PPG has reported net sales of $4.7 billion, up 8% on the same quarter last year. According to the company it had 12% higher selling prices, although volumes were down 4%. However, raw material costs were up about 20% year-on-year and energy and transportation costs remained elevated.
Michael H. McGarry, PPG chairman and chief executive officer, said: “For the seventh consecutive quarter, we delivered record quarterly sales driven by our continued implementation of real-time selling price increases to fully counter inflation and we benefitted from our recent acquisitions. Our sales growth was achieved despite softening consumer demand in Europe, significant COVID-19-related demand disruptions in China and unfavourable currency translation. Our organic sales grew 8% as we continued to deliver above-market volume performance in several end-use markets, including all-time quarterly sales records in the automotive refinish coatings, PPG-Comex and traffic solutions businesses.”
Performance Coatings sales, that include automotive refinish were $2.9 billion, up $180 million or 7% from $2.7 billion in the second quarter last year. Sales increased primarily due to selling price increases across all businesses and acquisition-related sales. While the unfavourable impact of supply chain disruptions decreased during the quarter, certain raw material availability and logistics bottlenecks continued to constrain coatings manufacturing in the US, impacting sales volumes in most businesses in the segment.
While body shop demand continues to gradually improve in all major regions, it remains about 5% below pre-pandemic levels, depending on the region. Demand was mixed by country and impacted by mobility restrictions in certain countries and supply chain disruptions, most notably in China.
In addition, raw material availability and logistics bottlenecks continued to impact the business in the U.S., where open orders for refinish customers increased further. Raw material availability is expected to continue to impact this business in the third quarter as a few commodities remain on supplier allocation. In the US, body shop activity was robust during the second quarter, positively impacted by higher miles driven, more people returning to office work and rising collision claims, with year-on-year claims up about 7%. However, compared to second quarter 2019, collision claims remain about 8% lower.
Globally, the business continued to convert new body shops to PPG products during the second quarter, and PPG has now installed more than 1,000 Moonwalk automated paint dispensing devices, with about 20% of these installed with new PPG customers.
Entering the third quarter, order books remain strong across all regions, especially in the US. Aggregate sales activity in the third quarter is expected to be similar to the second quarter with ongoing raw material and labour availability challenges. Further selling price increases are being implemented.
This article courtesy of Russell Thrall III, publisher CollisionWeek. Check out the website at: www.collisionweek.com.