PPG – Fourth Quarter and Full Year 2017 Financial Results Michael H. McGarry, Chairman and Chief Executive Officer Vincent J. Morales, Senior Vice President and Chief Financial Officer John Bruno, Director, Investor Relations Information current as of January 18, 2018
Forward Looking Statements The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company. 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” and other expressions that indicate future eve nts and trends. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward looking statement, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our reports to the Securities and Exchange Commission. Also, note the following cautionary statements: Many factors could cause actual results to differ materially from the Company’s forward -looking statements. Such factors include ongoing impacts of the natural disasters and their length and severity, any currently unanticipated future impacts from the natural disasters, global economic conditions, increasing price and product competition by foreign and domestic competitors, fluctuations in cost and availability of raw materials, the ability to achieve selling price increases, the ability to recover margins, the ability to maintain favorable supplier relationships and arrangements, the timing of and the realization of anticipated cost savings from restructuring initiatives, 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 and the unpredictability of existing and possible future litigation. However, it is not possible to predict or identify all such factors. Consequently, while the list of factors presented here and under Item 1A of PPG’s 2016 Form 10 -K is 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 the 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, other factors set forth in Item 1A of PPG’s 2016 Form 10-K and similar risks, any of which could have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity . All of this information speaks only as of January 18, 2018, and any distribution of this presentation 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. 2
Fourth Quarter 2017 Financial Highlights Net sales up nearly 8 percent; local currency sales increased over 4 percent • Sales volumes increased 3 percent year-over-year; balanced across all regions • Aggregate selling prices improved sequentially for the third consecutive quarter • Favorable foreign currency translation benefited sales by over 3 percent, or about $115 million Adjusted earnings per diluted share up about 3%* • Adjusted earnings per diluted share of $1.19; up about 3 percent, including the unfavorable impact of 5 cents per diluted share impact from the natural disasters that occurred in the third quarter • Raw material inflation was elevated and logistics costs increased primarily due to heightened environmental enforcement in China • Modest segment margin recovery achieved sequentially in the fourth quarter; further selling price increases have been secured for the first quarter 2018 • Restructuring actions continued and related savings met the upper-end of the targeted savings range Cash deployment continues, minimum of $2.4 billion targeted for in 2018 • Cash deployment of over $550 million in the fourth quarter on stock repurchases and acquisitions • Active acquisition pipeline remains * Adjusted EPS (from continuing operations) – see presentation appendix for reconciliation to reported EPS 3
PPG Fourth Quarter Net Sales* ($ in millions) $3,750 +0.7% 3,682 +3.3% +3.0% $3,500 +0.6% 3,417 $3,250 4Q'16 Price Volume Currency Acq./Div. 4Q'17 Foreign Currency Rate Trends vs. U.S. Dollar PPG Y-O-Y Volume Trends** (indexed to Q4’15) (excl. price, currency and acquisition/divestiture impacts) 15% 4% Impacted by 10% natural 3.0% 3% 5% disasters 0% 1.9% 2% Q4'15 Q1'16 Q2 Q3 Q4 Q1'17 Q2 Q3 Q4 1.6% 1.5% 1.5% -5% 1.0% 0.6% -10% 1% -15% 0.0% 0.0% 0% -20% -25% -1% -30% -35% -2% 4Q 2Q 4Q 2Q 4Q Euro MXP RMB UK 4Q’17 sales volumes up 3% with broad contribution U.S. dollar weakened versus key currencies in 4Q’17 * Sales from continuing operations 4 ** Volumes as originally reported include the former Glass segment
Fourth Quarter Net Sales Volumes PPG volume performance by major coatings vertical vs. prior year and end-use market demand U.S. & Canada Europe / Middle Asia-Pacific Latin America East / Africa Aerospace Above Market At Market Above Market At Market Automotive Refinish Above Market Above Market At Market At Market DIY & CN BRZ Mexico Co. Stores AUS Architectural At Market Dealer Above Below At Market At Market Above Market Mkt At Market Mkt Protective At Market At Market At Market At Market Marine At Market At Market At Market N/A Automotive OEM At Market At Market At Market Above Market General Industrial Above Market At Market Above Market Above Market Packaging Above Market Above Market At Market Above Market 2. Year-over-year PPG volume legend: 1. PPG compared to industry end-use market demand legend: • Above Market • At Market Contraction Expansion • Below Market Based on PPG estimates 5
PPG Full Year Net Sales (continuing operations) ($ in millions) $15,500 +1.4% 14,750 +0.4% +1.3% +0.2% $14,500 14,270 $13,500 FY'16 Price Volume Currency Acq./Div. FY'17 2017 Net Sales by Major Region 2017 Net Sales by Business Segment Latin America 10% All Other Asia- 17% Pacific 43% United 41% 59% States & Canada Industrial Performance 30% Coatings Coatings Mexico Europe Growth exceeded 3 percent driven by sales volume and acquisitions 6
PPG Earnings Per Diluted Share (continuing operations) * -10 cents impact Full Year Fourth Quarter from natural disasters $6.25 $1.25 1.19 5.87 1.16 1.14 5.67 5.33 0.95 $5.00 $1.00 4.67 $3.75 $0.75 $0.50 $2.50 $1.25 $0.25 $0.00 $0.00 4Q '14 4Q '15 4Q '16 4Q '17 2014 2015 2016 2017 * Adjusted EPS – see presentation appendix for reconciliation to reported EPS 7
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