Coatings World - January 2017

PPG’s board of directors approved significant and broad restructur- ing actions to reduce its global cost structure. The actions are focused on certain regions and end-use markets where business conditions are weakest, and they are targeting structural reductions in operating, functional and administrative costs.

“Because of continued slow overall
growth in global demand, we are tak-
ing decisive action to adjust our cost
structure,” said Michael H. McGarry,
PPG chairman and chief executive of-
ficer. “These measures will better align
our resources with anticipated ongo-
ing business conditions and will keep
PPG competitive in the end-markets in
which we participate. Even with this
broad effort to reduce our total costs,
we remain committed to continued in-
vestment in growth-related initiatives
and in geographies with continued
growth potential.”
PPG will record a pretax restructuring
charge of $190 million to $200 million,
or 53-58 cents per diluted share, in the
fourth quarter 2016, of which approxi-
mately $140 million represents cash costs
and $50 million to $60 million is related
to the write-down of certain assets and
other non-cash costs. Of the approxi-
mately $140 million total cash outlay,
about $110 million is expected in 2017,
with the balance to occur in 2018.

In addition to the aforementioned pretax charge and cash costs, approximately $15 million of incremental restructuring-related cash costs are expected during 2017, for certain items that are required to be expensed on an as-incurred basis.

When completed, the company expects the restructuring actions to generate $120 million to $130 million in annual savings, with $40 million to $50 million of savings projected to be realized in 2017 and the remainder of the expected annual savings to be substantially realized by year-end 2018.

Looser Holding Plans to Sell
its Coatings Segment

Looser Holding AG has announced its plans to sell its coatings segment. The intended sale marks the outcome of the strategy review that was announced in the second half of 2015.

Following an overall assessment of the
strategic options, the company manage-
ment has taken the decision to concen-
trate its forces and to focus on the two
divisions of Industrial Services and Doors.
A selling process has been launched for
the Coatings Group, comprising the com-
panies of:
• Feyco AG
• Treffert Coatings GmbH (FEYCO
TREFFERT)

• Industrielack AG (ILAG)

• Schekolin AG
The aim is to transfer these compa-
nies to a new proprietor by the end of
2016, if possible. The main concern is to
achieve a good and sustainable solution
for the Coatings Group’s business and,
in particular, for its employees, accord-
ing to the company.

The Coatings Group is active in the sectors of wood coatings, non-stick coatings and packaging coatings in regional and international niche markets. In light of the coating companies’ high innovativeness, comprehensive product portfolio and leading market positions, the Board of Directors and Group Executive Management are convinced that a wide range of positive development options are open to the companies of the Coatings segment under a new proprietor.

After the planned transaction, the Looser Group will comprise the two segments of Doors and Industrial Services. Both segments are strategically well-placed and are in a competitive position, with a high earnings power. The proceeds from the sale are to be used for the further dynamic development of these two segments.

H.B. Fuller Announces
Proactive Restructuring
Initiative to Accelerate
Growth

H.B. Fuller Company has announced an initiative to accelerate its growth by restructuring various parts of its business to more closely align with the company’s 2020 strategic vision.

“Our results over the past five years
demonstrate the strength of our long-
term growth strategy and the commit-
ment of our employees to the company’s
success,” said Jim Owens, president and
CEO, H.B. Fuller. “Over the past five
years, we have transformed our market
focus, innovation portfolio and manu-
facturing capabilities to deliver value for
customers, shareholders and employees.
As we continue to shift our product port-
folio to a richer mix of higher growth,
higher profitability adhesive market seg-
ments, we need to ensure our resources
align with our vision. The proactive
changes we are announcing will allow us
to invest in the highest opportunity areas
within our portfolio and become more
agile as we support our customers’ suc-
cess and deliver our 2020 plan.”
The restructuring initiative will include
the elimination or relocation of approxi-
mately 220 positions globally by early
2017 across various businesses and func-
tions at the company, along with other
product line and operations enhancements
and efficiencies. The changes the company
is making will allow H.B. Fuller to oper-
ate more effectively and efficiently, while
proactively responding to end-market and
global industry dynamics, such as global
prices for petrochemicals and a significant-
ly stronger U.S. dollar.

“These changes support our plan to deliver 10 percent adjusted EPS growth in 2017 versus 2016 on a comparable 52 week basis,” said Owens. “Our fourth quarter numbers are not yet finalized, but we expect results in line with previous guidance.”