PPG chairman notes accelerated transformation, record sales at annual meeting
SigmaKalon acquisition strengthens coatings portfolio, broadens geographic presencePITTSBURGH, April 17, 2008 –
PPG Industries’ (NYSE: PPG) Chairman and Chief Executive Officer Charles E. Bunch discussed steps the company took in 2007 to become a more focused coatings and specialty products company at its annual meeting of shareholders today.
“PPG continued in 2007 to strengthen and sharpen its portfolio,” Bunch said. “We believe that our strategy to reshape PPG is precisely what is needed in order for us to maintain our long tradition of success."
Bunch called PPG’s Jan. 2 acquisition of SigmaKalon a "transformational step." According to Bunch, the acquisition – the company’s largest in its 125-year history – is expected to increase PPG's year-over-year coatings sales 40 percent in 2008 and to increase the proportion of coatings and specialty products in PPG's portfolio from 66 percent to 80 percent in two years.
In 2007, PPG’s overall sales were a record $11.2 billion, up 14 percent over the previous year. The company’s Performance Coatings, Industrial Coatings, and Optical and Specialty Materials reporting segments all experienced double-digit sales increases for the year. Overall, PPG’s reported earnings from continuing operations for 2007 were $5.03 per share – an 18 percent increase over the previous year.
Bunch said the SigmaKalon acquisition gives PPG one of broadest geographic reaches of any global coatings company and noted that he expects less than 50 percent of 2008 sales to come from the United States and Canada, down from 68 percent in 2006.
“Our efforts to achieve profitable growth are focused on coatings, optical products and emerging regions,” Bunch said. From 1998 to 2007, the average PPG annual sales growth in these businesses was about 12 percent, while the company saw growth in these areas of more than 20 percent in 2007. Bunch said this was driven by strong organic growth, which was the highest in three years for PPG in 2007; by the successful integration of 12 acquisitions made in 2006, mostly in coatings, which added annual sales of approximately $750 million; and by broadening the company’s global footprint in emerging regions such as Asia, Latin America and Eastern Europe. He noted also that North American businesses performed "admirably in the face of a sluggish economy."
Bunch also addressed the status of the company’s automotive glass and services businesses, saying, “It remains PPG’s intent to divest this business in 2008." In the meantime, PPG has taken steps to improve the business by combining the original-equipment and replacement glass businesses into one unit, consolidating administrative functions, transitioning away from PPG processes to reduce overhead, reducing labor costs and reviewing alternatives to reduce capacity.
“As PPG enters its 125th year,” Bunch said, “we are encouraged by the spirit of our founders, who sought to create value by offering innovation and specialty products to their customers. By accelerating our transformation, we at PPG believe that we’re entering our next 125 years by continuing to create value for our shareholders through growth, leadership and innovation.”
PPG shareholders elected three incumbent directors: Hugh Grant, chairman, president and chief executive officer of Monsanto Co.; Michele J. Hooper, managing partner of The Directors’ Council; and Robert Mehrabian, chairman, president and chief executive officer of Teledyne Technologies, Inc. Also, shareholders endorsed the appointment of Deloitte & Touche LLP as the company’s independent registered public accounting firm for 2008.About PPG
Pittsburgh-based PPG is a global supplier of paints, coatings, chemicals, optical products, specialty materials, glass and fiber glass. The company has more than 150 manufacturing facilities and equity affiliates and operates in more than 60 countries. PPG’s sales in 2007 were $11.2 billion. SigmaKalon, a worldwide coatings producer based in Uithoorn, Netherlands, that PPG acquired Jan. 2, 2008, had 2007 sales of $2.9 billion. PPG shares are traded on the New York Stock Exchange (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, difficulties in integrating acquired businesses and achieving expected synergies therefrom, 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.