CEO Forum
McGarry: PPG’s business performed well in 2015 in a challenging economic environment. Full-year 2015 net sales from continuing operations were $15.3 billion, consistent with the prior
year. The company’s 2015 full-year reported net income from
continuing operations was $1.41 billion, or $5.14 per diluted
share, versus $1.13 billion, or $4.05 per diluted share, in 2014.
Full-year 2015 adjusted net income from continuing operations
was $1.56 billion, representing an increase of 17 percent.
Roy: Yes, our company registered double digit growth in 2015
in the Indian sub-continent, comprising of India, Bangladesh
and Nepal. The growth in profit was much higher and was in excess of 25 percent, largely due to the drop in raw material prices.
Shaver: Although overall revenue in 2015 declined slightly to
$4.1 billion, Axalta finished the year with a strong fourth quarter performance, highlighted by 4. 5 percent net sales growth
year-over-year excluding currency and continued margin improvement. Moreover, our 2015 earnings expressed in EBITDA
increased to $867 million from $841 million in 2014 despite
headwinds from unfavorable currency exchange rates.
Rodriguez: In 2015, our company had a significant revenue
increase as we had optimized production; we also worked to
keep the prices of raw materials without changes, in a country
with an inflation rate of 2 percent per month. Mainly, Sinteplast
grew in sales due to the acquisition of decorative BASF business
(Casablanca brand).
CW: What areas of the paint and coatings
market represent the most growth
opportunities for your company?
Büchner: For our decorative paints business, we have a unique
portfolio of businesses with potential for higher growth levels,
while allowing for diversification of individual country risk. It
also means we have to compete successfully and win in markets
that are very different in terms of value chain, competitive environment and customer and consumer behavior. In the UK for
example, our focus is on increasing the overall market size by
improving the painting experience. One way we are achieving
this is through the launch of the Dulux Amazing Paint service.
We are also continuing our strong focus on innovation, introducing new products with clear customer benefits in terms of
energy savings and well-being.
In our decorative paints business overall, we continue to
reduce the environmental impact of our own operations and
products and are increasingly working with our suppliers to do
the same. We are focusing in particular on reducing our carbon
footprint (including VOCs), identifying opportunities to pro-
mote waterborne paints where possible, and offering products
with additional sustainability benefits.
For our Performance Coatings business, having completed
our major restructuring activities, the next step in delivering
our leading performance vision is to deliver profitable organic
growth and continuous improvement. We are focusing and pri-
oritizing our growth activities by pursuing differentiated growth
strategies. In Marine Coatings, for example, we will continue to
invest in fouling control, sustainable innovation and enhanced
services. Another example is our Protective Coatings business,
in which we are continuing to build our business beyond up-
stream oil and gas. In other parts of our Performance Coatings
portfolio – where our position is often strong, but the headroom
for growth more limited – we want to grow with our markets
while driving operational excellence and controlling costs.
Falder: We try to operate as a very bespoke and highly technically capable supplier so we look for niched business areas
combined with our overall policy of working smart and hard
to create customized and tailored specific products for our customer base. Making what our customers want.
Kamieth: We will continue to push for profitable growth in our
all our businesses with a clear strategy to focus on emerging
markets. Besides China, markets like Mexico and ASEAN play
an important role. In addition, we see substantial growth opportunities by launching both product and process innovations
that serve our customers’ needs for sustainable solutions.
McGarry: As we enter 2016, we anticipate global economic
growth will continue, but at a varied pace and mixed by major
economies. In the Asia-Pacific region, growth will most likely
remain mixed throughout the year, but solid on a full year basis.
Some of this 2016 year-over-year variation will be due to uneven
2015 regional volume patterns. A primary driver for growth in
Asia is increased consumer spending, which is beneficial to PPG
as this effects the majority of our products sold in the region.
Economic expansion in North America is likely to continue
at a modest pace, comparable to 2015, supported by multiple
sectors. We anticipate continued improvement in construction
markets in the U.S. and for Canada to stabilize a lower activity
level realized in the second half of 2015.
Overall, industrial activity is expected to remain modest, but
positive in comparison to the lower than anticipated 2015 level.
We continue to expect solid organic growth in Mexico, supplemented by revenue related acquisition synergies. During 2016,
we will be working with our major national retail or DIY customers on various branding initiatives and continue to build our
PPG Paints brand in our U.S. company-owned stores.
In South America, where our business is relatively small at
about 3 percent of total sales, demand in that region is expected
to remain erratic and subdued. In Europe, we expect the economy to build on the broadening growth rates achieved in 2015,
which would be beneficial to PPG as nearly 30 percent of our
total sales are in that region. Favorable end-use market trends
are expected to continue in 2016 particularly in automotive
OEM coatings. Industry build growth rates in Europe and in
aggregate globally are expected to be positive for the year. Given
that we have substantially reduced our cost structure in Europe,
