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- Fourth quarter highlights include:
- Record fourth quarter net sales of US$4.4bn
- Net sales up 4% year over year (YOY), including organic sales growth of 1%
- Quarterly earnings per diluted share (EPS) of US$0.38 and adjusted EPS of US$1.53
- Further progress on margin recovery; segment margin up 260 basis points YOY
- Share repurchases of US$100M
- Full-year 2023 highlights include:
- Record sales of US$18.2bn; aided by 3% organic sales growth
- EPS of US$5.35 and record adjusted EPS of US$7.67
- Record operating cash flow of over US$2.4bn; up more than US$1.4bn YOY
Tim Knavish, PPG Chairman and CEO, commented on the quarter and 2023:
“Capping off a record year, the PPG team delivered solid year-over-year sales growth, strong adjusted earnings growth and record operating cash flow. The breadth and diversity of our business portfolio was a key driver to our record fourth quarter performance, as we benefited from solid volume growth in China, demand stabilisation in Europe and continued growth in several key end-use markets such as aerospace, automotive original equipment manufacturer (OEM) and protective coatings.
“We made strong progress on returning to our historic segment margin profile while delivering segment earnings growth of 30% and an aggregate segment margin improvement of 260 basis points, marking the fifth consecutive quarter of year-over-year margin improvement. Additionally, our earnings growth and working capital management resulted in strong cash generation in the quarter and record operating cash flow of over US$2.4 billion for the year. We ended the year with a strong balance sheet that, coupled with our legacy of solid cash flow, provides us with shareholder value creation opportunities going forward.
“Looking at the full year, in addition to our record financial performance, we successfully implemented various strategic initiatives to strengthen the company, including key actions to position PPG for higher organic growth. We also executed on our ongoing portfolio review leading to the divestitures of both our European and Australian Traffic Solutions businesses and the recently announced strategic alternatives review of the silicas products business. Finally, we have continued our heritage of rewarding our shareholders with our 124th consecutive year of dividend payments, including 52 consecutive years of dividend increases.
“Looking ahead, while global industrial production remains at low absolute levels, we expect that demand for our businesses in China will continue to improve. In Europe, we believe that economic activity will stabilise in 2024 at current levels. In the US, we anticipate that economic conditions will remain subdued during the first half of 2024, and in Mexico, which is now our second largest country in terms of total net sales, we expect strong momentum to continue. From a PPG perspective, we plan to deliver volume growth in 2024 by executing on our key strategic growth initiatives and fully capitalising on continued demand in several areas, including aerospace and Mexico, which will also benefit from cross-selling initiatives through our concessionaire network.
“We are laser focused on maintaining the unwavering support of our customers as we leverage our strong brands and provide technology-advantaged products and solutions that enhance their productivity and sustainability. We aim to build on our strong 2023 financial performance by continuing our growth and value creation in 2024 for the benefit of all stakeholders. Finally, I want to thank our more than 50,000 employees around the world for “making it happen” in 2023 and positioning us for growth in 2024.”