PPG Industries has posted second quarter net sales of US$4.1bn, up 16%, with net income from continuing operations of US$341m.
“We achieved new sales and adjusted earnings records due to the continued strong performance of our coatings businesses, which in aggregate delivered 25% earnings growth in comparison to last year’s record level,” said PPG chairman and CEO, Charles Bunch.
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“The record adjusted earnings results were driven by our strong operating focus, including ongoing aggressive cost management and the earnings benefit from cash deployed on recent coatings acquisitions.”
Bunch added overall economic conditions remained dependent on region with North America continuing to expand, aided by higher industrial and auto production combined with continued positive momentum in construction markets.
Asia also grew, led by higher local consumption in China, while Europe remained sluggish with economic activity generally declining.
“An important factor to our overall coatings results was higher sales in businesses such as automotive OEM (original equipment manufacturer) coatings, automotive refinish and aerospace,” said Bunch.
“Importantly, we finalised our acquisition of the AkzoNobel North American architectural coatings business on 1 April and we are very pleased with the results in the quarter. The acquired business had sales of about US$475m in the quarter and delivered a mid-single-digit percentage earnings return on sales, which was slightly ahead of our target.
“We are in the early stages of integration and still have a considerable amount of work to do, including executing our recently approved restructuring programme.
“We remain confident we will deliver the targeted $200m of annual synergies over a three-year period, as previously outlined.”
PPG added its board of directors had approved a US$102m business restructuring programme to achieve cost synergies relating to the recent North American architectural coatings acquisition, as well as in PPG’s legacy architectural business.
Additionally, smaller targeted actions were approved for businesses where market conditions remain challenging, most notably protective and marine coatings, as well as certain European businesses such as architectural coatings and fibre glass.
