PPG chairman issues optimistic outlook for company PITTSBURGH, April 20, 2006
– PPG Industries has a “great future” as the company’s performance in 2005 demonstrated, said Charles E. Bunch, chairman and chief executive officer, at the company’s annual meeting of shareholders.
“Though we faced a number of challenges last year, including the impact of the Gulf Coast hurricanes and substantial increases in raw material and energy costs, PPG delivered a strong performance,” Bunch said.
Sales were up 7 percent in 2005 to a record $10.2 billion. In addition, the company’s coatings and chemicals segments established sales records.
Furthermore, PPG generated more than $1 billion in cash from operations in 2005. Bunch said the company is using its strong and stable cash generation to fund growth throughout its businesses, especially in industrial, architectural and Asian coatings, and optical and aerospace products. Combined sales in the five areas have grown 10 percent per year since 1997, and combined earnings have increased 11 percent during the period.
In his first annual meeting as chairman and CEO, Bunch, a 27-year veteran of the company, shared his vision for PPG.
“Quite simply, we want to be the world’s leading coatings, and specialty products and services company,” Bunch said. “In fact, we want to be the leader in the markets and technologies in which we compete.”
In addition, Bunch said he envisions a PPG that:
- Achieves consistent sales and earnings growth greater than its peers’.
- Becomes an integrated, market-oriented company, “continuing to find ways to work and think as one PPG. Our cross-business sales unit efforts are helping us to increase sales and profits.”
- Continues to honor its hallmark values of ethics, quality and commitment to customers.
- Provides superior shareholder returns. PPG has paid uninterrupted dividends since 1899, increasing payments annually for 35 consecutive years.
Bunch said the company’s investments in innovation, brands, customer networks and emerging regions are essential to achieving his vision for PPG.
“We must continue driving innovation and technology development to capitalize on the macro trends shaping our world,” Bunch said. The drive for energy efficiency, improved environmental performance, safety and security, and personal comfort, he said, has enabled the company to leverage its technical expertise to generate new products and growth.
To strengthen its Pittsburgh brand paint, Bunch said, PPG created The Voice of Color Web site, enabling users to determine the color palette that is right for them. Dealer recruitment for Pittsburgh Paints increased 10 percent in 2005. Also, investments in technology as well as the marketing of Transitions photochromic lenses have helped PPG’s optical products business grow sales at a rate of 18 percent per year the past four years. In the automotive aftermarket, meanwhile, PPG’s alliances with body shops and auto glass installers have enabled the company and its customers to grow in “otherwise mature markets,” Bunch said.
The company’s sales of coatings in Asia have grown in recent years to account for nearly 10 percent of PPG’s coatings sales worldwide. Furthermore, Bunch said coatings operating margins in Asia are “on par” with margins for the company’s entire coatings segment.
This is “pretty impressive when you consider many companies are struggling to eke out profits in Asia,” according to Bunch. “It’s even more impressive when you realize our worldwide coatings margins are No. 1 in the industry. That’s the definition of profitable growth.”
Bunch said high energy and raw material costs will continue to challenge the company in 2006 and beyond.
“Nonetheless, I continue to believe we have a very bright future. We’re acting with a sense of urgency to accelerate growth and strengthen our businesses. As a result, we believe we’re positioned to capture a world of opportunities.”
PPG shareholders elected four incumbent directors: Robert Ripp, chairman of Lightpath Technologies; Thomas Usher, chairman of the board of Marathon Oil Corporation and former chairman of the board of United States Steel Corporation; David Whitwam, retired chairman of the board and chief executive officer of Whirlpool Corporation; and Bunch.
Also, shareholders approved PPG’s Omnibus Incentive compensation plan. In addition, shareholders endorsed the appointment of Deloitte & Touche LLP as the company’s independent registered public accounting firm for 2006.
Statements contained herein relating to matters that are not historical facts are forward-looking statements reflecting PPG’s current view with respect to future events and financial performance. These matters involve risks and uncertainties that may affect PPG’s operations, as discussed in PPG’s filings with the Securities and Exchange Commission pursuant to Sections 13(a), 13(c) or 15(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. Accordingly, many factors may cause actual results to differ materially from the forward-looking statements contained herein. Such factors include increasing price and product competition by foreign and domestic competitors, fluctuations in cost and availability of raw materials and energy, the ability to maintain favorable supplier relationships and arrangements, economic and political conditions in international markets, foreign exchange rates and fluctuations in such rates, and the unpredictability of existing and possible future litigation, including litigation that could result if the asbestos settlement discussed in PPG’s filings with the Securities and Exchange Commission does not become effective. However, it is not possible to predict or identify all such factors. Consequently, while the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on PPG’s consolidated financial condition, operations or liquidity. All information in this news release speaks only as of April 20, 2006, and any distribution of this news release after that date is not intended and will not be construed as updating or confirming such information.
and The Voice of Color
are trademarks of PPG Industries. Transitions
is a trademark of Transitions Optical, Inc. Contacts: