PPG Industries (PPG) 20 Oct 222022 Q3 Earnings call transcript

Good morning. My name is Elliot; I will be your conference operator today. At this time, I would like to welcome everyone to the Third Quarter PPG Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. Instructions] [Operator

would Vice turn Please President sir. I to conference go like Bruno, John of now you. the to over ahead, Thank Investor Relations.

you, results PPG and again, you to everyone. We Thank quarter your welcome good XXXX third John financial appreciate in is call. Bruno. Once interest continued our and Elliot, conference this morning,

and Executive me Chief Senior Executive Officer; Chief on Chairman McGarry, and Morales, the Joining Officer. Vince Knavish, Financial call Officer, Chief Michael Vice and from President PPG are elect; Tim

comments to the financial Our markets released closed XXXX. information XX, equity relate after on US Wednesday, October

posted additional and ppg.com. the The have to comments opening support this the make presentation website, Investor also are slides for available on the brief We on detailed will commentary slides webcast Michael our provide center shortly. and of site accompanying call

perspective will we Following the company’s move to the management’s for Q&A session. results quarter, on a

this the which events company subsequent these contain potential performance. no the actual discussion under may operating and risks, involve forward-looking prepared These future differ. to results provide of cause call is obligation view financial forward-looking statements reflecting updates during uncertainties statements, statements. and on to current PPG’s and and commentary may to effect Both The their company’s

comparable of contains reconciliations This financial these the in measures. the non-GAAP presentation The measures non-GAAP appendix GAAP certain presentation website, company financial also the of on available materials, measures. financial has directly most our provided which to are

For please additional to information, refer SEC. with filings PPG’s the

introduce let Chairman McGarry. PPG me and Michael CEO, Now,

and are XXXX earnings and hope welcome everyone. would to quarter to good healthy. your remaining you our you morning, and third I John, safe I you, loved ones Thank call. like

business congratulate and future X, has during record, would for regarding I quarter, Executive and every his I Tim years Tim appointed full January With immediately XX Tim having to and appointment, and value. I effective Chairman the Officer leading shareholder of have an that career. more for my the confidence into President January growth of XXXX, company Board outstanding additional and become comments on Board Directors. served PPG the like X, XXXX. go The Executive PPG I Chief Knavish joining company's will nearly Tim's Before PPG being than third guide will to track

Now financial results. evening, let to turn me Last reported our we quarter financial third results. XXXX

For billion, and adjusted earnings the sales continuing $X.X diluted were third per share we delivered quarter, $X.XX. of net operations from our

sales second cost of stack, increases performance To continued XX%. our consecutive record, the realization are price was driven up quickly On inflation real-time for a quarter. summarize total about offset fully the by prices two-year quarter, a that selling

a results than As of restrictions month, in these September. lower economic earlier less earnings and demand quarter guidance this were in due we the of expected Europe we for were and impacted in China by our sales the softening further communicated than improvement to as sequential pandemic

In record another quarter. quarter. our Coatings Traffic set and sales did strengthening of lower-than-forecasted X%, performances lowered Packaging businesses, Solutions Also, or deliver million US quarterly sales the PPG delivered these the than strong in each in including automotive by addition, our worse all-time which was sales, records Despite dollar it $XXX global originally forecasted. we the of several US Comex, refinish businesses about

value Year-to-date, that and wins the shop delivered business automotive services delivers customers day. capabilities technology new has as our coatings body industry-leading refinish net X,XXX this and about business every product, to continued

products, continue PPG's travel beyond. XXXX aided XX% business pre-pandemic aerospace expect business sales now book and into addition, advantaged we levels. that to order recovering a strong this additional volume of about In is growth, airline percentage to With by double-digit our industry strong and delivered technology growth grow recovery,

We raw commodity in improvement continue availability. material experience to

ability refinish respective to the to automotive our these similar a impacted materials strong backlog books. raw two million second businesses end constraining order supply the with the their short meet $XXX ended aerospace their quarter businesses of certain However, quarter. and Together, coatings

implementing Importantly, we our increases. year-over-year in progress price segment operating margin recovery selling This reflects has made begun. have the

consecutive marked selling of XXnd prices. third The higher quarter quarter the

margin by accelerate will to cumulative into XXXX We all expect inflation XXXX XXXX recovery the our quarter first anticipate XXXX. from and and recover fully of we

We incremental cost which program, million continued make from benefit good quarter. progress our other in $XX initiatives announced acquisition-related and the to about of restructuring executing synergies on delivered third savings previously

pro new our team business progress customers expanded our initiative new Each During the thousands wins. Home of of calling delivering launch quarter, and prospective The with painter we continued week, to the is Depot. on

also In early, hunt quarter, future while this maintenance for results including yielding be the new in is growth another expect customers, for paint to work US HD commercial with joint area. we And collaboration started we catalyst business. third the and the Supply architectural will coatings team in the

The providing ongoing with convenience pro opportunities at see to we contractors on Overall, growth the are of Home in paint for Collectively, PPG Depot. coming us positive products feedback significant well-recognized years. continue buying the

globally, we basis. While lower been working historic and and in past we chain than to higher able raw stock historic now than carrying our canceling reducing We third to of destock, or But including levels. orders higher safety of capital material closer had supply given over remains given quarter on constraints the the inventory like, inventories levels are progress solid broadening reducing we made the began would year. a elongation to sequential supply

inventory benefit reductions We our quarter, generation. fourth cash the further which in will prioritizing are

our quarter $XXX stock We made million repaid of repurchases of and during debt. modest the

deploy shareholders, practices, cash some We most bolt-on the continued continued including debt with manner strategic accretive we our our reduction. for potential to evaluate in past acquisitions. will Consistent

advantaged, products XX% economy. recyclable. solutions circular from packaging bio-based leading enhancing to is that include to want sustainable that also program through recycled The proved another several the addition made way. Tikkurila to XX% highlight contribute the of I fronts, XXX% of These has and front, ESG acquisition the example to very the on PPG's of yet valuable On be ESG plastic PPG including

of products XX% and Tikkurila's nearly the waterborne Currently, eco-level. is portfolio of XX% are

leveraging sustainability beginning our are in Tikkurila's We architectural Europe. in approach business

the businesses, sales including sales most of to XX% in fall seasonal our demand the in historically ahead about where sequential are Looking Traffic quarter, architectural and business, fourth our trends also Solutions normal lower lower expected, In confidence considerations. weather the softening activity Europe, issues. consumer related to and conditions industrial and to remain expect significantly we energy due to economic geopolitical to weak due costs, the higher

factory restrictions curtail activity and production to was pandemic-related In PPG's China, XX for fourth close China and to economic required further October, continued for activity. commercial in Europe. days the slowing weaker-than-normal could we anticipate due quarter to disruptions largest and the first exports of

automotive to XXXX. China spending consumer One to solid remain offset in important into OEM to improve PPG is and expect builds we

In year-over-year and general, several for continue huge of volume we the our markets and deliver positive US demand DIY the architectural in to Demand growth. residential anticipated demand to basis coatings sales in in remain businesses next to and solid quarter US beginning new home leading further indicators. year's products is in expect fourth the in slow, and economic the is weaken industry to the

PPG's than market exposure and percentage our is small low US less the residential company relatively to market of single-digit a and of is overall revenue. the housing XX% home new to exposure company sales

and the of other growth our to industry some Depot, with expect by Home The initiatives We be customer offset gains. weakness

the year, digit with higher Raw fall sequential mid-single materials than modestly are but to expected a prior remain a quarterly on inflationary, basis.

as supply XXXX to and transportation continue chain improve, We suppliers expect raw and including manufacturing, our material broadly better availability nearing supply to are their capability. conditions

reminder, a XXXX. inflation absorbed of we've billion As about of material since raw $X.X beginning

increases In quarter, in degree further costs, and US. the in fourth Europe expect especially we the in energy some to

past uncertainty, price increases targeted to selling continue real-time the concentrated several in implementing have we with on to payback additional actions implementation. Due costs. to of lower matching an on is further mostly $XX economic million prioritize restructuring savings, will of full focused level implemented We our staffing upon program higher targeting demand. these mitigate Europe, program The includes heightened initiatives annualized levels

automotive period aerospace a to economic business and quarters, of if and a PPG's economic OEM heightened in we with more coatings remain with in more As recovery we our traffic global prove Along we experience the of will portfolio believe broader refinish uncertainty, like resilient demand-stable automotive coming businesses. expect portfolio we even than that the resilient XX% continued businesses decline. enter solutions,

we prior sequential we as be operating we continue profile. momentum importantly, prices This value work step-change quarterly on maintaining quarter, fourth historical and the the towards reflect services the back will noteworthy the supported that provide. selling This will in Also our of from and our is positive improvement margin products margin recession. by expect our to

remain referenced to in capabilities margins, about confident the the that catalysts conditions earnings prior fully to as of them. the certainly exceed I'd with to see operating future are the a challenging opportunities economic we intact, and path term, past near While earnings remain I return peak in PPG,

the even we where XX,XXX confidence and times, operate. customers the your happen the is finish inspiring PPG. intensifying the challenging communities our to want making world you who continued look drives purpose In it are I and in world. beautify protect to of closing, the Thank and as our dedication, around Their most thank our team supporting we managing for during challenges, year to employees by

remarks. our And please questions. concludes This open Elliott, prepared now, would line for the you

first Mizuho. Our Parkinson Thank you. comes from from Christopher [Operator question Instructions]

line is Your ahead. please go open,

and aero, refinish the and with is like fixed margin Great. it leverage, Can for per as history, past for across this your not you just the update us here price on but thoughts Thank seem asset outlook mix necessarily downturns. Thank of cost consequences you. sort you're changing, has overall much. setup you better, The market discussing aligns anything overall just doesn't environment comments your macro of when versus end give so the well? potentially which recessionary

Thanks, Christopher.

is First what coming. think, encouraging we about see increases price thing see the most of that I continued all, we

digits, still low high price So looking at fourth quarter, single increases. we're double-digit

that's So be going to significant.

starting have raw China. up seen have They are loosened materials, in loosen they to in up Europe. We

Europe to arbitraging expect are into and in Europe China we we what We elsewhere. see arbitrage

than last So a little are ones. things that these bit different the are

have quarter labor, by it, it, And covered remind and we third we includes That MRO, going $X that inflation, inflation. everybody, we'll very and So continue confident about inflation. going recover to of we're logistics, end gap. quarter into all total okay? freight second quarter, other the have feel the that name the material still the fourth to you we raw billion year, for we I'll of covered

the will end inflation. before quarter, the recovered By the will all of first raw of we end year, recover total material the inflation. have we And all

good from really So we're that standpoint. in shape

last this going business. to pleased a a bit with I I what and refinish and I'm is than have OEM strong So little business different see think a we recession time, because be strong

comes Our Panjabi Ghansham next from Baird. question from

Your go Please line is ahead. open.

cycle we Can DIY volumes the how architectural markets as mortgage evolving how of see XXXX? first us as and has evolution mean, been in given a US sense, Europe Michael in and three But in and there? extent well Mexico Europe. just the the you are such and US, volumes Yes, you as regions the fundamental for US, on just give Tim. thank your some the into impacted you of congrats and increases off, housing of planning major I of obviously, you for Michael, that rate shifts

take Ghansham , let to going one. Tim this I'm

opportunity, Thanks, to global continue around positioned and -- the we of as Ghansham. this frankly, the forward leadership, for and I navigate PPG today's Michael And economic to setting I with future growth me, confidence forward. world. Board a portfolio with and PPG well positioned thank Excited and XX,XXX and their well mentorship up really working continuing first, his work want personal look Michael want personally company people I to to our future to challenges. also the the through for for is thank for that drive also for trust his and

so the Mexican specifically Now question, world our to continues around architectural, your business to PPG-Comex, shine. for

of than GDPs position, world the the America. results just to most our strength holding services, the second, of are down strength of in of will strength strength up First, network our put there. better And our parts of our continue Latin brand, the strong the up

actually to business see -- for a Asia it positive to DIY, QX quite us of soft small point. depressed today. given at as QX, is fairly and know, a in this China, And at we in expect continue it happening some that's things Europe, in soft levels Pacific we you continue the said the that and architectural. is As we

that stronger. mid-single actually in driven a anything, there, shortages still do backlogs It's see than digits. expect. moderating we well you moderating. Trade is business trade The labor but by are as more largely see Trade, do We down bit in as Europe, Europe PRO would the

there it south. the Some country, then and you know variability more you gets. UK, zone, closer what's depressed the get in happening the by a the to stronger war bit

better up in US, Holding the market. over Canada here

survey softness business holding quarter. like more up up US/Canada. for DIY the backlog, the like the Nothing consistent remain pretty contractors And PRO business quarterly our well. seeing quarter. strong. PRO, down averaged here. But single-digits low Backlogs Europe, of DIY, weeks XX this with Backlogs, paint are in we We is our actually were about prior omni-channel

up better US/Canada in holding here region. So the

next Our question Spector Josh from from UBS. comes

Your line is open.

question. taking for my Thanks guys. Hey,

if improvement curious of the pricing maybe less two-year stack Just an above progression stack. have the slightly Performance segments. you XX%, much with mean, But or a two comment isn't in that increase obvious, on can you on clearly, bit Industrial two-year momentum I a little Q-on-Q. in that

and talking prices, to about pricing that be in I'm a there an factor, accelerating. would pricing segment? up Thanks. either a on new higher especially it does factor, just if inflationary being And higher, the So inflationary wondering get comment energy impact ability you margins perhaps you moving if why can

Josh, this is Michael.

what all, bit segment you sales, seeing okay? the part would little mix what slowing because going on tell a in So in of Performance of of drop issue is is there. the you of the a increases of I that, Coatings in the First architectural price you're have of

So, that's one.

little have to side. The thing Coatings segment. lag And you always pricing other earlier bit much Performance got a is remember we Industrial the in we've in

So other mix the besides is timing. piece

average, see, catching expect was that and Industrial important, And it which our company that in you Industrial does on what we up. fourth most well. So, to is side but as is now above the the continue lag, it's back quarter side,

in importantly, customers provided our have most segment, number our automotive a retroactive as pricing of And well. us

that that so helps And well. margin as

the improvement be And again, So, QX quarter. significant first to but will we in price later, as we're about -- talk still in we'll positive positive significant price have well. anticipating quarter some fourth the ready

Vince. is this Josh,

we is to recovery the We're into margin key QX for the to into continue recovery, seeing us expect promised Industrial think underway. QX. things remember -- we is, I margin in expand and that

put to surcharges energy question Your did and Europe, we what's accommodate as we're in in being Europe, tough that. on done energy a as -- we're not select much We're have big companies energy a reacting consumer downstream as in can Europe. what's to in environment energy most we

Our next question comes Capital from BMO John McNulty Markets. from

open. is line Your

again and to for Tim my question Thanks taking and morning. Good congratulations Michael both.

still chains mean as to currently how still lot it challenged? understand about of lot, we basket, a think I guess, XXXX? relief as improved, but we supply guess challenges. when I material thinking we So, looks And the of some raw to you raw raw things have sounds basket about, us then, that the for be like can are there is the a improve, it help to what material portion have they what might Thanks. should and look continue material like

is John, Vince. this Yes,

quickly real chime start me then to Let here. Tim think and is in I going

levels. starting do the inflation we're but in Michael And sequentially. and QX, is that's, different, the is to It's Tim cumulative, it's think down break. you I fever XX% key see We about as If arbitrage specifics. by some I again, seeing think mentioned, region opportunities. has we're have year-over-year And we see look, inflation

Yes.

And so situation, it's from We're availability isolated better. examples. the to now much John,

to we parts with disruption. transient components, two in in things certainly caused You've additives fire And look got that handfuls assembly down supplier at got aerospace resin that. now windshield. you've to cut with the the example machine what a place a as quarter, the a you We But at go and a opposed particular manufacture a that items, to alternatives some transparencies, here like has US coatings, across parts, singular the we're or but had some if put quarters not some minor of ago. to into acrylic of related deal

Yeah. of started other part that then that issues of now, is the here the a And A past inflation wayside. think it the supply one just issues. issue, freight we absorbed absenteeism, those if issues, were with COVID about comment years lot chain have other included port we've a saddled but by you two almost inflation fallen as in

have So will economics other given factor. issues we bigger the play feel, resolved, a been do those to supply/demand start

comes next Lynch. Merrill Our Stephen from America question from of Byrne Bank

is line open. Your

Yeah.

was refinish where For on various curious you expand your think you or either that example, I that did Tikkurila, region in geographically meaningfully to your can ability the businesses. you markings? a for potential hear the to traffic the footprint What's outlook expand of a in region? you for So in to view you do give them have you you Which think most expand?

Michael. is Well, Stephen, this

me play we positives give do that all the you Let what with just some of the examples acquisition. into

if had take Mexico our about PPG-Comex US solutions traffic you a where and They they're primarily in key think team, a a So in business. that powerhouse piece you tiny was Mexico.

we do? We solutions had we we down since and sell We percent Mexico. traffic to them quarter have it they markets, them. those localize we've and that to business in So started quarters. And five what XX-plus them local do the take for had transfer growing we've now formulations US, it those every is our

moving along. it's So

with Same thing Tikkurila.

Tikkurila, Scandinavia. So relationships. strong to you they they Scandinavia, tremendous up but in It's a not we weren't had go relationship some had in selling customer that and

up there. to that up highlighted see think for products able our we're up We're Scandinavia there. expand you some products there Investor in our bring industrial birch So we we the take Day. I to And able and when them of refinish took to

think And the about same China. thing you when

in business China We nice [indiscernible], we us. for when to been and automotive win and grow a to we've we moved been and those them able took over accessories formulations. China, bought parts So our that's

than where significantly waterborne technology new parts faster automotive we're growing market. a have We for

we of have do around and be to out us. the them we strong these a where turns I move a So for world, number and examples acquisitions think it we positive

very So the much thank for you question.

McCarthy Our next from Kevin VRP. question comes from

open. line Your is

ask much morning. externally. destocking to you good like how I'd do Yes, internally and anticipate

do OEM you been the to your in next expect outside and where example, consumption perhaps markets of several assets dislocated auto depressed? that's a rate underlying For run more or those have below at quarters aerospace

we're of raw do built where materials for our that going businesses certainly, some up. we Kevin, Well, to the

to highlight going going well be did that. happen. that But that's to are you a north of So number

be to advantage But take the to So all automotive, average. like in above remember thing refinish, raw things solutions, of also traffic is, to you going going we're materials. company are that well arbitrage have the

So now us, right moving it if it makes for TiOX sense moving Europe. we're into China. from We're

So be we're to you of QX. We're pretty couple think to going to we're things in advantage take net-net, tell million pretty took going in that. down million that like I down shape. another close. We And And probably of hundred QX. dollars $XXX going inventories take probably good we're in would I

Yes.

to Michael on Let here. said what me add just

about if think I industry you process. the a we're think more batch broadly, coatings

typically we and start not stop We're please. So can a as continuous we process.

versus we inventory. cycles have don't lot is, a are this cycle we prior Where of

a customers, end chain. We're lot for seeing the a inventory of aerospace. refinish, alluded automotive to. as have certainly in not do We're Our seeing few Michael that in with exceptions, example, that in,

we're the coming through one industries. a of So there's way Automotive, many all not, big where Kevin, our chain. in destock the inventory light another

inventories. inventory fourth lot a huge drawing not the down there's customers, going with to of inventories DIY raw draw small run a focus our have in our we slightly exceptions, in in consumption box our we're channels. we big customers' do our as at So quarter. But couple But we're some below to including of material see of on down end or what a

Paribas. Our BNP Laurent next question from from Exane comes Favre

open, ahead. line go Your is please

again, Michael point all. and and Yes. inventory My team. to morning, question this is, Good Congrats on destocking. again

QX, the had a on wondering guidance On customer was specific side. the made assumption for if itself volume I on destocking you

box. This seeing here in seeing customer Yes, is Europe the the architectural question. that Vince's we Laurent, but the thanks States. also in predominantly, To point, really, DIY segment on And for are where side we're the big Tim. is United only destocking

until many so, they of continue still fairly of on remainder very expect levels. our the customer year some But in do are cases reach that for their targeted or beyond channels light that, we inventory. to light And really the

So to see. that's we the only expect destocking

Vince add, just Yes. I And if is this again. can

Europe, to year. -- If to you really that, when go QX we QX, this see that seeing early in started of QX we're

of So in declines. months to lap we're those we're to going lap going -- here, couple a

have in do comparison base for we different XXXX So Europe. a

comes Sison question next from Our from Michael Fargo. Wells

Your open. line is

Michael. and sort think Hey. on moving fourth Good I your you, Congrats you're morning. Mike, to to outlook run quarterly been for quarter, of -- post guess, rate. Cleveland about the you, to with when I the you, for Tim, a question assume seems first low great but you retirement, the $X.XX $X.XX, working

was one number out is half And XXXX. at can just number. improvement the heading is some happen PPG's the that curious what the you. you what $X then point potential there on There if Tim, in I just believe maybe maybe was see Thank you a still think time. to comment and of while, know needs that didn't for you to you earnings for And sequential a right first think into

is Mike, Okay. Michael. this

the Xi's Chinese guidance, our China So be the put our COVID I the at and Tim it, answer we end President call and will the first normalized let's post confident would for day, question. take -- our very pre-announcement that original, I'll that Look, when would team the we third election relaxed approach. policies a second was more together term in his let of question, take

week, this case. to Clearly, with be speech is not going last that the

on So we've adjusted that. based

reduced And are which plant, to projecting last the closely going the in encouraged for is rates. we're very something coatings third -- at China. very That's confidence, fact world automotive that watching in had be good plant news down days the obviously, automotive China, China. look XX running down China by September. the a days the in consumer pretty quarter. And rest the But good of very the strong was I'm XX is It it you business of a October, the Tianjin fourth Our of was largest first electric best China, our the we're at guys is when in historically in very quarter. vehicles. exporting They quarter their automotive a had actually

as not is they're to vehicles are good Southeast know, also Europe, to you only And BYD the for but exporting electric exploring us. Asia.

about So that. we confident very feel

that but may new a fourth out think a don't get of the little as I overall, do We to quarter. they you destocking weak, there December guys ready in there's how quite much guide start DIY So -- view don't uncertain. We lot for typically how season. things are the know know will in much that they're going to buying

We that have of there. in not any put

So we're being given we a cautious what bit see.

think the reasonable, and as through you we're go. so to certainly going And our updated we keep I guide quarter is

I'll the sees with I'll he end that, $X. Tim let So about talk and how

The the it's The is answer absolutely question of are not fundamentals for there. $X, if. a Right. $X when,

minuses got versus refinish you got XX% recovery, auto for you've business look aero If at great down you've That you've is the pluses more recovery, on pre-COVID. recovery. that, and got the still ledger

got We've price the of inflection the cost curve.

You footprint and done. cetera, know synergies, our acquisition, closed, et et cetera. technology, work we've China's about still restructuring

side than is of other. that lot ledger the So stronger the a

The volume. of that some And really we other back ledger to about to get that macroeconomic-driven side the come only need only is to of $X.

question. absolutely So for And the in thanks it's our future.

Goldman from turn Noah Sachs. now Poponak to We

Your open. line is

Can hear Hey, guys. is This me Duffy. okay? you

morning. Good Duffy. Yes,

Good morning.

guys. Sorry,

and So to thanks Tim. first, congrats and Michael

cost. Second the -- price one questions around two

your whether much QX you seen inflation to do or up being how of raw get offsetting all QX year? half ends that to price sequential goal to-date, is we've need one first between first the next the QX material and So

there's you a there for, period? over I one second is say, the back. get we that true $X.X playing what we're it in inflation referenced, then the you And three-year think billion obviously, let's mean, never realistically is probably some

the analyzing back like back change But job You've some is can bogey for the there. relief each theoretically, stuff can think it on it a and running, again, see side got the over of years? realistic as is we up the supply/demand you'll couple Alnext that do we Is as lot three-quarters? you that's get that, plant soon a raw half? a material of particular, What better

I'll the and QX, targeted part have late is QX, going we're and QX. fully very as inflation, to total targeted second take some we're part. take in of Vince. we this question Duffy, that early, we going actions To let modest the first to Michael QX, take early in recover I'll pricing said take actions our

-- exceedingly forward. pricing not we're relying this is again, So going on not exceptionally high

So let third quarter. Duffy, cover covered look, second the quarter. at the just covered the That's covered in all reiterate, going just going not we're me it We've all all We all raws. to inflation, have total in inflation. it quarter. to it We're in fourth

now may to up days targeted in we as tag we're And that we that from also that had QX. caught standpoint. the may totally eating XX anything -- we'll next the gap and says, XX talk some come in So of be that's price that into Vince know. what up up, built increases we on, a with That's not

going we're to see get going are we happen. question clearly We're on? materials, the seen relief is no to on little going what see see not have already to transportation. relief We're going see labor. it So costs That's started going warehousing going -- think to are we we're not relief to to to QX not that We've emulsion seen to But to going probably moderate going raw continue it it basic in we've a start costs. some on isocyanates. in in see significant, moderate bit. some. There's We TiOX. -- starting lower not And to to in in be going of to but it already that's epoxy. It's

see can we these things So coming.

on has team job levels the what of back am too good XXXX to I we get not. to is a maybe way effectively. But a little done Maybe, confident pricing bit really are Now going call. that our to make all that of some enough these? early It's

we're Our well be space. in going and that's end completely will to of continue aware by going QX. close what's to margins that customers why closed that we're will to the XXXX. confident expand gap are continue of on this it think in And I And

Mitsch next comes from from Our Frank Fermium Research. question

open. line Your is

we with you. get Best in Tim. guard congratulations thank pleasure of first, working a a you. the quarterback now Yes, the future, been changing wishes obviously, the and Michael, and to it's this. And at Pittsburgh for

bit the trends. I down into a wanted to volume drill more

about Third prepared if quarter there I by the some I digits. was could think offer that that quarter. about Canada And I let you the US, was to fourth if expected as was -- was remarks, XX%. X%. and in quarter on us wondering you Asia what quarter, fourth as anticipate volumes the down month mid-single volumes think you some as wondering comments Asia. degradation be if mentioned we you you the were that exited know Europe, And see down could said expectations, to you down was

Michael. end Frank, much obviously, and continue Jets this the your to playing follow kind been we'll very a It's up Thank is you regardless the I working comments. of in for you pleasure where with future. golf

rates the China certainly asking than Look, let's September XX-plus reduce quarter bit So, not expect a was we percent in about impact talk our thing from we Tianjin was, plant. them third did expected, the quarter. third the weaker little in us about to that the

and the decreases well. in architectural they the in Europe. in the frame. destocking aggressive to even that time US started saw the certainly in coming We been We that as with They've very that the aggressive channel see September made in more

area continues think to or that consumer, whether like about things the a that weaker. Anything be it's that look Peloton, touches appliance a

volumes, closely. that would Right not say, tracking So area. fourth quarter now, projecting we're for surprises I any we're major that in the

the space in bottom. I mean, reached Europe that cautiously optimistic OEM the has

out in is be now. how and watching impact here levels that's where it worried about rates see that's to we're if think I looking the we'll area that going one US automotive. and the for interest Certainly, that to

to million. But year, look, probably year around this we're next automotive going finish million at about be and we're to XX-plus looking cars with builds XX

are are of see weakening, So things for we some do some these strengthening. things that that

they They move least government. to from move been in policy, move significantly just want will China haven't ever China should away pent the by at but up. from just away And know partially to -- flights They've allowed increase. we Zero-COVID their that around, been or

confident. I So pretty standpoint, on that feel

Capital Our comes from Arun from RBC next question Markets. Viswanathan

Your line open. is

just my question. endeavors with on the on your Good volume there. And Thanks congratulations for that. Great, for I'm Michael, taking working Apologies you. curious side. next

in pre-pandemic like real been there necessarily we structural recover to there's may when think about damage where they Volumes were Europe. it, not So some looks levels.

I don't volumes with if then some that, in maybe risk secondarily, there continued a Europe, And do comment see that. agree just you'd know weakness you if that also but on run can is that's next then likely are kind good rate point could And most deteriorate year. a and as QX thinking case, of Thanks. about in QX starting North the of for earnings America? if we we

Yes.

it So, to is I'll the Arun, for Vince. this and question. go hand Tim. then over maybe first Thanks

the an auto. we from what volume Europe, I comfortable think put standpoint projected We we're For architectural guidance pretty with a we from situation. we standpoint, on that much like European industrial, out, feel the bottomed

holding yet. up architectural And US we The then, the the volumes really consumer-related seen for anything are with US, us on the of, carryover side haven't exception well again, pretty the DIY. haven't industrial and to that -- we

the the yet. into market really States United ocean contagion So cross the we haven't seen

Yes. think Arun, to this structural Vince. demand, about I early is call. that question too On make your it's

going question health the length We parts we XXXX, price that prices, those were your have. of And beginning that there's to lap issue don't shifts again, we due if we're will to We the some to due energy energy have positions. typically Europe do or prices. as already we world March. The look think just impact consumer of of from production that activity that other feel drive energy obviously there easier into there money. in is some has higher seeing spent I some from to -- comparisons to a a answers

to So shifts there. China Mexico, supply or if shifts we'll to it the customers

question next Our Roberts Suisse. from comes John from Credit

Your line is open.

and we levels wishes, auto theme Tim. we're The and already and at recession decline that OEM the Thanks that Europe in congrats, US, best don't Michael, is in further. so

European that is next auto a flat be Now going to do still OEM in year? actually probably that Europe is recession, up to think you

John, Michael. this is

the below million I million catalysts of gets I list At the the cars that going don't next or Europe three remain X think rarely to to demand day, that auto for European X end the two the see at in for is a quarters. turnaround. have we those Europe. that of lot have about are things. habits do behaviors those fleet Western companies corporate That's they're are ingrained and that And in the buying we not now. the buying ever because and overall, cars where by changed driven any of

we're confident at we're pretty So that level.

are In And very popular right XX mean, the there's US, only hard look, to days I many of find. the most inventory of constrained. lots. colors mean the I been we've on now,

are so still And people buying.

you a think there. market, out find the you If can't about truck truck

good that the man So a always very kind market, van the those need stuff, trucks. -- our of because and that's solid guys remains indicator a and

momentum And momentum we're China. do some about going so the to continuum on that's but really see in EVs, EV excited continue. We

I maker last about these that guys we fact by is having And an is us. goal BYD. And this are quarter, earlier, the China EVs of factor didn't EVs largest they happen to export the XX% hit the all of XXXX BYD Well, largest be target. China but of to starting to actually, had encouraging talk cars and that just a EV. supplier for in

feel we in shape. good So like we're

Yes.

I -- is this think, Vince. John

when at X% be year, holistically, was look months ago global up six we'd XX% forecast our the think year-over-year. next we to market auto I

up current Our is X%. X% be we're to forecast going to

we about So at there that, year. growth off auto might cropping global good some the top be of but feel very still next

Seaport to turn now Mike Partners. Research Harrison from We

ahead. Please open. go is line Your

$XX ask cost add the by morning. maybe another color taking Tim. congratulations, good on for and actions you Wanted bit more that million. Hi, to to a let And guys Michael me my reduce little are

buckets you. whether be different in ratably it's talk about split a terms segments? the in are we to chain of that of Maybe optimization, two of pretty Thank should going also, procurement, And count some mentioned can head talk between Europe. reduction. those taken lot supply that it's assume manufacturing about you the You timing? But the

majority I'll people and cost-out are X%, new of new Mike, fast about appropriate in majority program this vast Hey, of with the count the the Any most our be staffing. fairly fast by start moving. far course, fairly we'll and reduce councils. for Tim. The works discussions, -- with question. thanks is of head reductions work would are program this we But of reductions. facility those We will by globally the anticipate

ratably It the same Mike, side industrial the And between bit the a Michael. about And side. this little $XX is talk performance and is the I'll let John million.

Mike. yeah, Yeah,

targeting At progress with be prior fourth we've So time, the expect had $XX the $XX we the that million. as start will million we along year will early of years. total other company are quarter, next this open a from benefiting as and savings about

Our from David next question comes Begleiter Deutsche Bank. from

line Your is open.

quantify relationship? Merandetti Can on is Begleiter. Anthony the architectural Depot you David This from benefit morning. coatings maybe additional the mentioned The in were that wins in US for good discuss And Hi, Home prepared the commentary?

This well. multifamily, Supply, which MRO program. government, site do hospitality, and the largely is Home the focused, and customers they're HD in of The did question. HD delivered on new actually, Supply. Tim. activated with lot beauty of maintenance, previously thousands from engaging the the not progressing Thanks a next phase, Sure, is Anthony. as is paint. And healthcare, Depot And we've Pro comments, for prepared We've we've got heard program of you the repair

to by customer on earlier, CRM focused this some over and our we're every between systems opportunity the is Home put we're of PPG. a upside X,XXX averaging that and heavily indicators week, is The So of lead comments for engagements and scale And enabled Depot us. on the of lot linkage some new

customer are That else Home already rate. historical buying XX% got win for buying other So that compares from paint to new levels rate. XX% us and We've Depot. are about products these win from of about a a somewhere opportunities The

with lead that very satisfied we're So indicator.

early customers that also very the we've to next And then just but of on first engage the XX,XXX new the started here, program. through HD Supply, month stage days in we're

So marathon, $XX far, market category double-digit as we're convert to with for results contractors. and It's a for billion growth of these is addressable expecting a big come. this for many you pro sprint each this US a us quarters we're the the in pleased But painter. picture, so not one

Our Key Corp. comes from from next question Aleksey Yefremov

Your line is open.

it's October that comment How in DIY in congratulations, bad Michael is single September, if Canada digit. and mentioned think and low compare market, short if the also can single And get? could you digit, Thanks In low do was or term, does you getting this the down Tim. down was this this prior to downturns? stable? How US, you worse

was in the big business would boxes. bit the little in Michael, is tell lighter September This Aleksey. a I the you, architectural on destocking

inventory demand little not position. related. decided they They is would move lower into bit that just So a

it Home As announcements have big Depot further our the Tim with other continues there. multiple on that. in pleased appropriate put it's We're segment We'll grow. when wins occasions, some really The said some has to box to business with out about

historical. But interest in I rates. in tell the first we're the is is And box we'll would a to you than that the that, ship probably what quarter, lighter have obviously, this It's starting call, downturn is nice in going QX. so be substantial segment slight still starting win to early little to big and too

still at to got interest of it's that compared I first X%, low and When my rates XX%. about I think X% house

my on would you outlook kids don't I that, have the we a still understand housing So, tell market. of positive course, But that.

enough a there labor by fact both that driven labor and more is is the enough new know There's this We market. being pro of in construction that not our home painters labor. have shortage the don't

So net-net, you that still tell I optimistic. we're would

in other space. to for about plan with we going housing like with just based thing in all that, seen. that on I'd Yes, add everybody numbers really We're really, honest on how here. housing we're new the be ourselves has what's US And one happening to talking

total an only X% commercial we're it to about at in we space for enterprise repair. or And we're number pocket stronger sales. our standpoint, the air quarters. positive And new PPG looking represents maintenance some housing way it of frankly, of from the also, in do see is, X% The significantly --

So accounting new our we for in happening housing what's are guidance. in

well housing fundamentals the And long States countries. shortage strong alluded housing are term. many positive, Michael the to, still the as is There other United mid as to a as other the for in

for fundamentals remain term, pocket maybe the and air the the is mid long an short there strong. while in term So

comes from Citigroup. Juvekar next Our from question P.J.

Your line is open.

your expectations, Europe in is How holding up Cunningham and crunch is the slowdown? This especially on Patrick for given P.J. the consumer Tikkurila energy to relative

Tim here. Yes, again Patrick,

our position great a rest care pleased very are ESG. ownership. the us year It's of which Europe. a -- say to number had result anticipated. depth the one market was countries. the offering with wood a of management surprise, us rest given throughout and access, better we than in was not strength of way, It's of us great has the first It's in we a team I'm given management by given very the can but It a We number of Tikkurila with a team, spread technology. given starting that -- It's going PPG, strong as and us pleasant

the So forward. Tikkurila we path and with absolutely are thrilled

from bring from a mentioned we that Tikkurila Tikkurila course, But of the finish, businesses kind and into same issues industrial, I to are seeing and coatings, what protective like that we with thrilled DIY of is just their with situation. the we're Of between position really how able acquisition earlier they're standpoint, Pan-European like acquired light some like for doing. what other

in thing that the is Tikkurila that do, brought position exercised were where starting how to been skill pricing. to exercise previously, a Sweden, in one add how to market-leading we would it. showing but Baltics. muscle market-leading and they a have they learn the That pricing And accelerated to that set area Finland, we've we're I hadn't market-leading in is position this them Patrick, position And a an

from standpoint. win-win a it's So that

the want with Plant The US, had promising double-digit outlook look et We've business Patrick, we the did don't NS continues especially Michael earlier. this activities that in And from was the Vince. your to that I into but in is it to sway question, away sales growth business. XXXX, infrastructure other for to cetera. alluded [ph], acquisition

So NS as promising very with again, situation well. Plant

from Laurence from Alexander Jefferies. Our next question comes

is open. line Your

incremental taking Kevin by let's in, operate if Laurence. regions wondering This was margins, between in incremental think just and there spent between that could the additional difference customers? for if say, on you dollar morning. is was different Estok a good Thank US particular, I margins you question. how you Hey, about guys you for my EU discuss every

lower. range on a I XX% about then incremental because Europe are win just back, comes little certainly utilization to several rates to normalizes. as times this But margins, -- as as raws it Yes. Kevin, be activity in have the this in around We're XX% we in Vince. activity our -- higher some Europe incremental pencil little is XX% be that still certainly a fringes talked for And call, in from there'll that would margins. to XX% we've benefit price will

will margins. above that those incremental So be

Haynes question Our from Stanley. from Steven next Morgan comes

Your is line open.

Hi. Thanks for squeezing me in.

down, pipeline you Thank and little an just going thinking As working inventories a forward? a on you. buyback share how doing of up capital update as provide versus your come can M&A bit bit frees deals you're about

still on the remain we're Listen, is Michael. important the thing is on returns. total affects most to going disciplined inventory is this but Steven, deals shareholder pipeline of how our solid, it

to going most our versus whether accretive do acquisitions buying shareholders. down the versus decide is pay better back to stock, to debt we're it's whatever So

current always deals to number still like be want space. that because tell deals we're it's So what are actively in paid people are had. harder looking engaged on old the people when this falling, not a are earnings earnings done and to always There I get look of their earnings we like. what

And earnings challenge, from to past. disciplined a different this does talk little you've it the of in than you So currently But they that area. a where should we're in don't make more versus I going seen think normalized PPG always bit are. expect remain what anything about

today comes Tamagno Berenberg. from from question Adrien last Our

go ahead. Your line is open. Please

gentlemen. Tim recovery self-help and experience A PPG, Hello. Good question the And environment? all Michael. current given areas congratulations for in in margin you extensive for to greatest morning of of do your I where the potential mean see the Tim, and

say first recovery execute am we foremost. excited the opportunity and very Adrien, at first about have question. PPG. can for that margin to we execute on you, of continue on our return, to you shareholder Thank let will And and will I we continue just And the assure me I the optimization

becomes on this of look I of effective about that, the communicate second, next for indicated, Michael the for that, engaging at key vision evolution my after stakeholders, to and Beyond the group, X, phase appropriate PPG. further priorities, to including forward time all change our as January my

on encouraged to side. return the opportunity, deliver the recovery, with shareholder to opportunities for our both margin XXXX on encouraged look opportunity thrilled the and and on organic path continued inorganic So growth to forward

I Mr. further over no Bruno, John the at you. call There questions are to time. turn back this

attention want for and call. Thank good your you, our concludes to interest earnings This a everyone I thank today. day. third quarter Have Elliot. your

concludes call. conference This today's

You disconnect. now may