01—Abstract
Summary
Summary of the 10-K filed February 20, 2025. Cited figures are marked; the original filing is the authoritative source.
PPG Industries, Inc. reported net sales of $15.8 billiona for 2024, a decrease of 2% from 2023, as lower sales volumes and unfavorable foreign currency translation and divestitures reduced sales, partly offset by record aerospace coatings sales.
Income before income taxes rose $162 million to $1,852 millionb, driven primarily by lower raw material costs, lower performance-based compensation and restructuring savings, partially offset by overhead inflation and lower sales volumes. Earnings per diluted share from continuing operations were $5.72 versus $5.16 in 2023, and adjusted earnings per diluted share were $7.87, up 6% from $7.42. Cash from operating activities from continuing operations declined to $1,391 million from $2,294 million, primarily due to unfavorable working capital changes.
PPG completed the sale of its U.S. and Canada architectural coatings business and its silicas products business in December 2024 and November 2024, respectively. The U.S. and Canada architectural coatings business is presented as discontinued operations, with a loss on sale of $285 millionc, resulting in a net loss from discontinued operations of $228 million and a reported net income attributable to PPG of $1,116 million. In October 2024, PPG approved a cost reduction program with anticipated annualized pre-tax savings of approximately $175 million, and recorded a $239 million pretax restructuring charge in the fourth quarter.
A material item for investors is the Di Gregório litigation in Brazil. Westlake has informed PPG that a Brazilian court entered an award against PPG, which PPG believes Westlake is obligated to satisfy under the 2012-2013 separation agreements; PPG has filed a lawsuit against Westlake with a trial date of May 6, 2025, and characterizes its risk of loss as remote. Management expects a low single-digit percentage organic sales growth in 2025, with a 2025 effective tax rate expected in the range of 23%d to 25%.
02—Key points
Key Highlights
- Net sales of $15.8 billion in 2024, down 2% year over year, with sales volumes declining and unfavorable currency and divestitures reducing sales; aerospace coatings reached record sales.
- Income before income taxes of $1,852 million, up $162 million, driven by lower raw material costs, lower performance-based compensation and restructuring savings.
- Diluted EPS from continuing operations of $5.72 (vs. $5.16); adjusted diluted EPS of $7.87, up 6% from $7.42.
- Net income attributable to PPG of $1,116 million, including a $228 million loss from discontinued operations tied to the $285 million loss on the sale of the U.S. and Canada architectural coatings business.
- Cash from operating activities from continuing operations fell to $1,391 million from $2,294 million, mainly due to unfavorable working capital changes.
- Launched an October 2024 cost reduction program with approximately $175 million of anticipated annualized pre-tax savings and roughly 1,800 positions net reduction.
- Returned capital through $752 million of share repurchases and $622 million of dividends in 2024; approximately $2.8 billion remains under the repurchase authorization.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, PPG Industries kept $0.07.
- Revenue$15.85B100.0%
- Cost of revenue−$9.25B58.4%
- Gross profit$6.59B41.6%
- Operating costs−$5.25B33.1%
- Operating income$1.34B8.5%
- Interest, other & tax−$228.0M1.4%
- Net income$1.12B7.0%
Where FY2024 revenue went
$15.85B- Cost of revenue: $9.25B, 58% of revenue
- SG&A: $3.39B, 21% of revenue
- Net income: $1.12B, 7.0% of revenue
- R&D: $447.0M, 2.8% of revenue
- Other operating costs: $1.41B, 8.9% of revenue
- Interest, other & tax: $228.0M, 1.4% of revenue
Kept 7.0% as net incomeInterest, other & tax $228.0M · 1.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 20, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $15.85B$16.24B | −2.4% |
| Cost of Revenue | $9.25B$9.68B | −4.4% |
| Gross Profit | $6.59B$6.56B | +0.4% |
| R&D Expenses | $447.00M$446.00M | +0.2% |
| SG&A Expenses | $3.39B$3.40B | −0.3% |
| Operating Income | $1.34B$2.67B | −49.8% |
| Net Income | $1.12B$1.27B | −12.1% |
| EPS (Basic) | $4.77$5.38 | −11.3% |
| EPS (Diluted) | $4.75$5.35 | −11.2% |
| Shares Outstanding (Basic) | 233.80M236.00M | −0.9% |
| Shares Outstanding (Diluted) | 234.90M237.20M | −1.0% |
05—Questions
Frequently Asked Questions
What drove the change in PPG's 2024 profitability?
Income before income taxes increased $162 million to $1,852 million, primarily due to lower raw material costs, lower performance-based compensation costs and restructuring savings, partially offset by overhead inflation and the impact of lower sales volumes.
Why did reported net income fall relative to adjusted results?
Reported net income attributable to PPG of $1,116 million reflects a $228 million loss from discontinued operations, mainly the $285 million loss on the sale of the U.S. and Canada architectural coatings business. Adjusted EPS of $7.87 excludes items such as acquisition-related amortization, business restructuring-related costs and portfolio optimization charges.
What is the status of the Di Gregório litigation?
A Brazilian court entered an award against PPG, which remains the nominal defendant. Westlake told PPG it will not post a bond or pay the judgment, although it will continue to defend the case and pursue an appeal. PPG filed a lawsuit against Westlake in Delaware Court of Chancery, with a trial date of May 6, 2025, and states it believes the risk of loss is remote.
What does PPG expect for 2025?
PPG expects organic sales growth of a low single-digit percentage for 2025, a slow start given challenged European and global industrial demand, and a 2025 effective tax rate from continuing operations of 23% to 25%. Capital expenditures are expected to be approximately $725 million to $775 million.
What balance sheet and debt metrics did PPG report?
At year-end 2024, total debt was $5.8 billion, with cash and short-term investments of $1.4 billion. Total Indebtedness to Total Capitalization was 45%, compared with a covenant maximum of 60% (65% after acquisitions above $1 billion). The company had a $2.3 billion unsecured revolving credit facility with no amounts outstanding.
06—Continue