• Adjusted EPS for Full Year 2024: $7.87, a 6% increase year-over-year.
• Fourth Quarter Adjusted EPS Growth: 6% year-over-year, excluding unfavorable foreign currency translation.
• Global Architectural Coatings Segment EBITDA Margin: Improved by 70 basis points for the full year.
• Performance Coatings Segment Organic Sales Growth: 4% in the fourth quarter.
• Aerospace Coatings Organic Sales Growth: Double-digit percentage growth in the fourth quarter.
• Order Backlog: Approximately $300 million, indicating strong demand.
• Protective & Marine Coatings Sales Volume Growth: Seventh consecutive quarter of positive year-over-year growth.
• Industrial Coatings Segment EBITDA Margin: Reduced by 160 basis points for the quarter.
• Cash at End of Fourth Quarter: Approximately $1.4 billion.
• Share Repurchases in Fourth Quarter: $250 million.
• Dividends Paid in Fourth Quarter: Approximately $160 million.
• Total Shareholder Return in 2024: $1.4 billion, including dividends and share repurchases.
• Expected Adjusted EPS for Full Year 2025: $7.75 to $8.05, representing 7% growth at midpoint, excluding foreign currency and higher tax impacts.

• Warning! GuruFocus has detected 4 Warning Signs with PPG.

Release Date: January 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• PPG Industries Inc (NYSE:PPG) achieved record results in several businesses, including Aerospace Coatings and Automotive Refinish Coatings.
• The company delivered a 6% year-over-year growth in adjusted EPS for the full year 2024.
• PPG Industries Inc (NYSE:PPG) completed strategic divestitures, improving its financial profile and focusing on higher-margin businesses.
• The company reported strong organic sales growth in Aerospace Coatings, Protective & Marine Coatings, and Traffic Solutions.
• PPG Industries Inc (NYSE:PPG) returned $1.4 billion to shareholders in 2024 through share repurchases and dividends.

Negative Points

• Organic sales declined slightly year-over-year due to weak macroeconomic conditions.
• The Industrial Coatings segment faced challenges with reduced demand due to weak global industrial production.
• The Global Architectural Coatings segment was significantly impacted by unfavorable foreign currency translation.
• PPG Industries Inc (NYSE:PPG) anticipates a slow start to 2025 due to continued demand challenges in Europe and global industrial markets.
• The company expects low single-digit inflation in raw material costs due to enacted tariffs, impacting cost structures.

Q & A Highlights

Q: Could you talk about the $100 million new win for industrial? Is that related to a major competitor pulling back or is something else driving that? A: Certainly, the South American exit of one of our competitors is a part of that, slightly less than half. We've got a number of other significant wins in auto OEM as well as our Industrial Coatings and our Packaging Coatings businesses. The wins are spread across these major businesses, but a big piece is the exit in South America. - Timothy Knavish, CEO

Q: Can you give us more specifics on how you are adjusting pricing across the portfolio to reduce the risk of any sort of price cost mismatches as 2025 unfolds? A: Our guide for raw materials is up low single digits inflation throughout the year, based on tariffs already enacted. Pricing will be flattish to slightly positive in Q1, with low single-digit positive pricing for the company across the board for the full year. We remain flexible to adjust if necessary. - Timothy Knavish, CEO

Q: You're expecting full year segment margins to be up 50 bps and down 150 bps in Q1. How do you expect margins to trend from Q2 to Q4? A: In Q1, we have some raw material inflation and expect a flat to low single-digit decline in volumes. As you progress through the year, our volume performance gets better, which will improve margins. - Vincent Morales, CFO

Q: Can you talk about how you and your teams are now thinking about the respective growth rates of the new segments in terms of share gain and market outperformance? A: For Global Architectural Coatings, we expect growth aligned with housing and construction GDP, plus incremental share gain. Performance Coatings is more stable, with opportunities for share gain due to differentiated technology. Industrial Coatings is tied to industrial production, with share gains from our technologies. - Timothy Knavish, CEO

Q: How does the shape of the year-over-year EPS or EBIT look for 2025 compared to last year? A: We'll be behind last year in the first half, particularly in Q1, and then nicely above it in the second half. Operationally, it's 7% operational EPS growth, with a significant impact from FX. - Timothy Knavish, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.