certain items, due to its significance as a result of the
purchase price assigned to finite-live intangible assets at the
date of acquisition and the related impact on underlying business
performance and trends. While these intangible assets contribute to
revenue generation, the related revenue is not excluded.
(c)
Business restructuring-related
costs, net include business restructuring charges, offset by
releases related to previously approved programs, which are
included in Business restructuring, net on the consolidated
statement of income, accelerated depreciation of certain assets,
which is included in Depreciation on the consolidated statement of
income, and other restructuring-related costs, which are included
in Cost of sales, exclusive of depreciation and amortization and
Selling, general and administrative on the consolidated statement
of income. Business restructuring-related costs, net also includes
the fourth quarter 2024 recognition of accumulated foreign currency
translation losses of $110 million related to the company's exit of
its Argentina operations in connection with a restructuring
program, which are included in Other (income)/charges, net in the
consolidated statement of income. No tax benefit was recorded on
the fourth quarter 2024 recognition of the accumulated foreign
currency translation losses.
(d)
Portfolio optimization includes
gains and losses related to the sale of certain assets, which are
included in Other (income)/charges, net on the consolidated
statement of income, including the gain of $129 million on the sale
of the company's silicas products business in the fourth quarter
2024, and the losses on the sales of the company's traffic
solutions business in Argentina in the second quarter 2024, the
company's European and Australian Traffic Solutions businesses in
the fourth quarter 2023 and the company's legacy industrial Russian
operations in the third quarter 2023. Portfolio optimization
includes advisory, legal, accounting, valuation, other professional
or consulting fees and certain internal costs directly incurred to
effect acquisitions, as well as similar fees and other costs to
effect divestitures and other portfolio optimization exit actions.
These costs are included in Selling, general and administrative
expense on the consolidated statement of income. Portfolio
optimization also includes an impairment charge of $146 million
recognized during the fourth quarter 2024 when the company's
remaining operations in Russia were classified as held for sale,
which is included in Impairment and other related charges, net on
the consolidated statement of income. No tax benefit was recorded
on the fourth quarter 2024 impairment charge.
(e)
Legacy environmental remediation
charges represent environmental remediation costs at certain
non-operating PPG manufacturing sites. These charges are included
in Other (income)/charges, net in the consolidated statement of
income.
(f)
In the fourth quarter 2024 and
the fourth quarter 2023, the company received reimbursement for
previously approved insurance claims under policies covering legacy
asbestos-related matters. In the first quarter 2023, the company
received reimbursement under its insurance policies for damages
incurred at a southern U.S. factory from a winter storm in 2020.
These insurance recoveries are included in Other charges/(income),
net on the consolidated statement of income.
(g)
In the fourth quarter 2023, the
company recorded impairment and other related charges due to a
non-cash goodwill impairment recognized for the Traffic Solutions
reporting unit as a result of its annual goodwill impairment test.
The fair value of the Traffic Solutions reporting unit decreased
primarily due to increases in the cost of capital (discount rate
assumption) and declines in the reporting unit’s long-term forecast
driven by challenges at its operations in Argentina due to the
highly inflationary environment and changes to the reporting unit’s
global footprint, including the fourth quarter 2023 divestiture of
its European and Australian businesses.
(h)
In December 2023, the central
bank of Argentina adjusted the official foreign currency exchange
rate for the Argentine peso, significantly devaluing the currency
relative to the United States dollar. Argentina currency
devaluation losses represent foreign currency translation losses
recognized during December 2023 related to the devaluation of the
Argentine peso, which is included in Other charges/(income), net on
the consolidated statement of income.
(i)
In the first quarter 2023, PPG
purchased group annuity contracts that transferred pension benefit
obligations for certain of the company’s retirees in the U.S. to
third-party insurance companies, resulting in a non-cash pension
settlement charge.
Fourth Quarter
Full Year
2024
2023
2024
2023
Global Architectural Coatings
Net sales
$881
$943
$3,921
$4,021
Segment income
$118
$131
$678
$673
Segment depreciation and amortization
26
25
104
101
Segment EBITDA
$144
$156
$782
$774
Segment EBITDA %
16.3%
16.5%
19.9%
19.2%
Performance Coatings
Net sales
$1,262
$1,233
$5,237
$5,132
Segment income
$259
$218
$1,142
$1,019
Segment depreciation and amortization
33
35
132
139
Segment EBITDA
$292
$253
$1,274
$1,158
Segment EBITDA %
23.1%
20.5%
24.3%
22.6%
Industrial Coatings
Net sales
$1,586
$1,736
$6,687
$7,089
Segment income
$185
$231
$893
$968
Segment depreciation and amortization
49
54
206
213
Segment EBITDA
$234
$285
$1,099
$1,181
Segment EBITDA %
14.8%
16.4%
16.4%
16.7%
Total Segment EBITDA
Net sales
$3,729
$3,912
$15,845
$16,242
Segment income
$562
$580
$2,713
$2,660
Segment depreciation and amortization
108
114
442
453
Segment EBITDA
$670
$694
$3,155
$3,113
Segment EBITDA %
18.0%
17.7%
19.9%
19.2%
PPG INDUSTRIES, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF
INCOME (unaudited)
(All amounts in millions except per-share
data)
Three Months Ended December
31
Twelve Months Ended December
31
2024
2023
2024
2023
Net sales
$3,729
$3,912
$15,845
$16,242
Cost of sales, exclusive of depreciation
and amortization
2,217
2,300
9,252
9,678
Selling, general and administrative
834
906
3,391
3,401
Depreciation
87
96
360
360
Amortization
32
44
132
154
Research and development, net
106
109
423
424
Interest expense
58
57
241
247
Interest income
(43)
(44)
(177)
(140)
Business restructuring, net
234
1
233
(2)
Impairment and other related charges,
net
146
160
146
160
Pension settlement charge
—
—
—
190
Other (income)/charges, net
(23)
74
(8)
80
Income before income taxes
$81
$209
$1,852
$1,690
Income tax expense
70
94
475
428
Income from continuing operations
$11
$115
$1,377
$1,262
(Loss)/income from discontinued
operations, net of tax
(282)
(13)
(228)
47
Net (loss)/income attributable to
controlling and noncontrolling interests
$(271)
$102
1,149
1,309
Net (loss)/income attributable to
noncontrolling interests
(9)
(12)
(33)
(39)
Net (loss)/income (attributable to
PPG)
$(280)
$90
$1,116
$1,270
Amounts attributable to PPG:
Income from continuing operations, net of
tax
$2
$103
1,344
1,223
(Loss)/income from discontinued
operations, net of tax
(282)
(13)
(228)
47
Net (loss)/income (attributable to
PPG)
$(280)
$90
$1,116
$1,270
Earnings per common share (attributable to
PPG)
Income from continuing operations, net of
tax
$0.01
$0.44
$5.75
$5.18
(Loss)/income from discontinued
operations, net of tax
(1.21)
(0.06)
(0.98)
0.20
Net (loss)/income (attributable to
PPG)
$(1.20)
$0.38
$4.77
$5.38
Earnings per common share (attributable to
PPG) - assuming dilution
Income from continuing operations, net of
tax
$0.01
$0.43
$5.72
$5.16
(Loss)/income from discontinued
operations, net of tax
(1.21)
(0.05)
(0.97)
0.19
Net (loss)/income (attributable to
PPG)
$(1.20)
$0.38
$4.75
$5.35
Average shares outstanding
231.8
236.2
233.8
236.0
Average shares outstanding - assuming
dilution
232.8
237.3
234.9
237.2
PPG INDUSTRIES, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS HIGHLIGHTS (unaudited)
($ in millions)
Twelve Months Ended December
31
2024
2023
Cash from operating activities:
Cash from operating activities -
continuing operations
$1,391
$2,294
Cash from operating activities -
discontinued operations
$29
$117
Cash from operating activities
$1,420
$2,411
Cash (used for)/from investing activities
- continuing operations:
Capital expenditures
$(721)
$(516)
Business acquisitions, net of cash
balances acquired
$(31)
$(109)
Proceeds from divestiture of
businesses
$325
$36
Cash used for financing activities -
continuing operations:
Dividends paid on PPG common stock
$622
$598
Purchase of treasury stock
$752
$86
PPG INDUSTRIES, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
HIGHLIGHTS (unaudited)
($ in millions)
December 31
December 31
2024
2023
Current assets:
Cash and cash equivalents
$1,270
$1,493
Short-term investments
88
75
Receivables, net
2,985
3,007
Inventories
1,846
1,934
Other current assets
368
922
Total current assets
$6,557
$7,431
Current liabilities:
Short-term debt and current portion of
long-term debt
$939
$306
Accounts payable and accrued
liabilities
3,731
4,155
Restructuring reserves
128
84
Current portion of operating lease
liabilities
126
128
Other current liabilities
90
381
Total current liabilities
$5,014
$5,054
Long-term debt
$4,876
$5,748
PPG OPERATING METRICS
(unaudited)
($ in millions)
December 31
December 31
2024
2023
Operating Working Capital (a)
$2,331
$2,301
As a percent of quarter sales,
annualized
15.6 %
14.7 %
(a) Operating working capital includes:
(1) receivables from customers, net of allowance for doubtful
accounts, (2) FIFO inventories and (3) trade liabilities.
PPG INDUSTRIES, INC. AND
SUBSIDIARIES
CONSOLIDATED BUSINESS SEGMENT
INFORMATION (unaudited)
($ in millions)
Three Months Ended December
31
Twelve Months Ended December
31
2024
2023
2024
2023
Net sales
Global Architectural Coatings
$881
$943
$3,921
$4,021
Performance Coatings
1,262
1,233
5,237
5,132
Industrial Coatings
1,586
1,736
6,687
7,089
Total
$3,729
$3,912
$15,845
$16,242
Segment income
Global Architectural Coatings
$118
$131
$678
$673
Performance Coatings
259
218
1,142
1,019
Industrial Coatings
185
231
893
968
Total
$562
$580
$2,713
$2,660
Items not allocated to segments
Corporate
$(87)
$(114)
$(341)
$(391)
Interest expense, net of interest
income
(15)
(13)
(64)
(107)
Business restructuring-related costs, net
(a)
(362)
(16)
(377)
(41)
Portfolio optimization (b)
(17)
(31)
(59)
(53)
Legacy environmental remediation charges
(c)
(4)
(24)
(24)
(24)
Insurance recoveries (d)
4
7
4
16
Impairment and other related charges, net
(e)
—
(160)
—
(160)
Currency valuation loss (f)
—
(20)
—
(20)
Pension settlement charge (g)
—
—
—
(190)
Income before income taxes
$81
$209
$1,852
$1,690
(a)
Business restructuring-related costs, net
include business restructuring charges, offset by releases related
to previously approved programs, which are included in Business
restructuring, net on the consolidated statement of income,
accelerated depreciation of certain assets, which is included in
Depreciation on the consolidated statement of income, and other
restructuring-related costs, which are included in Cost of sales,
exclusive of depreciation and amortization and Selling, general and
administrative on the consolidated statement of income. Business
restructuring-related costs, net also includes the fourth quarter
2024 recognition of accumulated foreign currency translation losses
of $110 million related to the company's exit of its Argentina
operations in connection with a restructuring program, which are
included in Other (income)/charges, net in the consolidated
statement of income. No tax benefit was recorded on the fourth
quarter 2024 recognition of the accumulated foreign currency
translation losses.
(b)
Portfolio optimization includes gains and
losses related to the sale of certain assets, which are included in
Other (income)/charges, net on the consolidated statement of
income, including the gain of $129 million on the sale of the
company's silicas products business in the fourth quarter 2024, and
the losses on the sales of the company's traffic solutions business
in Argentina in the second quarter 2024, the company's European and
Australian Traffic Solutions businesses in the fourth quarter 2023
and the company's legacy industrial Russian operations in the third
quarter 2023. Portfolio optimization includes advisory, legal,
accounting, valuation, other professional or consulting fees and
certain internal costs directly incurred to effect acquisitions, as
well as similar fees and other costs to effect divestitures and
other portfolio optimization exit actions. These costs are included
in Selling, general and administrative expense on the consolidated
statement of income. Portfolio optimization also includes an
impairment charge of $146 million recognized during the fourth
quarter 2024 when the company's remaining operations in Russia were
classified as held for sale, which is included in Impairment and
other related charges, net on the consolidated statement of income.
No tax benefits was recorded on the fourth quarter 2024 impairment
charge.
(c)
Legacy environmental remediation charges
represent environmental remediation costs at certain non-operating
PPG manufacturing sites. These charges are included in Other
(income)/charges, net in the consolidated statement of income.
(d)
In the fourth quarter 2024 and the fourth
quarter 2023, the company received reimbursement for previously
approved insurance claims under policies covering legacy
asbestos-related matters. In the first quarter 2023, the company
received reimbursement under its insurance policies for damages
incurred at a southern U.S. factory from a winter storm in 2020.
These insurance recoveries are included in Other charges/(income),
net on the consolidated statement of income.
(e)
In the fourth quarter 2023, the company
recorded impairment and other related charges due to a non-cash
goodwill impairment recognized for the Traffic Solutions reporting
unit as a result of its annual goodwill impairment test. The fair
value of the Traffic Solutions reporting unit decreased primarily
due to increases in the cost of capital (discount rate assumption)
and declines in the reporting unit’s long-term forecast driven by
challenges at its operations in Argentina due to the highly
inflationary environment and changes to the reporting unit’s global
footprint, including the fourth quarter 2023 divestiture of its
European and Australian businesses.
(f)
In December 2023, the central bank of
Argentina adjusted the official foreign currency exchange rate for
the Argentine peso, significantly devaluing the currency relative
to the United States dollar. Argentina currency devaluation losses
represent foreign currency translation losses recognized during
December 2023 related to the devaluation of the Argentine peso,
which is included in Other charges/(income), net on the
consolidated statement of income.
(g)
In the first quarter 2023, PPG purchased
group annuity contracts that transferred pension benefit
obligations for certain of the company’s retirees in the U.S. to
third-party insurance companies, resulting in a non-cash pension
settlement charge.
PPG INDUSTRIES, INC. AND
SUBSIDIARIES
RECAST BUSINESS SEGMENT
INFORMATION
($ in millions)
Three Months Ended
March 31, 2024
June 30, 2024
September 30, 2024
December 31, 2024
Net sales to external customers
$966
$1,070
$1,004
$881
Cost of sales, exclusive of depreciation
and amortization
458
513
494
439
Selling, general and administrative
301
309
289
287
Depreciation and amortization
26
26
26
26
Other
15
11
12
11
Global Architectural segment
income
$166
$211
$183
$118
Net sales to external customers
$1,184
$1,418
$1,373
$1,262
Cost of sales, exclusive of depreciation
and amortization
628
773
755
695
Selling, general and administrative
245
261
258
253
Depreciation and amortization
34
34
31
33
Other
26
24
23
22
Performance Coatings segment
income
$251
$326
$306
$259
Net sales to external customers
$1,699
$1,747
$1,655
$1,586
Cost of sales, exclusive of depreciation
and amortization
1119
1164
1132
1083
Selling, general and administrative
212
210
207
209
Depreciation and amortization
52
53
52
49
Other
67
61
64
60
Industrial Coatings segment
income
$249
$259
$200
$185
Total net sales to external customers
$3,849
$4,235
$4,032
$3,729
Total segment income
$666
$796
$689
$562
Corporate / Non-Segment Items
Corporate / non-segment unallocated,
exclusive of depreciation and amortization
(76)
(67)
(72)
(76)
Corporate / non-segment depreciation and
amortization
(18)
(11)
(10)
(11)
Interest expense, net of interest
income
(13)
(17)
(19)
(15)
Business restructuring-related costs, net
(a)
(11)
(4)
—
(362)
Portfolio optimization (b)
(6)
(26)
(10)
(17)
Legacy environmental remediation charges
(c)
—
(20)
—
(4)
Insurance recoveries (d)
—
—
—
4
Total income from continuing operations
before income taxes
$542
$651
$578
$81
Three Months Ended
March 31, 2023
June 30, 2023
September 30, 2023
December 31, 2023
Net sales to external customers
$975
$1,066
$1,037
$943
Cost of sales, exclusive of depreciation
and amortization
495
543
512
472
Selling, general and administrative
279
296
293
302
Depreciation and amortization
25
25
26
25
Other
16
16
10
13
Global Architectural segment
income
$160
$186
$196
$131
Net sales to external customers
$1,153
$1,424
$1,322
$1,233
Cost of sales, exclusive of depreciation
and amortization
634
787
779
693
Selling, general and administrative
230
246
234
256
Depreciation and amortization
35
34
35
35
Other
24
28
32
31
Performance Coatings segment
income
$230
$329
$242
$218
Net sales to external customers
$1,753
$1,833
$1,767
$1,736
Cost of sales, exclusive of depreciation
and amortization
1201
1235
1187
1136
Selling, general and administrative
201
217
214
238
Depreciation and amortization
53
53
53
54
Other
57
78
67
77
Industrial Coatings segment
income
$241
$250
$246
$231
Total net sales to external customers
$3,881
$4,323
$4,126
$3,912
Total segment income
$631
$765
$684
$580
Corporate / Non-Segment Items
Corporate / non-segment unallocated,
exclusive of depreciation and amortization
(76)
(86)
(80)
(88)
Corporate / non-segment depreciation and
amortization
(8)
(10)
(17)
(26)
Interest expense, net of interest
income
(33)
(36)
(25)
(13)
Business restructuring-related costs, net
(a)
—
(10)
(15)
(16)
Portfolio optimization (b)
—
(7)
(15)
(31)
Legacy environmental remediation charges
(c)
—
—
—
(24)
Insurance recoveries (d)
9
—
—
7
Impairment and other related charges, net
(e)
—
—
—
(160)
Argentina currency devaluation losses
(f)
—
—
—
(20)
Pension settlement charge (g)
(190)
—
—
Total income from continuing operations
before income taxes
$333
$616
$532
$209
Twelve Months Ended
December 31, 2022
Net sales to external customers
$3,852
Cost of sales, exclusive of depreciation
and amortization
2,096
Selling, general and administrative
1,058
Depreciation and amortization
102
Other
38
Global Architectural segment
income
$558
Net sales to external customers
$4,792
Cost of sales, exclusive of depreciation
and amortization
2,813
Selling, general and administrative
879
Depreciation and amortization
142
Other
111
Performance Coatings segment
income
$847
Net sales to external customers
$6,970
Cost of sales, exclusive of depreciation
and amortization
5,062
Selling, general and administrative
786
Depreciation and amortization
207
Other
269
Industrial Coatings segment
income
$646
Total net sales to external customers
$15,614
Total segment income
$2,051
Corporate / Non-Segment Items
Corporate / non-segment unallocated,
exclusive of depreciation and amortization
(219)
Corporate / non-segment depreciation and
amortization
(51)
Interest expense, net of interest
income
(113)
Business restructuring-related costs, net
(a)
(72)
Portfolio optimization (b)
(10)
Impairment and other related charges, net
(e)
(231)
Total income from continuing operations
before income taxes
$1,355
(a)
Business restructuring-related
costs, net include business restructuring charges, offset by
releases related to previously approved programs, which are
included in Business restructuring, net on the consolidated
statement of income, accelerated depreciation of certain assets,
which is included in Depreciation on the consolidated statement of
income, and other restructuring-related costs, which are included
in Cost of sales, exclusive of depreciation and amortization and
Selling, general and administrative on the consolidated statement
of income. Business restructuring-related costs, net also includes
the fourth quarter 2024 recognition of accumulated foreign currency
translation losses of $110 million related to the company's exit of
its Argentina operations in connection with a restructuring
program, which are included in Other (income)/charges, net in the
consolidated statement of income. No tax benefit was recorded on
the fourth quarter 2024 recognition of the accumulated foreign
currency translation losses.
(b)
Portfolio optimization includes
gains and losses related to the sale of certain assets, which are
included in Other (income)/charges, net on the consolidated
statement of income, including the gain of $129 million on the sale
of the company's silicas products business in the fourth quarter
2024, and the losses on the sales of the company's traffic
solutions business in Argentina in the second quarter 2024, the
company's European and Australian Traffic Solutions businesses in
the fourth quarter 2023 and the company's legacy industrial Russian
operations in the third quarter 2023. Portfolio optimization
includes advisory, legal, accounting, valuation, other professional
or consulting fees and certain internal costs directly incurred to
effect acquisitions, as well as similar fees and other costs to
effect divestitures and other portfolio optimization exit actions.
These costs are included in Selling, general and administrative
expense on the consolidated statement of income. Portfolio
optimization also includes an impairment charge of $146 million
recognized during the fourth quarter 2024 when the company's
remaining operations in Russia were classified as held for sale,
which is included in Impairment and other related charges, net on
the consolidated statement of income. No tax benefit was recorded
on the fourth quarter 2024 impairment charge.
(c)
Legacy environmental remediation
charges represent environmental remediation costs at certain
non-operating PPG manufacturing sites. These charges are included
in Other (income)/charges, net in the consolidated statement of
income.
(d)
In the fourth quarter 2024 and
the fourth quarter 2023, the company received reimbursement for
previously approved insurance claims under policies covering legacy
asbestos-related matters. In the first quarter 2023, the company
received reimbursement under its insurance policies for damages
incurred at a southern U.S. factory from a winter storm in 2020.
These insurance recoveries are included in Other charges/(income),
net on the consolidated statement of income.
(e)
In the fourth quarter 2023, the
company recorded impairment and other related charges due to a
non-cash goodwill impairment recognized for the Traffic Solutions
reporting unit as a result of its annual goodwill impairment test.
The fair value of the Traffic Solutions reporting unit decreased
primarily due to increases in the cost of capital (discount rate
assumption) and declines in the reporting unit’s long-term forecast
driven by challenges at its operations in Argentina due to the
highly inflationary environment and changes to the reporting unit’s
global footprint, including the fourth quarter 2023 divestiture of
its European and Australian businesses. In 2022, the company
recorded impairment and other related charges due to the wind down
of the company's operations in Russia.
(f)
In December 2023, the central
bank of Argentina adjusted the official foreign currency exchange
rate for the Argentine peso, significantly devaluing the currency
relative to the United States dollar. Argentina currency
devaluation losses represent foreign currency translation losses
recognized during December 2023 related to the devaluation of the
Argentine peso, which is included in Other charges/(income), net on
the consolidated statement of income.
(g)
In the first quarter 2023, PPG
purchased group annuity contracts that transferred pension benefit
obligations for certain of the company’s retirees in the U.S. to
third-party insurance companies, resulting in a non-cash pension
settlement charge.
CATEGORY Corporate
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250130788715/en/
PPG Media Contact: Mark Silvey Corporate Communications
+1-412-434-3046 silvey@ppg.com
PPG Investor Contact: Alex Lopez Investor Relations
+1-412-434-3466 alejandrolopez@ppg.com investor.ppg.com
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