PPG Provides Sales Update and Reports Worsening Supply Disruptions and Customer Parts Shortages
PPG announced that it expects sales volumes in the third quarter 2021 will be lower by $225 million to $275 million, compared to what the company anticipated at the start of the third quarter. PPG’s sales volumes are being impacted by the increasing disruptions in commodity supplies; further reductions in customer production due to certain parts shortages such as semi-conductor chips; and continuing logistics and transportation challenges in many regions, including the U.S., Europe and China. In addition, raw material inflation for the third quarter is trending higher than previously communicated by about $60 million to $70 million.
The coatings commodity supply disruptions have further deteriorated since the company’s earnings announcement on July 19, due to several additional force majeure declarations and lower material allocations from certain suppliers. The company also continues to assess the full impact of Hurricane Ida, which could include additional supply chain effects.
The company reported that aggregate global economic demand remains robust, and that inventories in many of the company’s end-use channels are at very low levels. When supply conditions normalize, the company continues to expect strong sales growth into 2022. In addition, the company reported that it continues to make measurable progress implementing selling price increases to help offset the elevated raw material costs, and is seeking further increases. Overall price increases for the third quarter are estimated to be about 5% with similar contributions from both operating segments.
Based on the uncertainty created by these continuing and evolving disruptions, the company has elected to withdraw previously communicated financial guidance for the third quarter and full-year 2021.
About PPG Industries
At PPG (NYSE:PPG), we work every day to develop and deliver the paints, coatings and materials that our customers have trusted for more than 135 years. Through dedication and creativity, we solve our customers’ biggest challenges, collaborating closely to find the right path forward. With headquarters in Pittsburgh, we operate and innovate in more than 75 countries and reported net sales of $13.8 billion in 2020. We serve customers in construction, consumer products, industrial and transportation markets and aftermarkets. To learn more, visit www.ppg.com.
Mark Silvey – Corporate Communications – email@example.com – (412) 434-3046
Source: PPG Industries, Inc.