PPG (NYSE:PPG) today announced the company’s growth framework to
deliver Purposeful, Profitable Growth. The company shared details
of its organic growth framework and expectations for organic sales
and adjusted earnings per share (EPS) growth. In addition, the
company communicated the validation of its decarbonization targets
by the Science-Based Targets initiative (SBTi). PPG president and
chief executive officer, Tim Knavish, is presenting these updates
during an investor briefing today at the New York Stock
Exchange.
“PPG is poised to leverage our diverse business portfolio to
deliver industry-leading growth,” said Knavish. “Going forward, we
will intentionally invest in focused growth opportunities that
enhance our customers’ productivity and sustainability, elevate our
customer relationships and expand PPG’s technology leadership
positions in the coatings industry. We will continue our heritage
of cost management, consistent cash generation and focus on
returning cash to shareholders, including through increased annual
dividends.”
The PPG framework for Purposeful, Profitable Growth encompasses
four key elements:
- Focusing investment towards leading positions within advantaged
areas
- Partnering with customers to provide industry-leading
innovation
- Modernizing, simplifying and digitizing operations
- Delivering consistent high-cash conversion and continuing PPG’s
legacy of disciplined capital allocation
The company also communicated the following financial
expectations:
- Establishing annual 2% to 4% organic sales growth
- Annual adjusted EPS growth of 8% to 12% through 20261
- Free cash flow of approximately $1 billion per year
Knavish added, “Solutions that generate productivity and
sustainability benefits for our valued customers are a key piece of
our growth strategy. We’ve made strong progress against our 2025
sustainability goals and now are pleased to introduce ambitious
2030 Environmental, Social and Governance (ESG) targets, including
a sales target for sustainably advantaged products and greenhouse
gas (GHG) emissions reduction targets validated by the SBTi.”
PPG’s 2030 ESG targets include:
- 50% of sales from sustainably advantaged products
- 50% reduction in scope 1 and 2 GHG emissions relative to
2019
- 30% reduction in scope 3 GHG emissions relative to 2019
You can find further information on our achievements and the
full set of our new 2030 ESG commitments in our forthcoming ESG
report, which will be published May 31 and available at
PPG.com.
1 Compared to 2023 baseline.
Further Details on CEO Investor Briefing
The presentation from PPG’s 2023 CEO Investor Briefing will be
available in PPG’s Investor Center at
https://investor.ppg.com/presentations/events/default.aspx after
the investor briefing on May 24.
Non-GAAP Financial Measures
Adjusted EPS and free cash flow as included in this press
release are considered a “non-GAAP financial measure” under
Securities and Exchange Commission rules. PPG’s management
considers adjusted EPS 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. Free
cash flow is used by management to determine cash available for
day-to-day operations and other initiatives. Adjusted EPS and free
cash flow as used by PPG in this press release may be calculated
differently from, and therefore may not be directly comparable to,
similarly titled measures used by other companies. PPG is not able
to provide a reconciliation of targeted 2024-2026 adjusted earnings
per share and free cash flow to the most directly comparable GAAP
financial measures without unreasonable effort because certain
items that impact such measures are uncertain or cannot be
reasonably predicted at this time.
The term organic sales as used in this press release is defined
as net sales excluding the impact of currency, acquisitions, and
divestitures.
Free cash flow as used in this press release is defined as
operating cash flow less capital expenditures and dividends.
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 140 years. Through dedication and creativity, we solve
our customers’ biggest challenges, collaborating closely to find
the right path forward. With headquarters in Pittsburgh, we operate
and innovate in more than 70 countries and reported net sales of
$17.7 billion in 2022. We serve customers in construction, consumer
products, industrial and transportation markets and aftermarkets.
To learn more, visit www.ppg.com.
The PPG Logo and We protect and beautify the world are
registered trademarks of PPG Industries Ohio, Inc.
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 expected effects on our business of
COVID-19, global economic conditions, geopolitical issues in
Europe, 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, the timing and realization of
earnings growth through operational improvements and investment in
growth initiatives, economic and political conditions in
international markets, the ability to penetrate existing,
developing and emerging foreign and domestic markets, the ability
to meet our sustainability targets, 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 the date of
the release, 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.
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PPG Media Contact: Mark Silvey Corporate Communications
+1-412-434-3046 silvey@ppg.com
PPG Investor Contact: John Bruno Investor Relations
+1-412-434-3466 jbruno@ppg.com investor.ppg.com
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