PPG released the financial report for the first quarter of 2020
PPG released the financial report for the first quarter of 2020
April 30, 2020
the net sales in the first quarter of 2020 reached nearly $3.4 billion, a decrease of about 7% over the same period last year, and a decrease of about 5% based on the unchanged exchange rate
in the first quarter, the diluted earnings per share was $1.02 and adjusted diluted earnings per share was $1.19 when the "confirm" key was pressed at the same time
it is estimated that the novel coronavirus epidemic will have an adverse impact on net sales and diluted earnings per share, with the amount of impact of US $225 million and US $0.35 respectively
cash and cost control measures were quickly implemented
cash and short-term investment at the end of the quarter was about $1.9 billion; In April, the fund was supplemented by short-term loans of $700million
completed the "reinforcement acquisition" of ICR and alpha coating technologies
PPG today announced its financial report for the first quarter of 2020, achieving net sales of about $3.4 billion, a decrease of about 7% over the same period last year. The sales price of coatings increased by more than 1% year-on-year. The total sales volume decreased by about 8% compared with the same period last year. It is estimated that the epidemic of covid-19 will have an adverse impact on the total sales, about US $225million, with an impact range of about 6%. Exchange losses have an adverse impact on net sales, with an impact of more than 2%, about $75million. The acquisition of related businesses (excluding divested businesses) contributed to a nearly 2% increase in sales
in the first quarter of 2020, the net profit was US $243million, equivalent to US $1.02 per diluted share, and the adjusted net profit was US $282million, equivalent to US $1.19 per diluted share. In the first quarter of 2019, the net profit was $312 million, equivalent to $1.31 per diluted share, while the adjusted net profit was $330 million, equivalent to $1.38 per diluted share. In addition to other regular adjustments, the adjusted financial performance in 2020 also includes a capital exclusion: due to the increase in bad debt reserves caused by the covid-19 epidemic, the after tax expense of bad debt reserves increased by $0.10. The effective tax rate before and after adjustment in the first quarter of 2020 is about 22%, which is in line with expectations. The effective tax rate before and after adjustment in the first quarter of 2019 is about 24%. See below for details of the performance before and after adjustment
"our first quarter results show two important phenomena: in February, China's economic activity development pressed the 'pause button'; in March, the global market demand generally fell sharply. The novel coronavirus epidemic situation is becoming increasingly severe, and we have always been committed to putting the safety and health of employees, customers and all stakeholders in the first place." Michael H. McGarry, chairman and CEO of PPG, said: "In the unprecedented difficult period in the company's development history, our global employees go all out and make great efforts to protect everyone around us. I am deeply proud of them. Whether in factories, laboratories, sales stores or distribution centers, they strictly abide by the safe operation specifications and provide our customers with reliable core products and high-quality services. Considering the novel coronavirus epidemic is spreading As it continues to spread, we have also increased and accelerated the donation of materials from the State Key Laboratory of food contact materials of Changzhou inspection and Quarantine Bureau of Jiangsu Province to test food contact materials such as colored plastic lunch boxes and plastic cups. "
"From the perspective of financial situation, until the first ten days of March, except for some businesses in the Chinese market, the vast majority of our businesses have reached or even exceeded the performance development goals we set at the beginning of this year. In addition, our diluted earnings per share has also achieved a low double-digit growth rate. The global architectural coatings and packaging coatings business has achieved solid performance, and the aviation coatings business has also achieved sustained growth. However, In the last two weeks of March, many large automotive original equipment manufacturers (OEM) customers had to take production downtime measures; Many architectural paint stores in some countries were forced to close due to the suspension ban; Due to the implementation of 'foot ban' in many countries, the mileage of vehicles and aircraft flying around the world has decreased rapidly. "
"We have taken timely and effective measures to adapt to the current business development environment, including the implementation of cost control plans and continuous attention to cash generation and liquidity management. The specific implementation plans include the previously announced salary cuts for senior executives, the closure of some production bases and distribution centers, the arrangement of temporary holidays for employees in the business departments most affected by the epidemic, the reduction of daily expenses and deferred capital expenditure of all businesses and functional departments, etc. in addition, We also continued to implement the previously announced business structure adjustment plan, achieving cost savings of about $20million in the first quarter. At present, we are accelerating other related projects, and it is expected that the annual business structure adjustment can achieve cost savings of $million. We will continue to assess the development of the crisis and implement response and management measures. We will decide whether it is necessary to take further cost control and business structure adjustment according to the development of the epidemic. "
"looking into the future, we expect that the level of customer demand will still be seriously affected. The automotive original equipment manufacturer (OEM), automotive touch up paint and aviation paint business will also face a significant decline in sales. However, in some other business areas, such as packaging paint, global retail (DIY) Building coatings, durable industrial protective coatings and military products, etc., the impact of the epidemic on these markets is relatively small. In addition, our production base in China has fully resumed work, and economic activities in this region are gradually returning to the level before the epidemic. We will continue to focus on prudent management of cash flows and balance sheets. By the end of this quarter, we had about $1.9 billion in cash at our disposal, and we have begun to continue to optimize our overall liquidity. Finally, I want to say that I have great confidence in our global team. Their skills and experience can enable us to effectively survive this challenging and difficult period. We will certainly be able to get out of the crisis and create a brilliant future. "
performance of business departments in the first quarter of 2020
the functional coating business achieved a net sales of nearly $2billion in the first quarter, a decrease of $100million over the same period last year, a decline of nearly 5%. Based on the constant exchange rate, the net sales decreased by about 3% compared with the same period last year. The increase of product price contributes more than 2% to net sales. Acquisition related businesses increased sales by about 1%, equivalent to about $20million, mainly due to the acquisition of dexmet, texstar and ICR. However, the decrease of 6% in sales volume offset the increase in sales brought by the acquisition business, with an impact of about US $125million. Adverse exchange rate factors also had a negative impact on net sales, with an impact of about $40million, a year-on-year decrease of nearly 2%. The covid-19 epidemic reduced sales by about $90million
although the aviation coating business has maintained a high sales volume in the first two months of this quarter, the sales volume fell in March due to the shutdown of customer production lines and the weak demand of commercial after-sales market, resulting in a low single digit decline in the total sales volume in this quarter. Although the increase in product prices and the acquisition business drove the sales growth, the decrease in sales caused by the significant reduction in global vehicle mileage had an adverse impact, and the net sales of automotive touch up paint fell by a low median. Excluding the impact of exchange rate changes and acquisition business (organic sales), the annual net sales of architectural coatings in the Americas and the Asia Pacific region achieved a low single digit growth, with different growth rates in all channels and regions. The organic sales of PPG Comex business in Mexico and the sales of DIY business in the United States and Canada all achieved median single digit growth. Due to the suspension ban, the sales volume of products in the Chinese market fell, and the sales volume of industrial protection and marine coating business fell in low single digits. Despite the good business development in the first two months of the first quarter, the organic sales of architectural coatings in Europe, the Middle East and Africa (EMEA region) fell in low single digits due to the weak market demand caused by the forced temporary closure of retail paint stores in several countries in southern Europe in March
in the first quarter, the functional coating business achieved a net profit of $272million, a decrease of $25million or about 8% from the same period last year. This includes the adverse impact of exchange rate changes, amounting to $7million. The epidemic has led to a decline in sales, which has an adverse impact on net profits; However, the increase in product prices, cost control measures and business structure adjustment measures offset the impact of adverse exchange rate factors to a certain extent. Excluding the factors of exchange rate changes, the impact of novel coronavirus epidemic on the net profit of functional coatings is expected to be $35million
the first quarter net sales of the coating business in the industrial sector was about US $1.4 billion, a decrease of US $145million over the same period last year, a year-on-year decrease of nearly 10%. Thanks to the acquisition of Huafu and heimerat, the contribution rate of acquisition related businesses to sales is about 4%, approximately US $60million. The sales price increased slightly in this quarter. Adverse exchange rate factors had a negative impact on net sales, with an impact of about $35million, a year-on-year decrease of nearly 2%. The sharp decline in demand caused by the epidemic led to an 11% decline in sales. The impact of the epidemic on the sales of coatings in the industrial sector is about US $135million
due to the significant decline in the output of the global automotive industry, the paint sales of automotive original equipment manufacturers (OEMs) fell in high and medium figures compared with the same period last year. In the field of industrial coatings, although the acquisition activities brought some benefits, the industrial production activities in most regions slowed down due to the shutdown of customer factories, and the net sales fell in the middle single digits. Organic sales of packaging coatings fell in single digits compared with the same period last year, mainly due to the decrease in product sales caused by the suspension of customers in the Chinese market due to the epidemic, which offset the slight increase in product prices. The sales of packaging coatings in the United States, Canada and Latin America have increased
in the first quarter, the net profit of the coating business in the industrial sector was $181 million, a year-on-year decrease of $37million, or about 17%, including the adverse impact of exchange losses, which was about $5million. The net profit of the coating business in the industrial sector was also adversely affected by the decline in sales volume caused by the suspension of customers due to the epidemic, but these effects were offset to a certain extent by cost control measures, cost savings caused by the adjustment of business structure and the increase in product prices. Excluding the factors of exchange rate changes, the impact of novel coronavirus epidemic on the net profit of coatings in the industrial field is about US $55 million
in the first quarter of 2020, the adverse business impact caused by the covid-19 epidemic has been taken into account, and the amount of impact is about US $0.35 per share. From the perspective of business field, due to the large market share of industrial coatings in China, this business is more affected. High purity aluminum, electronic aluminum foil and electrode foil products are widely used in the fields of national major equipment manufacturing, national defense and military industry, aerospace, rail transit, electronic information and automobile lightweight. In addition, the adjusted diluted earnings per share also includes an increase provision - due to the increase in global bad debt reserves caused by the epidemic, the bad debt reserves increased by $0.10
by the end of 2019, the company's annual cash and short-term investment was about $1.3 billion. At present, the company has completed a number of strategic plans to help improve financial flexibility. In mid March, the company borrowed $800million from the revolving credit line, reflecting the company's