PPG Investor Overview/media/Files/P/PPG-IR/... · 2020-05-27 · • Silver Boeing Performance Excellence Award • Excellent Supplier Diversity Award from Toyota North America +

PPG Investor Overview

March 25, 2020

2

Notes

Forward-looking statements

3

This presentation contains forward-looking statements that reflect the Company’s current views with respect to future events

and financial performance. You can identify forward-looking statements by the fact that they do not relate strictly to current or

historic facts. Forward-looking statements are identified by the use of the words “aim,” “believe,” “expect,” “anticipate,”

“intend,” “estimate,” “project,” “outlook,” “forecast” and other expressions that indicate future events and trends. Any forward-

looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation

to update any forward-looking statement, whether as a result of new information, future events or otherwise. You are advised,

however, to consult any further disclosures we make on related subjects in our reports to the Securities and Exchange

Commission. Also, note the following cautionary statements:

Many factors could cause actual results to differ materially from the Company’s forward-looking statements. Such factors

include global economic conditions, increasing price and product competition by foreign and domestic competitors,

fluctuations in cost and availability of raw materials, the ability to achieve selling price increases, the ability to recover

margins, customer inventory levels, our ability to maintain favorable supplier relationships and arrangements, the timing of

and the realization of anticipated cost savings from restructuring initiatives, the ability to identify additional cost savings

opportunities, difficulties in integrating acquired businesses and achieving expected synergies therefrom, economic and

political conditions in the markets we serve, the ability to penetrate existing, developing and emerging foreign and domestic

markets, foreign exchange rates and fluctuations in such rates, fluctuations in tax rates, the impact of future legislation, the

impact of environmental regulations, unexpected business disruptions, disruption to our business resulting from the COVID-

19 virus, the results of governmental investigations and the unpredictability of existing and possible future litigation. However,

it is not possible to predict or identify all such factors. Consequently, while the list of factors presented here and under Item

1A of PPG’s 2019 Form 10-K is considered representative, no such list should be considered to be a complete statement of

all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-

looking statements. Consequences of material differences in the results compared with those anticipated in the forward-

looking statements could include, among other things, lower sales or income, business disruption, operational problems,

financial loss, legal liability to third parties, other factors set forth in Item 1A of PPG’s 2019 Form 10-K and similar risks, any

of which could have a material adverse effect on the Company’s consolidated financial condition, results of operations or

liquidity.

4

A global maker of paints, coatings and

specialty materials, with full-year net

sales of $15.1 billion in 2019

Corporate Social Responsibility Awards

• EcoVadis Gold Rating

• Constituent of the FTSE4Good Index Series

• Forbes Best Employers for Diversity in 2019

• Canada’s Best Employers 2019 List

Product and Process Awards

• R&D 100 Awards for PPG POWERCRON® 160

anionic epoxy electrocoat (e-coat) technology

Customer Awards

• Best Performer Award from Airbus

• Silver Boeing Performance Excellence Award

• Excellent Supplier Diversity Award from Toyota North

America + Quality Excellence Performance Award from

Toyota Latin America and Caribbean

How We Rank

Our employees protect and beautify the world

Ranked among the “World’s Most Admired Companies” in its industry by

Fortune Magazine in 2019

Who We Are

A leader in all our markets: construction,

consumer products, industrial and

transportation markets and aftermarkets

Headquartered in Pittsburgh,

Pennsylvania, with operations in more

than 70 countries; 47,000+ employees

Founded in 1883

Stock listing NYSE (Symbol: PPG)

Fortune 500: Ranked #205

Forbes’ Global 2000: Ranked #606

PPG background and recognition

2019 key achievementsStrategic Portfolio Actions

•Acquisitions with annual revenue of about $500 million

• Expanded technological capabilities and global footprint

Strong Financial & Operational Performance

•Grew adjusted EPS* by ~8% (excluding foreign currency translationimpact)

•Delivered approximately $85 million in cost savings from restructuring

actions

Cash and Cash Deployment

•Record ~$2.1 billion of cash generated from operations

•Quarterly per share dividend increase – 48th consecutive year (6% annual increase)

•Returned approximately $0.8 billion of cash to shareholders

• $0.5 billion for dividends

• $0.3 billion for share repurchases

5

* See appendix for reconciliation of PPG reported to adjusted EPS

Well positioned to deliver growth

PPG has many opportunities for profitable growth 6

• Specialty products and solutions with key functional value

• Highly Diversified global coatings company

• Growing portfolio of Sustainable products

• High percent of sales to Aftermarket end-use markets

• Strong pipeline of Innovative products

• Successful acquirer of coatings assets: Consolidating industry

7

Attractive positioning (Specialty chemicals)

Global footprint and capabilities

Innovative

PPG provides attractive investment fundamentals

1

2

• High functional value products

• Stable earnings/cash flow

• Vast growth potential

• Customer reach across every major region

• Opportunities to expand in Asia and growth markets

• Diverse participation in all key coatings end-use markets

• Shared service centers support lower cost

• Commitment to investment; R&D spend ~3% of sales

• New product sales nearing 23% of total sales

• On the frontier with products for electric vehicles

Powercron®

Epoxy electrocoat – low-temp cure

Auto-refinish automated

painting system

3

Environmental Formulation Application Functionality Color

8

Innovation levers at PPGDriving innovation across all aspects of coatings technology

2016

R&D 100 Finalist

2018

R&D 100 Finalist

Low Temperature

Cure

Coating System

for Ferrari

DESOTHANE ®

Solar Heat

Management

Coatings

Innovation Levers

2019

R&D 100 Winner

Powercron ® 160

Anodic Epoxy

Electrocoat

OLYMPIC ®

SMARTGUARD,

Multisurface

Waterproofer

2018

R&D 100 Winner

2017

R&D 100 Winner

LIQUID NAILS®

Fuze*It®

9

ESG commitment drives value

Products and

processes

Our

people

Resource

efficiency

Our

footprint

Environmental

safety

In 2019:

• Zero process

waste to landfill

for 33% of

manufacturing

and R&D

locations

• 29% less waste

disposed vs.

2017 baseline

32% reduction in

spill & release rate

in 2019 vs. 2017

baseline33%

Goal

Zero Injuries

2019 sales from

sustainably-

advantaged

products and

processes

7%

Less GHG

emissions in 2019

vs. 2017 baseline

AMSCI ESG(scale AAA

to CCC)

Acquisitions contribute to sales growth

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Acquisition Sales Growth Over Prior Year

Notable acquisitions:

2013: AkzoNobel North America

2014/5: Comex (partial years)

+3% average sales

growth from

acquisitions

(USD MM)

Acquisitions supplement organic growth

10

Other

Global paint and coatings industry (~$140B)

Competitive Landscape

PPG has completed 23 strategic acquisitions since the beginning of 201511

Source: IPPIC, Company Annual Reports, PPG estimates

Strong fundamentals

• Stable earnings/cash

• Growth potential

• Low capital intensity

• Technology & service

• Consolidating industry

U.S. & Canada

43%

EMEA30%

Asia Pacific 17%

Latin America

10%

Coatings geographic mix

Source: IPPIC

Coatings Industry

Geographic Sales Mix

PPG Coatings

Geographic Net Sales Mix

PPG - Opportunities to expand in Asia and globally

U.S. & Canada

18%

EMEA30%

Asia Pacific45%

Latin

America

7%

12

EMEA includes Europe, Middle East, and Africa

Coatings end-usesIndustry End Use Demand

(~$140B Sales Value)

Source: IPPIC, Company Annual Reports, PPG estimates

PPG Coatings End-Use Net

Sales Mix

PPG is in line with the global coatings industry end-use mix

13

General Industrial

Architectural

Automotive OEM & Aftermarket

Protective & Marine, Packaging, Aerospace

General Industrial

19%

Construction (New &

Maintenance)36%

Auto OEM, Parts, &

Aftermarket30%

Aerospace, Packaging &

Marine15%

#1 End-Use Position #2 End-Use Position #3 End-Use Position Meaningful presence No Current Meaningful Presence

PPG global end-use positions

Source: IPPIC; company annual reports, PPG estimates

Position by Coatings Vertical

PPG growth opportunity: To be #1 or #2 in every country/vertical

Source: Orr and Boss; Company Annual Reports; PPG estimates

---------- Participation in all end-use markets -----------

Global

Position

ArchGeneral

Industrial

Protective

& MarineAuto OEM

Refinish /

CollisionPackaging

Aerospace

PPG #2 #2 #3 ~#3 #1 #2 #2 #1

Sherwin-

Williams#1

AkzoNobel #3

Nippon #4

RPM #5

Axalta #6

BASF #7

14

15

PPG reporting segments drive our business

Performance Coatings

• Aerospace Coatings

• Architectural Coatings

- Americas & Asia Pacific

- Europe, Middle East, Africa

• Automotive Refinish Coatings

• Protective & Marine Coatings

40%

Industrial Coatings

• Automotive OEM Coatings

• Industrial Coatings

• Packaging Coatings

• Specialty Coatings & Materials

~ ~

• Automotive Refinish Coatings

• Architectural Coatings - Americas &

Asia Pacific

• Architectural Coatings - Europe, Middle

East, Africa

• Aerospace Coatings

• Protective & Marine Coatings16

$8.4 $8.5 $8.6$8.9

$9.0

14.8%15.4% 15.2%

14.4%

15.7%

'15 '16 '17 '18 '19

U.S. & Canada

45%

EMEA32%

Asia12%

Latin America11%

Net Sales with ROS* 2019 Net Sales by Geography

5-Year CAGR* +2%

EMEA: Europe,

Middle East, and

Africa

• Distribution focus

• After-market and maintenance component

• Consistent cash generation

• Stable industries

Strategic Business Units Segment Traits

$B

Performance Coatings segment

*includes acquisitions and excludes currency impact

'17 '18 '19

U.S. & Canada

EMEA

Asia Latin America

'15 '16 '17 '18 '19

Net Sales* 2019 Net Sales by Geography

5-Year CAGR* ~ 2%

17

• Color complexity

• Emerging region growth

• Technology shift to waterborne

• Value added programs and training

• Growth of advanced driver-

assistance systems

PPG Global Waterborne Paint ShopsKey Industry Trends

*includes acquisition and excludes currency impact

EMEA: Europe,

Middle East,

and Africa

3-Year CAGR ~ 7%000s

Automotive Refinish

50%

50%

30%

70%

U.S. & Canada

EMEA Asia

'15 '16 '17 '18 '19


5-Year CAGR* ~ 7%

18

• Single aisle aircraft driving growth

• Industry consolidation and OEM

vertical integration intensify

• Stable to moderate fuel

prices/strong passenger load factor

• Shift to robotic applications and

automation

Net Sales MixKey Industry Trends


EMEA: Europe,

Middle East,

and Africa

Aerospace

Aftermarket

OEM Military

Commercial

U.S. & Canada

EMEA

Asia

Latin America

15 16 17 18 19


5-Year CAGR* ~ 4%

19

• Infrastructure ($4.4B)

• Energy ($3.8B)

• Marine Aftermarket ($2.3B)

• Industrial Maintenance ($1.9B)

• Marine OEM ($1.3B)

PPG Net Sales MixKey Industry End Uses


EMEA: Europe,

Middle East,

and Africa

Protective & Marine Coatings (PMC)

Marine After Market

Marine New Build

0%

25%

50%

75%

100%

Protective

Coatings

Marine New Build

Marine After

Market

Protective

Coatings

20192009

'15 '16 '17 '18 '19


5-Year CAGR* ~ 2%

20


Architectural Coatings*

National

Retailers

(DIY)

25%

Strong Local Architectural BrandsPPG Net Sales Mix

Region Stores

USCA ~900

LA ~5,000**

AP ~50

EMEA ~700

U.S. & Canada

~45% DIY

EMEA ~35% DIY

Asia

Latin America

Region Company

Stores

Independent

Dealers

National

Retailers

USCA 50% 15% 35%

LA 2% 89% 9%

AP 15% 44% 41%

EMEA 48% 30% 22%

Worldwide 40% 35% 25%

EMEA: Europe,

Middle East,

and Africa

*Architectural Americas & Asia-Pacific and Architectural EMEA strategic business units

**Latin America “stores” are mostly concessionaire locations in Mexico and Central America

Architectural coatings is diversified globally

and well positioned

PPG’s local brands provide opportunities for growth 21

Region Strength / Focus Brands

U.S. and Canada • Services / Delivery

• Digitalization

• Higher variable cost structure

EMEA • Strong local brands

• One of the leading positions in

most countries

Latin America • Strong brand recognition

• Concessionaire model

• Expansion into Central America

• New factory in Panama

Asia-Pacific • Strong brand in ANZ

• Regional participation in China

• Automotive OEM Coatings

• Industrial Coatings

• Packaging Coatings

• Specialty Coatings & Materials

22

$5.2$5.6

$5.8$6.1 $6.1

18.2% 18.7%16.4%

13.1% 14.1%

'15 '16 '17 '18 '19

U.S. & Canada40%

EMEA28%

Asia24%

Latin America9%

Net Sales with ROS* 2019 Net Sales by Geography5-Year CAGR* +3%

EMEA: Europe,

Middle East, and

Africa

• Technology-advantaged products

• Mix of global and local customers

• High quality product performance

• Global customer footprint

Strategic Business Units Segment Traits

$B

Industrial Coatings segment


U.S. & Canada

EMEA

Asia

Latin America

'15 '16 '17 '18 '19


5-Year CAGR* ~ 1%

23

Global Auto OEM Production

Customer MixKey Industry Trends


EMEA: Europe,

Middle East,

and Africa

Automotive OEM

50

60

70

80

90

100

'15 '16 '17 '18 '19

5-Year CAGR ~ 0%

All Remaining

Customers

U.S.

Based

Non-U.S.

Based

Top 7 PPG

Automotive

Customers

300

450

600

750

'15 '16 '17 '18 19

U.S. & Canada

EMEA

Asia

Latin America

'15 '16 '17 '18 19


5-Year CAGR* ~ 7%

24

Asia Net Sales*Key Industry End Uses


EMEA: Europe,

Middle East,

and Africa

Industrial Coatings

• Heavy-duty Equipment

• Appliances

• Electronic Materials

• Coil

• Automotive Accessories

• Transportation

• Office Furniture

5-Year CAGR* ~4%


U.S. &

CanadaEMEA

Asia

Latin America

'15 '16 '17 '18 '19


5-Year CAGR* ~2%

25

Metal Packaging Industry SegmentsKey Industry Trends


EMEA: Europe,

Middle East,

and Africa

Packaging Coatings

• Metal packaging industry growth driven

by sustainability, performance and safety

• Conversion to BPA-NI technology

continues globally

• Can makers drive toward complexity

reduction in coatings portfolio

Beverage

Food

Other

Personal Care

'15 '16 '17 '18 '19


5-Year CAGR* ~ 0%

26

Net Sales MixKey Industry Trends

*excludes currency impact and R&D services

EMEA: Europe,

Middle East,

and Africa

Specialty Coatings & Materials

Beverage

Silica

Teslin

Optical Monomers and Dyes

OLED materials

U.S. & Canada

EMEA Asia

• Mobile device conversions and TV

transitioning to OLED technology

• Growth in large diameter tires and

tires containing premium silica

products

• Growth in durable labels in safety

critical applications

Coatings cost comparison

Sold in 2,000

Liter Totes

Sold in 1

Gallon

Paint

Cans

And 5

Gallon

Buckets

Average Architectural Coatings

Industry estimates – figures vary greatly by end-use and application

Source: PPG Estimates

Average Industrial Coatings

Raw material basket and manufacturing/distribution costs are different

Resins and Latex

Titanium Dioxide

Solvents and Pigments

Additives

Manufacturing

Packaging

Distribution - intermediate

Distribution - final

Resins and Latex

Titanium Dioxide

Solvents and Pigments

Additives

Manufacturing

Packaging

Distribution - final

27

http://blog.indco.com/2013/11/19/indco-industry-report-on-tote-mixers-for-2013/screen-shot-2013-11-19-at-4-13-02-pm/

+ Incremental impact due to the adoption of IFRS 16 “Leases” in 2019.

Adjusted EBITDA from continuing operations as percent of sales as reported in company reports (excluding unusual items);

See Appendix for reconciliations.

PPG remains a margin leader across coatings sector

17% 17%

15%

13%

21%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

PPG Sherwin-Williams Akzo Nobel RPM Axalta

2019 Full Year EBITDA as % of Net Sales

Coatings Peers EBITDA %

28

+

Adjusted EBITDA from continuing operations as percent of sales as reported in company reports (excluding unusual items); See Appendix for

reconciliations.

17%

16%

15%

14%

19%

18%

17%

13%14%

21%

17%

16%

12%

13%

19%

16% 16%

11%

13%

19%

17% 17%

13%

21%

-1.0%

1.0%

3.0%

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

17.0%

19.0%

21.0%

23.0%

PPG Sherwin-Williams Akzo Nobel RPM Axalta

Full Year EBITDA as % of Net Sales

2015 2016 2017 2018 2019

15%

+

Coatings Peers EBITDA %

Consistent coatings industry margins across varying economic conditions

29

+ Incremental impact due to the adoption of IFRS 16 “Leases” in 2019.

Corporate cost as a percentage of sales*

Source: Annual company filings

2%

3%

2%

1% 1%

3%

2%

2%

'15 '16 '17 '18 '19 '15 '16 '17 '18 '19 '15 '16 '17 '18 '19 '15 '16 '17 '18 '19

PPG Average:

1%

*Axalta corporate cost results are not reported in company filings

30

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwiL0N_Y5fPgAhXqlOAKHavzBBAQjRx6BAgBEAU&url=https://www.worldofchemicals.com/media/rpm-acquires-south-african-spray-paint-manufacturer-spraymate/8157.html&psig=AOvVaw08PrB_BGDJHDoTbCZH-yW5&ust=1552177438441828

31

Industry leading 2019 return on capital*Measurable proof of PPG’s successful, disciplined and value creating M&A

*Adjusted ROC excluding certain items (see reconciliation at end of presentation)

15.1% 14.7%

11.1%

8.6%

6.4%

PPG Sherwin RPM Axalta Akzo

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwiL0N_Y5fPgAhXqlOAKHavzBBAQjRx6BAgBEAU&url=https://www.worldofchemicals.com/media/rpm-acquires-south-african-spray-paint-manufacturer-spraymate/8157.html&psig=AOvVaw08PrB_BGDJHDoTbCZH-yW5&ust=1552177438441828

* Adjusted to exclude certain charges, see appendix for reconciliation. All years as originally reported, not adjusted for business divestitures.

ROC trend demonstrates successful acquisition integration

PPG return on capital (adjusted)*

32

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

2017 2018 2019

Capital Return on Capital

15.1%

2%

6%

10%

14%

0

200

400

600

EB

IT M

arg

in o

n S

ale

s

Ea

rnin

gs

Earnings EBIT %

0

1,000

2,000

3,000

4,000

5,000

Sa

les

Other PPG Businesses

Architectural Coatings EMEA

PPG Net Sales Mix (€MM) Earnings (€MM)

Sales growth continues with improved margins in 2019

33

Total PPG Europe, Middle East and Africa

$1,000

$2,000

$3,000

'13 '14 '15 '16 '17 '18 '19

Consolidated Net Sales

$0

$200

$400

$600

'13 '14 '15 '16 '17 '18 '19

Segment Income

Recent years impacted by significant cost inflation, depreciation of

Asian currencies and weak automotive demand

$MM - USD

PPG Asia-Pacific financials

$MM - USD

34

Strong and growing Asia-Pacific presence (excl. Japan)

*Many Leading Asia Markets (excl. Japan)

Performance

Industrial

Broad, full range coatings business portfolio

PPG Asia Net Sales Mix (2019)*Industry Coatings Demand for Asia

*Coatings Industry in Asia remains Fragmented

Sources: PPG Internal estimates (excludes Japan includes ARCH)

PPG Market

Position

PPG ’14 - ’19

CAGR

Automotive OEM #2 0%

General Industrial #2 5%

Packaging #1 2%

Auto Refinish #1 3%

Aerospace #1 9%

Protective/Marine #4 3%

Architectural #7 3%

Total Coatings #3 3%

Nippon 8%

Akzo 7%

PPG 5%

Asian Paints 5%

Kansai 3%

KCC 2%

S-W 2%

Jotun 2%

Berger 2%

Axalta 2%

BASF 1%

Noroo 1%TOA 1%SKShu 1%

Hempel 1%Chugoku 1%

Carpoly 1%

Others 55%

#~14,000

players

35

60%14%

13%

9%4% China

India

Southeast Asia

Korea

ANZ

*PPG estimates

PPG ‘14-’19 CAGR excludes currency impact

Robust cash generation over time while transforming the business portfolio

$2.4B

$1.7B

$1.2B

$1.5B

$1.9B

$1.5B

$1.0B

$1.3B

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

'12 '13 '14 '15 '16 '17 '18 '19

Approximate Cash & Short Term Investments

* As originally reported, not adjusted for business divestitures

Millions USD

PPG cash trends

36

$1,000

$1,300

$1,600

$1,900

$2,200

'12 '13 '14 '15 '16 '17 '18 '19

Cash From Operations*

+ Adjusted Cash from Operations; excluding cash paid to fund the Pittsburgh Corning asbestos trust

Ad

juste

d +

Cash Use Summary:

Grow Business ~45%

Return to Shareholders ~55%

20%

26%

18%

36%

Past 10 Years (~$22B)(2010 – 2019)

Approximate 2019 Cash Uses

$ in millions – As reported, not adjusted for business divestitures

Legacy of consistent and prudent cash deployment

Balanced cash deployment

37

$415

$680

$470

$325 Capital Spending

Acquisitions*

Dividends

Share Repurchases

*Acquisitions includes the 2019 cash paid to acquire the remaining minority interest in a coatings business.

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

'10 '12 '14 '16 '18 ‘19

0

200

400

600

800

1,000

1,200

1,400

2020 2021 2022 2023 2024 2025 2027 2028 2029 2038 2040 2044

USD Notes

EUR Notes

48 Years of Increased DividendsDividends per share – Adjusted for

stock splits

$ in millions

Long-Term Debt Maturity

Schedule13%

7%

3%

4%3%

2%3%

3% 3%2% 3%

0%

2%

4%

6%

8%

10%

12%

14%

1980 || 1990 || '03 '05 '07 '09 '11 '13 '15 '17 '19

Capital Spending as % of Sales (As originally reported, not adjusted for business

divestitures)

Last 5 years

Average =

~3.0%

PPG Share Repurchases

$ in millions

Average

~$800MM

Average

~$975MM

PPG financial hallmarks

38

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

$1.80

$2.00

$2.20

'79 '84 '89 '94 '99 '04 '09 '14 '19

Last 3

years =

8%

www.ppg.com

Additional Materials

and Appendix

PPG Sherwin-

WilliamsAkzo Nobel RPM

Axalta

Coatings

Systems

Currency USD USD Euro USD USD

Sales 15,146 17,901 9,276 5,565 4,482

Income before taxes 1,661 1,982 785 340 330

Unusual or Infrequent

Charges312 *151 **150 ***126 ****95

Interest, net 100 349 **76 102 163

Depreciation &

Amortization511 575 **360 142 353

EBITDA, adjusted 2,584 3,057 1,371 710 941

% of Sales 17% 17% 15% 13% 21%

EBITDA as % of Sales (excluding specials):

2019 EBITDA Reconciliation

41

-Amounts in millions, except percentages, reflects most recent year-end from continuing operations. Compiled from publically available segment disclosures.

-For all years presented, PPG results from continuing operations, as disclosed in the most recent 10-K and Annual Report.

*Trademark impairment, integration costs and a pension plan settlement expense, which were partially offset by a Brazil indirect tax credit and a reduction in

the California litigation provision.

**As disclosed on page 76 of the Akzo Nobel 2019 Annual Report. Akzo Nobel adjusted EBITDA as a % of sales of 14%, excluding the impact of adoption of

IFRS 16.

***Adjustments as disclosed on slide 8 of the RPM 4th Quarter 2019 Reconciliation of Non-GAAP and Supplemental Information Presentation.

****Termination benefits, divestiture and impairment charges, strategic review and retention costs, offering and transaction costs, accelerated

depreciation and debt extinguishment and refinancing related costs.

PPG Sherwin-


Axalta

Coatings

Systems


Sales 15,374 17,534 9,256 5,322 4,696



Charges189 *499 **193 ***62 ****102

Interest, net 95 367 52 84 160

Depreciation &

Amortization497 596 239 128 369

EBITDA, adjusted 2,474 2,822 1,057 691 899

% of Sales 16% 16% 11% 13% 19%



42

-Amounts in millions, except percentages, reflects most recent year-end. Compiled from publically available segment disclosures.


-Akzo Nobel results from continuing operations as disclosed in the Q4 2018 earnings release.

-Axalta results presented as disclosed in the 2019 10-K.

*Integration costs, environmental expenses, California litigation expense, and pension plan settlement expense

**Identified items as disclosed on page 23 of the Akzo Nobel 2018 Annual Report

***Adjustments as disclosed on slide 8 of the RPM Fourth Quarter Results for Fiscal Year 2018 presentation

****Termination benefits, debt extinguishment and refinancing related costs, accelerated depreciation and offering and

transaction costs.

PPGSherwin-


Axalta

Coatings

Systems


Sales 14,748 14,984 9,612 4,958 4,377



Charges20 *186 -- **216 ***155

Interest, net 85 263 78 83 147

Depreciation &

Amortization460 492 276 117 348

EBITDA, adjusted 2,570 2,410 1,118 660 840

% of Sales 17% 16% 12% 13% 19%



43




-Sherwin-Williams results for 2017 have been adjusted for adoption of ASU 2017-01 as well as an inventory accounting change made in 2018.

-Axalta results presented as disclosed in the 2019 10-K.

*Transaction and integration related SG&A expense related to the acquisition of Valspar, in addition to inventory accounting change adjustment

**Goodwill impairment charge, charge to exit Flowcrete Middle East, and severance expense.

***Termination benefits, transition-related costs, Venezuelan foreign exchange losses and effects of deconsolidation impacts and

impairments.



44




-Axalta results have been updated for correction of immaterial errors as noted in the 2017 10-K report.

*Transaction and integration related SG&A expense related to the acquisition of Valspar.

**Reversal of Kirker earnout.

***Termination benefits, debt extinguishment and refinancing related costs, offering and transaction costs, Venezuelan foreign

exchange losses and effects of deconsolidation impacts and impairments.

PPGSherwin-


Axalta

Coatings

Systems


Sales 14,270 11,856 9,434 4,814 4,069

Income before taxes 779 1,595 850 483 83


Charges1,234 *58 5 **(15) ***257

Interest, net 99 154 91 81 178

Depreciation &

Amortization440 198 282 111 322

EBITDA, adjusted 2,552 2,005 1,228 660 840

% of Sales 18% 17% 13% 14% 21%



45



-Akzo Nobel results from continuing operations (Paints & Coatings) with certain estimates based on 2016 recast data.

-Axalta results have been updated for correction of immaterial errors as noted in the 2017 10-K report.

*Termination benefits, transition-related costs, debt extinguishment and refinancing related costs, offering and transaction costs,

Venezuelan foreign exchange losses and effects of deconsolidation impacts and impairments.

PPGSherwin-


Axalta

Coatings

Systems


Sales 14,241 11,339 9,892 4,595 4,084



Charges198 -- 80 -- 116*

Interest, net 86 62 91 69 197

Depreciation &

Amortization446 198 306 99 308

EBITDA, adjusted 2,475 1,809 1,469 621 779

% of Sales 17% 16% 15% 14% 19%

(in millions, except percentages)

PPG**Sherwin

Williams

Akzo

NobelRPM

Axalta

Coatings

Systems


Net Earnings as Reported 1,243 1,541 555 267 249

Total Net Adjustments, after-tax (see details below)* 237 115 143 96 72

Adjusted Net Earnings 1,480 1,656 698 363 321

Net Interest Expense, after-tax* 100 265 45 78 124

Adjusted Net Earnings + Net Interest Expense 1,580 1,921 743 441 445

Capital (Average Debt & Average Equity) as Reported 9,991 12,941 11,397 3,868 5,129

Net Adjustments (see above) 237 115 143 96 72

Adjusted Average Capital 10,460 13,056 11,540 3,964 5,201

Adjusted Return on Capital 15.1% 14.7% 6.4% 11.1% 8.6%

2019 Adjusted Return on Capital Reconciliation

46

Sources for Summary of Net Adjustments:

PPG: Net income impact of certain items as disclosed in the 2019 Form 10-K, page 22.

Sherwin-Williams: Net income impact of certain items of trademark impairment, integration costs and a pension plan settlement expense, which were

partially offset by a Brazil indirect tax credit and a reduction in the California litigation provision as noted in the Fourth Quarter and Full Year 2019

Operating Segments presentation slide 2. This calculation does not include the adjustment for acquisition-related amortization.

Akzo Nobel: Net income impact of identified items as disclosed on page 3 of the Akzo Nobel Q4 and full-year 2019 report.

RPM: Net income impact of certain items as disclosed on slide 8 of the RPM 4th Quarter 2019 Reconciliation of Non-GAAP and Supplemental

Information presentation.

Axalta Coatings Systems: Net income impact of certain items of termination benefits, divestiture and impairment charges, strategic review and retention

costs, offering and transaction costs, accelerated depreciation and debt extinguishment and refinancing related costs as noted in the Fourth Quarter and

Full Year 2019 Results press release, page 11.

*Tax impact calculated using a 24% tax rate, except for Akzo Nobel net adjustments.

**Does not foot due to the rounding effect of net adjustments.

2019 Quarterly Financial Results by Reportable SegmentPPG INDUSTRIES AND CONSOLIDATED SUBSIDIARIES (Continuing Operations)

BUSINESS SEGMENT INFORMATION (unaudited)

Q1 Q2 Q3 Q4 Full Year

2019 2019 2019 2019 2019

Net sales

Performance Coatings $ 2,108 $ 2,430 $ 2,313 $ 2,183 $ 9,034

Industrial Coatings 1,516 1,594 1,513 1,489 6,112

TOTAL $ 3,624 $ 4,024 $ 3,826 $ 3,672 $ 15,146

Segment income

Performance Coatings $ 297 $ 425 $ 380 $ 307 $ 1,409

Industrial Coatings 218 235 206 203 862

TOTAL 515 660 586 510 2,271

Items not allocated to segments

Corporate (45) (45) (43) (64) (197)

Interest expense, net of interest income (25) (28) (23) (24) (100)

Legacy items (2) 1 - - (1)

Environmental remediation charges, net (10) (30) (21) - (61)

Business restructuring-related costs, net (3) (182) (18) (19) (222)

Acquisition-related costs (7) (10) - - (17)

Litigation matters, net (4) (3) - (5) (12)

INCOME BEFORE INCOME TAXES $ 419 $ 363 $ 481 $ 398 $ 1,661

Amounts in Millions of USD

47

48

Full Year

2019

Full Year

2018

Net Income EPS(1) Net Income EPS(1)

Reported net income from continuing operations $ 1,243 $ 5.22 $ 1,323 $ 5.40

Business restructuring-related costs, net(2) 168 0.71 53 0.21

Environmental remediation charges, net 47 0.20 58 0.24

Acquisition-related costs 13 0.05 4 0.02

Litigation matters, net 9 0.04 19 0.08

Gain from the sale of a non-operating asset — — (20) (0.08)

Net tax benefit for Tax Cuts and Jobs Act legislation — — (13) (0.05)

Costs related to customer assortment changes — — 14 0.05

Impairment of a non-manufacturing asset — — 7 0.03

Brand rationalization charge — — 4 0.02

Adjusted net income from continuing operations, excluding

certain items(3)

$ 1,480 $ 6.22 $ 1,449 $ 5.92

PPG Reported and Adjusted EPS

$ in millions, except EPS

(1) Earnings per diluted share is calculated based on unrounded numbers. Figures in the table may not recalculate due to rounding.

(2) Included in business restructuring-related costs, net are business restructuring charges, accelerated depreciation of certain assets and other

related costs, offset by releases to previously approved programs.

(3) After-tax impact of foreign currency translation was $37 million, or $0.16 per diluted share for the year ended December 31, 2019.

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