PPG reports fourth quarter and full-year 2023 financial results
- None.
- None.
Insights
The reported financial results for PPG Industries indicate a mixed performance with record fourth quarter net sales of $4.4 billion, a modest year-over-year increase of 4%. However, the net income decline by 62% to $90 million in the same quarter is a significant drop. The adjusted EPS of $1.53, up by 25% YOY, suggests that the company is managing to increase profitability through adjustments, which could be due to cost-cutting measures or one-off expenses not related to core operations.
The full-year net sales of $18.2 billion, driven by 3% organic growth, along with a record operating cash flow of over $2.4 billion, reflect a strong financial position. The increase in operating cash flow by more than $1.4 billion YOY is particularly noteworthy as it demonstrates effective working capital management and operational efficiency. The share repurchase of $100 million also signals confidence in the company's valuation and future prospects.
For investors, the long-term value creation opportunities mentioned by the CEO, coupled with the company's strong balance sheet, may indicate potential for continued stock buybacks, dividend payments, or strategic investments, which could affect the stock's attractiveness.
PPG's performance in various segments highlights diversification benefits and strategic positioning. The 5% increase in the Performance Coatings segment, driven by strong growth in aerospace and protective coatings, suggests resilience in these markets. The mid-single-digit organic sales growth in Automotive OEM coatings, supported by market share gains in the Asia-Pacific region and Mexico, indicates successful penetration in emerging markets.
The reported softness in do-it-yourself demand in the U.S. and Canada for architectural coatings is consistent with broader consumer trends towards professional services. The company's focus on volume growth and strategic initiatives, such as cross-selling through its concessionaire network, could help mitigate this challenge.
Geographically, the anticipation of improved demand in China and stabilization in Europe aligns with macroeconomic forecasts. The emphasis on Mexico, now PPG's second-largest market, reflects a strategic shift to leverage growth in regions with stronger economic momentum.
The company's financial results and forward-looking statements provide insight into broader economic conditions. The 260 basis point improvement in segment margin YOY indicates an ability to recover margins despite economic headwinds. This margin enhancement, particularly in a period of economic uncertainty, suggests effective cost management and pricing strategies.
The expectation of subdued economic conditions in the U.S. during the first half of 2024, as mentioned by the CEO, may reflect broader economic forecasts predicting a slowdown. However, the strong momentum expected in Mexico could be indicative of regional economic disparities.
The divestitures of the European and Australian Traffic Solutions businesses and the review of the silicas products business suggest a strategic refocus, which could streamline operations and concentrate resources on more profitable segments. Such corporate restructuring can have long-term effects on company performance and sector dynamics.
-
Fourth quarter highlights include:
-
Record fourth quarter net sales of
$4.4 billion -
Net sales up
4% year over year (YOY), including organic sales growth of1% -
Quarterly earnings per diluted share (EPS) of
$0.38 $1.53 - Further progress on margin recovery; segment margin up 260 basis points YOY
-
Share repurchases of
$100 million
-
Record fourth quarter net sales of
-
Full-year 2023 highlights include:
-
Record sales of
$18.2 billion 3% organic sales growth -
EPS of
$5.35 $7.67 -
Record operating cash flow of over
$2.4 billion $1.4 billion
-
Record sales of
Fourth Quarter Consolidated Results
$ in millions, except EPS |
4Q 2023 |
4Q 2022 |
YOY change |
Net sales |
|
|
+ |
Net income |
|
|
- |
Adjusted net income(a) |
|
|
+ |
EPS |
|
|
- |
Adjusted EPS(a) |
|
|
+ |
(a) Reconciliations of reported to adjusted figures are included below |
|||
Chairman and CEO Comments
Tim Knavish, PPG chairman and chief executive officer, commented on the quarter and 2023:
Capping off a record year, the PPG team delivered solid year-over-year sales growth, strong adjusted earnings growth and record operating cash flow. The breadth and diversity of our business portfolio was a key driver to our record fourth quarter performance, as we benefited from solid volume growth in
We made strong progress on returning to our historic segment margin profile while delivering segment earnings growth of
Looking at the full year, in addition to our record financial performance, we successfully implemented various strategic initiatives to strengthen the company, including key actions to position PPG for higher organic growth. We also executed on our ongoing portfolio review leading to the divestitures of both our European and Australian Traffic Solutions businesses and the recently announced strategic alternatives review of the silicas products business. Finally, we have continued our heritage of rewarding our shareholders with our 124th consecutive year of dividend payments, including 52 consecutive years of dividend increases.
Looking ahead, while global industrial production remains at low absolute levels, we expect that demand for our businesses in
We are laser focused on maintaining the unwavering support of our customers as we leverage our strong brands and provide technology-advantaged products and solutions that enhance their productivity and sustainability. We aim to build on our strong 2023 financial performance by continuing our growth and value creation in 2024 for the benefit of all stakeholders. Finally, I want to thank our more than 50,000 employees around the world for “making it happen” in 2023 and positioning us for growth in 2024.
Fourth Quarter 2023 Reportable Segment Financial Results
Performance Coatings segment
$ in millions |
4Q 2023 |
4Q 2022 |
YOY change |
Net sales |
|
|
+ |
Segment income |
|
|
+ |
Segment income % |
|
|
|
Sales volumes |
|
|
- |
Selling prices |
|
|
+ |
Foreign currency translation |
|
+ |
|
|
|
|
|
Performance Coatings net sales increased
Sales of PPG’s technology-advantaged aerospace products remained strong, as the business delivered mid-teen percentage organic sales growth year over year. Protective and marine coatings delivered mid-single-digit percentage organic sales growth driven by strong volume growth in the
Segment income increased by
Industrial Coatings segment
$ in millions |
4Q 2023 |
4Q 2022 |
YOY change |
Net sales |
|
|
+ |
Segment income |
|
|
+ |
Segment income % |
|
|
|
Sales volumes |
|
|
|
Selling prices |
|
|
|
Foreign currency translation |
|
|
+ |
|
|
|
|
Industrial Coatings segment net sales were higher compared to the fourth quarter 2022 aided by favorable foreign currency translation.
Automotive OEM coatings organic sales increased by a mid-single-digit percentage with higher selling prices in all regions and higher aggregate sales volumes led by our market share gains in the
Segment income was higher than the prior year by
Full-Year 2023 Financial Results
$ in millions, except EPS |
2023 |
2022 |
YOY change |
Net sales |
|
|
+ |
Net income(a) |
|
|
+ |
Adjusted net income(a)(b) |
|
|
+ |
EPS(a) |
|
|
+ |
Adjusted EPS(a)(b) |
|
|
+ |
(a) From continuing operations |
|||
(b) Reconciliations of reported to adjusted figures are included below |
|||
|
|||
Record full-year 2023 net sales were approximately
In 2023, the company paid approximately
Additional Financial Information
-
Fourth quarter reported EPS included a non-cash charge of
$0.67 -
Corporate expenses were
$100 million -
The reported and adjusted effective tax rates were
46.4% and22.0% , respectively, in the fourth quarter. The reported rate was impacted by the fourth quarter non-cash charge for impairment and certain other charges, for which there was not a tax benefit. -
Net interest expense of
$13 million -
At quarter end, the company had cash and short-term investments totaling nearly
$1.6 billion $4.5 billion $1.2 billion
Outlook
The company today reported the following projections for the first quarter and full year 2024 based on current global economic activity, soft industrial production, demand stabilization in
Outlook |
1Q 2024 |
FY 2024 |
|
|
|
Adjusted EPS |
|
|
The effective tax rate for the first quarter 2024 is expected to be between
Additional information related to 2024 financial projections are available in the detailed commentary and associated presentation slides related to the fourth quarter financial information which are posted within the investors section of PPG.com.
The term organic sales as used in this press release is defined as net sales excluding the impact of currency, acquisitions, divestitures and the wind down of
PPG: WE PROTECT AND BEAUTIFY THE WORLD®
At PPG (NYSE:PPG), we work every day to develop and deliver the paints, coatings and specialty materials that our customers have trusted for more than 140 years. Through dedication and creativity, we solve our customers’ biggest challenges, collaborating closely to find the right path forward. With headquarters in
The PPG Logo and We protect and beautify the world are registered trademarks of PPG Industries Ohio, Inc.
Additional Information
PPG will provide detailed commentary regarding its financial performance, including presentation-slide content, on the PPG Investor Center at www.ppg.com at about 4:30 p.m. ET today, January 18. The company will hold a conference call to review its fourth quarter 2023 financial performance on January 19, at 8:00 a.m. ET. Participants can pre-register for the conference by navigating to https://www.netroadshow.com/events/login?show=38e62f00&confId=58856. The conference call also will be available in listen-only mode via Internet broadcast from the PPG Investor Center at www.ppg.com. A telephone replay will be available January 19, beginning at approximately 11:00 a.m. ET, through February 2, at 11:59 p.m. ET. The dial-in numbers for the replay are: in
Forward-Looking Statements
Statements contained herein relating to matters that are not historical facts are forward-looking statements reflecting PPG’s current view with respect to future events and financial performance. These matters within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, involve risks and uncertainties that may affect PPG’s operations, as discussed in the company’s filings with the Securities and Exchange Commission pursuant to Sections 13(a), 13(c) or 15(d) of the Exchange Act, and the rules and regulations promulgated thereunder. Accordingly, many factors could cause actual results to differ materially from the forward-looking statements contained herein. Such factors include statements related to the effects on our business of COVID-19, global economic conditions, geopolitical issues, the amount of future share repurchases, increasing price and product competition by our competitors, fluctuations in cost and availability of raw materials, energy, labor and logistics, the ability to achieve selling price increases, the ability to recover margins, customer inventory levels, PPG inventory levels, the ability to maintain favorable supplier relationships and arrangements, the timing of realization of anticipated cost savings from restructuring and other initiatives, the ability to identify additional cost savings opportunities, the timing and expected benefits of potential future and completed acquisitions, 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, the unpredictability of existing and possible future litigation, including asbestos litigation, and governmental investigations. However, it is not possible to predict or identify all such factors. Consequently, while the list of factors presented here and in our 2022 Annual Report on Form 10-K 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 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 and similar risks, any of which could have a material adverse effect on PPG’s consolidated financial condition, results of operations or liquidity.
All information in this release speaks only as of January 18, 2024, and any distribution of this release 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.
Regulation G Reconciliation
PPG believes investors’ understanding of the company’s performance is enhanced by the disclosure of net income, earnings per diluted share from continuing operations and PPG’s effective tax rate adjusted for certain items. PPG’s management considers this information useful in providing insight into the company’s ongoing performance because it excludes the impact of items that cannot reasonably be expected to recur on a quarterly basis or that are not attributable to our primary operations. Net income, earnings per diluted share from continuing operations and the effective tax rate adjusted for these items are not recognized financial measures determined in accordance with
Regulation G Reconciliation - Net Income and Earnings per Diluted Share ($ in millions, except per-share amounts) |
|||||||||
|
Fourth Quarter
|
Fourth Quarter
|
|||||||
|
$ |
EPS(a) |
$ |
EPS(a) |
|||||
Reported net income from continuing operations |
|
|
|
|
|
|
|||
Acquisition-related amortization expense |
30 |
|
0.13 |
|
31 |
0.13 |
|||
Business restructuring-related costs, net(b) |
13 |
|
0.05 |
|
6 |
0.03 |
|||
Impairment and other related charges, net(c) |
160 |
|
0.67 |
|
11 |
0.05 |
|||
Portfolio optimization(d) |
28 |
|
0.12 |
|
— |
— |
|||
Environmental remediation charges(e) |
23 |
|
0.10 |
|
— |
— |
|||
|
24 |
|
0.10 |
|
— |
— |
|||
Insurance recoveries(g) |
(5 |
) |
(0.02 |
) |
— |
— |
|||
Adjusted net income from continuing operations, excluding certain items |
|
|
|
|
|
|
|||
|
|
|
|
|
|||||
|
Full Year
|
Full Year 2022 |
|||||||
|
$ |
EPS(a) |
$ |
EPS(a) |
|||||
Reported net income from continuing operations |
|
|
|
|
|
|
|||
Acquisition-related amortization expense |
121 |
|
0.51 |
|
126 |
0.53 |
|||
Business restructuring-related costs, net(b) |
34 |
|
0.14 |
|
56 |
0.24 |
|||
Impairment and other related charges, net(c) |
160 |
|
0.67 |
|
214 |
0.90 |
|||
Portfolio optimization(d) |
58 |
|
0.24 |
|
12 |
0.05 |
|||
Environmental remediation charges(e) |
23 |
|
0.10 |
|
— |
— |
|||
|
24 |
|
0.10 |
|
— |
— |
|||
Insurance recoveries(g) |
(12 |
) |
(0.05 |
) |
— |
— |
|||
Pension settlement charge(h) |
144 |
|
0.61 |
|
— |
— |
|||
Adjusted net income from continuing operations, excluding certain items |
|
|
|
|
|
|
|||
|
Fourth Quarter
|
|
Fourth Quarter
|
||||||||||||||
|
Income
|
|
Tax
|
|
Effective
|
|
Income
|
|
Tax
|
|
Effective
|
||||||
Effective tax rate, continuing operations |
|
|
|
|
|
|
46.4 |
% |
|
|
|
|
|
|
|
22.9 |
% |
Acquisition-related amortization expense |
40 |
|
|
10 |
|
|
25.0 |
% |
|
41 |
|
|
10 |
|
|
24.4 |
% |
Business restructuring-related costs, net(b) |
16 |
|
|
3 |
|
|
18.8 |
% |
|
8 |
|
|
2 |
|
|
29.7 |
% |
Impairment and other related charges, net(c) |
160 |
|
|
— |
|
|
— |
% |
|
15 |
|
|
4 |
|
|
24.7 |
% |
Portfolio optimization(d) |
31 |
|
|
3 |
|
|
9.7 |
% |
|
— |
|
|
— |
|
|
— |
% |
Environmental remediation charges(e) |
30 |
|
|
7 |
|
|
23.3 |
% |
|
— |
|
|
— |
|
|
— |
% |
|
20 |
|
|
(4 |
) |
|
(20.0 |
)% |
|
— |
|
|
— |
|
|
— |
% |
Insurance recoveries(g) |
(7 |
) |
|
(2 |
) |
|
28.6 |
% |
|
— |
|
|
— |
|
|
— |
% |
Adjusted effective tax rate, continuing operations, excluding certain items |
|
|
|
|
|
|
22.0 |
% |
|
|
|
|
|
|
|
23.2 |
% |
|
Full Year
|
|
Full Year
|
||||||||||||||
|
Income
|
|
Tax
|
|
Effective
|
|
Income
|
|
Tax
|
|
Effective
|
||||||
Effective tax rate, continuing operations |
|
|
|
|
|
|
25.1 |
% |
|
|
|
|
|
|
|
23.5 |
% |
Acquisition-related amortization expense |
161 |
|
|
40 |
|
|
24.8 |
% |
|
166 |
|
|
40 |
|
|
24.1 |
% |
Business restructuring-related costs, net(b) |
43 |
|
|
9 |
|
|
20.9 |
% |
|
75 |
|
|
19 |
|
|
25.3 |
% |
Impairment and other related charges, net(c) |
160 |
|
|
— |
|
|
— |
% |
|
245 |
|
|
31 |
|
|
12.7 |
% |
Portfolio optimization(d) |
53 |
|
|
(7 |
) |
|
(13.2 |
)% |
|
10 |
|
|
(2 |
) |
|
(20.0 |
)% |
Environmental remediation charges(e) |
30 |
|
|
7 |
|
|
23.3 |
% |
|
— |
|
|
— |
|
|
— |
% |
|
20 |
|
|
(4 |
) |
|
(20.0 |
)% |
|
— |
|
|
— |
|
|
— |
% |
Insurance recoveries(g) |
(16 |
) |
|
(4 |
) |
|
25.0 |
% |
|
— |
|
|
— |
|
|
— |
% |
Pension settlement charge(h) |
190 |
|
|
46 |
|
|
24.2 |
% |
|
— |
|
|
— |
|
|
— |
% |
Adjusted effective tax rate, continuing operations, excluding certain items |
|
|
|
|
|
|
22.0 |
% |
|
|
|
|
|
|
|
22.0 |
% |
(a) |
Earnings per diluted share is calculated based on unrounded numbers. Figures in the table may not recalculate due to rounding. |
(b) |
Business restructuring-related costs, net include business restructuring charges, offset by releases related to previously approved programs, which are included in Other charges/(income), net on the consolidated statement of income, accelerated depreciation of certain assets, which is included in Depreciation on the consolidated statement of income, and other restructuring-related costs, which are included in Cost of sales, exclusive of depreciation and amortization and Selling, general and administrative on the consolidated statement of income. |
(c) |
In the fourth quarter 2023, the company recorded impairment and other related charges due to a non-cash goodwill impairment recognized for the Traffic Solutions reporting unit as a result of its annual goodwill impairment test. The fair value of the Traffic Solutions reporting unit decreased primarily due to increases in the cost of capital (discount rate assumption) and declines in the reporting unit’s long-term forecast driven by challenges at its operations in |
(d) |
Portfolio optimization includes losses on the sale of non-core assets, including the losses recognized on the sales of the company's European and Australian Traffic Solutions businesses in the fourth quarter 2023, which are included in Other charges/(income), net in the consolidated statement of income, accelerated amortization expense recognized related to the exit of a non-core business, which is included in Amortization in the consolidated statement of income, and the impact for the step up to fair value of inventory acquired in certain acquisitions, which is included in Cost of sales, exclusive of depreciation and amortization in the consolidated statement of income. Portfolio optimization also includes advisory, legal, accounting, valuation, other professional or consulting fees, and certain internal costs directly incurred to effect acquisitions, as well as similar fees and other costs to effect divestitures and other portfolio optimization exit actions. These costs are included in Selling, general and administrative expense in the consolidated statement of income. |
(e) |
Environmental remediation charges represent environmental remediation costs at certain legacy PPG manufacturing sites. These charges are included in Other charges/(income), net in the consolidated statement of income. |
(f) |
In December 2023, the central bank of |
(g) |
In the first quarter 2023, the company received reimbursement under its insurance policies for damages incurred at a southern |
(h) |
In the first quarter 2023, PPG purchased group annuity contracts that transferred pension benefit obligations for certain of the company’s retirees in the |
| PPG INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED STATEMENT OF INCOME (unaudited) | ||||||||
| (All amounts in millions except per-share data) | ||||||||
| Three Months Ended | Twelve Months Ended | |||||||
| December 31 | December 31 | |||||||
2023 |
2022 |
2023 |
2022 |
|||||
| Net sales |
|
|
|
|
|
|
|
|
| Cost of sales, exclusive of depreciation and amortization | 2,531 |
|
2,623 |
|
10,745 |
|
11,096 |
|
| Selling, general and administrative | 1,114 |
|
955 |
|
4,222 |
|
3,842 |
|
| Depreciation | 104 |
|
92 |
|
391 |
|
388 |
|
| Amortization | 46 |
|
41 |
|
167 |
|
166 |
|
| Research and development, net | 111 |
|
108 |
|
433 |
|
448 |
|
| Interest expense | 57 |
|
53 |
|
247 |
|
167 |
|
| Interest income | (44 |
) |
(20 |
) |
(140 |
) |
(54 |
) |
| Impairment and other related charges, net | 160 |
|
15 |
|
160 |
|
245 |
|
| Pension settlement charge | - |
|
- |
|
190 |
|
- |
|
| Other charges/(income), net | 79 |
|
(1 |
) |
83 |
|
(27 |
) |
| Income before income taxes |
|
|
|
|
|
|
|
|
| Income tax expense | 89 |
|
73 |
|
439 |
|
325 |
|
| Income from continuing operations |
|
|
|
|
|
|
|
|
| Income/(loss) from discontinued operations, net of tax | - |
|
- |
|
- |
|
(2 |
) |
| Net income attributable to controlling and noncontrolling interests |
|
|
|
|
|
|
|
|
| Net income attributable to noncontrolling interests | (13 |
) |
(8 |
) |
(39 |
) |
(28 |
) |
| Net income (attributable to PPG) |
|
|
|
|
|
|
|
|
| Amounts attributable to PPG: | ||||||||
| Income from continuing operations, net of tax |
|
|
|
|
|
|
|
|
| Income/(loss) from discontinued operations, net of tax | - |
|
- |
|
- |
|
(2 |
) |
| Net income (attributable to PPG) |
|
|
|
|
|
|
|
|
| Earnings per common share (attributable to PPG) | ||||||||
| Income from continuing operations, net of tax |
|
|
|
|
|
|
|
|
| Income/(loss) from discontinued operations, net of tax | - |
|
- |
|
- |
|
(0.01 |
) |
| Net income (attributable to PPG) |
|
|
|
|
|
|
|
|
| Earnings per common share (attributable to PPG) - assuming dilution | ||||||||
| Income from continuing operations, net of tax |
|
|
|
|
|
|
|
|
| Income/(loss) from discontinued operations, net of tax | - |
|
- |
|
- |
|
(0.01 |
) |
| Net income (attributable to PPG) |
|
|
|
|
|
|
|
|
| Average shares outstanding | 236.2 |
|
235.5 |
|
236.0 |
|
236.1 |
|
| Average shares outstanding - assuming dilution | 237.3 |
|
236.6 |
|
237.2 |
|
237.3 |
|
| PPG INDUSTRIES, INC. AND SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS HIGHLIGHTS (unaudited) | ||||
| ($ in millions) | ||||
| Twelve Months Ended | ||||
| December 31 | ||||
2023 |
2022 |
|||
| Cash from operating activities - continuing operations |
|
|
|
|
| Cash used for investing activities: | ||||
| Capital expenditures |
|
|
|
|
| Business acquisitions, net of cash balances acquired |
|
|
|
|
| Financing activities: | ||||
| Dividends paid on PPG common stock |
|
|
|
|
| PPG INDUSTRIES, INC. AND SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED BALANCE SHEET HIGHLIGHTS (unaudited) | ||||
| ($ in millions) | ||||
| December 31 | December 31 | |||
2023 |
2022 |
|||
| Current assets: | ||||
| Cash and cash equivalents |
|
|
|
|
| Short-term investments | 75 |
|
55 |
|
| Receivables, net | 3,279 |
|
3,303 |
|
| Inventories | 2,127 |
|
2,272 |
|
| Other current assets | 436 |
|
444 |
|
| Total current assets |
|
|
|
|
| Current liabilities: | ||||
| Short-term debt and current portion of long-term debt |
|
|
|
|
| Accounts payable and accrued liabilities | 4,467 |
|
4,087 |
|
| Current portion of operating lease liabilities | 194 |
|
183 |
|
| Restructuring reserves | 87 |
|
138 |
|
| Total current liabilities |
|
|
|
|
| Long-term debt |
|
|
|
|
| PPG OPERATING METRICS (unaudited) | ||||
| ($ in millions) | ||||
| December 31 | December 31 | |||
2023 |
2022 |
|||
| Operating Working Capital (a) |
|
|
|
|
| As a percent of quarter sales, annualized | 15.2 |
% |
16.9 |
% |
| (a) | Operating working capital includes: (1) receivables from customers, net of allowance for doubtful accounts, (2) FIFO inventories and (3) trade liabilities. | |||
| PPG INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BUSINESS SEGMENT INFORMATION (unaudited) | ||||||||
| ($ in millions) | ||||||||
| Three Months Ended | Twelve Months Ended | |||||||
| December 31 | December 31 | |||||||
2023 |
2022 |
2023 |
2022 |
|||||
| Net sales | ||||||||
| Performance Coatings |
|
|
|
|
|
|
|
|
| Industrial Coatings | 1,735 |
|
1,695 |
|
7,082 |
|
6,958 |
|
| Total |
|
|
|
|
|
|
|
|
| Segment income | ||||||||
| Performance Coatings |
|
|
|
|
|
|
|
|
| Industrial Coatings | 230 |
|
155 |
|
966 |
|
643 |
|
| Total |
|
|
|
|
|
|
|
|
| Items not allocated to segments | ||||||||
| Corporate | (100 |
) |
(52 |
) |
(340 |
) |
(218 |
) |
| Interest expense, net of interest income | (13 |
) |
(33 |
) |
(107 |
) |
(113 |
) |
| Impairment and other related charges, net (Note A) | (160 |
) |
(15 |
) |
(160 |
) |
(245 |
) |
| Business restructuring-related costs, net (Note B) | (16 |
) |
(8 |
) |
(43 |
) |
(75 |
) |
| Portfolio optimization (Note C) | (31 |
) |
- |
|
(53 |
) |
(10 |
) |
| Environmental remediation charges (Note D) | (30 |
) |
- |
|
(30 |
) |
- |
|
(20 |
) |
- |
|
(20 |
) |
- |
|
|
| Insurance recoveries (Note F) | 7 |
|
- |
|
16 |
|
- |
|
| Pension settlement charge (Note G) | - |
|
- |
|
(190 |
) |
- |
|
| Income before income taxes |
|
|
|
|
|
|
|
|
| Note A: | ||||
| In the fourth quarter 2023, the company recorded impairment and other related charges due to goodwill impairment recognized for the Traffic Solutions reporting unit as a result of its annual goodwill impairment test. The fair value of the Traffic Solutions reporting unit decreased primarily due to increases in the cost of capital (discount rate assumption) and declines in the reporting unit’s long-term forecast driven by challenges at its operations in |
||||
| Note B: | ||||
| Business restructuring-related costs, net include business restructuring charges, offset by releases related to previously approved programs, which are included in Other charges/(income), net on the consolidated statement of income, accelerated depreciation of certain assets, which is included in Depreciation on the consolidated statement of income, and other restructuring-related costs, which are included in Cost of sales, exclusive of depreciation and amortization and Selling, general and administrative on the consolidated statement of income. | ||||
| Note C: | ||||
| Portfolio optimization includes losses on the sale of non-core assets, including the losses recognized on the sales of the company's European and Australian Traffic Solutions businesses in the fourth quarter 2023, which are included in Other charges/(income), net in the consolidated statement of income, accelerated amortization expense recognized related to the exit of a non-core business, which is included in Amortization in the consolidated statement of income, and the impact for the step up to fair value of inventory acquired in certain acquisitions, which is included in Cost of sales, exclusive of depreciation and amortization in the consolidated statement of income. Portfolio optimization also includes advisory, legal, accounting, valuation, other professional or consulting fees, and certain internal costs directly incurred to effect acquisitions, as well as similar fees and other costs to effect divestitures and other portfolio optimization exit actions. These costs are included in Selling, general and administrative expense in the consolidated statement of income. | ||||
| Note D: | ||||
| Environmental remediation charges represent environmental remediation costs at certain legacy PPG manufacturing sites. These charges are included in Other charges/(income), net in the consolidated statement of income. | ||||
| Note E: | ||||
| In December 2023, the central bank of |
||||
| Note F: | ||||
| In the first quarter 2023, the company received reimbursement under its insurance policies for damages incurred at a southern |
||||
| Note G: | ||||
| In the first quarter 2023, PPG purchased group annuity contracts that transferred pension benefit obligations for certain of the company’s retirees in the |
CATEGORY Corporate
View source version on businesswire.com: https://www.businesswire.com/news/home/20240118374446/en/
PPG Media Contact:
Mark Silvey
Corporate Communications
+1-412-434-3046
silvey@ppg.com
PPG Investor Contact:
Jonathan Edwards
Investor Relations
+1-412-434-3466
jonathanedwards@ppg.com
investor.ppg.com
Source: PPG
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