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During the third quarter of 2024, PPG reported $4,575 million in sales, a 1% increase year over year. Net income during Q3 hit $468 million, jumping 10% from Q3 2023, when it was $426 million. Total sales volume also increase 2% year over year.
“We delivered year-over-year sales volume growth of 2% in the performance coatings segment, offset by increasingly challenged global industrial production, which constrained demand in the industrial coatings segment,” says Tim Knavish, PPR chairman and chief executive officer. “Performance coatings growth was catalyzed by sustained strength in aerospace demand, refinish coatings share gains and strong performance in the architectural coatings Americas and Asia Pacific business.”
Knavish expects sales in Q4 to also be relatively flat year over year.
“Our balance sheet remains strong, which continues to provide us with the financial flexibility to drive shareholder value creation going forward,” Knavish says.
PPG also announced a definitive agreement to sell 100% of its architectural coatings business in the U.S. and Canada, valued at $550 million, to American Industrial Partners (AIP).
The transaction is expected to close in late 2024 or early 2025 and is subject to customary closing conditions. The deal is the result of PPG’s evaluation of strategic alternatives for the business.
The company also announced a comprehensive cost reduction program with anticipated annualized pre-tax savings of approximately $175 million once fully implemented, including savings of $60 million in 2025. The program includes various facility closures and other targeted fixed costs. The company will record a pre-tax charge of approximately $250 million in the fourth quarter 2024, and other charges over the next several years when certain costs are incurred. In total, PPG expects the cost reduction program to impact about 1,800 positions, primarily in Europe and the U.S.
The transaction includes manufacturing and distribution facilities in Georgia, Kentucky, Ohio, Nevada, Texas and Illinois. More than 15,000 points of sale, including 750 company-owned stores, 6,600 independent retailer locations and 81,00 major home improvement centers across the U.S., Canada and Puerto Rico are also included in the deal.
“From a PPG perspective, this transaction, along with the pending sale of our silicas products business, demonstrates the active portfolio management by the company and our Board,” Knavish says. “These divestitures further optimize our portfolio by improving our organic growth and financial return profiles and will result in increased capability to channel our growth resources to areas where we have the strongest right to win with our customers.”
