Sustainability at PPG
Since 1883, when PPG was founded as the Pittsburgh Plate Glass Co., the company has grown steadily. From what began as a company with one location, one product line and a few hundred employees, PPG today is a global enterprise with operations in every part of the world, producing thousands of diverse products and employing thousands of people. Financial discipline and flexibility have long been PPG hallmarks. The fact that PPG has rewarded its shareholders with uninterrupted annual dividends since 1899 is testament to the company’s successful business performance.
Since the late 1990s, PPG has embarked on a transformation from a North American-centric, chemical, coatings and glass company to the leading global coatings and specialty products company. Driven by organic growth, targeted acquisitions and divestitures, operational excellence, and a relentless pursuit of innovation, PPG has more recently accelerated this reshaping, which in turn has fueled its growth.
In the last several years, PPG has accelerated its transformation from a North American-centric, chemical, coatings and glass company to the leading global coatings and specialty products company.
In 2011, PPG delivered record full-year earnings per share of $6.87. This was an increase of 48 percent over 2010 and established a new record for the company. Net income also was a record at $1.1 billion, an increase of 42 percent over 2010. Earnings per share in each quarter of the year eclipsed prior quarter records by an average of about 20 percent. Sales for the year were $14.9 billion, an increase of 11 percent over 2010.
This strong performance was achieved despite global growth rates that were uneven by region and varied by industry. In the first half of 2011, the global economy continued to mend from the 2008-2009 recession. And, although year-over-year demand in the developed regions was higher in 2011, it still remained below pre-recession levels. In the second half of the year, economic conditions continued to moderate in response to sovereign debt concerns, primarily in Europe. Growth rates in emerging regions began to moderate. Late in the year, customers were cautious with their inventory levels and order patterns.
|In 2001, coatings and optical products accounted for about 60 percent of PPG’s sales. Today, PPG’s coatings and optical products sales have more than doubled and now account for about 80 percent of total company sales. In 2001, 74 percent of PPG’s sales were in the United States and Canada. Today, it is approximately 45 percent. Over this time, Asia Pacific sales have grown from 3 percent of the company to 17 percent.
In 2011, each of PPG’s 13 business units delivered higher pricing, and PPG gained market share in several end-use markets by leveraging leading technologies and customer service. This enabled PPG to counter persistent raw material inflation. Aggressive cost management also supported PPG’s efforts to further lower its cost structure.
During the year, PPG continued to invest cash to strengthen its businesses both organically and through acquisition. Among other projects, PPG completed construction of a new resin manufacturing facility in Zhangjiagang, China, and expanded waterborne coatings manufacturing capability in Tianjin, China. PPG also announced four acquisitions: Equa-Chlor, a chlor-alkali producer in the western United States; Dyrup, a European architectural coatings and wood care business; Ducol, a South African automotive refinish company; and Colpisa, a Columbian automotive coatings producer.
PPG Maintained a long tradition of rewarding shareholders by returning $1.2 billion, or about 85 percent of cash generated from operations, in the form of dividends and share repurchases. PPG has paid uninterrupted annual dividends since 1899, and 2011 marked the 40th consecutive year that the company increased its annual dividend payout. Additionally, the 10.2 million shares of PPG stock repurchased for about $850 million in the year marked the highest level in company history.
Fundamental to our strategies is operating our businesses with a global perspective and engaging the skills and diversity of all PPG employees.
Accelerate profitable growth
- Strengthen leadership in coatings and specialty products.
- Continuously improve customer value proposition.
- Drive innovation and new technologies to gain a competitive advantage.
- Expand global presence.
Enhance operational excellence
- Establish margin leadership.
- Selectively invest to strengthen all businesses.
- Strive for cost, supply chain and working capital leadership.