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顾晗丽-Liddy Gu
EMG China

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12 十月 2018

PPG reports first quarter 2018 financial results

• Net sales of approximately $3.8 billion, up nearly 9 percent versus prior year
• Reported earnings per diluted share from continuing operations of $1.38
• Adjusted earnings per diluted share from continuing operations of $1.39, up over 4% percent from prior year
• Momentum continues on achieving higher selling prices to offset inflation
• On-going cost management continued; selling, general and administrative costs declined by 140 basis points as a percentage of sales versus first quarter 2017
• Share repurchases of $600 million in the first quarter; commitment remains to deploy at least $2.4 billion on acquisitions and share repurchases in 2018
PITTSBURGH, April 23, 2018 – PPG (NYSE:PPG) recently reported first quarter 2018 net sales of about $3.8 billion, up nearly 9 percent versus the prior year. Net sales in local currencies grew approximately 3 percent year-over-year aided by higher selling prices of almost 2 percent. Selling prices increased by 100 basis points sequentially versus the fourth quarter. Sales volumes grew less than one percent year-over-year. Favorable foreign currency translation improved net sales by nearly 6 percent, or about $205 million. Acquisition-related sales, net of divestitures, added less than 1 percent to sales growth.

First quarter 2018 reported net income from continuing operations was $347 million, or $1.38 per diluted share. First quarter adjusted net income from continuing operations was $350 million, or $1.39 per diluted share, an over 4 percent increase versus the first quarter 2017. Adjusted net income excludes after-tax costs related to immediate, direct cost realignment following a customer assortment change in U.S. architectural coatings. The effective tax rate for the quarter was 23.5 percent.

First quarter 2017, net income from continuing operations was $328 million, or $1.27 per diluted share. First quarter 2017 adjusted net income from continuing operations was $345 million, or $1.33 per diluted share. Adjusted net income excludes an after-tax pension settlement charge of $14 million, or 5 cents per diluted share, and after-tax transaction-related costs of $3 million, or 1 cent per diluted share. The effective tax rate for the quarter was 24.3 percent, and the adjusted effective tax rate for the quarter was 24.9 percent.

A detailed reconciliation of the reported adjusted figures for the first quarter is included below.

“In the first quarter, selling price initiatives continued to gain momentum with increases across all regions that totaled nearly 2 percent. This is our most significant sequential improvement since raw material inflation began approximately one-year ago and includes an almost 200 basis points of sequential improvement in the Industrial Coatings segment,” said Michael H. McGarry, PPG chairman and chief executive officer. “During the quarter, we experienced further raw material inflation and higher logistics costs across all of our businesses. We are continuing to prioritize working with our customers to further offset the impact of inflation. These efforts, along with our continued focus on operational excellence are expected to aid our margin recovery efforts.

“Our volumes grew less than one percent, including the negative impacts to our distribution businesses of fewer shipping days due to a shift in the timing of the Easter holiday. In addition, we remain focused on recovering our operating margins and opted to decline certain business during the quarter. In the Performance Coatings segment, sales volumes were flat year-over-year as above-market growth in aerospace coatings was offset by lower European architectural coatings demand. In the Industrial Coatings segment, sales volumes increased by 1.5 percent led by solid growth in the general industrial and packaging coatings businesses.

“We continue to manage our costs, which is reflected in lower year-over-year selling, general, and administrative expenses of 150 basis points as a percentage of sales. This improvement includes benefits from our 2016 restructuring program, which remains on track to realize annualized savings of $120 million by 2019. Further, with the customer assortment change that we communicated during the first quarter, we have begun an extensive review of our cost structure that we believe will identify and drive additional cost savings opportunities. We expect to provide more information as we progress this initiative,” McGarry said

“Finally, we repurchased $600 million of stock during the quarter as part of our continued focus on earnings-accretive cash deployment. Our pipeline for acquisitions remains active, and we continue our focus on maximizing long-term shareholder value. As we look ahead, we still expect continued positive momentum in overall economic growth, and we remain optimistic that our leading-edge technology products will continue to bring value to our customers,” McGarry concluded.

First Quarter 2018 Reportable Segment Financial Results

• Performance Coatings segment first quarter net sales were approximately $2.2 billion, up $148 million, or 7 percent, versus the prior year. Organic sales in local currencies increased nearly 2 percent, primarily due to higher selling prices. Sales volumes were flat versus the prior year partially due to fewer shipping days which negatively impacted the distribution businesses. Favorable foreign currency translation increased net sales by $119 million, or nearly 6 percent.

Automotive refinish coatings organic sales increased year-over-year by a mid-single-digit percentage driven by above-market performance in Europe and strong demand in the Asia-Pacific region. Aerospace coatings sales volumes grew by a high-single-digit percentage due to improving customer demand for PPG products in the U.S. and Asia-Pacific. Architectural coatings – Americas and Asia Pacific organic sales advanced a low-single-digit percentage year-over-year, with differences by channel and region. In the U.S. and Canada, same store sales in company-owned architectural stores grew by a mid-to-high-single-digit percentage. Aggregate sales volumes in DIY and independent dealer channels declined a mid-single-digit percentage versus the prior year, including the unfavorable impact from a customer assortment change. Latin America architectural coatings sales volumes grew by a high-single-digit percentage with broad-based growth including Mexico, Central America and Brazil. Architectural coatings – EMEA sales volumes declined a mid-single-digit percentage including the effects from harsh regional weather conditions. Aggregate protective and marine coatings sales volumes were slightly higher year-over-year for the third straight quarter, with protective coatings sales growth offsetting moderating marine coatings sales contraction.

Segment income for the first quarter was $285 million, in-line with the first quarter 2017, including favorable foreign currency translation of $15 million, as higher selling prices and lower operating costs were more than offset by raw material inflation.

• Industrial Coatings segment first quarter net sales were more than $1.6 billion, up nearly $152 million, or more than 10 percent, versus the prior year. Year-over-year sales volumes increased by 1.5 percent, and favorable foreign currency translation added $84 million, or about 6 percent. During the quarter, sales volume growth was negatively impacted by a concentrated effort by the businesses on executing selling price initiatives, which resulted in certain business being turned away. Selling prices increased nearly 1 percent year-over-year and about 200 basis points sequentially versus the fourth quarter. Acquisition-related sales added approximately $30 million in sales or about 2 percent year-over-year.

Automotive OEM coatings sales volumes were in-line with the prior year and global industry automotive builds. Aggregate general industrial coatings and specialty coatings and materials sales volumes continued to grow and outpaced global industrial production growth rates for the ninth consecutive quarter, led by strong sales in heavy-duty equipment and electronic materials. Packaging coatings sales volumes grew by a low-single-digit percentage year-over-year with above-industry growth rates in the U.S. and Europe stemming from customer adoption of new PPG technologies.

Segment income for the first quarter was $240 million, down $36 million, or 13 percent, year-over-year. Segment income was lower due to elevated raw material inflation which was partly offset by higher selling prices and also favorable foreign currency translation of about $10 million. Additional selling price initiatives have been secured in the second quarter 2018.
Businesses within both reporting segments are managing costs and executing restructuring initiatives. Restructuring actions are expected to provide cost savings between $50 million and $55 million in 2018, higher than prior company guidance. First quarter corporate expenses were lower year-over-year, driven primarily by lower pension and other post-employment benefit costs. Corporate expenses are expected to be between $175 and $190 million for the full year 2018.

As PPG’s earnings release was being finalized, the company received a report through its internal reporting system concerning potential violations of PPG’s accounting policies and procedures regarding the failure to accrue certain specified expenses in the first quarter. Based on preliminary review, the company identified approximately $1.4 million of expense that should have been accrued in the first quarter, and the earnings reported in this release reflect the accrual of such $1.4 million of expenses. The report also alleges that there may have been other unspecified expenses, potentially up to $5 million in the aggregate, that were improperly not accrued in the first quarter. The Audit Committee of the company’s Board of Directors is overseeing an investigation of the matters set forth in the report, with the assistance of outside counsel. The company is currently unable to predict the timing or outcome of the investigation and will move with diligence.

At PPG (NYSE:PPG), we work every day to develop and deliver the paints, coatings and materials that our customers have trusted for more than 130 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 $14.8 billion in 2017. We serve customers in construction, consumer products, industrial and transportation markets and aftermarkets. To learn more, visit www.ppg.com.

We protect and beautify the world is a trademark and the PPG Logo is a registered trademark of PPG Industries Ohio, Inc.

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