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MOSCOW (MRC) -- PPG Industries today
reported fourth-quarter net income down 7% year-on-year (YOY), to USD272
million, on net sales up 2%, to USD3.76 billion. Adjusted earnings, which
exclude some impairment charges, totaled USD1.59/share, up 21% YOY and slightly
ahead of analysts’ consensus estimate of USD1.58/share, according to Chemweek with reference to Refinitiv (New
York, New York).
Sales volumes were down 1.5% YOY, but this was offset
by a 1.5% increase in selling prices, favorable exchange rates, and
acquisitions.
“The more than 20% increase in our adjusted EPS (earnings
per share) was the result of strengthening year-over-year sales growth in our
industrial coatings reportable segment, led by the automotive original equipment
manufacturer (OEM), general industrial, and packaging coatings businesses,” says
PPG chairman and CEO Michael McGarry. “In addition, the global architectural
coatings business continued its excellent execution as we leveraged higher
year-over-year sales into strong earnings growth. Consistent with the third
quarter, we achieved improved operating results despite continued weakness in
several key end-use markets, including aerospace and automotive refinish
coatings, which are still being heavily impacted by the ongoing
pandemic.”
Performance coatings segment sales declined 1% YOY, to US2.2
billion, while segment income was down 3%, to USD8 million. Volumes fell 6% YOY,
while selling prices were up 3%. The declines were mostly due to a 30% drop in
sales for aerospace coatings, and smaller declines in protective and marine and
automotive refinish coatings. However, architectural coatings sales grew YOY,
and automotive refinish coatings sales increased on a sequential
basis.
Industrial coatings segment sales grew 7% YOY, to USD1.6 billion,
while segment income was up 40%, to USD282 million. Sales volumes grew in the
automotive OEM, industrial coatings, and packaging coatings businesses.
Automotive OEM sales growth differed by region, with particularly large
increases in China.
For the year ahead, PPG expects “overall global
coatings demand continues to improve in many of the end-use markets we serve and
across all our major regions, and we expect overall global economic activity to
strengthen in the first half of 2021,” McGarry says. “However, due to increasing
pandemic-related restrictions and certain supply chain disruptions, there is
uncertainty regarding when this coatings demand growth will fully
materialize.”
The company cut costs by about USD115 million in full-year
2020, a result of restructuring programs put in place partly in response to the
pandemic. PPG generated about USD2.1 billion in cash during 2020, McGarry
says.
As MRC
informed before, the board of Tikkurila (Helsinki, Finland) says it
“unanimously recommends” that the company’s shareholders accept a planned tender
offer for the company from PPG Industries. PPG’s offer will be at
EUR27.75/share, valuing Tikkurila at about EUR1.24 billion (USD1.50 billion),
after PPG raised its bid price on 5 January in response to a competing offer
from an unspecified company. The Tikkurila board says in a statement that its
assessment of PPG’s revised bid took the rival offer into
consideration.
We remind that in
February 2020, PPG said it had completed its acquisition of Industria Chimica
Reggiana (ICR, Reggio Emilia, Italy), a maker of automotive refinish products.
Financial terms of the deal, including purchase price, were not disclosed. The
deal was announced on 8 January. ICR was founded in 1961 and employs about 180
people. ICR manufactures automotive refinish products, including putties,
primers, basecoats and clear coats. It also makes a range of coatings, enamels
and primers for light commercial vehicles and other light industrial coatings
applications. ICR employs about 180 people and sells its products in more than
70 countries in Europe, Africa, the Middle East, the US and Latin
America.
We also remind that Russia's output of chemical products rose
in November 2020 by 9.5% year on year. At the same time, production of basic
chemicals increased in the first eleven months of 2020 by 6.6% year on year,
according to Rosstat's data. According to the Federal State Statistics Service
of the Russian Federation, polymers in primary form accounted for the greatest
increase in the January-November 2020 output. November production of polymers in
primary form rose to 896,000 tonnes from 852,000 tonnes in October. Overall
output of polymers in primary form totalled 9,240,000 tonnes over the stated
period, up by 17.1% year on year. |
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