PPG
Ppg Industries INC
NYSE
DEF 14A: PPG Industries Reports Record 2023 Financial Results, Advances Sustainability Goals
Sentiment:
Proxy Statement
7 March 2024 1:30 PM
PPG Industries achieved record full-year financial results in 2023, including net sales of $18.2 billion and adjusted earnings per share of $7.67, while also progressing its sustainability commitments.
Better than expected
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.
Summary
- PPG Industries reported record full-year net sales of $18.2 billion in 2023, a 3% increase compared to the prior year.
- Organic sales also increased by 3%, driven by higher selling prices.
- 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, primarily due to higher selling prices, lower input costs, restructuring cost savings, and acquisition-related synergies.
- PPG became the first U.S.-based coatings manufacturer to receive validation from the Science Based Targets initiative (SBTi) for its 2030 emissions reduction targets.
- The company's global giving totaled more than $17.5 million in 2023, supporting community organizations worldwide.
- PPG is asking shareholders to approve a proposal to provide shareholders holding 25% of PPG's voting power with the right to call a special meeting of shareholders.
- The company is also asking shareholders to approve a proposal to amend the company's Articles of Incorporation to provide for the exculpation of officers of the company.
Sentiment
Score: 8
Explanation: The document presents a positive outlook with record financial results and advancements in sustainability, indicating a strong and well-managed company.
Positives
- Record financial performance in 2023 demonstrates the breadth, diversity, and resiliency of PPG's business portfolio.
- The company is actively engaged in overseeing the initial progress of its enterprise growth strategy.
- PPG is advancing its sustainability commitments, including validation from the Science Based Targets initiative (SBTi).
- The company is investing in STEM education and workforce development initiatives.
- PPG is committed to using resources efficiently and prioritizing decarbonization.
- The company is recognized by external organizations for its leadership and progress in ESG areas.
Negatives
- The global demand environment remained challenging in 2023.
- Selling, general and administrative costs as a percentage of sales for 2023 increased by 130 basis points compared to 2022.
- PPG's spill and release and injury and illness rates did not meet target for 2023.
Risks
- The document includes forward-looking statements that involve risks and uncertainties.
- Actual future results could differ materially from projected results due to changes in circumstances, assumptions not being realized, or other risks, uncertainties, and factors.
- The company faces risks and uncertainties discussed in its most recently filed periodic reports on Form 10-K and Form 10-Q, current reports on Form 8-K, and subsequent filings.
Future Outlook
The Company looks forward to building upon last year's successes by focusing on the unwavering support of our customers by providing superior services and products that enhance productivity and sustainability.
Management Comments
- Michael McGarry's leadership set the Company on a solid path for future growth and success.
- The Board is grateful for Hugh and Steve's thoughtful guidance and their many years of dedicated service to PPG.
- The Board believes that Mr. Knavish is the best person to serve as Chairman.
Industry Context
The announcement highlights PPG's strong performance in a challenging global demand environment, showcasing the resilience of its business portfolio and its ability to capitalize on growth opportunities in specific sectors like aerospace and automotive OEM coatings.
Comparison to Industry Standards
- The comparator group used in 2022 to set 2023 compensation was: 3M Company, Eaton Corporation plc, International Paper Company, Textron Inc., Air Products and Chemicals, Inc., Ecolab Inc., Johnson Controls International Plc, The Sherwin-Williams Company, Celanese Corporation, Emerson Electric Co., Linde Plc, Trane Technologies Plc, Dow, Inc., Honeywell International Inc., Parker-Hannifin Corporation, DuPont de Nemours, Inc., Howmet Aerospace Inc., Rockwell Automation, Inc., Eastman Chemical Company, Illinois Tool Works Inc., Stanley Black & Decker, Inc.
- The peer group consists of: 3M Co., Akzo Nobel N.V., Axalta Coatings Systems Ltd., Dow, Inc., Dupont de Nemours, Inc., Eastman Chemical Co., Masco Corp., RPM International Inc., and The Sherwin-Williams Co.
Stakeholder Impact
- The company's performance and initiatives impact shareholders, customers, employees, retirees, suppliers, the communities it serves, and the environment.
Next Steps
- Shareholders are encouraged to vote on the included proposals.
- The Board will continue its refreshment process in 2024, seeking directors with skills and experience that dovetail with the enterprise growth strategy.
- The company will continue the integration of recent acquisitions and realize acquisition-related synergies.
- The company will continue to focus on cost savings from restructuring actions.
- The latest ESG Report will be available in May with updates on the progress made in 2023.
Related Party Transactions
- During 2023, PPG and its subsidiaries sold approximately $1.2 million of products and services to Linde plc and purchased approximately $1.0 million of industrial gases from Linde plc.
- During 2023, PPG and its subsidiaries sold approximately $200,000 of products and services to Ashland Inc. and purchased approximately $18.8 million of products and services from Ashland Inc.
- During 2023, PPG and its subsidiaries purchased approximately $1.1 million of products and services from Ecolab Inc.
Key Dates
- 1883: PPG was founded as The Pittsburgh Plate Glass Company.
- 1995: Reference to the Private Securities Litigation Reform Act of 1995.
- 2005: Stock ownership guidelines for non-employee directors effective January 1, 2005.
- 2010: Reference to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
- 2021: The Board conducted a comprehensive review of its oversight of the Company's ESG programs and practices.
- May 13, 2022: PPG's Articles of Incorporation were amended to provide that all directors will be elected annually beginning at the 2025 Annual Meeting.
- July 20, 2023: The Board of Directors elected Christopher N. Roberts III as a director of PPG, effective October 18, 2023.
- October 1, 2023: Michael H. McGarry retired as PPG's Executive Chairman of the Board and as a director.
- December 31, 2023: Hugh Grant retired from our Board of Directors.
- February 15, 2024: Stephen F. Angel retired from our Board of Directors at the conclusion of the Boards February 15, 2024 meeting.
- February 16, 2024: Record date for the Annual Meeting.
- March 7, 2024: Date of the Proxy Statement.
- April 17, 2024: Deadline to pre-register for the virtual Annual Meeting by 5:00 p.m. Eastern Time.
- April 18, 2024: Date of the Annual Meeting of Shareholders at 11:00 a.m. Eastern Time.
- October 8, 2024: Earliest date for receipt of director nominations submitted pursuant to PPG's proxy access Bylaw for consideration at the 2025 Annual Meeting of shareholders.
- November 7, 2024: Latest date for receipt of director nominations submitted pursuant to PPG's proxy access Bylaw for consideration at the 2025 Annual Meeting of shareholders.
- November 7, 2024: Deadline for shareholder proposals to be included in the Proxy Statement for the 2025 Annual Meeting.
- January 17, 2025: Deadline for shareholder notice of intent to present business for consideration at the 2025 Annual Meeting.
- April 17, 2025: Expected date of the 2025 Annual Meeting of Shareholders.
Keywords
financial results, sustainability, corporate governance, executive compensation, net sales, earnings per share, operating cash flow, ESG, board of directors, proxy statement, PPG Industries
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.
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
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.
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.
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