PPG offers dim outlook for 2020 amid manufacturing decline
PPG, the world’s leading coatings company, said that weaker industrial demand from the US and Europe would damage sales in 2020 as it announced its results for 2019.
The figures:
The Fortune 500 company said that sales for the full year hit $15.1bn (£11.6bn), a fall of 1.5 per cent on the previous year.
Fourth quarter sales were $3.7bn, which represented a one per cent increase on the prior year.
The firm said it had set a new record for cash flow of approximately $2.1bn, roughly $600m higher than in 2018.
Earnings per share also grew five per cent year on year, from $5.92 in 2018 to $6.22 this year.
Over the year, PPG completed several acquisitions during the year including Whitford, Hemmelrath, Dexmet, and Texstars, with combined revenue of approximately $500m.
Shares in PPG fell about three per cent on the back of the announcement.
Why it’s interesting:
Global trade tensions, which have hit industrial demand in western economies, as well in a drop in output at Boeing, one of PPG’s largest customers in the US, are set to have an impact on the paint company’s sales.
Boeing has suspended production of the best-selling 737 Max after two fatal crashes last year saw the model grounded globally.
Key sectors such as the US automobile market, which has contracted for five straight months, will also create a challenge for PPG next year.
What PPG said:
Chief executive Michael McGarry said: “We delivered this strong performance in spite of weakening global manufacturing activity that impacted many of our industrial end-use markets.
“I am very pleased with our team’s ability to achieve record adjusted earnings per diluted share results in 2019, despite broad contraction in industrial demand in most parts of the world.”
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