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Bill Wulfsohn Sr. VP, Industrial Segment Tim Knavish VP, Automotive Coatings - Americas
February 23, 2010
Core Themes
At $4B - $6B, Automotive Coatings is a key segment of the coatings market PPG has broad strength and balance within the Automotive industry PPG has a long history of aggressive actions driving profitable growth and successful leadership PPG has clear strategies to capitalize on significant growth opportunities
Coatings Industry
Global Coatings = $87B
Global Coatings by Region Global Coatings by Mix
Others 11%
M&P 18%
Asia is expected to be the largest market in 2010 More cars are produced in China than U.S.
Source: PPG Estimate February 23, 2010 PPG Industries, Inc. 4
Core Layers
Pretreatment Electrocoat Primer Surfacer Basecoat Clearcoat
Source: PPG Estimate
Description
Conversion coating that improves corrosion resistance and paint adhesion Electrically deposited coating that protects metal from corrosion Spray applied coating that improves surface smoothness, durability and protects against chip Color coat that adds the decorative chroma and aesthetic effects Final coating layer that provides protection and shine to the vehicle to maintain its showroom like finish
February 23, 2010
Size (MM)
$150 $900 $500 $1,750 $750
PPG Industries, Inc. 5
Movie Clip
Auto OEM
History of sustained investment in capabilities and technology leadership Well positioned Joint Ventures and Partnerships
Europe
BASF
BASF
Asia Pacific
Other KCC BASF Nippon DuPont PPG
South America
Other
PPG
Ex - Japan
Europe
BASF
BASF
Asia Pacific
Other KCC BASF Nippon DuPont Nippon PPG
China
Other KCC PPG
South America
Other
PPG
BASF DuPont
Primer Base
Base Primer
PPG
PPG
1980
1985
1990
1995
2000
2005
2010
PPG Innovations
PPG has been a finalist for an Automotive News PACE Award 7 times in the last 9 years resulting in 6 awards 41 percent of Automotive OEMs sales are from products that are five or fewer years old
Joint Ventures
PKAF Asian PPG PPG Helios
Scope
Alliance with Kansai Paints Formed in 2004 Target Japanese OEMs in
Scope
JV with Asian Paints Formed in 1997 Support growing Indian
Scope
JV with HeliosPaint Formed in 2000 Provide sales and service to
transportation markets
Historical Performance
PPG Sales
NA EMEA AP SA
NA
EMEA
AP
SA
Automotive Coatings
Global Chaos
MM Builds
Builds
Clunkers
Other
2009
EMEA Builds
25 20
MM Builds
Asia Builds
Excluding Japan
Sales
MM Builds
25 20 15 10 5
2008
2009
0 2005
China
2006
India
2007
Australia
2008
Korea Other
2009
Manufacturing Rationalization
Facility
Clarkson, Ontario Baton Rouge, LA Saultan, FR European Mfg Satellites (3) North America Mfg Global Tech Labs Sales and Admin
Overhead Reduction
Action
Closed Closed Exited Paint Mfg Headcount Reduction Closed Headcount Reduction Footprint Reduction Headcount Reduction
20%
2008
2009
15%
Automotive Coatings
Rebound Build Forecast
Excluding Japan
60 50 40 30 20 10 0
2009
NA
EMEA
AP
SA
2010
2011
2012
Source: PPG
Looking Forward
Leverage market demand growth with strong focus on the BRIC countries Sustain profitability with content growth, cost reduction, pricing discipline and new valueadded technology
Industry Outlook
North America: Demand Recovery
16 14 12 10 8 6 4 2 0 2007 2009 2011 2013 45 40 35 30 25 20 15 10 5 0 2007 2009 2011 2013
Builds MM
Builds MM
India Korea
Excluding Japan
MM
Solventborne
2010
2010 2011
India Builds
Builds MM
#2 Supplier
Asian PPG
New Sriperumbudur facility Integration of Farber acquisition Eight primary OEM customers Recent Awards: Tata Pune VW Pune Ford Chennai GM - Talegaon
February 23, 2010 PPG Industries, Inc. 30
5 4 3 2 1 0 2009
Source: CSM Worldwide
2010
2011
2012
NJ-Fiat
Shanghai Auto Shanghai GM Honda Wuhan II Shanghai VW Proton Hangzhou PSA Wuhan III R/Nissan Xiaogan SAIC-GM-Wuling PSA Chenzhen BYD Auto Nissan Southeast Fujian Daimler GEELY DongFeng-Peugeot-Citron
Mahindra Renault Mahindra Tata GM Bajaj Renault Bajaj Tata Fiat VW Mercedes Mahindra Toyota Ashok Leyland Ford Nissan Renault Hyundai Motor Ford
Daimler Hero
India Will Become a Leading Exporter of Vehicles Industries, Inc. 32 February 23, 2010 PPG
Adhesives
Energy
Move to fuel efficient platform designs, conservation approaches Shift in vehicle segment sales Local production Alternative fuel sources
Market Drivers
Energy Cost / Durability / Environment Appearance / Chip / Environment Cost / Energy / Appearance Appearance / Environmental Energy
E-Coat
Rinse Cycle
Cool
Bake
Primer
Sanding
Sanding
Basecoat Booth
Inspection
Cool
Bake
Clearcoat
Pick-Up
Cool
Bake
Compact Process
E-Coat
Rinse Cycle
Sanding
Inspection
Cool
Bake
Clearcoat
Pick-Up
Cool
Bake
Conventional
Compact Process
Strategic Summary
At $4B - $6B, Automotive Coatings is a key coatings segment PPG has broad strength and balance within the Automotive industry
Strong global presence utilizing technology with a healthy mix of customers
PPG has a long history of aggressive actions driving profitable growth and successful leadership
Tough restructuring actions combined with an energized focus on Joint Ventures Proven sustainability through investment in capabilities and technology
ForwardForward-Looking Statement
Statements contained herein relating to matters that are not historical facts are forward-looking statements reflecting PPGs current view with respect to future events and financial performance. These matters within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended, involve risks and uncertainties that may affect PPGs operations, as discussed in PPGs filings with the Securities and Exchange Commission pursuant to Sections 13(a), 13(c) or 15(d) of the Exchange Act, and the rules and regulations promulgated thereunder. Accordingly, many factors could cause actual results to differ materially 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 availability of raw materials, the ability to maintain favorable supplier relationships and arrangements, difficulties in integrating acquired businesses and achieving expected synergies therefrom, the realization of anticipated cost savings from restructuring initiatives, economic and political conditions in international markets, the ability to penetrate existing, developing and emerging foreign and domestic markets, which also depends on economic and political conditions, foreign exchange rates and fluctuations in such rates, the impact of environmental regulations, unexpected business disruptions, and the unpredictability of existing and possible future litigation, including litigation that could result if the asbestos settlement discussed in PPGs filings with the Securities and Exchange Commission does not become effective. However, it is not possible to predict or identify all such factors. Consequently, while the list of factors presented here is 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 results compared with those anticipated in the 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 on PPGs consolidated financial condition, results of operations or liquidity. All information in this presentation speaks only as of February 23, 2010, 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.
February 23, 2010 PPG Industries, Inc. 45