Core Insights - PPG Industries is experiencing challenges due to demand weakness, particularly in Europe, but is benefiting from cost discipline, acquisitions, and pricing actions [1][6][9] Financial Performance - PPG's second-quarter adjusted earnings were $2.22 per share, matching estimates but down from $2.35 a year earlier [1] - The company reported a roughly 1% decline in revenue, with higher sales in the Performance Coatings unit offset by declines in Global Architectural Coatings and Industrial Coatings segments [1] Cost Management and Restructuring - PPG is implementing a cost-cutting and restructuring strategy, realizing an additional $20 million in structural cost savings in Q2 2025, with expectations of around $60 million in total savings for the full year [2][9] - A comprehensive cost reduction program is expected to deliver annualized pre-tax savings of approximately $175 million once fully implemented, focusing on structural costs mainly in Europe [3] Acquisitions and Growth Strategy - The company is pursuing inorganic growth through acquisitions, including Tikkurila, Worwag, Cetelon, and Arsonsisi's powder coatings business, which are expected to contribute positively to its revenue [4][9] Shareholder Returns - PPG has a strong track record of returning cash to shareholders, having returned $1.4 billion in 2024 through dividends and share buybacks, with a quarterly dividend increase of 4% in July 2025 [5] Market Challenges - The company faces challenges from soft global industrial production, particularly affecting the Industrial Coatings segment, with lower automotive OEM build rates and weak consumer confidence in Europe [6][8] - Demand in the Global Architectural Coatings segment fell by 5% due to lower sales volumes and weaker consumer confidence in Europe [8] Future Outlook - PPG maintains its full-year 2025 adjusted earnings per share guidance of $7.75 to $8.05, supported by share gains and internal improvement initiatives despite current economic conditions [9]

Core Insights - PPG Industries Inc. has entered into a new authorized distributor partnership with GPA to expand the distribution of PPG TESLIN substrate for commercial printing and label applications [1][7] - The collaboration enhances the availability of PPG Teslin synthetic paper solutions, which are known for their durability and reduced plastic content [2][7] Company Developments - PPG Teslin substrates are designed for long-lasting performance in commercial printing and pressure-sensitive label applications, featuring strong bonding and high versatility [2][3] - The partnership with GPA aims to help clients achieve their business objectives by leveraging the unique performance qualities of Teslin substrates [3] Financial Performance - PPG's shares have decreased by 7.7% over the past year, contrasting with a 0.3% increase in its industry [5] - The company has maintained its full-year 2025 adjusted earnings per share guidance at $7.75 to $8.05, supported by market share gains and internal improvements [6]

Core Insights - PPG's "Colorful Community Project" marks its 10th anniversary in Tianjin, symbolizing a commitment to social responsibility and community engagement [2][3][6] - The project has expanded globally, impacting over 10.2 million people across more than 50 countries, with over 600 projects completed [2][3] - PPG plans to invest $15 million in the next decade (2025-2035) to continue supporting community initiatives [6] Group 1: Project Overview - The Tianjin station of the Colorful Community Project is a collaboration with local government, schools, and communities, focusing on integrating aesthetic education, technological innovation, and reading inspiration [2][3] - The project has invested over 14 million RMB in various themes such as biodiversity protection and rural revitalization across multiple Chinese cities [3] Group 2: Community Engagement - On the launch day, 100 PPG volunteers painted 1,276.3 square meters of walls at Binhai TEDA Primary School, creating an immersive "Color Reading Experience Hall" [5] - PPG's engineers conducted a "COLOR-X Power Car Experience Class," combining color design, environmental knowledge, and STEAM education to inspire students [5] Group 3: Future Commitment - PPG's Asia Pacific President emphasized the importance of understanding community needs for sustainable change [6] - The company and its foundation will donate $1 million to 100 long-term partners in 2025, reinforcing their commitment to community development [6]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited statements show decreased net sales and net income for Q2 2025 compared to the prior year [Condensed Consolidated Statement of Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Income) Net sales and net income declined in the second quarter and first half of 2025 versus 2024 Condensed Consolidated Statement of Income (Unaudited) | ($ in millions, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $4,195 | $4,235 | $7,879 | $8,084 | | Income before income taxes | $598 | $651 | $1,100 | $1,193 | | **Net income (attributable to PPG)** | **$450** | **$528** | **$823** | **$928** | | **Earnings per common share - assuming dilution** | **$1.98** | **$2.24** | **$3.60** | **$3.93** | [Condensed Consolidated Balance Sheet](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) Total assets, liabilities, and shareholders' equity all increased as of June 30, 2025 Condensed Consolidated Balance Sheet (Unaudited) | ($ in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $8,190 | $6,557 | | **Total assets** | **$22,099** | **$19,433** | | **Total current liabilities** | $5,762 | $5,014 | | **Total liabilities** | **$14,355** | **$12,471** | | **Total PPG shareholders' equity** | **$7,577** | **$6,785** | [Condensed Consolidated Statement of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Cash from operations increased slightly, while proceeds from debt issuance drove a positive financing cash flow Condensed Consolidated Statement of Cash Flows (Unaudited) | ($ in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Cash from operating activities** | **$369** | **$305** | | Cash used for investing activities | ($288) | ($370) | | Cash from/(used for) financing activities | $37 | ($185) | | **Net increase/(decrease) in cash and cash equivalents** | **$291** | **($378)** | | Cash and cash equivalents, end of period | $1,561 | $1,115 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail divestitures, restructuring, new debt issuance, and a revised segment reporting structure - In December 2024, PPG completed the sale of its architectural coatings business in the U.S. and Canada, now presented as **discontinued operations**[23](index=23&type=chunk)[29](index=29&type=chunk) - The company completed the sale of its remaining Russian business in Q1 2025, following a **$146 million impairment charge** in Q4 2024[31](index=31&type=chunk) - In March 2025, PPG issued **€900 million in 3.250% Notes due 2032** and repaid **€300 million** of maturing notes in June 2025[45](index=45&type=chunk)[46](index=46&type=chunk) - Effective December 31, 2024, the company revised its reportable business segments to three: **Global Architectural Coatings, Performance Coatings, and Industrial Coatings**[113](index=113&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes a 1% Q2 sales decrease to divestitures, which offset volume and price gains [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Q2 net sales decreased slightly due to divestitures, while adjusted EPS fell 5.5% from the prior year Q2 2025 vs Q2 2024 Performance | ($ in millions) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $4,195 | $4,235 | (0.9)% | | Income before income taxes | $598 | $651 | (8.1)% | - Q2 2025 net sales change was driven by: **Divestiture-related sales (-3%)**, **higher selling prices (+1%)**, and **higher sales volumes (+1%)**[131](index=131&type=chunk)[134](index=134&type=chunk) Adjusted Earnings Per Diluted Share | | Three Months Ended June 30 | Six Months Ended June 30 | | :--- | :--- | :--- | | **2025** | $2.22 | $3.93 | | **2024** | $2.35 | $4.22 | | **% Change** | (5.5)% | (6.9)% | [Performance of Reportable Business Segments](index=34&type=section&id=Performance%20of%20Reportable%20Business%20Segments) Performance Coatings sales grew, while Global Architectural and Industrial Coatings sales declined in Q2 Q2 2025 Segment Performance vs Q2 2024 | Segment | Net Sales ($M) | % Change | Segment Income ($M) | % Change | | :--- | :--- | :--- | :--- | :--- | | **Global Architectural Coatings** | $1,018 | (4.9)% | $160 | (24.2)% | | **Performance Coatings** | $1,512 | 6.6% | $356 | 9.2% | | **Industrial Coatings** | $1,665 | (4.7)% | $227 | (12.4)% | - Performance Coatings growth was led by a **high single-digit increase in aerospace coatings** and a **double-digit increase in protective and marine coatings**[160](index=160&type=chunk)[161](index=161&type=chunk) - Industrial Coatings decline was driven by the divestiture of the global silicas business and lower automotive OEM coatings sales, partially offset by **high single-digit growth in packaging coatings**[170](index=170&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $1.6 billion in cash and projects capital spending up to $775 million - Cash and short-term investments totaled **$1.6 billion** at June 30, 2025[182](index=182&type=chunk) - Cash from operating activities for the first six months of 2025 was **$371 million**, up from $348 million in the prior year[183](index=183&type=chunk) - Total capital spending for 2025 is expected to be approximately **$725 million to $775 million**[187](index=187&type=chunk) - The company expects restructuring savings of approximately **$75 million in 2025**, with related cash outlays of about **$125 million**[194](index=194&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages foreign currency and interest rate risks using derivative instruments - The company is exposed to foreign currency transaction and translation risk; a hypothetical adverse change in exchange rates could reduce pre-tax income by **$495 million** as of June 30, 2025[207](index=207&type=chunk) - PPG manages interest rate risk by balancing fixed and variable rate debt, with interest rate swaps converting **$375 million** of fixed-rate debt to variable-rate[210](index=210&type=chunk) - A **10% increase in interest rates** would increase annual interest expense on variable rate debt by **$3 million**[210](index=210&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were effective - Management concluded that the company's **disclosure controls and procedures are effective** as of the end of the reporting period[212](index=212&type=chunk) - **No material changes** to the company's internal control over financial reporting occurred during the second quarter of 2025[214](index=214&type=chunk) [Part II. Other Information](index=43&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) PPG is managing litigation related to a divested business and asbestos claims, believing its risk is remote - PPG is in a legal dispute with Westlake Corporation regarding the 'Di Gregório litigation', for which liability was transferred to a Westlake predecessor in 2013; a Brazilian court has entered an award against PPG, which could be between **$350 million and $700 million**[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk) - PPG has filed a lawsuit against Westlake in Delaware to enforce Westlake's obligations to cover the award and all related costs; a decision is expected in Q3 2025 and PPG believes its **risk of loss is remote**[223](index=223&type=chunk)[224](index=224&type=chunk) - The company continues to be a defendant in lawsuits involving claims of personal injury from **asbestos exposure**[225](index=225&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported since the 2024 Annual Report - **No material changes** in the Company's risk factors were reported compared to the 2024 Form 10-K[226](index=226&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased over 1.3 million shares of its common stock during the second quarter of 2025 Issuer Purchases of Equity Securities (Q2 2025) | Month | Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | — | $— | | May 2025 | 656,169 | $111.37 | | June 2025 | 689,305 | $111.60 | | **Total** | **1,345,474** | **$111.48** | - The board of directors authorized an additional **$2.5 billion for share repurchases** in April 2024, with no expiration date[227](index=227&type=chunk) [Other Information](index=45&type=section&id=Item%205.%20Other%20Information) The Chief Financial Officer adopted a Rule 10b5-1 trading plan in May 2025 - On May 2, 2025, CFO Vincent J. Morales adopted a **Rule 10b5-1 trading plan** for the potential sale of up to **34,872 shares** of common stock upon exercise of stock options[228](index=228&type=chunk) [Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the report, including officer certifications and XBRL data - Exhibits filed include **CEO and CFO certifications** pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[233](index=233&type=chunk) - The filing includes financial statements and notes formatted in **Inline XBRL**[235](index=235&type=chunk)

Financial Performance - The company reported net sales of $4.2 billion, with a 2% increase in organic sales, driven by aerospace coatings, protective and marine coatings, and packaging coatings [8][9] - The quarterly segment EBITDA margin was 20.3%, and adjusted earnings per diluted share were $2.22 [9] - The company repurchased approximately $150 million of stock during the quarter, totaling $540 million year-to-date, and raised its quarterly dividend per share by 4% [9][19] Business Segment Performance - In the Global Architectural Coatings segment, positive selling prices were offset by lower volumes and the impact of a divestiture, with organic sales growth in the Nordic region and the UK, but lower demand in Eastern Europe [10][11] - The Performance Coatings segment saw a 6% increase in organic sales, with aerospace delivering high single-digit percentage organic sales growth [11][12] - Protective and Marine Coatings achieved double-digit percentage organic sales growth, marking the ninth consecutive quarter of positive year-over-year sales volume growth [13][14] - The Industrial Coatings segment's sales volumes were flat, with selling prices declining by 1% due to index-based customer contracts [15][16] Market Performance - Organic growth was delivered in both the United States and Latin America, while demand in Europe was tepid and some softening was noted in Asia [9][10] - The company expects project-related spending in Mexico to improve in the second half of the year, with organic growth in Mexico projected to be modestly up to mid-single digits [10][90] Company Strategy and Industry Competition - The company is focused on leveraging its technology advantage in the Performance Coatings segment, particularly in aerospace and protective and marine coatings [21][22] - The company anticipates continued growth in the aerospace sector, with high single-digit to double-digit growth expected for the foreseeable future [80] - The company is committed to driving shareholder value through disciplined capital allocation and a strong balance sheet [20][23] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the dynamic macro environment, with expectations for sales and earnings growth momentum in the second half of the year [20][22] - The company is monitoring tariff situations and plans to react accordingly with pricing actions to mitigate financial impacts [20][21] - Management expects to achieve a mid-single-digit percentage increase in EPS for the third quarter and a low double-digit percentage increase for the fourth quarter [22] Other Important Information - The company retired €300 million of debt during the quarter and has another €600 million of euro debt maturing in the fourth quarter [19][20] - The company is investing in both operational and capital expenditures in aerospace to support future growth [11][80] Q&A Session Summary Question: Global Architectural Coatings segment performance - Management noted that Eastern Europe did not recover as expected, impacting margins, while Mexico showed signs of retail recovery [28][30] Question: Volume growth expectations for Q3 and Q4 - Management expects low single-digit growth in volumes for the second half of the year, with confidence in share gains [33][34] Question: Outlook for Performance Coatings and Refinish - Refinish is expected to be soft in Q3, with a return to normalization in Q4, while Protective and Marine Coatings are anticipated to continue strong growth [36][38] Question: Raw material inflation compared to peers - Management explained that raw material inflation is influenced by the company's significant purchases in Mexico and specific material costs like epoxy [44][45] Question: Buyback activity and M&A considerations - Management confirmed ongoing buyback activity and indicated that any M&A would be small and not materially affect cash allocation [47][50] Question: Share gains and margin impacts - Management indicated that share gains would improve net margins through fixed cost leverage and manufacturing efficiencies [77] Question: Aerospace growth outlook - Management anticipates high single-digit to double-digit growth in aerospace, supported by strong forecasts from industry CEOs [80] Question: Mexico architectural market outlook - Management expressed confidence in project spending recovery in Mexico, with expectations for modest growth in the second half of the year [88][90]

Financial Data and Key Metrics Changes - The company reported net sales of $4.2 billion, with an organic sales increase of 2% [7] - Adjusted earnings per diluted share were $2.22, and the quarterly segment EBITDA margin was 20.3% [8] - The company repurchased approximately $150 million of stock during the quarter, totaling $540 million year-to-date [8][19] Business Line Data and Key Metrics Changes - In the Global Architectural Coatings segment, positive selling prices were offset by lower volumes and the impact of a divestiture [9] - The Performance Coatings segment achieved record net sales and earnings, with a 6% increase in organic sales driven by higher selling prices and sales volumes [11] - Protective and Marine Coatings delivered double-digit percentage organic sales growth, marking the ninth consecutive quarter of positive year-over-year sales volume growth [13] Market Data and Key Metrics Changes - Organic growth was delivered in both the United States and Latin America, while demand in Europe was tepid and some softening was noted in Asia [8] - In Architectural Coatings Latin America, organic sales growth was seen in Mexico, aided by solid retail sales [10] - The company expects project-related spending in Mexico to improve as the year progresses [10] Company Strategy and Development Direction - The company is committed to using its strong balance sheet for shareholder value creation and has raised its quarterly dividend per share by 4% [8][19] - The company anticipates continued growth in its Performance Coatings segment, driven by technology advantages in Aerospace and Protective and Marine [20] - The company is focused on aggressive self-help and discretionary cost management programs to drive future growth [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the dynamic macro environment, expecting sales and earnings growth momentum for the second half of the year [19] - The company is monitoring the tariff situation and plans to react accordingly with pricing actions to mitigate financial impacts [19] - Management expects to achieve high single-digit percentage year-over-year earnings growth for the second half of the year [21] Other Important Information - The company retired €300 million of debt during the quarter and has another €600 million of euro debt maturing in the fourth quarter [19] - The company is investing in both OpEx and CapEx in aerospace to support continued growth [11] Q&A Session Summary Question: Global Architectural Coatings segment performance - Management noted that Eastern Europe did not recover as expected, impacting overall performance, but there was positive momentum in the Nordic region and the UK [26][28] Question: Volume growth expectations for Q3 and Q4 - Management expects low single-digit volume growth to continue into the second half of the year [34][35] Question: Outlook for Performance Coatings and Refinish - Management anticipates a soft Q3 for Refinish due to distributor order patterns but expects normalization in Q4 [39] Question: Raw material pricing and inflation - Management explained that raw material inflation is influenced by the company's significant operations in Mexico and specific material costs like epoxy [44][45] Question: Buyback activity and M&A plans - Management confirmed ongoing buyback activity and indicated that there are no significant M&A plans on the horizon [48][49] Question: Outlook for auto OEM and production dynamics - Management highlighted share gains and long-term fundamentals in the auto OEM sector, expecting to outperform the industry [92][94] Question: Architectural margins and cost impacts - Management discussed the mix impact from Mexico and the normalization of FX impacts in the second half of the year [107][108]

Second Quarter 2025 Financial Results July 29, 2025 Forward-Looking Statements This presentation contains forward-looking statements that reflect the Company's current views with respect to future events and financial performance. You can identify forward-looking statements by the fact that they do not relate strictly to current or historic facts. Forward-looking statements are identified by the use of the words "aim," "believe," "expect," "anticipate," "intend," "estimate," "project," "outlook," "forecast" ...

Core Insights - PPG Industries reported revenue of $4.2 billion for the quarter ended June 2025, reflecting a 12.5% decline year-over-year, with EPS at $2.22 compared to $2.50 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $4.13 billion by 1.53%, while the EPS met the consensus estimate [1] Financial Performance - Net Sales in Performance Coatings were $1.51 billion, surpassing the average estimate of $1.48 billion, but showing a significant year-over-year decline of 50.4% [4] - Global Architectural Coatings reported Net Sales of $1.02 billion, slightly below the average estimate of $1.03 billion [4] - Industrial Coatings achieved Net Sales of $1.67 billion, exceeding the average estimate of $1.64 billion, with a year-over-year decline of 4.6% [4] Segment Income - Segment Income for Performance Coatings was $356 million, higher than the estimated $327.83 million [4] - Global Architectural Coatings had Segment Income of $160 million, below the estimated $184.59 million [4] - Industrial Coatings reported Segment Income of $227 million, slightly above the average estimate of $219.24 million [4] Stock Performance - PPG Industries' shares returned +0.2% over the past month, compared to a +3.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Group 1: Earnings Performance - PPG Industries reported quarterly earnings of $2.22 per share, matching the Zacks Consensus Estimate, but down from $2.5 per share a year ago [1] - The company had revenues of $4.2 billion for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 1.53%, but down from $4.79 billion year-over-year [2] - PPG Industries has surpassed consensus EPS estimates only once in the last four quarters [1] Group 2: Stock Performance and Outlook - PPG Industries shares have declined approximately 4.6% year-to-date, contrasting with the S&P 500's gain of 8.6% [3] - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $2.12 for the next quarter and $7.89 for the current fiscal year [4][7] - The Zacks Rank for PPG Industries is currently 3 (Hold), indicating expected performance in line with the market [6] Group 3: Industry Context - The Chemical - Specialty industry, to which PPG Industries belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, which may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that investors should monitor these revisions closely [5]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) PPG reported Q2 2025 net sales of $4.2 billion, a 1% decrease, with 2% organic growth and adjusted EPS of $2.22, down 6% Q2 2025 Consolidated Results ($ in millions, except EPS) | Indicator | 2Q 2025 | 2Q 2024 | YOY change | | :--- | :--- | :--- | :--- | | **Net sales** | $4,195 | $4,235 | (1)% | | **Net income** | $450 | $493 | (9)% | | **Adjusted net income** | $504 | $555 | (9)% | | **EPS** | $1.98 | $2.09 | (5)% | | **Adjusted EPS** | $2.22 | $2.35 | (6)% | - **Organic Sales:** Increased **2%** year-over-year, driven by both higher sales volumes and prices[4](index=4&type=chunk) - **Segment Margin:** Achieved **17.7%** with a segment EBITDA margin of **20.3%**[4](index=4&type=chunk) - **Share Repurchases:** Totaled approximately **$150 million** in the quarter and **$540 million** year-to-date[4](index=4&type=chunk) [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Management highlighted 2% organic sales growth and record Performance Coatings, reaffirming full-year adjusted EPS guidance of $7.75 to $8.05 [Chairman and CEO Comments](index=1&type=section&id=Chairman%20and%20CEO%20Comments) CEO highlighted 2% organic sales growth, record Performance Coatings, flat Industrial Coatings volumes, and varied architectural coatings demand - Delivered **2%** organic sales growth with equal contributions from sales volumes and selling prices, reflecting strong product portfolio and commercial execution[3](index=3&type=chunk) - The Performance Coatings segment achieved record quarterly sales and earnings, with a **6%** increase in organic sales[3](index=3&type=chunk) - Industrial Coatings segment sales volumes were flat following several quarters of contraction, signaling initial benefits from share gains[3](index=3&type=chunk) - Regional architectural coatings performance was varied: Europe was lackluster, Mexico's retail demand was solid, and the U.S., Canada, and Latin America saw mid-single-digit organic growth[4](index=4&type=chunk)[5](index=5&type=chunk) [Outlook](index=2&type=section&id=Outlook) PPG anticipates accelerated volume growth and strong H2 2025 EPS growth, reaffirming full-year adjusted EPS guidance of $7.75 to $8.05 - Expects volume growth momentum to accelerate in H2 2025, driving high single-digit percentage EPS growth year-over-year[6](index=6&type=chunk) - Industrial Coatings segment is projected to have low single-digit percentage sales volume growth in Q3 and Q4 due to share gains[6](index=6&type=chunk) - The company reaffirmed its full-year 2025 adjusted earnings per share guidance of **$7.75 to $8.05**[7](index=7&type=chunk)[21](index=21&type=chunk) [Segment Performance Analysis](index=2&type=section&id=Segment%20Performance%20Analysis) Performance Coatings led with 7% net sales growth, while Industrial Coatings fell 5% due to divestiture, and Global Architectural Coatings declined 5% [Global Architectural Coatings Segment](index=2&type=section&id=Global%20Architectural%20Coatings%20Segment) Net sales decreased 5% to $1,018 million due to divestitures and lower volumes, with segment income down 24% Global Architectural Coatings Financials ($ in millions) | Indicator | 2Q 2025 | 2Q 2024 | YOY change | | :--- | :--- | :--- | :--- | | **Net sales** | $1,018 | $1,070 | (5)% | | Sales volumes | | | (2)% | | Selling prices | | | +1% | | Divestitures and other | | | (4)% | | **Segment income** | $160 | $211 | (24)% | | Segment income % | 15.7% | 19.7% | | - The net sales decrease was driven by the divestiture of the architectural coatings business in Russia and lower sales volumes, partially offset by higher selling prices[12](index=12&type=chunk) - Organic sales in EMEA and Latin America/Asia Pacific declined by a low single-digit percentage. In Mexico, solid retail sales were offset by paused business investment, which is expected to improve in H2 2025[13](index=13&type=chunk) [Performance Coatings Segment](index=3&type=section&id=Performance%20Coatings%20Segment) Net sales increased 7% to $1,512 million, driven by volume and price growth, boosting segment income by 9% to $356 million Performance Coatings Financials ($ in millions) | Indicator | 2Q 2025 | 2Q 2024 | YOY change | | :--- | :--- | :--- | :--- | | **Net sales** | $1,512 | $1,418 | +7% | | Sales volumes | | | +3% | | Selling prices | | | +3% | | **Segment income** | $356 | $326 | +9% | | Segment income % | 23.5% | 23.0% | | - Sales volume growth was led by strong performance in aerospace coatings (which achieved record quarterly sales), protective and marine coatings, and traffic solutions[16](index=16&type=chunk) - Automotive refinish coatings organic sales decreased by a low single-digit percentage but still outperformed the industry due to share gains and subscription revenue[16](index=16&type=chunk) [Industrial Coatings Segment](index=4&type=section&id=Industrial%20Coatings%20Segment) Net sales declined 5% to $1,665 million due to divestiture, with flat volumes indicating share gains, but segment income fell 12% Industrial Coatings Financials ($ in millions) | Indicator | 2Q 2025 | 2Q 2024 | YOY change | | :--- | :--- | :--- | :--- | | **Net sales** | $1,665 | $1,747 | (5)% | | Sales volumes | | | —% | | Selling prices | | | (1)% | | Divestitures and other | | | (5)% | | **Segment income** | $227 | $259 | (12)% | | Segment income % | 13.6% | 14.8% | | - The net sales decline was primarily due to the impact of the divestiture of the silicas products business in late 2024. Sales volumes were flat, reflecting benefits from share gains[18](index=18&type=chunk) - Packaging coatings organic sales increased by a high single-digit percentage driven by share gains, while automotive OEM coatings organic sales decreased by a low single-digit percentage[19](index=19&type=chunk) [Financial Position and Capital Allocation](index=2&type=section&id=Financial%20Position%20and%20Capital%20Allocation) PPG maintained a strong balance sheet with $1.6 billion cash, $5.7 billion net debt, repurchasing $150 million in shares and retiring €300 million debt - The company repurchased approximately **$150 million** of shares in Q2, bringing the year-to-date total to **$540 million**[9](index=9&type=chunk) - At the end of Q2 2025, cash and short-term investments totaled **$1.6 billion**. Net debt was **$5.7 billion**, up **$479 million** from Q2 2024[11](index=11&type=chunk) - The company retired **€300 million** of debt at maturity in Q2 and has a **€600 million** debt maturity due in Q4 2025[11](index=11&type=chunk) Balance Sheet Highlights ($ in millions) | Account | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,561 | $1,115 | | Total current assets | $8,190 | $7,784 | | Total current liabilities | $5,762 | $5,225 | | Long-term debt | $5,919 | $5,765 | [Appendix: Financial Statements & Reconciliations](index=6&type=section&id=Appendix%3A%20Financial%20Statements%20%26%20Reconciliations) This section presents unaudited Q2 and H1 2025 financial statements and Regulation G reconciliations for non-GAAP measures [Regulation G Reconciliation](index=6&type=section&id=Regulation%20G%20Reconciliation) This section reconciles GAAP to non-GAAP figures, adjusting Q2 2025 reported net income ($450 million) to adjusted net income ($504 million) Reconciliation of Reported to Adjusted Net Income ($ in millions, except EPS) | Description | Q2 2025 $ | Q2 2025 EPS | | :--- | :--- | :--- | | **Reported net income from continuing operations** | **$450** | **$1.98** | | Acquisition-related amortization expense | $25 | $0.11 | | Business restructuring-related costs, net | $15 | $0.07 | | Portfolio optimization | $2 | $0.01 | | Legacy environmental remediation charges | $12 | $0.05 | | **Adjusted net income from continuing operations** | **$504** | **$2.22** | Segment EBITDA Reconciliation ($ in millions) | Segment | Net Sales | Segment Income | Segment EBITDA | | :--- | :--- | :--- | :--- | | Global Architectural Coatings | $1,018 | $160 | $187 | | Performance Coatings | $1,512 | $356 | $389 | | Industrial Coatings | $1,665 | $227 | $276 | | **Total** | **$4,195** | **$743** | **$852** | [Condensed Consolidated Financial Statements](index=8&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Unaudited financial statements show Q2 2025 net income of $450 million, $1.6 billion cash, and $371 million H1 2025 operating cash flow Condensed Consolidated Statement of Income (Three Months Ended June 30, $ in millions) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Net sales | $4,195 | $4,235 | | Income before income taxes | $598 | $651 | | Net income (attributable to PPG) | $450 | $528 | Condensed Consolidated Statement of Cash Flows Highlights (Six Months Ended June 30, $ in millions) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Cash from operating activities | $369 | $305 | | Capital expenditures | $330 | $367 | | Dividends paid on PPG common stock | $308 | $305 | | Purchase of treasury stock | $540 | $312 | [Consolidated Business Segment Information](index=11&type=section&id=Consolidated%20Business%20Segment%20Information) This table details net sales and segment income for PPG's three business segments for Q2 and H1 2025/2024, reconciling to consolidated income before taxes Segment Net Sales and Income (Three Months Ended June 30, $ in millions) | Segment | Net Sales 2025 | Net Sales 2024 | Segment Income 2025 | Segment Income 2024 | | :--- | :--- | :--- | :--- | :--- | | Global Architectural Coatings | $1,018 | $1,070 | $160 | $211 | | Performance Coatings | $1,512 | $1,418 | $356 | $326 | | Industrial Coatings | $1,665 | $1,747 | $227 | $259 | | **Total** | **$4,195** | **$4,235** | **$743** | **$796** |