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PPG’s Aerospace Business Information Session Montreal, Canada June 4, 2019

PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

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Page 1: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

PPG’s Aerospace Business – Information Session

Montreal, CanadaJune 4, 2019

Page 2: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company.

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, the ability to maintain favorable supplier relationships and arrangements,

the timing of and the realization of anticipated cost savings from restructuring initiatives, difficulties in integrating acquired businesses and

achieving expected synergies therefrom, economic and political conditions in international markets, 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, the effectiveness of our internal control over financial

reporting, the unpredictability of existing and possible future litigation, including asbestos litigation, and governmental investigations. 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 2018 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 earnings, business

disruption, operational problems, financial loss, legal liability to third parties, other factors set forth in Item 1A of PPG’s 2018 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.

All of this information speaks only as of June 4, 2019, and any distribution of this presentation after that date is not intended and will not be

construed as updating or confirming such information. PPG undertakes no obligation to update any forward-looking statement, except as

otherwise required by applicable law. 2

Forward-looking statements

Page 3: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

PPG Investor Relations “Deep Dive” Program

Year Topic(s) Location

2007 PPG Aerospace PPG aerospace facility Huntsville, AL

2008 SigmaKalon Acquisition Overview Offsite

2010 PPG Asia and PPG Auto OEM Coatings BMW facility Greenville, SC

2011 PPG Automotive Refinish Penske Racing facility Charlotte, NC

2012 PPG Industrial Coatings Harley-Davidson facility York, PA

2013 PPG Packaging Coatings Ball Container facility Williamsburg, VA

2014 PPG Architectural CoatingsPPG company-owned stores, Lowes &

The Home Depot locations Dallas, Texas

2015 PPG Comex Cabo San Lucas, Mexico

2016 PPG Research and Development Allison Park, PA

2018 PPG Industrial Coatings PPG/John Deere facilities, East Moline, IL

2019 PPG Aerospace Bombardier facility Montreal, Canada

3

Page 4: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

No financial updates will be provided during today’s presentation.

4

Page 5: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

Today’s presentation agenda

8:30 AM PPG’s Aerospace Business Information Session

Technology and Capabilities

Corporate and Business Overview

Growth Opportunities

Aerospace Industry Dynamics

Additional Q&A / Wrap Up

Conclusion

11:30 AM Plant Tour

Page 6: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

PPG speakers and attendees

Daniel G. Korte

Global Vice President,

Aerospace

John Bruno

Director

Investor Relations

Vincent J. Morales

Senior Vice President

& CFO

6

Page 7: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

PPG executive profilesDan KorteGlobal Vice President, Aerospace

Dan Korte is global vice president, aerospace, PPG.

He joined PPG in May 2018 with more than 30 years of aerospace and defense industry leadership experience in design and systems engineering,

integrated product team leadership, supplier management and program management. In his most recent role at LMI Aerospace, Inc., Korte served as the chief

executive officer and a member of the company’s board of directors. Prior to LMI, he progressed through various roles at Boeing, including program manager, F/A-

18E/F; vice president, supplier management and procurement; and vice president and general manager, global strike systems. He also served as president of the

defense business at Rolls-Royce in London.

Korte currently serves as director and member of the audit committee of Woodward Inc., an aerospace and industrial company. He also serves as a member of the

board of trustees of the St. Louis Science Center; board member of the St. Louis University Master of International Business program; member of the executive

committee and head of the development committee of Southern Illinois University (SIU); and member of SIU’s Industrial Advisory Board, where he advises the College

of Engineering on technology and curriculum. In addition, Korte serves as a board member and member of the nominating and technology committees of the United

Way of Greater St. Louis.

Korte earned a bachelor’s of science degree in electrical engineering and an associate of applied science in computer engineering from Southern Illinois University. He

holds a master of business administration from Lindenwood University in Missouri. He is also a graduate of the Strategic Thinking and Management for Competitive

Advantage Program at the University of Pennsylvania’s Wharton School of Business.

7

Page 8: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

PPG executive profilesVincent J. MoralesSenior Vice President and Chief Financial Officer

Vince Morales is senior vice president and chief financial officer

of PPG. He serves on the company’s executive and operating

committees.

Morales joined PPG in the corporate controller’s office, Pittsburgh headquarters, in

1985. He then advanced through finance and accounting assignments at PPG

facilities such as supervisor, shared accounting services, at the Chillicothe, Ohio,

shared services center and director, information and financial services, at the

former PPG glass plant in Mount Zion, Illinois.

Morales returned to Pittsburgh in 2000 as manager, chemical revenue recognition,

and then became director, internal financial reporting, in 2001. He was named

director, investor relations, in 2004 and then promoted to vice president in 2007.

Morales added responsibility as corporate treasurer in 2015. He was appointed

vice president, finance, in June 2016, and he assumed his current role in March

2017.

A native of Pittsburgh, Morales earned a bachelor’s degree in accounting from

Robert Morris University and a Master of Business Administration from the Ohio

State University.

John BrunoDirector, Investor Relations

Since July 1, 2017, John Bruno has served as director,

investor relations at PPG, a leading coatings and specialty

products and services company based in Pittsburgh, Pennsylvania. He oversees

all of PPG’s interactions with the investment community.

Bruno has broad financial and leadership experience in his over 20 years with

PPG since 1995. Before his current role, he was located in Hong Kong as chief

financial officer, Asia Pacific, from November 2013 to June 2017, responsible for

all finance matters in the region and overseeing approximately 300 employees.

Prior to that, Bruno was located in Pittsburgh as director, corporate audit

services, including an appointment as the Secretary of the Audit Committee of

the PPG Board of Directors from December 1, 2009 to November 1, 2013, and

an additional interim chief compliance officer role from April to November 2013.

From 2007 to 2009, he was located in Rolle, Switzerland to support the

integration of PPG’s SigmaKalon acquisition and then serving as corporate

controller, Europe, Middle East and Africa. His previous roles included senior

finance positions in the automotive replacement glass, insurance and services

businesses and in corporate development. Prior to joining PPG, Bruno spent six

years in financial positions at United States Steel Corporation from 1989 to 1995

and was an adjunct accounting professor at Duquesne University, Pittsburgh,

Pennsylvania, from 2000 to 2007.

Bruno holds bachelor of science in finance and master of business administration

degrees from Duquesne University and is an active certified public accountant.

8

Page 9: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

Corporate and Business Overview

Page 10: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

47,000 employees protecting and beautifying our worldA global maker of paints, coatings, and specialty materials.

A leader in all our businesses: construction, consumer products, industrial

and transportation, and aftermarkets.

$15.4B

In net sales from

global operations

in 2018

PPGFounded in 1883 and

headquarters in

Pittsburgh, Pennsylvania

Operations47,000 employees

operating in more than 70

countries worldwide

R&D6 core Research &

Development Centers

with more than 70

global Technical

Centers

#205Fortune 500

Ranked 205

NYSETicker symbol “PPG”

10

Page 11: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

Lightweight Reliability Efficiency

Sustainability Performance

PPG’s Aerospace Business

Aerospace supplier

since 1927

Glass Transparencies Coatings, Sealants, & Packaging

Advanced

Plastic Transparencies

1927 1999 2006

The Segments

We Serve

Commercial Aviation General Aviation Military

An Industry Driven

By Innovation

Bringing Innovation to Aerospace Since 192711

Page 12: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

0

3,000

1950 1965 1980 1995 2010

Supply

Fle

et S

ize

Develo

pm

en

t

An industry that’s driven by the ability to meet specificationsLockheed C-130: Flying with PPG specified products since 1954

Specify Requirements

Develop Product

Certify / Qualify

Manufacturing Site and

Process Approval

Flow Spec to Sub-Tiers

Flow Spec to Aircraft

Operators

OEM & PPG Collaborative

Development Steps

Collaborative efforts to develop products and specifications

for new aircraft ensure long-term partnership12

Page 13: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

$608

$567

$206

$178

$150

$87

$41

$36

$23

$11

Airbus A320/Neo

Boeing 737NG/MAX

Airbus 350XWB

Boeing 787

Boeing 777X

Airbus A330NEO

Airbus A220

Lockheed Martin F-35

Boeing 767/KC46

Gulfstream G500/600 Backlog Value

PPG is trusted by the world’s largest aviation programsIndustry Backlog Value 2019 $US-BPPG Content

Source: Teal Group

13

Page 14: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

Coatings

Adhesives &

Sealants Transparencies Packaging CMS

PPG

3M

Akzo Nobel

BASF

GKN

HB Fuller

Henkel

Mankiewicz

Nordson EFD

Saint Gobain Sully

Sherwin Williams

Wesco

A broad range of products & services

14 Note: Selected competitors - not representative of entire industry

Page 15: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

Technology and Capabilities

Page 16: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

PPG’s products cover the entire airframe

Coatings

Sealants

Transparencies

Engine

High Temperature Coatings

Primer

Anti-Corrosion

Top Coat

AestheticsCabin

Dimmable, Scratch

Resistant

Flight Deck

Anti-Ice, Bird Strike Protection,

UV Blockage

Fasteners

Corrosion Protection

Lightning Protection

Radome

Electrically Conductive

Engine

High Temperature Sealant

Fuel Tank

Vapor Barrier

Lightning Protection

Aerofaring

Aerodynamic Smoothing

16

Page 17: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

• Corrosion Protection

• Aesthetics

• Solar Heat Management

• Thermal Barrier

• Aerodynamics

• Military Requirements

…and help fight corrosion on aircraft structure

Our coatings provide color…

Aluminum/Composite Substrate

Surface Pretreatment

Chromated Exterior Primer

Chrome Free Exterior Primer

Structural Primer

PPG Desothane® HS Topcoat

Basecoat Clearcoat (BCCC)

Chrome Free Wash Primer

Standard High Solid Exterior Commercial

Topcoat System

17

Page 18: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

Our technology improves product performanceBrand Differentiation Heat Reflective

PPG Andaro® coatings add vibrancy

Coated with

PPG Andaro®

special-effect

pigments

Solar heat management coatings allow darker colors

Traditional

coating system

Our coating innovations enhance color intensity and help reflect heat

away from the aircraft18

Photo by Mikhail Okrochkov

Page 19: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

Creating / capturing value – levering PPG capability

• Chrome & metal free

• 90-95% material usage – no overspray

• Uniformly coats complex parts (weight control)

• Eliminates process steps

PPG Aerocron™ Electrocoat primer and coating system

Automotive

PPG Pioneer (Steel)

Aerospace

PPG Pioneer 2010’s

(Aluminum)

PPG promotes sustainability with products that eliminate chrome

and reduce waste19

Page 20: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

• Vapor Barrier

• Pressure Barrier

• Lightning Protection

• Aerodynamic Smoothing

• Corrosion Protection

• Electrical Conduction

…that protects the aircraft from the harsh flight environment

Our sealants provide a critical barrier…

Products Designed To Save Time, Reduce Rework, and Improve Quality

PPG Semplug™ Sealants

PPG Seafoam™ Sealants

PreCast Sealants

PPG PRC® Seal Caps

20

Applying Fuel Tank Sealants

Page 21: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Wide Body

Lb

s.

of

Seala

nt

Creating / capturing value – improving aircraft performanceLightweight sealant technology (PR-2870)

PR-2870 Sealant

Packaged in PPG Semkit®

• Extends range and improve operating efficiency

• The Next Gen Corrosive Inhibitive Sealant

• REACh Compliant & Chrome-Free

• Environmentally Friendly

• Cures Faster

• Lighter Weight

Gen IV Sealants reduce weight by

thousands of pounds

PPG continually innovates products to reduce airframe weight and

improve aircraft operating efficiency

Weight Savings on Wide Body Aircraft

Gen I

Gen II

Gen III

Gen IV

SG = 1.6 SG = 1.3 SG = 1.1 SG = 0.75

SG = Specific Gravity

21

Page 22: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

Creating / capturing value – customer manufacturing performance

Airframe Assembly Speed PPG products decrease customer cycle time to support increasing build rates

UV cure sealants reduce assembly line cure time Pre-molded seal caps speed the assembly process

• “Infinite” application time

• Cures in seconds

• Excellent depth of cure: ~ 15mm

• Low density: 1.15 specific gravity

• Solvent-free and low shrinkage

• Fast installation

• Reduces waste

• Eliminates “artisan skill”

• Lightning strike protection

PPG innovations in UV cure materials and pre-molded seal components

increase aircraft assembly speed 22

Page 23: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

• Critical Aerostructure

• Crew & Passenger Protection

• Anti-Ice

• Optics & Visibility

• Solar Protection & Control

• Dimmable

• Ballistic Protection

• Lightning Strike Protection

• Special Mission

…and act as critical aerostructure to help keep passengers and crew safe

Our transparencies provide a clear view…Aerodynamic

Sealant

Structural Ply – Glass or Plastic

Interlayer – Vinyl or Urethane

Electrical heater film

Aluminum

Frame

Windshield

Laminate

23

Page 24: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

Creating / capturing value – improving aircraft performance

Composite windshields reduce

aircraft weight by more than 100 lbs

Lightweight Predictable

Extend range and improve operating efficiency

PPG WinLogic™ sensors minimize

unscheduled windshield removals

Reduce aircraft maintenance costs

Our transparency innovations improve airline operating costs by saving

fuel and reducing unscheduled maintenance24

Page 25: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

Creating / capturing value – improving product performance

PPG window technology enhances crew / passenger safety by reducing

exposure to ultraviolet and high energy visible (HEV) light

Increased blockage over a

greater range

Solaron Blue Protection™Current Blockage

~40% blockage ~80% blockage

~100% blockage

PPG’s Solaron Blue Protection™ outperforms current technology by

shielding ~100% UV and most HEV light

UVA

HE

V

UVB

~75% blockage

~100% blockage~100% blockage

25

Page 26: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

Creating / capturing value – levering PPG capability

• Reduced weight versus acrylic

• Improved scratch resistance

• Improved chemical resistance

• Improved impact resistance

PPG Opticor™ advanced transparency material

PPG’s Specialty Coatings & Materials

Optical Products

PPG’s Aerospace

Flight Deck and Passenger Windows

Revolutionary PPG Opticor™ is first FAA-qualified transparent material

for aerospace since polycarbonate in 1960’s26

Page 27: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

• Process Efficiency

• Right Sizing

• Foreign Object Debris Reduction

• Contaminant Containment

…and provide customized solutions that ‘right-size’ product delivery to reduce waste

Our packaging systems simplify manufacturing…

Packaging Mixing Dispensing Application Removal

27

Page 28: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

Creating / capturing value – application packaging

UV Blocking Packaging

• Blocks UV light, preventing UV-activated materials from reacting

• Non-leaching material reduces likelihood of contamination

Semco® Glow-in-the-Dark Applicators

• Reduces orphaned debris during final assembly

• Made from proprietary GID formula

• Excellent for use in any area where limited light is available

PPG innovations for product application streamline customers’ production environments28

Page 29: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

• Just-In-Time

• Waste Elimination

• Shop Floor Control

• Critical Documentation Management

• Hazardous Material Management

…and manage environmental and compliance requirements

Our chemical management services help customers optimize supply chain…

Customer site shop

floor control using RFID

and PPG smartphone

app to manage

inventory movements

29

Page 30: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

PPG technology: adding value to the aerospace industry for nearly 100 years

Investment in technology to create mutual value with customers

Improving aircraft performance and operations

• Lightweight and aerodynamic products

• Continuous reliability improvement

Enhancing product performance

• Additional functionality

• Simplified product use and application

Improving customer manufacturing performance

• Products that improve throughput

• Products that reduce waste and costs

Safety and Sustainability

• Products that enhance safety for passengers and crew

• Environmentally friendly products

• Carbon footprint reduction

Protect and beautify

• Anti-corrosion & degradation

• Color technology leader

PPG well positioned for continued growth in the future30

Page 31: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

It’s a global industry

USCA

EMEA

AP

LA

USCA

EMEA

AP

LA

PPG supports the aerospace industry around the entire globe

Industry

31

Page 32: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

It’s a diversified industry…

OEM

Aftermarket

…supported by a global PPG network

32

Page 33: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

That values sustainability

Dedicated to protecting

the environmentWe value our employees We value our communities

$3.7 million committed to the

COLORFUL COMMUNITITES®

program through 2018

Record low number of

injury cases in 2018

5.6% decline in total

waste in 2018

33

Page 34: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

Aerospace Industry Dynamics

Page 35: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

The industry is defined by three principle types of customers

Aircraft build rates and fleet maintenance are measures of industry size

Commercial Aviation

General Aviation & Business Jets

Military Fighters & Transports• Aircraft build rate dependent

• Aftermarket / maintenance activity

Commercial Aviation

General Aviation

Military

35

Page 36: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

What’s driving military growth?

• Heightened geopolitical tension

• Military spending increasing

• Replacing aging fleets

• Advanced aircraft

• Maintenance intensity

Maintenance intensity of latest generation replacements creating greater

aftermarket opportunity

1,071 1,040 1,017 937 853 931 976 1,027 983

0

500

1,000

1,500

2,000

2014 2015 2016 2017 2018 2019 2020 2021 2022

Bu

ild

s

Military Build Rates

Source: Forecast InternationalFighters & Transports

36

Page 37: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

What’s driving business aviation growth?

• Growing / aging fleet

• High utilization

• Low used inventory

• Higher maintenance spending

Stable fleet growth with increasing aftermarket opportunity

800 741 661 667 616 689 750 693 655

0

500

1,000

1,500

2,000

2014 2015 2016 2017 2018 2019 2020 2021 2022

Bu

ild

s

Business Jet Build Rates

Private & Business Aircraft Source: Forecast International

37

Page 38: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

1,627 1,669 1,724 1,761 1,8392,064 2,164 2,164 2,190

0

500

1,000

1,500

2,000

2,500

2014 2015 2016 2017 2018 2019 2020 2021 2022

Bu

ild

s

Commercial Build Rates

Source: Forecast International

26,540

Growth

xx%

Industry fundamentals remain strong

Commercial Aviation

Airlines and Freighters

Commercial aviation is the biggest growth driver

7.0% 7.2%8.0%

6.6%6.0% 6.0%

3.9%

5.9% 6.1%

-1%

1%

3%

5%

0%

2%

4%

6%

8%

10%

2014 2015 2016 2017 2018 2019 2020 2021 2022

GD

P Y

OY

% C

ha

ng

e

Tra

ffic

RP

M Y

OY

%

Worldwide Traffic and GDPRevenue Passenger Miles

• High backlog for new aircraft

• Demand for new, more efficient aircraft

• Demand for greater passenger capacity

• Traffic drives higher maintenance spend

Source: Economic Indicators and Airline Monitor

38

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0

10,000

20,000

30,000

40,000

50,000

2018

Glo

bal

Fle

et

Siz

e

What’s driving commercial growth?

It’s less expensive than ever to fly…..

• More efficient aircraft

• Favorable interest rates

• Stable fuel prices

• Airline route and operation optimization

• Aircraft utilization at all-time high 81.9%

….doubling the global commercial fleet by 2037

21,45037,390

47,990

26,540

Growth

71%

10,850

Replacement

29%

CAGR: 4.1%

2037

10,600 Retained fleet

Source: SpeedNews

Demand for commercial air travel will double the global fleet in 20 years39

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More of the world can afford to fly

• Global GDP

• Emerging region traffic

• More cities connected together than ever before

Asia Pacific42%

North America

17%

Europe18%

Middle East11%

Latin America6%

Russia & Central Asia3% Africa

3%

Airplane Deliveries By Region Next 20 Years

A greater middle class in emerging regions

Source: SpeedNews

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And more of the world is flying

More of the world now travels by air – 100 million people flew for

the first time in 2017

18 million passengers in 1946…over 4 billion today

Source: ICAO / IATA December 2017

0

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• Growth in air travel continues in all regions

• Emerging regions sustaining higher growth with

population of new flyers

41

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0

5,000

10,000

15,000

20,000

25,000

30,000

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Giving the industry a global reach

Annual Fleet Size North America vs Rest of the World

0.4% -1.2% 1.9%

6.5% 4.3%

4.7%

2006-2019 CAGR

Rest of the World: 4.9%

North America: 0.3%

Source: Oliver Wyman at MRO Americas

The industry has become more global as emerging regions increase

demand for air travel

North America Fleet Growth

• Mature flying population

• Low growth in fleet size

‘Rest of World’ Fleet Growth

• Impact of 2008 recession minimal

• Driving global fleet dynamics

• Exceeds global GDP growth

Recession

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Backlog Net Orders

The industry is more geographically diversified

Recession

Commercial Aircraft Backlog

Source: Airbus and Boeing annual reports

Globalization is making the industry less sensitive to recession than in the past

Recessions before 2008

• Aircraft backlog reduced

• Aircraft deliveries reduced

2008 Recession

• Global backlog supported build rate stability

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Growth Opportunities

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An integrated vision to growth

Best-in-class service Focused

Acquisition Process

Voice of customer

innovation

Aerospace delivers consistent growth

2012-2018 growth driven by broader customer

reach and increased adoption of new technologies

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PPG acquisition history

PPG Aerospace

Complex Glass

PRC-DeSoto

Advanced Coatings

and Sealants

1927 1999 2006 2013 2015

Sierracin

Lightweight

transparencies and

thin film technology

Deft

Military primers and

topcoats

Le Joint Français (LJF)

Sealants

Cuming Microwave

Corp. (CMC)

Specialty Coatings

Transparencies Coatings Sealants

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Our aerospace research centersAllison Park, PAHarmarville, PA

Burbank, CA

Sylmar, CA

47

Bezons, FranceShildon, UK Gonfreville, France

Transparencies

Coatings & Sealants

Coatings

Sealants

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Our aerospace manufacturing locations

Transparencies

Coatings & Sealants

Coatings

Sealants Milan, Italy

Sylmar, CA

Boston, MA

Mojave, CA

Huntsville, AL

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Bezons, FranceShildon, UK Gonfreville, France

Strong Operational Excellence and Customer Qualification, AS9000 and

NADCAP certified

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Adding value with integrated solutions and serviceApplication Support Center (ASC)

Conformance

Testing

Third Party

Packaging

Regulatory Compliance

& Reporting

Management

• Fast response time

• Local support staff

• Sales and customer support

• Technical specialists

• Regional inventory management

• Same day delivery when required

Providing services that add value close to the customer

Filling

Component

Manufacturing Color Blending

• Supply chain management

• Hazardous material reporting

• Customer inventory optimization

• Designated source delegation

49

ASC Network

PPG Sales Offices

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Supporting Future Growth in Asia

Providing services that add value close to the customer

New Singapore ASC

• Support SEA region growth

• Coatings and Sealants Packaging Center

• Chemical Management Services

• Supports COMAC ARJ & C919 builds

• Supports Boeing 737 & Airbus 320

final assembly

• Support region airlines

Application Support Center (ASC)

Suzhou, China Tianjin, China

Singapore

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Page 51: PPG’s Aerospace Business Information Session/media/Files/P/PPG-IR/presentations/investor... · PPG Investor Relations “Deep Dive” Program Year Topic(s) Location 2007 PPG Aerospace

Our aerospace customers

Global Customer ProfileOEM: Airplane Manufacturers

Sub-Tiers: Critical Structure, Systems, Subsystems, Materials

Airlines: Passenger and Freight

MRO: Maintenance, Repair, Overhaul

Latin AmericaOEM ~4

Sub-Tiers ~80

Airlines ~16

MRO ~12

EMEAOEM ~22

Sub-Tiers ~150

Airlines ~69

MRO ~50

Asia PacificOEM ~10

Sub-Tiers ~70

Airlines ~71

MRO ~45

PPG’s breadth of reach supports the entire global industry

USCAOEM ~28

Sub-Tiers ~360

Airlines ~52

MRO ~40

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• Nearly 100 years in aerospace

• Close alignment and long history with OEMs

• Technology leader with broad range of materials/products/qualifications

• Continuous investment in technology, innovation, and operations

• Technology incubated by cross pollination with other PPG businesses

• Global footprint to support growth in all regions

• High growth industry driven by continuous innovation and global demand for air travel

Summary

PPG well positioned for continued growth52

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2019 Investor Deep Dive

Image Courtesy of Bombardier

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Notes

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Notes

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Notes

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Notes

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