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]

Second Quarter 2025 Financial Performance - Net sales reached $4.2 billion, reflecting a 2% organic sales increase[5] - Adjusted EPS was $2.22[5] - Segment EBITDA margin stood at 20.3%[5] - The company executed approximately $150 million in share repurchases[6] Segment Results - Global Architectural Coatings segment net sales were $1.018 billion, down from $1.070 billion in the prior year[13] - Performance Coatings segment net sales increased to $1.512 billion from $1.418 billion, driven by a 6% organic sales growth[19] - Industrial Coatings segment net sales were $1.665 billion, compared to $1.747 billion in the prior year, with flat volume reflecting share gains offsetting end-market declines[25] Balance Sheet and Cash Deployment - Net debt as of June 30, 2025, was $5.7 billion, with a cash balance of $1.6 billion[30] - The company deployed $300 million in dividends and share repurchases during the second quarter of 2025[30] Third Quarter and Full-Year 2025 Projections - The company projects flat to low-single-digit (LSD) organic sales growth for the third quarter of 2025[31] - Full-year 2025 adjusted EPS is projected to be between $7.75 and $8.05 per share[31] - The company anticipates low-single-digit (LSD) inflation in raw material and enacted tariff costs for both the third quarter and full year 2025[31]