PPG Industries growth is forecast to continue, aided by company cost and productivity initiatives and anticipated stronger global economic growth.
PPG Industries reported its first quarter 2015 net sales from continuing operations were $3.7 billion, up 1 percent versus the prior year, according to a release from the company.
Net sales in local currencies grew 8 percent year-over-year, including a 7 percent contribution from acquisition-related sales and a 1 percent improvement in sales volume. According to PPG, “unfavourable currency translation” reduced year-over-year net sales by 7 percent, or about $260 million.
Glass segment net sales were $267 million for the quarter, up $1 million year-over-year. Flat glass sales volumes grew modestly, and results were aided by an improved, value-added product mix, according to PPG.
“From an economic perspective, overall global activity was subdued in the quarter, as reflected by our modest sales-volume growth,” said CEO Charles E. Bunch. “… However, both of our coatings segments delivered all-time-record first-quarter earnings, and the glass segment delivered its highest first quarter earnings in more than 10 years. Our ongoing cost and productivity initiatives, continued PPG volume growth in certain end-use markets and an accelerating company growth rate in emerging regions aided our segment results.”
PPG also announced a business-restructuring program that includes “actions necessary to achieve cost synergies related to recent acquisitions. In addition, the program aims to further right-size employee headcount and production capacity in certain businesses and regions based on current product demand and in various global administrative functions.”
According to the company, a pre-tax restructuring charge of $135 million to $140 million will be recorded in PPG’s second quarter 2015 financial results, of which about 85 percent represents cash charges. PPG said it expects these restructuring actions will result in full-year pre-tax savings of $100 million to $105 million by 2017, including 2015 partial-year savings of $15 million to $20 million.
“Looking ahead, we anticipate stronger global economic growth in the coming quarters, including a resumption of growth in Europe and a return to a higher growth rate in the US,” Bunch says. “We remain well-positioned to leverage this growth into strong earnings contributions, given our lower cost base stemming from our continued cost management actions. We remain focused on aggressively managing our costs and are initiating restructuring actions concentrated on securing the synergies we committed to with our recent acquisitions, along with other global productivity measures in certain businesses and regions.”