PPG Industries (PPG) 21 Apr 232023 Q1 Earnings call transcript

Good morning. My name is Elliot, and I will be your conference operator today. At this time, I would like to welcome everyone to the First 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. you. Thank Instructions] [Operator

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

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

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

U.S. to equity XX, relate financial the Thursday, released after closed comments April markets Our XXXX. information on

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

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

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

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

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

Tim and President let CEO, Knavish. me PPG introduce Now

on call. quarter to brief, will performance comments John, our first you, keep Thank good earnings highlights outlook. on I'd our financial a welcome morning, and I first few and providing our to everyone. quarter XXXX like you my

weakening soft backdrop challenges, a were demand billion were in and end elevated markets. and construction-related continued achieved $X.X including despite activity, of the use Our industrial inflation, issues cost first U.S. geopolitical quarter sales macro global record

share higher of than operations which the from delivered per of XXXX. We continuing $X.XX, quarter first earnings diluted adjusted is XX%

points compared of to work improving our XXX as segment we toward recovery margin basis back XXXX quarter the operating Our accelerated, first profile. historical

price Coatings in incremental by The first Performance selling was segment aided and XXXX in increases the quarter total company-wide. reporting

inflation We offset have now since cumulative early incurred all XXXX. fully cost

some As first the are theme diverse that the portfolio. overriding performance, around is deriving strong drove quarter we an the benefits from highlight I drivers of our key

For coatings most example, largest PPG has and aerospace diversified in the business the industry.

sealants are aerospace aftermarket our technologically backlogs well their customers PPG's quarter, the once customers the replenish including with to We expanded as again to transparencies. serve positioned in reopening stock in and our following China this need products, advantaged and

to and the to business expect of for this grow remainder XXXX continue We beyond.

Also, PPG in has quarter their strong the the best sales. of coatings robust business among execution and an current in largest conditions remain XXth PPG Comex where business The the record delivered architectural world. consecutive continued and Mexico, economic

laser driving are We focused organic growth. on

from quarter, support brand at will independent X,XXX we wins The customer that carry DIY included Walmart location our primary Glidden opportunities. During expansion benefited becoming Walmart's dealer products. growth our the well-recognized that the of in further channel several paint and at supplier paint

MoonWalk global shop machines, gaining globally. U.S. third wins. additional installations planned The with recently rollouts these has X,XXX body a new business in refinish of installed are traction automotive now the About

region, rise region Europe in conditions base. to in in OEM low remain sharp historically off during our allowed leading customers automotive difficult, a builds albeit in our automotive demand overall position the support the a While us in

and up volumes growth were additional OEM the in expect XXXX. quarter for region mid-teen Our the sales throughout percentage we

generation our cash due quarter quarter typically to seasonality. a negative business is The first

million was in quarter seven about operating years, XXXX. contributed first generated of first However, us the our strong flow than earnings our cash the generating positive quarter higher for $XXX operating the to cash in as first-time

to, attributable update results on our month, costs was than stronger sales predicted. of a we Our richer end better quarter lower mix first preliminary sales than X. the and were at financial mostly April the This

initiatives. our important update to very quick ESG A

advantaged We advantaged increased lever sales our are of Last and of priorities sustainably prioritizing organic define delivering products enable and year, view services as for sustainably this our continue products better sustainability and growth. to from total our and product to we customers XX% to to our a customers. sales key ambitions our sustainability the

new our forward once validated XXXX goals targets look We the to sharing by science-based are reduction targets emissions initiative. our

include targets. in late our We as also progress as XXXX our equity environmental and launching communicated will will inclusion our current against May, be report well previously ESG which goals diversity,

strong second earnings the expect in year-over-year for remain our of that supporting margin to they our their challenges of and shopping to and outlook. strong we such continue. contribute Despite remain in XX% volume weakening. recovery rest is to executing business. these to anticipated as order our sales we a and year-over-year as of and construction, more straight we books, that growth This environment the this will second cases, the momentum than they're quarter list against expect fulfill growth demand the It We're some confident which customers aerospace opportunities, XXXX. Moving evident headwinds, housing in quarter includes U.S.

deflation Also, recent expect highs. as to availability of we pre-pandemic from raw returns our historic earnings start materials moderate to from benefiting levels, inflation

since high material XXXX levels. reminder, remains inflation early historically aggregate a As at raw

efficiencies disruptions. for Additionally, our this to manufacturing production in another quarters. lever multiyear coming will generate And beginning will provide expect growth that we the improve is earnings

positions we architectural year-over-year the countries auto in lower are These United investment a demand further to levels program. stabilize, will for further this has will proven prior support these to economy by protective I'm with economic growth for downturns demand an Once resilient in and Solutions refinish, against more the in in States. have of also which pleased and lever. coatings prospects the begins our Europe, to improve, than growth the markets businesses. albeit enable are to be seeing provide several couple restructuring growth, coatings earnings Traffic at aided growth additional actioning our Europe. earnings leading respect coatings With PPG end-use infrastructure positioned

strong In more pandemic-related earnings various been have year-over-year continuous quarters, XXXX. year evident be sequential in summary, quarters. quarterly conveying that progresses. inflection full China, restrictions fourth this given In few a catalysts year have in earnings to for This the moderate we be expect reflected our will that reached last have conviction during would will and China as growth am that continue demand we in past guidance the domestic on continue as and our I activated. year-over-year year and growth improvement earnings we second the the pleased strong conviction basis point

period, on being highly macroeconomic our optimizing controlling focused count structure legacy including PPG's In and addition, our the in also can this of on challenging controllables, managing capital. cost you working entire

I've and team This digital challenged advancing investments to begun my focus efficiencies. our further our our that advantages, our differentiate our includes and us for and prioritizing I've as our our new enhance capabilities on business. improve As needle CEO, customers move will to productivity businesses our role internal throughout the customers'

is earnings of growth committed the PPG's strength accelerating to Our while legacy. preserving team

Elliott, Thank you the our questions. for for concludes your you And continued confidence line in would PPG. prepared open please This remarks.

question Fischer [Operator today Our from Sachs. first Duffy Goldman from comes Instructions]

line open. Your is

to around congrats on a question the and history. relates guys nice how mostly morning, that Good sequential is My EPS and Yeah. quarter.

with QX year. XXXX years $X.XX. at last up up the XXXX you to about guide, years has above $X.XX of your and midpoint stripped And being averaged all $X.XX that and So out QX six of looked you're the if this those year, only at before and

So how do you match two? those

your your same just And guide, the in if if for half, you second first averaged the half $X.XX about But years, versus those similar seven you then a midpoint look use first question it's half down to historically, down second is versus $X.XX. half.

of loading But through maybe you we or kind can be something be could to Walmart. of why in could prevail? the around history expect of the that should conservatism, why lower we a higher So walk of expect seasonality, shouldn't number a just -- different kind something

Hey. Good to you. from Sure, Duffy. hear

all, give in gaps. and comments, a of the high-level let let First fill me you Vince I'll few

settlements QX. we one-timers related step in, the QX had we to QX storms. insurance past to the definitely Walmart some On had load up, in some Notably,

promotion of can QX, and a you give details. QX Vince Comex were of for QX sales And than Easter normal. More sales year. the pulled into I'm sure more that's to piece big have We every those a

for U.S. housing on rest we year, cautious the the global for cautious reasons. the are half the of volume number Slower We're second of a on for of industrial. As of cautious manufacturing. opening on We're China year.

Vince, those So want the add few are high some to details? levels. few a of And you

No.

the between the load quantified campaign. color. large business. for split has last in about $XX The This we Walmart us QX QX. Comex I little more QX. most Again, just QX Easter was a year, of very year a business load-in million. and The started campaign The in Easter think was

is, And really not Europe And a we're European business. to that's step QX good activity that very So strong our be have see auto. traditional to very up. prediction still strong did well, in going a going was auto. we again,

next comes Our Panjabi from Baird. question from Ghansham

Your line is open.

some on of Thanks. outlook on to a of out? start the directional order North just and the the China congrats timing period progress for and reopening? comparability more all year. guys year-ago Can customer Thanks. the first you weakness first Is from for refinish back you guess, in pattern And called the XQ. the on Yeah. also quarter. the morning, that auto auto some Good and volume us improvement refinish I give to going Europe that function America off, in your color and in just

the question, for Thanks Sure. Yeah. Ghansham.

QX, business last it by sometimes of just our project What several really Let our high then of I look key because what value our confidence, a refinish to it's over need refinish, independent distribution. because this to to forward auto the distribution, in quarters going you me see over as start best-in-class. off order is well proposition saying QX confidence hard look as have we're because to you the if pattern you full then at saying, key at for business, the multi-quarter in two-step QX, basis globally

at at lights individual by we backlogs driven across driven parts and QX shortages. have body instead of two and look by But So it’s an strong it multiple over labor paint. shops, things it’s driven shortages, look and that other rather in the by quarters. at really It’s I would than look quarter,

remain. those backlogs So

ordering patterns. And to so, just collision the this independent There’s in distribution industry some actual strong. fluctuation remains sellout

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

Your line open. is

could drill Yes. a arrangement your seems a offering similar that My The those nearly the architectural buckets? have in in those Thank be you. your next sales I'd in stores like little could it and between where your hardware this Glidden split do Home you Depot independent sales you the own you question and at U.S. stores, like it think with various in could paint And would architectural. in this to cannibalize now XX,XXX locations. between commercial It stores? on how your go for seems platform. in bit is, U.S. in in the years you like strategy few And Walmart own

Thanks, Steve. Great question.

expect So we don't cannibalization.

about brand in by strongest me bit a we doing. Let what strength, the U.S. strong distribution. despite explain Glidden DIY and that far, brand little our known lacked historically, is best we're And

So always partner we've And The our Glidden. obviously, with with Home Glidden. dealers We're with Depot now we independent with partnered partnering with Glidden. Walmart with

One we stores. at carry company our points, of your Glidden typically, own don't

think private dealers. plus home plus box it So about big Walmart as improvement

The type different The paint type that Home Is Depot. of buys the at customer at buys very paint Walmart of customer that than

distribution price a consumers different points expanding what is so to DIY multiple really and access consumers, across with providing multiple geography. of these we’re expanded And of different and moves strong types doing brand recent

really and pieces three very between that’s what little certainly very So conflict we’re there’s And here. little those doing cannibalism.

McNulty BMO. John next Our from from comes question

Your open. line is

with Solutions, my taking XX other question. be them we've that's for margins, which think down even don't high and than Tim, maybe in Traffic first I years, the should I Thanks Yeah. this dragging think it twice your XQ. quarter seen in last adding

of go all big the one, help guess, efficiency it I price to to? should you I see can where measures raws? frame what mix, are about factors? speaking you the we can we bit? guess were versus of think year for then margins this So some that How a us Is some PPG? And

pleased a satisfied margin not on we're on we are. a And point improvement, are journey. are we're -- we you've with progress, Well, heard we that as happy XXX where say, basis but as as me with with recovery the are John, we

do straight to We that historical still We've margin are see and This work to not back year-over-year more levels. improvement. we improvement. continue to confident quarter is of we're got our frankly, will second

work the services And to value and improvement. we've margin the got and capture paid of the mix It's work products more year-over-year for on We some And moderation here. the expect third side. both see do cost QX that we driven. straight to begun to on But quarter getting be deliver. side more we've certainly, it's

John. Yeah, This is Vince.

some Just versus numeric the XXX hit XXX times several We're our past down more watermarks, several high to basis prior years here. still and points, first XX basis give in we the in times guidance which quarter. points

have opening to we comments. to in So back want where the we levers. other mentioned not still manufacturing. be one Tim on We're

Our on still volumes again, feel which multiyear is better. control, a legacy here, we down. cost basis a are And could we do

have levers prior those. to exceed to and high back multiple get then still eventually we to So watermarks hoping

Parkinson from comes from question next Christopher Our Mizuho.

is Your line open.

MAX some body refinish about the the so thinking aerospace you're and that. rates, And specifically offer any about more in on color the and a guidance Great. little is so labor about Boeing's forth. bit further world, year? the embedded side, you U.S. dealing Just on your aerospace in Does think what's color for levels? Thank and Can you you with how both include refinish build wide-body, constraints on XXX then color in so much. just shop just China, how still

seen just so versus particular underscoring You the what's actually, pretty in levels? you for much. optimistic great Thank know It'd or to quarter. bullish comments have second that 'XX be

Chris. Thanks, Sure.

mentioned So the things number on you answer of to be would yes the all side, there aero and them. a of

XXXX China levels. reopening, number drives widebody -- travel there. MRO a activity still Domestic lot below a of even catalysts of is alone have well The We for us. China international positive though China

expect we to to that continue So grow.

You OEM customers. big one mentioned our of

XXXX is their seen You've much output better. so far

So that certainly helps.

particularly and backlog -- MRO side, -- the aftermarket, sorry, We've the on got the continues side. so grow OEM to both on transparency on I'm

got military of planning. built And that into strong. the some So remains catch-up backlog very our segment we've

in is of our the lot of aerospace, strength right in we we output produce. demand in business whatever we've our also underlying many what our ability because a continue So now, increase got to built but to sell can parts can

you take very side, business refinish Fundamentally, still collision out again, the strong. the have quarter-to-quarter On to fluctuations. these is

improve we're And body our to get much because behind they're shops cars able so are supply to through situation us. labor, most parts, a of supply more the better if in on are because able supply improve dynamics

motivated -- which achieve, strong. really to increase, whatever so capture their throughput able to backlogs I'm they're because do poised output are we're sorry, So to throughput they're highly

Just to some numbers [indiscernible]. put the to

Domestic Just are is to that’s flights market to again, for us, aerospace in big business. – versus our numbers opportunity, all put aerospace Big XX% obviously OEM and some the XX% international pre-pandemic down about both for down China to in aftermarket China and players. still. the opportunity And China about versus all travel pre-pandemic. from

Deutsche question Begleiter from next from Our comes David Bank.

line Your is open.

morning. Thank Good you. Hi, Tim.

year-over-year? in of your just guidance declines increases? you on still materials. And terms implementing Just pricing, raw embedded What's second on where are in price half

let's move with we the was statement to continue is, realized through well, we see to we a expect on And moderation basis. raw On flat -- actually start what QX in David. materials, as Thanks, essentially high-level year. Sure. year-over-year the

would to so digits at We parts. say be on still that's scale year-over-year we because further But raw but down expect this hard beyond what low-single the to I a continued basis. QX side. that, many that there's And quantify moderation, expect material of point moving the about on

pricing being more The We some did quarter on in X% in majority of were segment. we the an achieve We that total. Above incremental On able XX% Coatings basis. QX. to in vast pricing that Performance up the were the carryover. achieve is side, pricing of in additional

we'll the forward start as on move we'll higher comp increases price, move -- comp from I as through last So year. year to think we we

print the smaller confident So for increments that price will are QX, be but will QX, highly we we numbers. QX, positive

reminder, rates a with still our year inflation moderation. just high XX even And a we're at in sector, this

from JPMorgan. Our Jeff Zekauskas next comes from question

open. is line Your

question. Thanks very much. Two-part

prices quarter, that look OEM don't prices auto is up, you what you comparable the they to segment Can industrial lower? were calibrate Is when first, that in that? OEM So your X%? in they auto or second... maybe did at were know, they general higher industrial was were the or I And

certainly were they in Jeff, line.

ahead. go Sorry,

then puzzled propylene were a was barrel 'XX, $X.XX in XXXX $XXX that a pound. raw the of year-over-year Yeah. your I'm oil that materials was came first quarter that second in flat in believe I raw materials and your And of and probably peaked maybe quarter down. the

there basket the something it seems was an from should first from last the where it raw outside is coming -- least your perspective. be it must inflation or to be that in material quarter unusual lower where be at of and like about than year, So

I'm take the going Jeff. auto to Hey, question.

So that with new pricing, remind I vast that with pricing that carryover, you, of much and the implementation. OEMs consistent was again, was part the last majority the there, business. of which yes, auto negotiated process negotiations was that year. segment to And OEM of is magnitude And actually want X%. auto about is in of in And timing especially

that's answers question. want do take to Vince, first raws? your So the to you

Jeff. Yeah,

I our get pulling inventory. this materials when several the think And abnormally when talked of year, half you the if through materials, the ended -- the talked high last back of with about look QX year last buying we've you We we we was were at about our ended in quarters inventory and we look, we balances. them. QX can raw things that raw one

to So that down. work we inventory have

elevated it's are. to inventory what expectations our at balance look you our If QX, in relative actually still

to We still in So see cost more season how through that purchases once we the peak some have get benefit realized a into pulling prior some, we our it's to down as sales. through work we're are inventory our here matter able inventory And we'll again, those inventory. work QX. into of of really and

Yeah, of basket there where still items raw in. largely we’re we’re Jeff. parts basket material raw it’s basket inorganics, Pigments, But your To increase. that a material year-over-year of what that year-over-year seeing number been. question, is inflation our seeing are additives, always extenders, still

comes from Vincent Andrews Stanley. question next Morgan Our from

Your line open. is

it you. could expected the Thank understand wondering stronger obviously, It quarter, March the of in much. you to went. particular in half which data that in? And better particular into was have areas extent Thank I'm how you was than the sounds April any us you there far continued you back you for like, of particularly can? so business came your just help it whether strength force it's driving if if very and

Vincent. our Comex Sure, of were our parts campaign. The of we business would through aerospace saw move that to very earlier, business, Vince auto Europe Easter I auto. as our say, business stronger than Sure. March, business, pull particularly as expected more had we alluded as strong was And the we our forward

January, And March the XX% just when of we XX%, quarter, in typically the of size a is in terms this reminder, the of said quarter financially.

have So it’s strong again, when we very a March, helpful.

Josh next from UBS. question comes from Spector Our

Your open. line is

taking for question. Thanks Hi. Yeah. my

on guidance year. So I again poke just want the for to the

No in about materials. of one-timers I the if kind of in I think first guidance year if some XXX. midpoint XQ, year's So EPS maybe seasonally the the half at the raw say, for from implies benefit they're your about of incremental $X.XX adjust

on of And we're refinish, XX%, aero, where optimistic where you're your talking but you more that. China housing weakness, than about auto OEM, offsets the XX% areas about which industrial, volume talk sales, maybe

on to at second like to is there's take are fair entirely a it say, at pricing or benefit the this just is you're materials that and way really it? today look in mean, similar of pushing wrong raw volumes and where benefit an I of half, minimal look So

still first environment. Y-o-Y Well, extremely thing in growth on challenging our an guide, second say it's EPS is, I'll XX% half

on of And in of just side. We're -- industrial of And second want the industrial/manufacturing half housing. pace recovery so with China. to the on got the I And that. more uncertainty lead slowdown, concern U.S. really, for general is most continued uncertainty focused. volume We've

half. So those the second key drivers are really to the

typically that Vince. world. different is when We economy. increases and around This we We're are still delay add. between the cloudy Yeah. the just of do rate raising a it's know interest effect. portfolio those interest Again, consumer at rates. our seeing countries There's I'll in that look parts

remain somewhat we increase delayed just environment. that the on cautious interest So rate on effect

sure We moderate at recovery. inflation, recovery China. be As time. the this Tim I’ll guide That’s of that our a about mentioned, that uncertain not to from creating we’re it’s still that pace elongated in is do recovery – our we don’t pace continuing, – commodity beneficial the recovery includes see echo, of perspective feel because but more going

KeyCorp Yefremov comes Our from next (ph). question Aleksey from

line open. is Your

In from Thanks sentiment and in U.S., you How changing backlog Pro the good here? contractors? any architectural morning, the or is share everyone. can paint data

what's shortages Backlogs Yeah. happening everything and in driven have the in despite robust remained surprisingly primarily. see you news by construction, despite labor

for And business So the our Pro omnichannel up remain strong. our backlogs quarter. of was the business, Pro the XX% for almost

are we continued space seeing So in States. good the United activity in Pro in architectural

question Fargo. Michael Sison comes from from next Wells Our

Your line is open.

half Hey, with miss terms but the up you. guys. company? to I second just volumes? Nice curious. maybe of sort of year. comps? on for outcomes EPS I Thank even growth, What's down, the expect Just do what you range flat, Is start easy this, apologize for of curious, the it XX% Tim, the the in

that Hey, Mike. take John. one. This I’ll is

that Tim pointed, provided. would guide. So that say in second forecast in Tim it’s slightly considering there’s based Mike, a the on that all as in volumes that’s the the few down guidance, feedback half factors our overall, I we’re

from next Generale. Our question comes from Societe Clark Peter

line Your is open.

Yes. everyone. morning, Good

over margin priority particularly looking your at number obviously, one picking there's were and changes. know I Coatings Just been you on your because Industrial mix the back XX%. at of getting

if I inferring XX% with sort about recovering to full But guidance, lower margin that working You play this bought of in year you're acquisitions you're margin your on. ex-amortization.

that achieving level? in of I of stops back 'XX still level and there understand 'XX it's that you. next great. are challenging. few in you anything Thank basis the But XXX structurally points still not you're So were Volumes that getting to sort years drift. you is back

big structurally Volume periods for question. from the referenced. one, getting still levels. is back preventing driver time the Number you say would us two nothing The for those volume. from I significantly Thanks that to things. us, There's Yeah. down

And so operating the then other one from just efficiencies. And the leverage that. is,

years, benchmark. that of And as supply some had heard couple we've did that All expecting move over disruptions not our and last costs that further we you manufacturing the the forward. have improvement we see at chain in been QX we're improvement of in

So segment. there's nothing getting in structurally peak from us to back preventing margins that

Our Viswanathan next from RBC. comes Arun question from

line Your open. is

for Thanks question. my taking Great.

Just a couple of would questions around into margins. EBIT of you It looks the for Do like there level what your see back continued Thanks. margins growth were volume high-teens in expect growth up level? at to and mid-teens around XX% that quarter. first to kind you get the

our volume Well, see improvement. next going the we will growth base will for that (ph) case John quarters but mentioned a is potentials margin The question, volume likely that to mentioned, absolutely couple expect upside, earlier, challenges as continued volume show of we're second as tougher I everyone, have margin to year-over-year half. it continued confident we're be

Arun. is This Yeah, Vince.

If nearer in strength Tim term of expect about continue of key you technology mentioned have, look the the the at rich we levers we to economy. businesses, Mexican benefited our QX, from we aerospace, against automotive. some the some mix of

Mexico positions businesses, several and including We have leading in our Comex. of

with internally managing. costs, focus concern we’re mentioned manufacturing see – our we long I as to a consumer go I optimization. And laser that’s signs mentioned, talked Tim especially something on that as of the Still spending volume have we there, we’re about long earlier. still have And early around way but outlook the and a earlier, starting to

next Kevin question comes VRP. Our from from McCarthy

line Your is open.

business. And for would Thanks. your on builds coatings playing guide? EV shifts terms also meaningful any penetration and of you global is region in baking are OEM Good share PPG? for EPS morning. auto your the questions few you out A on What how annual comment by in

Kevin. Thanks, Sure.

base with case OEM on a potential things happens is our China. Our the upside low-single base whole of year for But around in affordability low-single builds for auto on with digits case depending number digits. what is

We business, were a margin of have We some number seen there, our historically lower strategy. what's did did of come share we reasons. in happened is as shift. margin back not China for huge Kevin, some see the lose We amount executing a of recovery they ultimately but

winning, part What of are extremely your EVs. We're which I is we're winning EVs say EVs progress around where And could with pleased was on is, third question China. our there. on EVs

one doing we're China player, and they're doing well the with So EV number well.

now of EVs, China If were builds all XX% at having EVs. is XX% builds look success, now of most up EVs. you in And sold which of in vehicles they China, we're now over over of our global are where are

seeing So standpoint progress, do pleased we but more lot still like what we're to penetration from a and we're with a our there.

was digit we for Just year with mid-single global came the to on add, a QX to again, the industry low projection X%. into builds the year. was for –

initial outperformed the projections for industry. the So QX

Michael Barclays. from comes with Our next Leithead question

is line open. Your

architectural, morning, guys. Real you all with a flagged. Perfect. briefly, wins pieces North few there's on Good Thanks. moving just American obviously the

grow year be going is the versus guess, So at? you think level, industry do do I assume you PPG to is able or growing think this high you to what at what

houses I Number fronts. what soft, it's is you one, side totality is reality due And the industry their period. from housing. the have to during still on two going by driven the happened think everybody to be some painting number DIY that in two, did, post-COVID -- hangover what's

So industry-wide, that's seeing. what we're

program. of PPG, launch Pro Depot as programs, we've Walmart The got our a win, the you of Home say, For obviously with number

new we and on construction Our big build on as as mix maintenance. are were not

U.S. by expect thinking rest this architectural DIY, bit be year and in we're little the we overall to it better So driven of about driven a than challenging a the housing industry. by But

paint of Yeah. the And cycle. Mike, just typically the another reminder here. part -- is last We're

So as housing backlogs from off working paint past we're have the those come several quarters, a still starts perspective. down

housing mixture down come I’m least already. or starts, of bought that XX% they they sure not you roughly at some at have if positive Those single-family. flattened. If yet the look There’s are signs them not.

year think this credit record. Again, a maybe at after year. et a And look cetera. is do or single-family, will we you multifamily those to pocket multifamily. multifamily, XX% very still an air high liquidity, late delivered that And the there’s next If early be XX%

we So the multifamily. seen at negative haven’t effects

with next from Alexander comes question Jefferies. Laurence Our

Your open. line is

Could you the your like emerging current morning. of back and year for the assumptions of -- infrastructure the for the and bolt-on Good half just view, opportunities out landscape of briefly thinking kind in particularly flesh U.S. M&A about markets? for pipeline outlook potential or particularly how and you're your how sort the for

Yeah. Sure, Laurence.

we're infrastructure, a for is outlook and that quite lot have portfolio queue. in number the on there. us there's infrastructure the help spending -- the On And more positive starting of positions the we projects should as a that

Protective our and Coatings certainly, some industrial business. coatings our Solutions Traffic Our business, of business

that only this So future. into move we're ramping we through positive year but the as on up not

Laurence. Yeah,

the vintage. yeah, There's that files or somewhat environment, M&A are consistent. not of active, kind active. some Historically, some more still say percolating it's been it's I'd On of certainly the small deals

many same deals still So would an with done year expect coming based space said issue to if we on buyer we this past a financials. or XX-month Again, each expectation get there's a times, you're our year. our price and that's the few up a a seller, in

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

open. is line Your

Two quick Good very Yes. please. questions, morning. Hi.

us? And just the in marine The on manufacturing. question or for Can you was the is, opportunity see U.S.? and for surprise protective. QX. part issues that like also that of see a in QX size it you It just first and where early bit about sounds COVID one you was Europe second an on you that China opportunity in do And is

can I'm it share your just thought down, you wondering, Thank would You up. be was there. thoughts if you.

Tim manufacturing will is one, take the start John. with I'll and part. the This Laurent. second Hi,

So since, due to go if And manufacturing quarter the to challenges significant January of had we was the $X.XX disruptions back a height impact. had And every the of about we've of fourth we talked 'XX. quarter type negativity. quoted you some 'XX, EPS supply in about of That impacts. we

get close the to of and quarter, Now as year-over-year to first on being forward. this quarter a expect we basis, we that breakeven better we go were XXXX,

in had back quarters. last the inefficiencies claw the the objective we've all is of five for So us to that

Yeah, right also, positioned energy, pivoted are this well. I which around protective well infrastructure, I'll is, And really marine lot marine, now take think marine our investments focus happening and those about business aftermarket, have the where for a The the of to is it's in doing near-shoring, side. areas. way we that

So QX. digits add those expect were we we all mid-single when together, and up in high-single you again digits in to be QX up

of one businesses that bullish that’s the on. we’re pretty So

from Our comes Mitsch Research. next from question Fermium Frank

Your open. line is

concerns impressive curious progress as what that the record obviously, on gentlemen. sort morning, And obligation. the But the price year. any might raws, due from that you a the $XXX positive expectation givebacks pension of Good on of year. deflation price balance for cost we million the have businesses? any is to you're benefit from on Vince, your future price very and to expect potential I'm to going of your charge we took action? as Congrats Thank start see to in benefit Tim, you.

Yeah. Vince. Thanks, Frank. is This

did about have non-cash do fairly step-up Fairly We $X to It's expense it portion we a that reminder, expense. million a quarter. as quarter. or a from of a our a $XX pension annuitized million significant, minimal. step plan. perspective $XX million XXXX, relates to benefit $X is The million pension up a an Just from in

nothing coming relative So we've year. step-up sizable the had into to

we of we through as back On price segment is total, give protective, give any so we Yeah. the expect the And index on I'm any, little -- as arrangements. Frank, little, on protective, about business, I'll very back meant On industrial, I our based in if we expect said move pricing XX% industrial I on performance. performance, sorry, year. price, remind, very

those a depending material there's contract. the delay but kick on there quarters will of deflation, if in, multiple raw indexes is So

issue for more of 'XX that's So us. a

And beyond churn to would that, something be if more act -- we there's watch say, generally, this we primary we I'd day indicator and very upon. our every need closely obviously,

we've little the seen and and Our very churn, as competitors Asia. we I a are earlier, And facing other cost inputs watch same structure to-date, cost basic than our bit in we little that are churn. mentioned

from comes Roberts Suisse. John Our Credit next question from

open. line Your is

business within price Performance you. in the that the you able aerospace with or get Thank were the mix Where to mix? just was improving segment additional

mix it business, of factors. both there our no aerospace was Well, The element, part doubt. were

we incremental As the able almost on first part parts got price price, our get performance we're all segment. to where in of

that some seeing inflation while raw seeing inflation, material we are refinish. And architectural, in categories. just and moderation indirects we're and I'd material So raw some and remind still wages

So I'd say response incremental that in incremental price to was largely inflation.

Yeah, John. This is Vince.

We in guide our Just combine externally, at mix, updated for so numbers we look have break our benefited We that or And pricing, incremental with mix. if business stand-alone you final these we volume. guys you updated we product both pricing. clarity, out from and we invoice guide price regional mix, numbers, -- as put original for separate. pricing,

Tim and regional benefited benefited our business, Secondarily were our business including some We than America from expectations. mix. Latin of separately, higher mix. from mentioned we

Some from of we higher higher product called we within our of than releases. businesses technology And in mix. were expectation both as our benefited business our out

we hit, categories big for three I So us. think,

Pandya Our Research. final question today Jaideep Field from comes On from

is line Your open.

Thanks.

you U.S. the First, the some just us is I EV? question alluded Industrial And That's is in what my then end Could versus color ICE sort you EV coil U.S., seen the question. to top QX? vehicle the coming the want the of in you content weakness first Thank on especially you. where And from Have to go an categories the or are of your second all weaker customers, and back volumes on QX companies? Chinese for you point. EV exclusion in top the to destocking Coatings, destocking sort further per to of are they QX give in expecting in

with going them. Jaideep. asked how to backwards be Thanks, you I'm

our -- a the at Industrial held segment customers. there's amount Just destocking, of not tremendous businesses, our inventory

that whether whether us. so softening is significant of largely it's general U.S. couple -- or a is And particular any we performance segments. the in But across the key it's industrial destocking, in and here behind frankly, mentioned industrial in

But kitchen well that's some as and seen that's But heavy-duty that areas, consumer-facing electronic softness that One you HD those in soft. a the some coil positives on materials, segments there's mentioned, also some to because we've transportation, of them construction. were largely tied in bit were equipment, offsetting already powder. and general, -- bakeware of Unfortunately, appliance.

the specialty content there's what to conventional a different is that that not range because -- that unfortunately, simple each On the OEMs. that systems, is of will a which between do upon vehicle, by the adopted your to the so of in number But functional for one per question, it technologies I answer per are same potential content the can EV depends content and tell the per vehicle vehicle. protective can and layering $XXX $XX significant scale coatings as vehicle you

whether or with EVs You thus are the embedded with. in Who all in our had of with a most Generally working with we of we're question we Chinese but had there far China. who OEMs, we have speaking, in working successful China. commercial are one it's in about number player non-Chinese, success the

this your to want it industrial broaden maybe Jaideep, and little I go is back Vince. bit. to question a

If really geopolitical was in our you affect significant the Europe, a exposure saw had We items think about PPG, volumes. we year. difficult XXXX where

in America of most stable to fully XXXX. grow. aware, Latin China months U.S. one our had and was is And As continued And of everybody Mexico businesses. multiple shutdowns the

XXXX, put stabilized, into is If feel and grow. going on feel able that. We then and we're to stewardship Europe you cost Asia to fast our forward we China

pointing So and the certainly feel still as about seeing construction year. that very America strong we direction our the of offsetting in two protective, with big mentioned. but pieces some of the grow, right we're automotive, industrial, softness majority in as markets, it Tim the And we're last U.S. portfolio in and compared aerospace to and in Latin

for pockets we some U.S. difficult the a we’re we that softening had think and XXXX. see those I thing only in again, So XXXX, of lapping us, in The is really

to time. now the no turn this are at back over John call questions further Bruno. There I'll

Elliott. everyone's our Thank in interest quarter confidence and appreciate first earnings call. PPG. concludes We you, continued This

This conference concludes call. today's

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