Acquisitions Help Drive PPG Sales Growth in 2014
PPG Industries recently reported fourth quarter 2014 net sales from continuing operations of $3.71 billion, up $207 million, or 6%, vs. $3.5 billion in the previous year. Fourth quarter 2014 reported net income from continuing operations was $86 million. Adjusted net income from continuing operations for the quarter was $293 million.
Performance Coatings segment net sales for the quarter were $2.1 billion, up 10%, or $184 million, over the prior-year period. The sales growth was primarily due to acquisition-related gains, including about $175 million of sales from the Comex acquisition that closed in early November 2014. Segment sales volumes improved 2% and pricing added 1% year-over-year, offset by unfavorable currency translation of 4%.
Architectural coatings – EMEA (Europe, Middle East and Africa) sales volumes were down 2% vs. an improving sales trend in the prior-year period. Demand in the region remained mixed by country, with certain countries improving while others lagged. Aggregate protective and marine coatings sales also improved, aided by growth in Asia. Segment earnings of $239 million were up $37 million, or 18%, as a result of the increase in sales volumes and acquisition-related earnings, including a mid-teens percentage return on sales for the Comex acquisition.\
Industrial Coatings segment net sales for the quarter were $1.34 billion, increasing $15 million, or 1%, year-over-year. Sales volume growth of 5% was partly offset by unfavorable currency translation of 4%. Automotive original equipment manufacturer (OEM) coatings delivered higher sales volumes in all regions, growing in aggregate by mid- to high-single-digit percentages, which exceeded the global industry growth rate of about 2%.
PPG’s 2014 full-year net sales from continuing operations were $15.4 billion, an increase of 8% compared to $14.3 billion the prior year. Acquisition-related sales contributed 4% year-over-year, supplemented by sales volumes and pricing, which added 4% and 1%, respectively, and partly offset by unfavorable currency translation of 1%. The company’s 2014 full-year reported net income from continuing operations was $1.13 billion, vs. $950 million in 2013. Full-year 2014 adjusted net income from continuing operations was $1.36 billion, compared to $1.11 billion in 2013.
“We established new fourth quarter and full-year milestones in sales and adjusted earnings per share from continuing operations,” said Charles E. Bunch, chairman and CEO. “Our strong financial performance, including several consecutive years of at least 20% adjusted earnings growth, clearly illustrates the benefits of our active portfolio management, earnings-accretive cash deployment and persistent operational focus.”
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