ppg coatings
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Pierre-Marie De Leener, Executive Vice President
PPG Capital Markets DayDecember 5, 2011
Business Updates Aerospace, Refinish and Protective
& Marine Coatings
Information current as ofDecember 5, 2011
Global businesses with heavy focus on technology, distribution and customer service
• Protective and Marine Coatings
• Aerospace
• Automotive Refinish
• Architectural Coatings Americas &
Asia/Pacific
(Overview by Rich Alexander)
Geographic Sales Mix
Aftermarket, ~80%
OEM / New, ~20%
U.S. & Canada, 49%
Europe, 21%
Asia/Pacific, 25%
Latin America, 5%
Emerging Regions = ~30%
Performance Coatings Business Units
Performance Coatings Segment
2
15.4% 15.3%
0%
5%
10%
15%
20%
$2,500
$2,750
$3,000
$3,250
$3,500
$3,750
$4,000
3Q08 3Q09 3Q10 3Q11
EB
IT M
arg
in
Sale
s
Sales Margin
3Q YTD Segment Financial Results
OEM / New, ~20%
Excellent financial performance continues, driven by large aftermarket presence
Performance Coatings Sales Mix
Aftermarket, ~80%
OEM / New, ~20%
Performance Coatings Segment
3
Millions of USD
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
Other
Rail
Offshore
Power
Oil & Gas
Infrastructure
Marine Aftermarket
Marine OEM
Protective & Marine Coatings Industry
Varied industry end-use markets; Strong Asian profile (ship building)
Protective & Marine Coatings Industry ($B)
Source: Company Estimates
Eastern Europe & Mid-East
Asia Pacific
Latin America
Western Europe
U.S. & Canada
Industry Geographic Mix
4
PPG Protective & Marine Coatings
PPG equally split between protective and marine markets, strong technology requirements
50%
25%
25%
0%
25%
50%
75%
100%
ProtectiveCoatings
PPG Protective & Marine Coatings Sales Mix
MarineOEM
Marine Aftermarket
Premium and Standard Antifoulants
Ultra Durable TopcoatsTank Linings
Fire Protection
Technology-driven End-use Markets
5
6
Protective & Marine Coatings Industry Statistics
Protective market growing; Marine OEM activity declining after strong build cycle
0%
2%
4%
6%
8%
10%
12%
0.00
0.40
0.80
1.20
1.60
2007 2008 2009 2010 2011E 2012P
Order B
acklog -% of Fleet
Deliveries
Deliveries Order Backlog
Container Ship DeliveriesTwenty-Foot Equivalent Units – (TEUm)
Sources: Clarkson Research Services, ABG Sundal Collier, Company Estimates
0
500
1,000
1,500
2,000
2,500
2010 2011 2012 2013 2014 2015
Developed Emerging
Global Infrastructure Spending
CAGR:U.S./W. Europe = 4%
Emerging Regions = 8%
Source: IHS Global Insights
Billions of USD
7
45%
55%
PPG Aerospace Sales Mix
Aftermarket
OEM
Global technology and service business; Equally split between OEM and aftermarket
• Leading technologies• Coatings
• Sealants
• Transparencies (aircraft windows)
• Services
• Global distribution
• Service
Business Success Factors
PPG Aerospace
8
Basecoat Clearcoat System
Solar Reflective System
Single Stage Topcoat
Non Chrome Exterior Primer
Non Chrome Flexible Primer
Non Chrome Structural Primer
Aerocron® Electrocoat
Sanding Surfacers
PPG Aerospace Leading Technologies
Extensive aerospace technology content
CoatingsLegend:
9
Basecoat Clearcoat System
Solar Reflective System
Single Stage Topcoat
Non Chrome Exterior Primer
Non Chrome Flexible Primer
Non Chrome Structural Primer
Aerocron® Electrocoat
Sanding Surfacers
Intelligent Windows
Complex Glass & Plastic Forming
Next Generation Surface Seal
Improved P-Static Coating
Opticor™ Advanced Transparency Material
Alteos™ Interactive Window Systems
PPG Aerospace Leading Technologies
Extensive aerospace technology content
CoatingsLegend: Transparencies
10
Basecoat Clearcoat System
Solar Reflective System
Single Stage Topcoat
Non Chrome Exterior Primer
Non Chrome Flexible Primer
Non Chrome Structural Primer
Aerocron® Electrocoat
Sanding Surfacers
Intelligent Windows
Complex Glass & Plastic Forming
Next Generation Surface Seal
Improved P-Static Coating
Opticor™ Advanced Transparency Material
Alteos™ Interactive Window Systems
Lightweight Sealants
Spray Seal
Cure on Demand Sealant
Non Chrome Corrosion Inhibitive SealantLightweight Conductive Sealant
Customized Sealant Solutions
PPG Aerospace Leading Technologies
Extensive aerospace technology content
CoatingsLegend: Transparencies Sealants
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PPG Aerospace Distribution & Service
ASC’s provide high degree of customer service in close proximity to customer locations
PPG Application Support Center (ASC) Network
12
0
250
500
750
1,000
1,250
2007 2008 2009 2010 2011E 2012P
Boeing/Airbus Jet Deliveries
Source: Boeing / Airbus & UBS Estimates
+6%
+14%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2008 2009 2010 2011E 2012P
U.S. / W. Europe Emerging Regions
Global Airplane Fleet(Aerospace Aftermarket)
2011 – 2012 CAGR:U.S./W. Europe = 4%
Emerging Regions = 6%
# of Aircraft
Aerospace industry expected to continue strong growth trends in both OEM and aftermarket
Aerospace Industry
# of Aircraft
13
Refinish industry has broad geographic split; Several large global competitors
Eastern Europe & Mid-East
Asia Pacific
Latin America
Western Europe
U.S. & Canada
Industry Geographic Mix(CAGR = 2% - 4%)
Emerging regions approaching
40% of industrySource: Company Estimates
PPGLocal Competitors
Global Global Global Global Competitor Competitor Competitor Competitor
#2#2#2#2
Global Global Global Global Competitors Competitors Competitors Competitors #3, 4 & 5#3, 4 & 5#3, 4 & 5#3, 4 & 5
Refinish Competitive Landscape
Competitive set varies by region
Refinish Coatings Industry
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Global leader with broad global footprint; Distribution, technology & service key PPG attributes
Asia Pacific
Latin America
Europe
U.S. & Canada
PPG Refinish Geographic Mix
Solid growth in emerging regions
with further opportunities
• Distribution & service• Differentiated network
• Leading technologies• Water-based coatings
• Color
•Global presence
Business Success Factors
PPG Refinish
15
Collision Repair End-use Mix
Collision Commercial & LICCommercial/Fleet & Light Industrial Coatings (LIC)
PPG Refinish
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11 PPG manufacturing facilities
Distributors >5,500
North America
Asia / Pacific
Latin America
EuropeBody Shops >100,000
North AmericaAsia /
Pacific
Latin America
Europe
PPG differentiated two-step distribution model provides for high customer service levels
PPG Refinish Coatings Distribution Model
17
Color critical to customers; PPG leading color tools to aid in body shop productivity
• Sprayed out Variant Chips • Computerized Mixing Systems• TouchMix®
• RapidMatch® Variant Selector
U.S. multi-brand distributor survey feedback(5 high – 1 low)
Color matchQuality/durabilityProduct availability
Ease of useTM service
Brand
TrainingDiscountsNet costs
Source: Independent Consultant Study
Refinish Customer Desired Criteria PPG Color Tools
1.0
2.0
3.0
4.0
5.0
Top 3 Criteria Middle 3 Criteria Bottom 3 Criteria
PPG Competitor Avg.
PPG Refinish Color
18
Global leader in refinish water-based customer adoption; Rapid shift to new, premium technology aided by product performance
2010
13%
87%Water
Solvent
2005
30%
70%
22% CAGR
Key Water Advantages:Environmental considerations
Ease of use / Productivity tools
Color consistency / OEM alignment
PPG Refinish New Technology Adoption
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Market Segment Brands Comments
Premium
Premium products markets
more prevalent in developedregions
Mid-Tier / Value
Mid-Tier / Value markets
more prevalent in emergingregions
Distinguished brands to address varied market segments
PPG Brands:
PPG Refinish Brand Strategy
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Strong global presence; solid penetration with further opportunities in emerging regions
Source: Company Estimates
PPG Geographic Profile
PPG Refinish
21
Emerging regions shifting toward developed model; Growth in global automotive fleet
Source: IHS Global Insights
# of Vehicles
MarketDriver
DevelopedRegions
ImpactEmergingRegions
Impact
Car Parc + +Accident Rates = +Miles Driven = +Technology
ValueHigh +
CurrentlyLow/Mid +
InsuranceInfluence
High +Currently
Low -
Current Industry Trends
0
100,000
200,000
300,000
400,000
500,000
600,000
2009 2010 2011E 2012P 2013P
U.S. / W. Europe Emerging Regions
Global Automotive Fleet(Refinish Aftermarket)
2011 – 2012 CAGR:U.S./W. Europe = 1%
Emerging Regions = 6%
Refinish Industry
Source: Company Estimates
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Industries:
Multi-national coatings competitors, with some smaller local competition
Technology, distribution and service are key success factors and present entry barriers
PPG:
Strong global businesses (#1 or #2 in each end-use market) with heavy aftermarket mix
Leading technologies and distribution/service model
Consistent earnings, with capability to counter raw material inflation with cost management
and price
Outlook:
Lower Marine OEM builds
Stable end-use markets (Refinish & Protective in developed regions, Marine aftermarket)
Strong Aerospace industry growth, supplemented by PPG share gains (e.g., Boeing 787)
Continued emerging regions growth (Refinish, Aerospace, Protective)
Summary
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Forward-Looking StatementsStatements contained herein relating to matters that are not historical facts are forward-looking statementsreflecting PPG’s current view with respect to future events and financial performance. These matters within themeaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Actof 1934, as amended, involve risks and uncertainties that may affect PPG’s operations, as discussed in PPG’s filingswith the Securities and Exchange Commission pursuant to Sections 13(a), 13(c) or 15(d) of the Exchange Act, andthe rules and regulations promulgated thereunder. Accordingly, many factors could cause actual results to differmaterially from the forward-looking statements contained herein. Such factors include global economic conditions,increasing price and product competition by foreign and domestic competitors, fluctuations in cost and availabilityof raw materials, the ability to maintain favorable supplier relationships and arrangements, difficulties in integratingacquired businesses and achieving expected synergies therefrom, economic and political conditions in internationalmarkets, the ability to penetrate existing, developing and emerging foreign and domestic markets, foreign exchangerates and fluctuations in such rates, fluctuations in tax rates, the impact of future legislation, the impact ofenvironmental regulations, unexpected business disruptions, and the unpredictability of existing and possiblefuture litigation, including litigation that could result if the asbestos settlement discussed in PPG’s filings with theSecurities and Exchange Commission does not become effective. However, it is not possible to predict or identifyall such factors. Consequently, while the list of factors presented here and in PPG’s Form 10-K for the year endedDecember 31, 2010 are considered representative, no such list should be considered to be a complete statement ofall potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realizationof forward-looking statements. Consequences of material differences in results compared with those anticipated inthe forward-looking statements could include, among other things, business disruption, operational problems,financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect onPPG’s consolidated financial condition, results of operations or liquidity. All information in this presentation speaksonly as of December 5, 2011, and any distribution of this presentation after that date is not intended and will not beconstrued as updating or confirming such information. PPG undertakes no obligation to update any forward-lookingstatement.
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