PPG chairman outlines progress toward achieving vision, implementing strategyPITTSBURGH, April 19, 2007 –
Company continues to be world leader in coatings, specialty products and services
PPG Industries’ chairman and chief executive officer Charles E. Bunch continues to be optimistic about the company’s future. He outlined PPG’s progress toward achieving its vision and implementing its strategy at the company’s annual meeting of shareholders today.
“Our strategies are sound. We are adapting and changing to meet the challenges we face. And we are taking decisive steps that will accelerate our profitable growth, strengthen our businesses and enable PPG to continue its tradition of rewarding shareholders,” Bunch said.
Sales were up 8 percent in 2006 to a record $11 billion. In addition, the company’s Industrial Coatings, Performance and Applied Coatings, and Optical and Specialty Materials businesses all had double-digit sales increases. Overall, PPG’s reported earnings for 2006 were $4.27 a share, which represents a 22-percent increase over the previous year.
In his remarks, Bunch discussed key components of two strategies for PPG: accelerating profitable growth and strengthening its businesses.
In regard to accelerating profitable growth, Bunch told shareholders that the company’s strong organic growth in coatings, optical products and emerging regions was complemented by acquisitions. “Last year was one of our most acquisitive years on record,” he said. PPG spent in 2006 about $480 million on acquisitions, including the assumption of about $80 million in debt. “These acquisitions added approximately $380 million to PPG’s sales in 2006. In 2007, we expect these same acquisitions to generate full-year sales of between $700 and $800 million,” Bunch said.
“Our strategy also involves moving down the value chain into new businesses that are ‘adjacent’ to our current businesses,” Bunch added. He cited several initiatives and ventures, including a small-parts coating facility in Taiwan; the acquisition of Intercast Europe, the world’s leading manufacturer of non-prescription, hard-resin sunlenses; a joint venture with Devold to manufacture glass-fiber reinforcement fabrics used in turbine blades for the North American wind energy market; and a facility in Allentown, Pa., where PPG is making high-quality, double-pane insulating glass units for home windows.
Bunch also discussed PPG’s efforts in innovation, categorizing the company’s research and development into four “mega-trends”: security, energy efficiency, environmentally-friendly products and comfort.
In regard to PPG’s strengthening of its businesses, Bunch said that “over the last 10 years, the company has driven nearly $800 million of manufacturing efficiencies and cost reductions in its businesses.” Over the past four years, Bunch added, PPG has significantly increased capital spending outside of acquisitions. “We’re investing in projects that help us renew technology and/or improve efficiency,” he said.
Bunch noted that the company is continuing to aggressively explore all alternatives for its Automotive OEM and Replacement Glass and Services businesses and its Fine Chemicals business. “The goal, very clearly, is to maximize shareholder value. These alternatives may include restructuring, forming strategic alliances and/or divesting the businesses,” he said.
“As I look forward to the rest of this year, PPG is operating in a very dynamic, global economy,” Bunch said. “Although we’ve seen some slowing growth in North America, we still have plenty of opportunities for rapid growth in our emerging markets where we’re very well-positioned.”
PPG shareholders elected three incumbent directors: James Berges, partner at Clayton, Dubilier & Rice and retired president of Emerson Electric Co.; Erroll Davis Jr., chancellor of the University System of Georgia and former chairman and chief executive officer of Alliant Energy; and Victoria Haynes, president and chief executive officer of RTI International.
Also, shareholders endorsed the appointment of Deloitte & Touche LLP as the company’s independent registered public accounting firm for 2007. In addition, shareholders voted to implement a majority vote standard for the election of directors in all uncontested elections, retaining a plurality standard in contested elections, and to eliminate cumulative voting in all elections of directors, which were conditioned on each other. Lastly, shareholders approved a shareholder proposal related to future severance agreements with senior executives.About PPG
Pittsburgh-based PPG is a global supplier of paints, coatings, chemicals, optical products, specialty materials, glass and fiber glass. The company employs more than 30,000 people and has 125 manufacturing facilities and equity affiliates in more than 20 countries. Sales in 2006 were $11 billion. PPG shares are traded on the New York and Philadelphia stock exchanges (symbol: PPG). For more information, visit www.ppg.com
Statements in this news release relating to matters that are not historical facts are forward-looking statements reflecting the company's current view with respect to future events or objectives and financial or operational performance or results. These matters involve risks and uncertainties as discussed in PPG Industries' periodic reports on Form 10-K and Form 10-Q, and its current reports on Form 8-K, filed with the Securities and Exchange Commission. Accordingly, many factors could cause actual results to differ materially from the company's forward-looking statements.
Among these factors are 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, the impact of environmental regulations, unexpected business disruptions and the unpredictability of possible future litigation, including litigation that could result if the asbestos settlement discussed in PPG's filings with the SEC 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 as 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.