PPG
Ppg Industries INC
NYSE
10-K: PPG Industries Details Securities and Financial Reporting in 10-K Filing
Sentiment:
Annual Report
15 February 2024 1:10 PM
PPG Industries, Inc. provides a detailed description of its registered securities, financial performance, and risk factors in its annual 10-K filing.
Better than expected
The company's net sales increased by 3% to $18.2 billion, driven by higher selling prices.
Income before income taxes rose to $1,748 million in 2023, a $367 million increase year-over-year.
Adjusted earnings per diluted share increased by 27% compared to 2022.
Summary
- PPG Industries, Inc. has five classes of securities registered under the Securities Exchange Act of 1934, including common stock and several series of notes.
- The company's authorized capital includes 1,200,000,000 shares of common stock and 10,000,000 shares of preferred stock.
- Holders of common stock are entitled to one vote per share and are eligible to receive dividends as declared by the Board of Directors.
- The company has issued several series of notes with varying interest rates and maturity dates, including 0.875% Notes due 2025, 1.875% Notes due 2025, 1.400% Notes due 2027, and 2.750% Notes due 2029.
- These notes are unsecured and rank equally with other unsecured debt, but are effectively subordinated to secured debt.
- The company's 2023 net sales were approximately $18.2 billion, a 3% increase compared to the prior year, driven by higher selling prices.
- Income before income taxes was $1,748 million in 2023, an increase of $367 million compared to the prior year, primarily due to higher selling prices and lower raw material costs.
- Research and development costs were $456 million in 2023, representing 2.5% of annual net sales.
- Raw material costs decreased by more than $500 million in 2023 compared to 2022, but wage inflation continues to be a factor.
- The company's 2030 sustainability goals include a commitment to reduce absolute emissions from its own operations by 50% and scope 3 GHG emissions by 30% from a 2019 base year.
- The company's average number of employees in 2023 was approximately 53,000, with 16,300 in the United States and 36,700 elsewhere.
- The aggregate market value of common stock held by non-affiliates as of June 30, 2023, was $34,856 million, and as of January 31, 2024, was $33,112 million.
Sentiment
Score: 7
Explanation: The document presents a generally positive outlook with strong financial results and strategic initiatives, but also acknowledges challenges and risks. The sentiment is positive but tempered by the recognition of ongoing economic and operational uncertainties.
Positives
- The company achieved record net sales, adjusted earnings per diluted share, and operating cash flow in 2023.
- Net sales increased by 3% over the prior year, supported by higher prices and favorable foreign currency translation.
- Adjusted earnings per diluted share increased by 27% compared to 2022.
- Aggregate segment margins were 310 basis points higher than the prior year, driven by strong selling price realization and moderating raw material costs.
- The company successfully executed various strategic initiatives to strengthen the company and position it for higher organic growth.
- Raw material and logistics availability improved throughout 2023 and is now comparable to pre-pandemic conditions.
- The company has a strong cash position with approximately $1.6 billion in cash and short-term investments at the end of 2023.
Negatives
- Sales volumes decreased by 2% in 2023.
- Selling, general, and administrative expenses increased by $380 million due to wage inflation, unfavorable foreign currency translation, and higher performance-based compensation.
- The company recorded a goodwill impairment charge of $158 million for the traffic solutions reporting unit.
- The company incurred a pension settlement charge of $190 million.
- The company experienced foreign currency losses of $20 million in Argentina due to a central bank adjustment.
- The company anticipates further wage inflation impacts in 2024.
- Global demand for architectural coatings is expected to remain subdued and global industrial production to persist at lower absolute levels.
Risks
- Increases in raw material prices and supply chain disruptions could negatively impact financial results.
- Weak economic conditions and geopolitical uncertainty could negatively impact demand for products and services.
- Fluctuations in foreign currency exchange rates could affect financial results.
- Increased competition may cause loss of market share or reduced margins.
- Public health crises could adversely impact financial condition and results of operations.
- Environmental laws and regulations could require substantial capital expenditures.
- The company is involved in a number of lawsuits and claims, which could be expensive to defend.
- Changes in tax regimes could adversely affect results and effective tax rate.
- International operations expose the company to additional risks and uncertainties.
- Business disruptions could have a negative impact on results of operations and financial condition.
- Cybersecurity threats could compromise information technology systems and adversely affect operations or reputation.
- The company may not effectively integrate acquired businesses into existing operations.
- An inability to innovate and develop products that meet customer demand could adversely affect results.
- The company may face challenges attracting or retaining qualified employees.
Future Outlook
The company expects softening global economic activity in 2024, with an increase in volumes driven by demand growth in China, India, and Mexico, industry growth in aerospace, and economic stabilization in Europe. Global demand for architectural coatings is expected to remain subdued and global industrial production to persist at lower absolute levels. The company expects strong cash generation in 2024.
Management Comments
- PPG achieved annual records for net sales, adjusted earnings per diluted share and operating cash flow in 2023.
- The company benefited from higher prices in all businesses and favorable foreign currency translation, which offset lower sales volumes.
- The company successfully executed on various strategic initiatives to strengthen the company, including key actions to position PPG for higher organic growth.
- The company will continue to monitor and aggressively manage the Companys cost structure to ensure alignment with the overall demand environment.
Industry Context
The coatings industry is highly competitive, consisting of several large firms with global presence and many firms supplying local or regional markets. PPG competes with the world's largest coatings companies, most of which have global operations, and with many regional coatings companies.
Comparison to Industry Standards
- PPG competes with major global players such as Akzo Nobel N.V., Axalta Coating Systems Ltd., BASF Corporation, and The Sherwin-Williams Company.
- The company's performance in 2023, with record net sales and adjusted earnings per diluted share, indicates a strong position relative to industry benchmarks.
- The company's focus on sustainability and innovation aligns with broader industry trends.
- The company's global operations and diverse end-use markets help to mitigate risks associated with economic downturns in specific regions or sectors, a common strategy among large global coatings companies.
Stakeholder Impact
- Shareholders: The company's strong financial performance and commitment to shareholder value creation are positive for shareholders.
- Employees: The company is committed to ensuring employees are safe, healthy, enabled, engaged, and valued.
- Customers: The company aims to be the first-choice partner to meet customers' evolving needs for innovative paints, coatings, and surface solutions.
- Suppliers: The company is committed to sustainability and expects its suppliers to comply with applicable laws and adhere to internationally recognized environmental, social, and corporate-governance standards.
- Creditors: The company's strong cash position and access to capital markets provide assurance to creditors.
Next Steps
- The company will continue to focus on executing various existing cost-savings initiatives.
- The company will continue to monitor and aggressively manage the Companys cost structure to ensure alignment with the overall demand environment.
- The company will continue to deploy cash focused on shareholder value creation, with a preference for business acquisitions, coupled with prudent debt reduction to enhance financial flexibility.
Legal Proceedings
- PPG is involved in a number of lawsuits and claims, both actual and potential, including some that it has asserted against others, in which substantial monetary damages are sought.
- These lawsuits and claims may relate to contract, patent, environmental, product liability, asbestos exposure, antitrust, employment, securities and other matters arising out of the conduct of PPGs current and past business activities.
- PPG believes that the remaining claims in the case for attorneys fees and a civil penalty related to the Cadogan Property are without merit and intends to defend itself against these claims vigorously.
- PPG has been dismissed as a defendant from most lead-related lawsuits and has never been found liable in any of these cases.
- The Pennsylvania Supreme Court denied the Counties Petitions and, as such, dismissal of the lawsuit is now final.
Key Dates
- March 18, 2008: Date of the Base Indenture between the Company and The Bank of New York Mellon Trust Company, N.A.
- March 13, 2015: Date of the Fifth Supplemental Indenture for the 2027 Notes.
- November 3, 2016: Date of the Sixth Supplemental Indenture for the 2025 Notes.
- May 25, 2022: Date of the Eleventh Supplemental Indenture for the 2025A and 2027 Notes.
- February 15, 2024: Date of the document and reference date for securities information.
Keywords
PPG Industries, Securities, Financial Performance, Coatings, Paints, Raw Materials, Sustainability, Emissions, Debt, Acquisitions, Restructuring, Share Repurchase, Dividends, Risk Factors, Cybersecurity
PPG
Ppg Industries INC
NYSE
Sector: TBD
Filings with Classifications
Worse than expected
30 April 2025 2:13 PM
Quarterly Report
- Net sales decreased by 4.3% year-over-year.
- Income before income taxes decreased from $542 million to $502 million.
- Earnings per diluted share decreased from $1.71 to $1.64.
Worse than expected
29 April 2025 4:24 PM
Earnings Release
- Net sales decreased by 4% year-over-year, primarily due to unfavorable foreign currency translation and business divestitures.
- Adjusted EPS decreased from $1.87 to $1.72, impacted by foreign currency translation and divestitures.
- The Global Architectural Coatings and Industrial Coatings segments experienced sales declines.
Worse than expected
20 February 2025 2:40 PM
Annual Report
- Net sales were approximately $15.8 billion in 2024, a decrease of 2% compared to the prior year, due to sales volumes declining and the combination of unfavorable foreign currency translation and divestitures reducing net sales.
Delay expected
20 February 2025 2:40 PM
Annual Report
- PPG's aerospace business is currently experiencing a backlog resulting in product shortages to certain of our customers.
Worse than expected
30 January 2025 6:36 PM
Earnings Release
- Net sales decreased by 5% in Q4 and 2% for the full year.
- Reported net income decreased significantly in Q4.
- Organic sales declined a low single-digit percentage year over year.
Worse than expected
17 October 2024 4:02 PM
Quarterly Report
- Net sales decreased by 1.5% year-over-year, indicating weaker performance than expected.
- The industrial coatings segment experienced a decrease in sales and segment income, suggesting underperformance in this area.
- Automotive OEM coatings saw a double-digit percentage decrease in organic sales, indicating a significant downturn in this sector.
Worse than expected
19 July 2024 2:08 PM
Quarterly Report
- Net sales decreased by 1.6% in both the three and six months ended June 30, 2024, primarily due to currency headwinds and divestitures, indicating worse than expected performance.
- Automotive OEM coatings organic sales decreased by a high single-digit percentage year over year driven by lower sales volumes and lower index-based selling prices for certain customer contracts, indicating worse than expected performance.
Better than expected
18 July 2024 4:21 PM
Quarterly Report
- The company achieved record reported EPS and adjusted EPS, exceeding expectations despite flat organic sales.
Better than expected
19 April 2024 2:34 PM
Quarterly Report
- Net income increased significantly due to the absence of a $190 million pension settlement charge from the prior year.
Better than expected
18 April 2024 4:12 PM
Quarterly Report
- The company reported record earnings per share and adjusted earnings per share, which is better than expected given the challenging economic environment.
Better than expected
7 March 2024 1:30 PM
Proxy Statement
- The company achieved record full-year adjusted earnings per share of $7.67.
- Operating cash flow from operations reached a record $2.4 billion, up $1.4 billion year-over-year.
- Adjusted net income increased by approximately 30% compared to 2022.
Better than expected
15 February 2024 1:10 PM
Annual Report
- The company's net sales increased by 3% to $18.2 billion, driven by higher selling prices.
- Income before income taxes rose to $1,748 million in 2023, a $367 million increase year-over-year.
- Adjusted earnings per diluted share increased by 27% compared to 2022.
Better than expected
18 January 2024 4:16 PM
Quarterly Report
- The company achieved record full-year sales and adjusted EPS, indicating better than expected financial performance.
- The company's segment margin improvement of 260 basis points year-over-year was better than expected.
- The company's record operating cash flow of over $2.4 billion was better than expected.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.