PPG Industries chairman and chief executive officer Charles E. Bunch told the company“s annual meeting of shareholders that the firm“s performance in 2005 showed it has a “great future”.
“Though we…
PPG Industries chairman and chief executive officer Charles E. Bunch told the company“s annual meeting of shareholders that the firm“s performance in 2005 showed it has a “great future”. “Though we faced a number of challenges last year, including the impact of the Gulf Coast hurricanes and substantial increases in raw material and energy costs, PPG delivered a strong performance”, Mr. Bunch said. Sales were up 7% in 2005 to a record USD 10.2 billion. In addition, sales records were set by the company“s coatings and chemicals segments. PPG generated more than USD 1 billion in cash from operations in 2005. Mr. Bunch said the company is using its strong and stable cash generation to fund growth throughout its businesses, especially in industrial, architectural and Asian coatings, and optical and aerospace products. Combined sales in the five areas have grown 10% per year since 1997, and combined earnings have increased 11% during the period. In his first annual meeting as chairman and CEO, Mr. Bunch, a 27-year veteran of the company, shared his vision for PPG. “Quite simply, we want to be the world“s leading coatings, and specialty products and services company”, Mr. Bunch said. “In fact, we want to be the leader in the markets and technologies in which we compete”. Mr. Bunch told shareholders that he envisions a PPG achieving consistent sales and earnings growth greater than its peers“, becoming an integrated, market-oriented company, continuing to honor its hallmark values of ethics, quality and commitment to customers, and providing superior shareholder returns. PPG has paid uninterrupted dividends since 1899, increasing payments annually for 35 consecutive years. Mr. Bunch said the company“s investments in innovation, brands, customer networks and emerging regions are essential to achieving this vision. “We must continue driving innovation and technology development to capitalize on the macro trends shaping our world”, Mr. Bunch said. The drive for energy efficiency, improved environmental performance, safety and security, and personal comfort, he said, has enabled the company to leverage its technical expertise to generate new products and growth. Investments in technology as well as the marketing of Transitions photochromic lenses have helped PPG“s optical products business grow sales at a rate of 18% per year the past four years. In the automotive aftermarket, PPG“s alliances with body shops and auto glass installers has enabled the company and its customers to grow in “otherwise mature markets”, Mr. Bunch said. The company“s sales of coatings in Asia have grown in recent years to account for nearly 10% of PPG“s coatings sales worldwide. Furthermore, Mr. Bunch said coatings operating margins in Asia are “on par” with margins for the company“s entire coatings segment. This is “pretty impressive when you consider many companies are struggling to eke out profits in Asia”, according to Mr. Bunch. “It“s even more impressive when you realize our worldwide coatings margins are No. 1 in the industry. That“s the definition of profitable growth”. Mr. Bunch said high energy and raw material costs will continue to challenge the company in 2006 and beyond. “Nonetheless, I continue to believe we have a very bright future. We“re acting with a sense of urgency to accelerate growth and strengthen our businesses. As a result, we believe we“re positioned to capture a world of opportunities”. PPG shareholders elected four incumbent directors: Robert Ripp, chairman of Lightpath Technologies; Thomas Usher, chairman of the board of Marathon Oil Corporation and former chairman of the board of United States Steel Corporation; David Whitwam, retired chairman of the board and chief executive officer of Whirlpool Corporation; and Mr. Bunch. Shareholders also approved PPG“s Omnibus Incentive compensation plan and endorsed the appointment of Deloitte & Touche LLP as the company“s independent registered public accounting firm for 2006.