PPG reported financial results for the fourth quarter of 2022 and the full-year 2022. Net sales were down slightly from Q4 2021, posted at $4,185,000 for Q4 2022. Net income was also down 11% from $267,000,000 in 2021 to $238,000,000 in 2022. Adjusted net income dropped 4% from $298,000,000 to $286,000,000 in Q4.
For the full year 2022, net sales from continuing operations were approximately $17.7 billion, up about 5% versus the prior year. Organic sales were higher by 8% driven by higher selling prices. Net income in 2022 decreased versus 2021 due to raw material cost inflation, lower sales volumes, unfavorable foreign-currency translation and higher manufacturing costs related to supply and labor disruptions, partially offset by higher selling prices, restructuring cost savings and acquisition-related synergies.
In 2022, the company paid $570 million in dividends. Capital expenditures totaled about $520 million, which was higher than the prior year due to more normalized spending. The company had about $1 billion remaining on its current share repurchase authorization at the end of 2022.
“We continued to make good progress on our focus to achieve full operating margin recovery, as year-over-year earnings improved in both segments despite more acute pandemic-related demand disruptions in China,” says Tim Knavish, PPG president and chief executive officer. “This earnings improvement was driven by aggregate selling price increases that totaled 19% on a two-year stacked basis, as we remained focused on mitigating the significant cumulative cost inflation incurred the past two years.”
“Looking ahead, we remain highly focused on building further momentum to restore margins in line with our historical profile. In the first quarter, we will continue to prioritize supporting our customers through superior service and products, executing our cost-savings initiatives, and optimizing inventory. We expect the overall demand environment to remain consistent sequentially with the fourth quarter with soft economic activity remaining in Europe and China. However, as the year progresses, we anticipate several positive catalysts that will enable earnings improvement, including certain PPG commercial initiatives with our valued customers and the continued rebound in demand for our technology-advantaged aerospace products. Other catalysts include moderating raw material costs, coatings demand stabilization in Europe beginning in the second quarter, and strong economic recovery in China as the pandemic reopening progresses. Finally, with fewer supply chain disruptions we expect ample commodity raw material availability and improved manufacturing efficiencies. Lastly, I am looking forward to leading PPG in my new role and want to thank our customers for selecting PPG as their supplier of choice, our shareholders for their confidence, and our global employees who demonstrate The PPG Way by making it happen every day.”
Fourth Quarter 2022 Reportable Segment Financial Results
- Performance Coatings segment
|
$ in millions |
4Q 2022 |
4Q 2021 |
Y-O-Y change |
||
|
Net sales |
$2,490 |
$2,507 |
|
-1% |
|
|
Segment income |
$272 |
$243 |
|
+12% |
|
|
Segment income % |
10.9% |
9.7% |
|
|
|
|
Sales volumes |
|
|
|
-4% |
|
|
Selling prices |
|
|
|
+9% |
|
|
Divestitures and wind down of Russia |
|
|
-1% |
||
|
Foreign currency translation |
|
|
-5% |
||
- Industrial Coatings segment
|
$ in millions |
4Q 2022 |
4Q 2021 |
Y-O-Y change |
||
|
Net sales |
$1,695 |
$1,683 |
|
+1% |
|
|
Segment income |
$155 |
$105 |
|
+48% |
|
|
Segment income % |
9.1% |
6.2% |
|
|
|
|
Sales volumes |
|
|
|
-5% |
|
|
Selling prices |
|
|
|
+13% |
|
|
Divestitures and wind down of Russia |
|
|
-1% |
||
|
Foreign currency translation |
|
|
-6% |
||
