• Sales: $3.7 billion, a decrease of 4% compared to Q1 2024.
• Organic Sales Growth: Achieved in Asia and the US, with a 4% increase in the US.
• Segment EBITDA Margin: 19.4% for the first quarter.
• Adjusted Earnings Per Diluted Share: $1.72.
• Share Repurchases: Approximately $400 million in the first quarter.
• Global Architectural Coatings: Sales impacted by a 7% decrease due to unfavorable foreign currency translation.
• Performance Coatings Organic Sales: Increased by 9%, with Aerospace delivering double-digit growth.
• Industrial Coatings Organic Sales: Down less than 2%, with a 1% decline in selling prices.
• Debt Issuance: EUR900 million at 3.25% during the quarter.
• Dividends Paid: Approximately $160 million in the first quarter.

• Warning! GuruFocus has detected 3 Warning Signs with PPG.

Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• PPG Industries Inc (NYSE:PPG) achieved organic sales growth in Asia, particularly in China, India, and Vietnam, and a 4% growth in the US after several quarters of flat or declining performance.
• The Performance Coatings segment saw a 9% increase in organic sales, with Aerospace delivering double-digit growth and record first-quarter sales and earnings.
• PPG Industries Inc (NYSE:PPG) repurchased approximately $400 million of its stock, maintaining a strong balance sheet and demonstrating commitment to shareholder value.
• The company is benefiting from its enterprise growth strategy, with strategic investments in innovation driving positive momentum.
• PPG Industries Inc (NYSE:PPG) has a balanced global business portfolio and a highly variable cost structure, providing resilience against macroeconomic uncertainties.

Negative Points

• Overall sales decreased by 4% compared to the first quarter of 2024, primarily due to unfavorable foreign currency translation and business divestitures.
• European organic sales were down 1%, and the Architectural Coatings segment was significantly impacted by unfavorable foreign currency translation.
• In the Industrial Coatings segment, net sales declined due to foreign currency impacts and the divestiture of the Silica Products business.
• Segment EBITDA margin in the Architectural Coatings segment decreased by 310 basis points due to lower sales volumes and regional inflation.
• The company faces potential downsides if overall economic demand significantly weakens, and it is closely monitoring customer order patterns.

Q & A Highlights

Q: Tim, just on Global Architectural, I know margins are under pressure here. How do you expect margins to trend in Q2? Any relief from the pressure you saw in Q1? A: Timothy Knavish, CEO: We expect some margin benefit from sequential volume improvement. We've had positive price in that segment, so it's primarily a volume story, particularly with Europe and Mexico. We fully expect margins to recover.

Q: Just on Comex, how much was the business down in Q1? And what gives you the confidence that business will come back over the next few quarters? A: Timothy Knavish, CEO: The confidence comes from our strong connections in Mexico and the belief that project spending will increase as the year progresses. Our core retail sales in Mexico remained solid in Q1, and we expect project spending to resume, especially in the second half.

Q: Can you unpack the sales guidance for Global Architectural Coatings? You were down 11% in the first quarter. How do you see volumes trending? A: Timothy Knavish, CEO: We expect positive price trends to continue. The project pause in Mexico may continue into Q2, but we see momentum in Europe, which could lead to flat or incrementally positive volumes.

Q: On Performance Coatings, volumes were impressive. What do you think your volume should be for this year in total? A: Timothy Knavish, CEO: We expect consistent growth across our Performance Coatings businesses, driven by Aerospace and Protective & Marine. We anticipate mid-single-digit growth for the year due to strong demand and share gains.

Q: Can you talk about the aerospace opportunity and potential for debottlenecking to facilitate growth? A: Timothy Knavish, CEO: Aerospace remains strong across military, commercial, and general aviation. We have active debottlenecking projects and are considering larger capital investments to support long-term growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.