U.S./Canada Architectural Coatings Sale
Q: Is there increased likelihood of selling the U.S./Canada architectural business?
A: PPG has received strong and diverse interest in their U.S./Canada architectural coatings business, including full sale, joint ventures, and partnerships. They are making good progress and remain on schedule to determine a path forward, but it's too early to say which option will prevail. " They had a very good quarter with mid-single-digit growth in this business, with no significant disruptions or market share losses due to the strategic review. " The best transaction for shareholders will balance immediate proceeds with the long-term strategic value of any retained interests. "

Auto OEM Outlook and Downtime
Q: Why did PPG's auto OEM volumes underperform, and is it a recession signal?
A: PPG's auto OEM business underperformed due to increased summer downtimes at specific assembly plants in the U.S. and Europe, and cautious production plans in China following EV tariff announcements. " " This is seen as a transitory issue rather than a foreshadowing of a recession, with adjustments driven by inventory levels and consumer affordability concerns. " "

European Volumes and Architectural Challenges
Q: What caused the volume decline in Europe, and what's the outlook?
A: European volumes declined more than expected, particularly in June, due to softness in the decorative business and auto OEM sector. " France, a key market, experienced a slowdown due to unique situations, while Eastern Europe showed strength. " " Some competitive price pressures have emerged in architectural EMEA, but overall pricing is holding up due to higher wage and benefit inflation. " Sequential improvement is expected in Q3, but volumes may still be down versus prior year. "

Raw Materials and TiO₂ Pricing
Q: Will Chinese TiO₂ tariffs impact PPG's costs, and how will they manage?
A: PPG foresees no impact from Chinese TiO₂ tariffs in 2024 due to contractual coverage. " For 2025, they plan to reduce TiO₂ consumption per batch, leverage increased sourcing flexibility, and, if necessary, offset costs with price increases, especially in the decorative business. " They are neither advantaged nor disadvantaged compared to competitors and have production outside the EU not affected by tariffs. " "

Aerospace Business Capacity Constraints
Q: How significant are the aerospace capacity constraints and plans to expand?
A: PPG's aerospace business has a backlog of almost $300 million, with everything they can make being sold and shipped. " They are adding capacity through productivity improvements and incremental capital investments and are assessing the need for larger-scale expansion due to strong demand across commercial, general aviation, and military sectors. "

Refinish Business Growth and Digital Tools
Q: What is driving growth in the refinish business, and what's the outlook?
A: PPG continues to gain market share in refinish by rolling out digital productivity tools like MoonWalk and LINQ, which have been widely accepted. " " With penetration rates still in single digits globally, they see significant runway for growth, especially outside Europe where the rollout is in early stages. " Order patterns are also favorable for the second half due to last year's pricing dynamics. "

Packaging Coatings Share Gains
Q: Can PPG sustain its packaging coatings share gains?
A: PPG is confident in retaining and growing its share gains in packaging coatings, achieved through technological advancements rather than competitors' disruptions. " " They are gaining share across various applications, including inside the can, outside the can, easy-open ends, and food lines, independent of isolated industry incidents. "

Capital Allocation Strategy
Q: Will PPG prioritize share repurchases or acquisitions with excess cash?
A: PPG prefers shareholder value–accretive acquisitions but acknowledges that the acquisition pipeline is currently thin. " They have been buying back shares over the last three quarters and will continue to deploy excess cash through share repurchases if suitable acquisitions are not available. "

Specialty Business and Silica Sale
Q: What is the status of the silica sale, and how does PPG view its specialty portfolio?
A: The silica sale is on track, potentially ahead of the architectural business review, with good interest received. " PPG values its remaining specialty businesses, which have leadership positions and high technology content aligning with their R&D strengths, contributing to growth in Q2. "

Volume Growth Strategies
Q: How is PPG addressing volume growth challenges and incentivizing sales?
A: PPG has modified incentive compensation to drive more organic growth, with some measures already in place and others being implemented. " This is part of a multifaceted strategy to enhance their organic growth profile and address volume growth issues experienced over the past quarters. "

Impact of Chinese EV Tariffs
Q: How are Chinese EV tariffs affecting PPG's business?
A: PPG saw a step-down in China auto production plans after EV tariff announcements, as customers adopted a cautious approach due to export uncertainties. " " However, they believe this is moderating the growth curve rather than changing its trajectory, with EV production in China still projected to grow by 14% in 2024. "