PPG INDS INC earnings calls

industrial coatings pricing timing

Q (David Begleiter · Deutsche Bank): When will index-based pricing catch up with COGS inflation in industrial coatings? And what drove Q4's more modest organic sales outlook versus Q3?

A: They said index pricing started to help in Q3 and Q4 but most benefit will come in Q1 and Q2 next year because of contract structure. Margin compression should moderate through Q4, and Q4 volume weakness is driven mostly by lower automotive builds, especially in China.

"But most of that benefit will come in, Q1 and Q2 of next year just because of the structure of our contracts." — Timothy Knavish (CEO·CHAIR)

refinish outperformance drivers

Q (John McNulty · BMO): What drove Refinish's volume outperformance versus industry — account wins, inventory timing, or other factors?

A: They said destocking is behind them and purchase orders are normalizing, with slight sequential improvement in body shop activity. They noted small net body shop share wins and reduced auto insurance rates, so the result was modest normalization and some better-than-expected performance.

"1, the destocking, is behind us, so you do have some more normalization of purchase orders." — Timothy Knavish (CEO·CHAIR)

industrial subsegment growth mix

Q (Kevin McCarthy · Vertical Research Partners): How much of industrial subsegment's high single digit growth was price versus volume, and outlook?

A: They said growth was roughly half volume and half price, with strong execution and new business wins driving momentum across powder, heavy duty equipment, transportation and data center related electrical infrastructure. They expect continued positive pipeline and momentum.

"As far as the blend of how the team achieved that org, organic sales, it is almost it is almost exactly half volume and price." — Timothy Knavish (CEO·CHAIR)

architectural margins and France effects

Q (Michael Harrison · Seaport Research Partners): Can the 24% EBITDA margin in global architectural be sustained? And how will unrest in France affect demand into Q4?

A: They said the global architectural business should be a consistently 20%-plus EBITDA business and Q3 benefited from strong execution and some peso strength in Mexico. On France, they have not seen demand impact yet but logistics have been affected and they are watching consumer confidence closely.

"Our aspiration is this, in total, is a 20%-plus EBITDA business but we did have a bit of help in Q3 that you just you know, watch the peso." — Timothy Knavish (CEO·CHAIR)

M&A view on peer disposals

Q (James Hooper · Bernstein): How is PPG thinking about recent industry mergers and disposals? Any changes in competitive behavior?

A: They said they are not materially involved in Brazil disposals and have not seen significant behavior changes yet. They will look for opportunities if competitors are distracted, and would consider portfolio moves if they add long-term shareholder value.

"You know, it is obviously you know, we will do what we can to take advantage of any distraction." — Timothy Knavish (CEO·CHAIR)

2027 volume and margin themes

Q (Ghansham Panjabi · Baird): What is the trend for volumes across major end markets into 2027 given higher rates and weaker geographies like China?

A: They said it's early for a 2027 guide but they do not expect any large recovery; organic growth momentum and margin expansion should continue due to pipelines, commercial actions and R&D. Final outlook will depend on inflation developments through mid-January.

"You should expect our organic growth momentum to continue, and we see that in our pipelines." — Timothy Knavish (CEO·CHAIR)

cost actions in architectural EMEA

Q (Barclays): What cost and restructuring actions have been done in architectural EMEA, and what to expect for rest of year and 2027?

A: They said about $100 million of combined restructuring and productivity actions are expected for 2026 and 2027. For architectural EMEA specifically, productivity helped margins in 2026, but the main benefit will come from four plant closures, with significant restructuring benefit expected in first half of 2027.

"You should expect in 2026 and 2027. Is about a $100 million combined between restructuring and productivity actions." — Timothy Knavish (CEO·CHAIR)

highest priced house paint in Europe

Q (John Roberts · Mizuho): What is PPG's highest priced house paint in Europe, and could price now cause demand elasticity in DIY?

A: They said they don't see demand elasticity driving volumes and that macro factors are the main cause of volume challenges. The highest shelf price point is probably in The Netherlands due to higher formulation cost, and consumer savings remain higher versus pre-COVID.

"And as a result, without going through all of the countries we operate in off the top of my head, the highest price point would probably be in The Netherlands." — Timothy Knavish (CEO·CHAIR)

Q4 guide and drivers by segment

Q (BofA): Can you reconcile architectural EBIT drivers and clarify why volumes and guidance decelerate in Q4 across segments?

A: They said the peso benefit was only part of the architectural EBIT gain; major drivers were Mexico volume, Mexico mix, price in Mexico and Europe, and European cost outs, with the peso about $15 million to $20 million. For Q4, volume softness is driven largely by reduced automotive builds in China and uncertainty in Europe affecting consumer confidence.

"But your point on volume being a bit softer there, remember, we have 2 businesses there that are lapping multiple double-digit quarters, multiple double-digit Q4s." — Timothy Knavish (CEO·CHAIR)

industrial EBITDA excluding auto OEM; Europe deco sale

Q (Jeffrey Zekauskas · JPMorgan): If you remove auto OEM from industrial coatings, would industrial operating income have risen? And would you ever sell architectural Europe?

A: They said industrial operating income would have grown without auto OEM issues, but packaging also has index dynamics that will take time. On architectural Europe, they view it as a good earnings and cash business, not a growth driver, and they will consider divestiture if it maximizes long-term shareholder value at the right price.

"If it were not for the challenges in automotive OEM, would EBITDA have grown in that segment? The answer is yes." — Timothy Knavish (CEO·CHAIR)

raw material inflation outlook

Q (Goldman Sachs): With oil up recently, will raw material inflation increase more for PPG and what should we expect into early next year?

A: They said Q3 actual raw material inflation was mid single digits versus prior guide, and they are guiding high single digits for Q4. It's early to guide 2027; Q1 will show significant year-over-year inflation due to comps, and future levels depend on oil and geopolitical developments.

"We are guiding high single digits for the fourth quarter." — Timothy Knavish (CEO·CHAIR)

protective & marine growth drivers

Q (Frank Mitsch · Fermium): Can you expand on growth in Protective and Marine and sustainability of that growth?

A: They said marine new build and marine dry dock are the strongest subsegments, especially in Marine Asia driven by anti-fouling technologies. Protective is also doing well on infrastructure and data centers, but data center sales are still a small percentage of total company sales.

"In total, data center, protection, coating sales are still low single digit percent of our whole company." — Timothy Knavish (CEO·CHAIR)

why Q3 COGS inflation lower; FX role

Q (Joshua Spector · UBS): Why was COGS inflation in Q3 lower than expected despite raw material acceleration, and how much did FX affect it?

A: They said Q3 mid single digit inflation versus expected high was influenced by Mexican peso strength and procurement actions using global footprint; the Mexican peso is the FX to watch as most other businesses buy and sell in the same currency. Pricing accelerated Q2 to Q3 and should continue into Q4.

"The only 1 that hits my radar screen is some specifically Mexican peso FX because most of our businesses other than that 1 buy and sell in the same currency." — Timothy Knavish (CEO·CHAIR)

price-cost neutrality details

Q (KeyBanc): Is your net neutrality purely from pricing or other actions? Will price-cost become a tailwind soon?

A: They said commercial actions are over 90% price, with some mix effects. Enterprise-wide they are at neutrality, but some individual businesses still need to catch up and they would not assume a price-cost tailwind short term while raw materials continue to escalate.

"The commercial actions are well over 90% price." — Timothy Knavish (CEO·CHAIR)

EU quotas on China cars impact

Q (Vincent Andrews · Morgan Stanley): How will EU quotas on Chinese auto imports affect PPG's mix or margins?

A: They said little impact because PPG is represented in all car-producing countries and cares most about net vehicle sales. One caveat: higher EV penetration is a content opportunity for PPG, so EV mix changes matter more than country-of-production shifts.

refinish year-end rebates effect

Q (Evercore): Could rebate thresholds or year-end purchasing by distributors cushion Refinish stabilization, and what does that mean for Q1 comps?

A: They said they do not know how independent distributors will behave around year-end rebates; some may buy in Q4 if close to thresholds, others may wait to Q1, adding variability. They built their best estimate into the guide but will watch this dynamic closely.

"If they are within striking distance, of a rebate, they might. They may buy a lot in Q4." — Timothy Knavish (CEO·CHAIR)

initial 2027 framework questions

Q (Arun Viswanathan · RBC): Can you give an initial framework for 2027 on pricing, volumes, EBIT and EPS growth assumptions?

A: They said it's too early for granular 2027 guidance but themes are clear: expect continued organic growth from pipeline and margin expansion from pricing catch-up and productivity. Some businesses like aerospace and packaging have higher certainty, but final numbers will be shared in January.

"We will continue our organic growth because we have got a good pipeline." — Timothy Knavish (CEO·CHAIR)

traffic solutions decline reason

Q (Abigail Eberts · Wells Fargo): Was traffic solutions' mid single digit organic decline weather related or anything else to call out?

A: They said traffic solutions is very seasonal and volatile with summer months driving results; customer buying patterns in the quarter differed from last year's Q3 and that produced the mid single digit decline rather than purely weather.

"This is a business. First of all, it is by far our most seasonal business, so you really need to watch it in the summer months." — Timothy Knavish (CEO·CHAIR)

structural changes reducing commodity sensitivity

Q (Laurence Alexander · Jefferies): Are there structural changes that reduce PPG's sensitivity to oil and raw material moves?

A: They said PPG is structurally better: improved commercial excellence, R&D-driven innovation, diversified procurement, and AI-enabled formulation work that optimizes raw material mixes. These changes help capture value faster and partly offset commodity sensitivity, but they remain tied to some commodity chemicals.

"We use AI to optimize our raw material combinations without sacrificing performance for our customers." — Timothy Knavish (CEO·CHAIR)

share gains visibility and pipeline

Q (Christopher Parkinson · Wolfe): How much of the 300 bps outperformance was share alignment vs new share gains, and how much share pipeline remains?

A: They said it is both: a 'win with the winners' approach and chunky industrial share wins. They have a pipeline that converts roughly $25 million a quarter of new industrial segment wins and expect that run rate to continue in coming quarters.

"I think we have said we have we have got a pipeline that will get about $25 million a quarter of new industrial segment wins." — Timothy Knavish (CEO·CHAIR)