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PPG has reported financial results for the first quarter 2024.
- Record reported earnings per diluted share (EPS) of US$1.69 and adjusted EPS of US$1.86
- Net sales of US$4.3bn; organic sales declined 2% versus prior year, down 1% excluding prior year large customer load-in
- Segment margins improved 60 basis points year over year, the sixth consecutive quarter of margin expansion versus prior year
- Share repurchases of approximately US$150M
Tim Knavish, PPG Chairman and CEO (pictured), commented on the quarter:
“We achieved year-over-year adjusted EPS growth for the fifth consecutive quarter despite continued challenges in the macro environment. The company benefited from our well-established businesses in Mexico and China, our second and third largest net sales countries, respectively. We also delivered organic sales growth in India and in several long-cycle businesses, such as protective and marine coatings and aerospace coatings, where our backlog grew. These gains were mitigated by a large customer load-in and pass-through energy surcharges in Europe that occurred in the prior-year period, lowering year-over-year sales comparisons by approximately 130 basis points. During this year’s first quarter, we were also impacted by lower demand in Europe, including an early Easter holiday which reduced the number of selling days in March, and ongoing tepid global demand for industrial coatings.
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“We continue to make progress on returning to our historic segment margin profile with an aggregate segment margin improvement of 60 basis points, marking the sixth consecutive quarter of year-over-year improvement. 2024 is expected to be another year of excellent cash flow, and our balance sheet remains strong, including lower inventories year over year, providing us with ongoing shareholder value creation opportunities. We completed approximately US$150 million of share repurchases in the first quarter.
“Looking ahead, while global industrial production remains at low absolute levels, we believe that demand in China for our products will deliver solid organic growth. In Europe, demand is expected to stabilise as we progress through 2024, despite unevenness by country. In the U.S., economic conditions have remained subdued in several end-use markets, but we expect overall improvement as the year progresses. In Mexico, we forecast strong momentum to continue.
“We are executing on the strategic reviews of the architectural coatings U.S. and Canada business and global silicas products business that we announced in the first quarter. Our target is to determine a path forward for each of these assessments no later than the third quarter.
“PPG remains focused on various enterprise growth initiatives to drive higher sales volumes and fully capitalize on our technical and service capabilities. In the second quarter, we expect low single-digit percentage aggregate sales volume growth, led by our aerospace, protective and marine, and packaging coatings businesses and by Mexico, China and India.
“Thank you to our more than 50,000 employees around the world who partner with our customers every day to drive mutual success by providing best-in-class paints, coatings and speciality materials, including productivity-enhancing and sustainable solutions.”
For more information, the report can be found here: https://news.ppg.com
