PPG Industries (PPG) Q4 2023 earnings summary

Executive summary

• Q4 net sales reached a record $4.35B, up 4% YoY with 1% organic growth; adjusted EPS was $1.53 and segment margin rose 260 bps.

• FY 2023 net sales were $18.249B, adjusted EPS was $7.67, segment margin was 14.7%, and operating cash flow reached a record $2.411B.

Financial highlights

• Q4 sales of $4.35B compared with $4.185B a year earlier; price added 2%, volume declined 1%, currency added 2%, and acquisitions/divestitures added 1%.

• Q4 adjusted net income was $363M versus $286M; reported net income was $90M versus $238M.

• FY sales rose 3%, including 3% organic growth driven by higher selling prices; adjusted net income increased 27% to $1.82B.

• FY operating cash flow was $2.411B, up more than $1.4B YoY; operating working capital was 15.2% of annualized quarter sales versus 16.9%.

Outlook and guidance

• Q1 2024 outlook: total organic sales +/- low-single-digit; adjusted EPS $1.80-$1.87; raw material costs expected to decline mid-single-digit YoY.

• FY 2024 outlook: total organic sales up low-single-digit; adjusted EPS $8.34-$8.59; capital expenditures $320M-$340M; effective tax rate 23%-24%.

• Q1 effective tax rate expected at 24%-25%; volume growth initiatives include aerospace demand and Mexico cross-selling through the concessionaire network.