PPG Industries : 4Q21 Earnings Presentation

Fourth Quarter 2021 Financial Results

Michael H. McGarry, Chairman and Chief Executive Officer

Vincent J. Morales, Senior Vice President and Chief Financial Officer John Bruno, Vice President, Investor Relations

All content within is proprietary to PPG. Information current as of January 20, 2022.

Forward-Looking Statements

This presentation contains forward-looking statements that reflect the Company's current views with respect to future events and financial performance. You can identify forward-looking statements by the fact that they do not relate strictly to current or historic facts. Forward-looking statements are identified by the use of the words "aim," "believe," "expect," "anticipate," "intend," "estimate," "project," "outlook," "forecast" and other expressions that indicate future events and trends. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward looking statement, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our reports to the Securities and Exchange Commission. Also, note the following cautionary statements:

Many factors could cause actual results to differ materially from the Company's forward-looking statements. Such factors include statements related to the expected effects on our business of COVID-19, global economic conditions, increasing price and product competition by our competitors, fluctuations in cost and availability of raw materials, the ability to achieve selling price increases, the ability to recover margins, customer inventory levels, our ability to maintain favorable supplier relationships and arrangements, the timing of and the realization of anticipated cost savings from restructuring and other initiatives, the ability to identify additional cost savings opportunities, the timing and expected benefits of our acquisitions, difficulties in integrating acquired businesses and achieving expected synergies therefrom, economic and political conditions in the markets we serve, the ability to penetrate existing, developing and emerging foreign and domestic markets, foreign exchange rates and fluctuations in such rates, fluctuations in tax rates, the impact of future legislation, the impact of environmental regulations, unexpected business disruptions, the unpredictability of existing and possible future litigation, including asbestos litigation and governmental investigations. However, it is not possible to predict or identify all such factors. Consequently, while the list of factors presented here and under Item 1A of PPG's 2020 Form 10-K and third quarter 2021 quarterly report on Form 10-Q are considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in the results compared with those anticipated in the forward-looking statements could include, among other things, lower sales or earnings, business disruption, operational problems, financial loss, legal liability to third parties, other factors set forth in Item 1A of PPG's 2020 Form 10-K and third quarter 2021 quarterly report on Form 10-Q and similar risks, any of which could have a material adverse effect on the Company's consolidated financial condition, results of operations or liquidity.

All of this information speaks only as of January 20, 2022, and any distribution of this presentation after that date is not intended and will not be construed as updating or confirming such information. PPG undertakes no obligation to update any forward-looking statement, except as otherwise required by applicable law.

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Fourth Quarter 2021 Financial Highlights

		Net sales			• Sales volumes decreased ~4%; remained 6% below 4Q 2019
		up ~12%
				• Supply chain disruptions constrained sales by ~$150 million
					• Selling prices +8%; acquisition-related sales +9%
		Adjusted earnings			• Supply and COVID-19 related disruptions impacted operating costs
		per diluted share* of			• Elevated coatings raw material cost inflation: ~30% higher Y-O-Y
	$1.26			• Cost actions delivered savings of ~$20 million in the quarter
			• Favorable discrete items lowered tax rate
					• More than $200 million of share repurchases
		Cash deployment
		and liquidity			• Cash ~$1 billion at quarter-end / strong liquidity continues

Comparisons are year-over-year, unless otherwise indicated.

3 *Adjusted EPS (from continuing operations) see presentation appendix for reconciliation to reported EPS

PPG Fourth Quarter Net Sales

($ in millions)

$4,400										+9%		4,190
$4,200				+8%	-4%
			-1%
$4,000			3,757
$3,800
$3,600
$3,400
		4Q'20		Price		Volume		Currency	Acquisitions	4Q'21

PPG Y-O-Y Net Sales Trend

(excluding currency impacts)*

38.5%

16.5%

11.7%12.3%

1.7%	0.8%

-4.7%-3.7%

		-21.8%
4Q' 19	1Q '20	2Q	3Q	4Q	1Q '21	2Q	3Q	4Q

4Q21: Sales growth from acquisitions and selling price increases

* Figures in the table may not recalculate due to rounding.

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Selling Price Increase Progression

vs Last Inflation Cycle

10%

This Cycle Selling Price*

Last Cycle Selling Price**

Sales

8%

6%

Q1 2022 2-year

PY

4%

stack is +12%

of

2%

%

0%

Q1

Q2

Q3

Q4

Q1

Q2

Pricing realization continues ahead of prior inflation cycle

• This Cycle = Q1 2021 - Q1 2022 forecast
• Last Cycle = Q1 2017 - Q2 2018

Performance Coatings

$MM (USD)	4Q21	4Q20	Chg	%
Net Sales	2,507	2,167	+340	+16%
Segment Income	243	299	-56	-19%
Margin %	9.7%	13.8%	-4.1%	--
Margin % excl. amort.	11.0%	14.9%	-3.9%	--

Select Net Sales Detail	Volume	Currency	Acquisition
4Q YOY Change	-2%	-1%	+11%

4th Quarter Highlights

• Sales impacted by raw material shortages / logistics bottlenecks; impacting all businesses
• Architectural businesses: softening DIY sales from elevated prior year levels
• Selling price increases of 8%; higher than 3Q 2021
• Acquisition sales: mostly Tikkurila and Ennis-Flint; incurred normal seasonal operating losses
• Aerospace sales volumes remain ~20% below 4Q 2019 levels
• Open orders remain elevated, not filled due to supply constraints, grew sequentially from 3Q

Organic Sales	Total	Refinish	Architectural	Architectural	Aerospace	PMC
YOY	Segment	Americas & AP	EMEA
4th Quarter	MSD	MSD	LSD	LSD	DD	DD
Results
1st Quarter	HSD	MSD	LSD	LSD	DD	DD
Outlook

Legend: Green (YOY percent increase); Red (YOY percent decrease); DD = double digit; HSD/MSD/LSD = High/Mid/Low Single Digit - organic sales include price and sales volumes

1st Quarter Outlook

• Additional selling price increases, above fourth quarter levels, reflecting cost inflation in multiple areas
• Raw material cost inflation ~25% to 30%
• Sales volumes impacted by continued raw material shortages
• Acquisition sales (Tikkurila and VersaFlex) expected to be ~$150 to $170 million; margins below segment average

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