First Quarter 2025 Financial Highlights This section summarizes PPG's first quarter 2025 financial performance, including consolidated results, CEO commentary, and key financial metrics [Consolidated Results Overview](index=1&type=section&id=First%20Quarter%202025%20Consolidated%20Results) PPG reported a decrease in net sales, net income, and EPS for the first quarter of 2025 compared to the prior year, with adjusted figures also showing a decline | $ in millions, except EPS | 1Q 2025 | 1Q 2024 | YOY change | | :------------------------ | :------ | :------ | :--------- | | Net sales | $3,684 | $3,849 | (4)% | | Net income | $375 | $405 | (7)% | | Adjusted net income | $396 | $443 | (11)% | | EPS | $1.64 | $1.71 | (4)% | | Adjusted EPS | $1.72 | $1.87 | (8)% | [Chairman and CEO Commentary](index=1&type=section&id=Chairman%20and%20CEO%20Comments) CEO Tim Knavish highlighted positive organic sales growth driven by increased volumes and selling prices, particularly in the Performance Coatings segment and the U.S. The company is realizing benefits from its enterprise growth strategy, expecting $75 million in annual cost savings, and reaffirms its full-year EPS guidance - PPG is beginning to realize benefits from its enterprise growth strategy, delivering **positive organic sales growth** with increases in both sales volumes and selling prices[4](index=4&type=chunk) - The Performance Coatings segment delivered **9% organic sales growth**, with strong performance in automotive refinish, traffic solutions, aerospace, and protective and marine coatings[4](index=4&type=chunk) - The company expects to deliver **$75 million in annual savings** from self-help cost actions this year[7](index=7&type=chunk) - PPG is maintaining its full-year earnings per share guidance range of **$7.75 to $8.05**[8](index=8&type=chunk) [Key Financial and Operational Metrics](index=1&type=section&id=Key%20Financial%20and%20Operational%20Metrics%20Summary) For Q1 2025, net sales decreased 4% to $3.7 billion, while organic sales increased 1%. Reported EPS was $1.64 and adjusted EPS was $1.72. The company repurchased approximately $400 million in shares, and net debt increased to $5.4 billion | Metric | Value | YOY Change | | :---------------------- | :---------- | :--------- | | Net sales | $3.7 billion| (4)% | | Organic sales | +1% | | | Reported EPS | $1.64 | | | Adjusted EPS | $1.72 | | | Segment margin | 16.5% | | | Segment EBITDA margin | 19.4% | | | Share repurchases | ~$400 million| | | Net debt (quarter end) | $5.4 billion| +$340 million| [Additional Financial Information](index=2&type=section&id=Additional%20Financial%20Information) During the first quarter, PPG repurchased approximately $400 million in shares and issued €900 million of debt. The company's cash and short-term investments totaled $1.9 billion, with net debt at $5.4 billion, reflecting a $340 million increase from the prior year - Share repurchases in the first quarter totaled approximately **$400 million**[10](index=10&type=chunk) - In March, the company issued **€900 million of debt**[10](index=10&type=chunk) Cash and Debt Metrics | Metric | Q1 2025 | Q1 2024 | | :------------------------------ | :---------- | :---------- | | Cash and short-term investments | $1.9 billion| N/A | | Net debt | $5.4 billion| $5.06 billion (implied) | | Corporate expenses | $95 million | N/A | | Net interest expense | $13 million | N/A | | Reported effective tax rate | 24.3% | N/A | | Adjusted effective tax rate | 24.5% | N/A | Segment Performance Analysis This section analyzes the financial performance of PPG's individual business segments, detailing sales, income, and key drivers [Global Architectural Coatings Segment](index=2&type=section&id=Global%20Architectural%20Coatings%20Segment) Net sales for the Global Architectural Coatings segment decreased 11% year-over-year, primarily due to unfavorable foreign currency translation and lower sales volumes, partially offset by higher selling prices. Segment income and EBITDA saw significant declines Global Architectural Coatings Financials | $ in millions | 1Q 2025 | 1Q 2024 | YOY change | | :------------------ | :------ | :------ | :--------- | | Net sales | $857 | $966 | (11)% | | Sales volumes | | | (3)% | | Selling prices | | | +1% | | Foreign currency | | | (7)% | | Divestitures | | | (2)% | | Segment income | $118 | $166 | (29)% | | Segment income % | 13.8% | 17.2% | | | Segment EBITDA | $144 | $192 | (25)% | | Segment EBITDA % | 16.8% | 19.9% | | - Organic sales for architectural coatings EMEA were **flat year over year**, with increased organic sales in Central Europe and the Nordic region offset by Western Europe[12](index=12&type=chunk) - Organic sales for architectural coatings Latin America and Asia Pacific declined by a **mid-single-digit percentage**[13](index=13&type=chunk) [Performance Coatings Segment](index=3&type=section&id=Performance%20Coatings%20Segment) The Performance Coatings segment achieved 9% organic sales growth, with net sales increasing 7% to $1,265 million. This growth was driven by strong sales volumes and higher selling prices, leading to an 8% increase in Segment EBITDA and an improved EBITDA margin Performance Coatings Financials | $ in millions | 1Q 2025 | 1Q 2024 | YOY change | | :------------------ | :------ | :------ | :--------- | | Net sales | $1,265 | $1,184 | +7% | | Sales volumes | | | +6% | | Selling prices | | | +3% | | Foreign currency | | | (1)% | | Divestitures & other| | | (1)% | | Segment income | $274 | $251 | +9% | | Segment income % | 21.7% | 21.2% | | | Segment EBITDA | $307 | $285 | +8% | | Segment EBITDA % | 24.3% | 24.1% | | - The Performance Coatings segment delivered **9% organic sales growth**, partially offset by unfavorable foreign currency translation and divestitures[15](index=15&type=chunk) - Sales volumes increased **6% year over year**, led by aerospace coatings (record sales, double-digit organic growth), protective and marine coatings (double-digit organic growth), and traffic solutions[16](index=16&type=chunk) [Industrial Coatings Segment](index=4&type=section&id=Industrial%20Coatings%20Segment) Net sales for the Industrial Coatings segment declined 8%, primarily due to foreign currency translation and the divestiture of the silicas business. Selling prices decreased due to index-based contracts, and sales volumes were down due to lower automotive industry production, despite some strength in other subsegments Industrial Coatings Financials | $ in millions | 1Q 2025 | 1Q 2024 | YOY change | | :------------------ | :------ | :------ | :--------- | | Net sales | $1,562 | $1,699 | (8)% | | Sales volumes | | | (1)% | | Selling prices | | | (1)% | | Foreign currency | | | (2)% | | Divestitures | | | (4)% | | Segment income | $215 | $249 | (14)% | | Segment income % | 13.8% | 14.7% | | | Segment EBITDA | $263 | $301 | (13)% | | Segment EBITDA % | 16.8% | 17.7% | | - Automotive OEM coatings organic sales decreased by a **mid-single-digit percentage** due to lower U.S. and European industry build rates, partially offset by growth in China and Latin America[19](index=19&type=chunk) - Packaging coatings organic sales increased by a **low single-digit percentage** year over year driven by share gains[19](index=19&type=chunk) Outlook and Company Information This section provides PPG's financial outlook, a company profile, and important disclaimers regarding forward-looking statements [Outlook](index=4&type=section&id=Outlook) PPG reaffirms its adjusted earnings per share guidance for the full-year 2025, citing momentum from share gains and self-help actions, while also considering global economic conditions and mixed demand - The company reaffirms its adjusted earnings per share guidance of **$7.75 to $8.05** for the full-year 2025[21](index=21&type=chunk) [Company Profile](index=5&type=section&id=PPG%3A%20WE%20PROTECT%20AND%20BEAUTIFY%20THE%20WORLD%C2%AE) PPG is a global leader in paints, coatings, and specialty materials, operating in over 70 countries and serving diverse markets including construction, consumer products, industrial, and transportation. The company reported net sales of $15.8 billion in 2024 - PPG develops and delivers paints, coatings, and specialty materials, trusted by customers for over 140 years[24](index=24&type=chunk) - The company operates and innovates in **more than 70 countries**[24](index=24&type=chunk) - PPG reported net sales of **$15.8 billion in 2024**[24](index=24&type=chunk) [Additional Information & Forward-Looking Statements](index=5&type=section&id=Additional%20Information%20%26%20Forward-Looking%20Statements) This section provides details for accessing PPG's Q1 2025 financial performance commentary and conference call. It also includes a standard disclaimer regarding forward-looking statements, highlighting various risks and uncertainties that could impact future results - PPG will provide detailed commentary and hold a conference call to review its first quarter 2025 financial performance[26](index=26&type=chunk) - Forward-looking statements involve risks and uncertainties that may affect PPG's operations, as discussed in SEC filings[27](index=27&type=chunk) - Factors that could cause actual results to differ materially include global economic conditions, raw material costs, competition, and foreign exchange rates[27](index=27&type=chunk) Non-GAAP Reconciliations This section provides reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures, offering additional insights [Regulation G Reconciliation](index=6&type=section&id=Regulation%20G%20Reconciliation) PPG provides non-GAAP financial measures such as adjusted net income, adjusted EPS, and segment EBITDA to offer insights into ongoing performance by excluding items not expected to recur or not attributable to primary operations. These measures are not substitutes for GAAP figures - PPG discloses non-GAAP measures like adjusted net income, EPS, and segment EBITDA to enhance investors' understanding of ongoing performance[29](index=29&type=chunk) - These non-GAAP measures exclude the impact of items that are not reasonably expected to recur quarterly or are not attributable to primary operations[29](index=29&type=chunk) Reconciliation of Reported to Adjusted Net Income and EPS (Continuing Operations) | | First Quarter 2025 | First Quarter 2024 | | :------------------------------------------------ | :------- | :------- | | Reported net income from continuing operations | $375 | $405 | | Acquisition-related amortization expense | 24 | 26 | | Business restructuring-related costs, net | 7 | 8 | | Portfolio optimization | (6) | 4 | | Insurance recovery | (4) | — | | Adjusted net income from continuing operations | $396 | $443 | Reconciliation of Effective Tax Rate (Continuing Operations) | | First Quarter 2025 | First Quarter 2024 | | :------------------------------------------------ | :------- | :------- | | Effective tax rate, continuing operations | 24.3 % | 23.6 % | | Acquisition-related amortization expense | 24.4 % | 24.6 % | | Business restructuring-related costs, net | 19.7 % | 27.4 % | | Portfolio optimization | N/A | 24.2 % | | Insurance recovery | 24.3 % | — % | | Adjusted effective tax rate, continuing operations| 24.5 % | 23.9 % | Segment EBITDA Reconciliation | | First Quarter 2025 | First Quarter 2024 | | :-------------------------- | :------- | :------- | | Global Architectural Coatings | | | | Net sales | $857 | $966 | | Segment income | $118 | $166 | | Segment EBITDA | $144 | $192 | | Segment EBITDA % | 16.8 % | 19.9 % | | Performance Coatings | | | | Net sales | $1,265 | $1,184 | | Segment income | $274 | $251 | | Segment EBITDA | $307 | $285 | | Segment EBITDA % | 24.3 % | 24.1 % | | Industrial Coatings | | | | Net sales | $1,562 | $1,699 | | Segment income | $215 | $249 | | Segment EBITDA | $263 | $301 | | Segment EBITDA % | 16.8 % | 17.7 % | | Total Segment EBITDA | | | | Net sales | $3,684 | $3,849 | | Segment income | $607 | $666 | | Segment EBITDA | $714 | $778 | | Segment EBITDA % | 19.4 % | 20.2 % | Condensed Consolidated Financial Statements (Unaudited) This section presents PPG's unaudited condensed consolidated financial statements, including income, cash flows, and balance sheet highlights [Condensed Consolidated Statement of Income](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20INCOME%20%28unaudited%29) The unaudited condensed consolidated statement of income shows a decrease in net sales and income from continuing operations for Q1 2025 compared to Q1 2024, with diluted EPS from continuing operations at $1.64 Condensed Consolidated Statement of Income | (All amounts in millions except per-share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net sales | $3,684 | $3,849 | | Cost of sales, exclusive of depreciation and amortization | 2,142 | 2,205 | | Selling, general and administrative | 838 | 850 | | Depreciation | 89 | 95 | | Amortization | 32 | 35 | | Research and development, net | 102 | 107 | | Interest expense | 56 | 55 | | Interest income | (43) | (42) | | Other (income)/charges, net | (34) | 2 | | Income before income taxes | $502 | $542 | | Income tax expense | 122 | 128 | | Income from continuing operations | $380 | $414 | | Loss from discontinued operations, net of tax | (2) | (5) | | Net income attributable to controlling and noncontrolling interests | $378 | $409 | | Net income attributable to noncontrolling interests | (5) | (9) | | Net income (attributable to PPG) | $373 | $400 | | Earnings per common share (attributable to PPG) - assuming dilution | | | | Income from continuing operations, net of tax | $1.64 | $1.71 | | Loss from discontinued operations, net of tax | (0.01) | (0.02) | | Net income (attributable to PPG) | $1.63 | $1.69 | [Condensed Consolidated Statement of Cash Flows Highlights](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS%20HIGHLIGHTS%20%28unaudited%29) The condensed consolidated statement of cash flows highlights for Q1 2025 show cash used for operating activities of $18 million, capital expenditures of $209 million, and significant share repurchases totaling $394 million Condensed Consolidated Statement of Cash Flows Highlights | ($ in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Cash used for operating activities | ($18) | ($60) | | Capital expenditures | $209 | $252 | | Dividends paid on PPG common stock | $154 | $153 | | Purchase of treasury stock | $394 | $149 | [Condensed Consolidated Balance Sheet Highlights](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEET%20HIGHLIGHTS%20%28unaudited%29) As of March 31, 2025, PPG reported total current assets of $7,901 million and total current liabilities of $5,837 million. Cash and cash equivalents significantly increased to $1,830 million from $1,168 million a year prior, while long-term debt stood at $5,574 million Condensed Consolidated Balance Sheet Highlights | ($ in millions) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :---------------------------------------- | :------------- | :---------------- | :------------- | | Cash and cash equivalents | $1,830 | $1,270 | $1,168 | | Short-term investments | 63 | 88 | 54 | | Receivables, net | 3,429 | 2,985 | 3,233 | | Inventories | 2,115 | 1,846 | 2,100 | | Other current assets | 464 | 368 | 1,116 | | Total current assets | $7,901 | $6,557 | $7,671 | | Short-term debt and current portion of long-term debt | $1,688 | $939 | $311 | | Accounts payable and accrued liabilities | 3,885 | 3,731 | 4,004 | | Current portion of operating lease liabilities | 134 | 126 | 125 | | Restructuring reserves | 130 | 128 | 86 | | Other current liabilities | — | 90 | 417 | | Total current liabilities | $5,837 | $5,014 | $4,943 | | Long-term debt | $5,574 | $4,876 | $5,940 | [Operating Metrics](index=10&type=section&id=PPG%20OPERATING%20METRICS%20%28unaudited%29) PPG's operating working capital increased to $2,843 million as of March 31, 2025, representing 19.3% of annualized quarter sales, up from 17.3% in the prior year PPG Operating Metrics | ($ in millions) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :------------------------------ | :------------- | :---------------- | :------------- | | Operating Working Capital | $2,843 | $2,331 | $2,668 | | As a percent of quarter sales, annualized | 19.3 % | 15.6 % | 17.3 % | [Consolidated Business Segment Information](index=11&type=section&id=CONSOLIDATED%20BUSINESS%20SEGMENT%20INFORMATION%20%28unaudited%29) This section provides a detailed breakdown of net sales and segment income across PPG's three primary business segments: Global Architectural Coatings, Performance Coatings, and Industrial Coatings, along with unallocated corporate items Consolidated Business Segment Information | ($ in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Net sales | | | | Global Architectural Coatings | $857 | $966 | | Performance Coatings | 1,265 | 1,184 | | Industrial Coatings | 1,562 | 1,699 | | Total | $3,684 | $3,849 | | Segment income | | | | Global Architectural Coatings | $118 | $166 | | Performance Coatings | 274 | 251 | | Industrial Coatings | 215 | 249 | | Total | $607 | $666 | | Items not allocated to segments | | | | Corporate / non-segment unallocated, exclusive of depreciation and amortization | (81) | (76) | | Corporate / non-segment unallocated depreciation and amortization | (14) | (18) | | Interest expense, net of interest income | (13) | (13) | | Business restructuring-related costs, net | (9) | (11) | | Portfolio optimization | 6 | (6) | | Insurance recovery | 6 | — | | Income before income taxes | $502 | $542 |

Core Viewpoint - PPG Industries is expected to report its first-quarter 2025 results on April 29, with mixed performance indicators suggesting potential challenges and benefits from restructuring and acquisitions [1][2]. Group 1: Earnings Performance - PPG Industries missed the Zacks Consensus Estimate for earnings in two of the last four quarters, with an average negative earnings surprise of approximately 0.6% [2]. - The Earnings ESP for PPG is +1.35%, with the Zacks Consensus Estimate for the first quarter set at $1.62 [6]. - PPG currently holds a Zacks Rank 3, indicating a neutral outlook [7]. Group 2: Revenue Estimates - The Zacks Consensus Estimate for PPG's sales in the upcoming quarter is $3,655.9 million, reflecting a decline of about 15.2% year-over-year [7]. - Estimated net sales for the Industrial Coatings segment are projected at $1,556.8 million, indicating an 8.4% decline year-over-year [8]. - The Performance Coatings segment is expected to see net sales of $1,199.3 million, suggesting a 1.3% year-over-year increase, while the Global Architectural Coatings segment is estimated at $967.9 million, indicating a 0.2% rise [8]. Group 3: Strategic Initiatives - PPG is implementing aggressive cost-cutting and restructuring strategies, anticipating around $45 million in restructuring savings for the full year 2025 [9]. - A comprehensive cost reduction program is expected to yield pre-tax savings of $60 million in 2025, primarily targeting structural costs in Europe and other global operations [9]. - The company is also raising selling prices across its segments to counteract cost inflation and enhance profitability [10]. Group 4: Market Challenges - PPG faces challenges from weak global industrial production, particularly affecting demand in the Industrial Coatings unit [12]. - Lower automotive OEM build rates and reduced industrial production in the U.S. and Europe are anticipated to negatively impact volumes and sales [12][13]. - Weak consumer confidence in Europe is further contributing to decreased demand [12].

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings and revenues for PPG Industries in the upcoming earnings report, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - PPG Industries is expected to report quarterly earnings of $1.62 per share, reflecting a year-over-year decrease of 12.9% [3]. - Revenues are projected to be $3.65 billion, down 15.3% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 1.39% lower in the last 30 days, indicating a reassessment by analysts [4]. - A positive Earnings ESP of +4.16% suggests analysts have recently become more optimistic about PPG's earnings prospects [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. - PPG Industries currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, PPG Industries was expected to post earnings of $1.65 per share but delivered $1.61, resulting in a surprise of -2.42% [12]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [13]. Conclusion - While PPG Industries is seen as a potential earnings-beat candidate, other factors should also be considered when evaluating the stock ahead of its earnings release [16].

Core Viewpoint - PPG Industries is experiencing challenges due to weak demand, particularly in Europe, but is benefiting from pricing actions, improved manufacturing efficiencies, cost discipline, and acquisitions [1][9]. Group 1: Financial Performance and Strategies - The company has implemented a cost-cutting and restructuring strategy, optimizing working capital, which is expected to generate significant cost savings [4]. - PPG realized an additional $15 million in structural cost savings in Q4 2024 and anticipates around $45 million in restructuring savings for the full year 2025 [4]. - A comprehensive cost reduction program is expected to deliver pre-tax savings of $60 million in 2025, focusing on structural costs mainly in Europe [4]. - PPG has achieved nine consecutive quarters of segment EBITDA margin expansion, indicating a commitment to enhancing profitability [5]. Group 2: Acquisitions and Growth - The company is pursuing inorganic growth through acquisitions, with contributions expected from recent acquisitions such as Tikkurila, Worwag, Cetelon, and Arsonsisi's powder coatings business [6]. - PPG returned $1.4 billion to shareholders in 2024 through dividends and share repurchases, with $620 million in dividends and $750 million in share buybacks [8]. Group 3: Market Challenges - PPG faces soft demand conditions, particularly in the automotive sector, with lower OEM build rates and industrial production impacting sales in the Industrial Coatings unit [9]. - The company anticipates a low single-digit to mid-single-digit percentage decline in industrial coatings segment sales in Q1 2025 due to subdued global industrial production [10]. - Overall organic growth is expected to be limited by lower automotive OEM and industrial production in the first quarter, with continued pressure on industrial coatings demand [10].

Group 1: Corporate Initiatives - PPG Industries Inc. has joined the Make it Zero initiative, focusing on reducing scope 3 greenhouse gas emissions in the DIY home improvement sector [1] - As a member of the initiative's task force, PPG is working on standardized methods for tracking and measuring carbon emissions, promoting best practices in reporting, and reducing scope 3 emissions [2] - The company is committed to collaborating with customers and suppliers to achieve sustainability goals and transition to lower-carbon products [3] Group 2: Financial Performance - PPG's shares have declined by 25.1% over the past year, while the industry has seen a smaller decline of 7.1% [4] - The company expects adjusted earnings per share (EPS) for 2025 to be between $7.75 and $8.05, indicating a 7% increase at the midpoint, excluding foreign currency impacts and higher tax rates [5] - Annual EPS growth is anticipated to be concentrated in the second half of 2025, with expectations of over $100 million in annualized share gains in the Industrial Coatings segment starting in the second half of this year [6]

Company Overview - PPG Industries (PPG) shares increased by 12.5% to close at $103.11, following a significant volume of trading, contrasting with a 19.2% loss over the past four weeks [1] - The rally in PPG's stock is attributed to a surge in material stocks after President Trump announced a 90-day pause on reciprocal tariffs for most countries [1] Earnings Expectations - PPG is expected to report quarterly earnings of $1.62 per share, reflecting a year-over-year decline of 12.9%, with revenues anticipated at $3.64 billion, down 15.5% from the previous year [2] - The consensus EPS estimate for PPG has been revised marginally higher over the last 30 days, indicating a potential for price appreciation if the positive trend continues [3] Industry Context - PPG Industries is part of the Zacks Chemical - Specialty industry, which includes other companies like Celanese (CE), whose stock closed 17.1% higher at $43.90, despite a 31.4% decline over the past month [3] - Celanese's consensus EPS estimate has decreased by 4.4% to $0.40, representing an 80.8% drop from the previous year's report, and it currently holds a Zacks Rank of 5 (Strong Sell) [4]

Company Developments - PPG Industries has launched a waterborne automotive coatings manufacturing plant in Samut Prakan, Thailand, with an annual production capacity of 2,000 tons to meet the rising demand for sustainable coatings in Southeast Asia [1] - The new facility includes an automated spray application center aimed at enhancing services and improving competitiveness in the global market [2] - PPG is focusing on the Southeast Asian market, particularly in the automotive sector, and plans to partner with Chinese brands like BYD and Chery for localized production and technical support [3] Financial Outlook - PPG missed fourth-quarter 2024 earnings and sales estimates but projects adjusted EPS for 2025 to be between $7.75 and $8.05, indicating a 7% increase at the midpoint, with growth expected in the second half of 2025 [4] - PPG aims to achieve over $100 million in annualized share gains in its Industrial Coatings segment starting in the second half of 2025 [4] Industry Comparisons - Dow Inc. anticipates benefits from near-term projects and increased operational focus in 2025, with a cost-cutting initiative of $1 billion, including workforce reductions of 1,500 roles globally [5] - DuPont projects consolidated net sales for 2025 to be between $12.8 billion and $12.9 billion, with adjusted EPS forecasted between $4.30 and $4.40 [6] - Eastman Chemical expects modest volume growth in its specialty businesses in 2025, with an EBITDA growth commitment of $75-$100 million [7]

Financial Performance - Net sales for 2024 were approximately $15.8 billion, a decrease of 2% compared to 2023, primarily due to declining sales volumes and unfavorable foreign currency translation [111]. - Income before income taxes increased by $162 million to $1,852 million in 2024, driven by lower raw material costs and restructuring savings [112]. - Cost of sales, exclusive of depreciation and amortization, decreased by $426 million to $9,252 million in 2024, representing 58.4% of net sales [117]. - Earnings per diluted share from continuing operations increased to $5.72 in 2024, up 10.9% from $5.16 in 2023 [136]. - Adjusted earnings per diluted share rose by 6% to $7.87 in 2024 compared to $7.42 in 2023 [141]. - The effective tax rate for continuing operations was 25.6% in 2024, an increase of 0.3% from the previous year [138]. - The effective tax rate for 2025 is expected to be in the range of 23% to 25%, an increase compared to the 2024 adjusted effective tax rate [151]. Cash Flow and Capital Management - The company generated $1.4 billion in operating cash flow during 2024, demonstrating resilience in a challenging macroeconomic environment [141]. - PPG ended 2024 with approximately $1.4 billion in cash and short-term investments, expecting strong cash generation in 2025 [153]. - Cash from operating activities for continuing operations decreased by $903 million to $1,391 million in 2024, primarily due to unfavorable changes in working capital [198]. - Cash used for investing activities decreased by $126 million to $399 million in 2024, a 24.0% decline compared to 2023, primarily due to proceeds from the sale of the silicas products business [206]. - Cash used for financing activities decreased by $125 million to $1,425 million in 2024, an 8.1% decline compared to 2023, mainly due to lower repayments of long-term debt [212]. - PPG repurchased approximately nine million shares of stock over four years, including $752 million in 2024, with $2.8 billion remaining under its current share repurchase authorization [152]. - Dividends paid to shareholders increased to $622 million in 2024, marking the 53rd consecutive year of increased annual per-share dividend payments, with a 5% increase in the quarterly dividend to $0.68 per share [215]. - The company expects capital expenditures for 2025 to be approximately $725 million to $775 million, aimed at supporting future organic growth opportunities [210]. Segment Performance - Global Architectural Coatings net sales decreased by 2.5% in 2024 to $3,921 million, primarily due to lower sales volumes [158]. - Segment income for Global Architectural Coatings increased by $5 million year over year, driven by higher selling prices and moderating raw material costs [163]. - Architectural coatings EMEA organic sales were flat year over year, with higher selling prices offset by lower sales volumes [166]. - Segment income for Performance Coatings increased by $123 million year over year, primarily due to higher selling prices and moderating raw material costs [174]. - Performance Coatings net sales increased by 2% in 2024, driven by higher selling prices (+6%) and partially offset by lower sales volumes (-5%) and divestitures (-2%) [170]. - Aerospace coatings organic sales increased by a double-digit percentage, supported by strong demand and customer order backlogs [172]. - Industrial Coatings segment net sales decreased by $402 million year over year, primarily due to lower selling prices and lower sales volumes driven by lower industry demand [180]. - Automotive OEM coatings organic sales decreased by a high single-digit percentage year over year due to lower sales volumes and indexed-based selling prices [181]. Cost Management and Restructuring - A comprehensive cost reduction program was approved in October 2024, focusing on reducing structural costs primarily in Europe [128]. - Total restructuring savings were approximately $40 million in 2024, with an anticipated annualized pre-tax savings of approximately $175 million once fully implemented, including $60 million in 2025 [146]. - PPG incurred wage inflation in 2024, impacting operating costs, but raw material costs were favorable compared to 2023 [148]. - Selling price improvements were achieved across several businesses in 2024, with careful monitoring of costs planned for 2025 [149]. Foreign Currency and Market Risks - Foreign currency exchange rates had a net unfavorable impact on net income from continuing operations of approximately $20 million in 2024, expected to continue in 2025 [150]. - The unfavorable impact of foreign currency translation on full year 2024 Income before income taxes was approximately $20 million, attributed to the strengthening of the U.S. dollar against the Mexican peso and Chinese yuan [236]. - A 10% adverse change in exchange rates for European and Canadian currencies could reduce Income before income taxes by $429 million in 2024, compared to $402 million in 2023 [243]. - PPG had non-U.S. dollar denominated debt of $3.3 billion as of December 31, 2024, with a potential unrealized translation loss of $369 million if the U.S. dollar weakens by 10% against European currencies [245]. - The company is exposed to market risks related to changes in foreign currency exchange rates and interest rates, and may use derivative financial instruments to manage these risks [241]. Debt and Capitalization - Total indebtedness to total capitalization ratio was 45% as of December 31, 2024, well below the 60% limit set by credit agreements [221]. - Long-term debt obligations total $5,808 million, with $933 million due in 2025 [224]. - The total amount of unrecognized tax benefits for uncertain tax positions was $152 million as of December 31, 2024 [226]. - As of December 31, 2024, consolidated net assets decreased by $905 million compared to December 31, 2023, primarily due to the strengthening of the U.S. dollar against the Mexican peso [235]. - The fair value of foreign currency forward contracts was a net liability of $53 million as of December 31, 2024, compared to a net asset of $23 million as of December 31, 2023 [243]. - Interest rate swaps converted $375 million of fixed rate debt to variable rate debt, with fair values of liabilities at $16 million as of December 31, 2024 [246]. - A 10% increase in variable interest rates would increase annual interest expense by $3 million for U.S., Canada, Mexico, and Europe, and by $2 million for Asia and South America [246]. - The fair value of U.S. dollar to euro cross currency swap contracts was a net asset of $50 million as of December 31, 2024 [244].

Company Overview - PPG Industries Inc. has expanded its non-bisphenol A (BPA) HOBA internal coatings line with the introduction of PPG Hoba Pro 2848 coating, aimed at the growing demand for aluminum bottle packaging for beverages [1][2] - The new coating was showcased at Paris Packaging Week and received an Aerosol and Dispensing Forum (ADF) Innovation Award [1] Product Details - PPG Hoba coatings have been utilized for five decades in aluminum aerosol cans and tubes for personal care products, and the new product targets the sustainable packaging market for beverages [2] - PPG Hoba Pro 2848 is a non-bisphenol, PFAS-NI, and non-phenolic internal liner that offers improved interior protection for various applications including personal care, beverages, pharmaceuticals, and food [3] Market Performance - PPG Industries shares have decreased by 19.3% over the past year, while the industry has seen a decline of 16.6% during the same period [4] - The company expects adjusted earnings per share (EPS) for 2025 to be between $7.75 and $8.05, indicating a 7% increase at the midpoint, excluding foreign currency translation and higher tax rates [5] Future Outlook - Annual EPS growth is anticipated to be concentrated in the second half of 2025, with expectations of more than $100 million in annualized share gains in the Industrial Coatings segment starting in the second half of this year [6]

Core Viewpoint - PPG Industries reported disappointing fourth-quarter adjusted EPS results and provided FY25 adjusted EPS guidance below market expectations [1][2]. Financial Performance - PPG's quarterly earnings were $1.61 per share, missing the analyst consensus estimate of $1.65 per share [1]. - The company achieved a 6% growth in adjusted EPS for the year 2024, generating $1.4 billion in operating cash flow [2]. - PPG returned $1.4 billion to shareholders through stock repurchases and dividends during the year, with approximately $250 million repurchased in the fourth quarter [2]. Future Guidance - PPG expects adjusted EPS for FY25 to be in the range of $7.75-$8.05, significantly below market estimates of $8.68 [2]. Market Reaction - Following the earnings announcement, PPG shares fell 2.9% to trade at $112.07 [3]. - Analysts adjusted their price targets for PPG, with Wells Fargo lowering it from $150 to $135, Mizuho from $150 to $140, and Barclays from $144 to $125 [4].