Above market refinish performance in US and Canada.
PPG reported fourth quarter 2019 net sales of nearly $3.7 billion, up approximately 1 percent versus the prior year. Net sales in constant currencies grew about 2 percent year-on-year, aided by higher selling prices of almost 2 percent. Sales volumes declined nearly 3 percent versus the prior year. Unfavourable foreign currency translation impacted net sales by approximately 1 percent and acquisition-related sales, net of divestitures, added nearly 3 percent to net sales.
Fourth quarter 2019 reported net income from continuing operations was $295 million, or $1.23 per diluted share, and adjusted net income from continuing operations was $313 million, or $1.31 per diluted share.
“For the second consecutive quarter, we delivered adjusted earnings per share growth of more than 10 percent, reflecting continuing improvement in our segment operating margins, which increased 160 basis points year-on-year,” said Michael H. McGarry, PPG chairman and chief executive officer. “We delivered this strong performance despite weakening global manufacturing activity that impacted many of our industrial end-use markets. As the quarter progressed, industrial demand began to stabilize in China, but remained challenged in Europe and the US.
Organic sales of automotive refinish coatings, excluding the impact of currency conversion and acquisitions were higher by a low-single-digit percentage as the unfavourable impact of customer inventory management in Europe was offset by increased selling prices.
During their earnings conference call, Vince Morales, senior vice president and chief financial officer for PPG explained, “Automotive refinish organic sales were higher with solid growth in the US offset partially by weaker volumes in Europe where customers continued to closely manage inventory levels. Our SEM acquisition has delivered strong financial performance in its first year and we are now commercialising various keys and products in certain international markets providing us with further growth opportunities.”
In response to an analyst question regarding the launch of its MoonWalk paint mixing system in Europe that was announced last year, McGarry explained that company has seen high levels of interest in the system but was focused on the European rollout before expanding to other markets. “We’ve already sold 100 of these machines in Europe. The interest level is very high,” said McGarry. “Obviously, we’re starting with our own paint shops first, and then we’ll be pushing it out into a competitive environment, so that we can start to gain share. We do have people outside of Europe that are also asking about it, because of the significant press we received. But I would say right now, we’re focused on Europe and then we’ll look at how we’re going to expand that over time.”
This article courtesy of Russell Thrall III, publisher CollisionWeek. Check out their website at: www.collisionweek.com.