In a year that delivered record earnings to its shareholders, PPG Industries in 2013 also completed several significant steps toward its goal of becoming a coatings-dominated company.
That was the message chairman Charles Bunch gave to shareholders Thursday morning at the corporation’s 131st annual meeting, which was held for the first time at the Fairmont Hotel, a few blocks from PPG’s Downtown headquarters.
Later in the afternoon, the chairman told securities analysts on a conference call that the company founded to produce plate glass had largely completed the transformation of its portfolio to primarily paints.
Among the milestones that contributed to the shift last year, Mr. Bunch said, were the spinoff of PPG’s commodity chemicals business; the announced sale of its stake in the Transitions Optical lens joint venture; the purchase of Deft aerospace coatings; and perhaps most importantly, the $1.05 billion purchase of Dutch paints maker AkzoNobel’s North American decorative coatings unit.
By the end of 2013, coatings represented 85 percent of PPG’s $15.1 billion in annual sales, and the company became “the largest coatings company in the world,” Mr. Bunch said.
Look for future acquisitions to be in the coatings segment as well, he said.
In the first quarter, for instance, PPG announced it would buy Canal Supplies Inc., a Panama-based distributor of protective and marine coatings; and Hi-Temp Coatings, a Massachusetts-based maker of coatings used in industrial facilities.
PPG also said it would buy a minority stake in The Coatings Alliance, a paint dealers’ cooperative for which it will become the exclusive paint manufacturer.
“We’re looking at all acquisitions — large and small,” Mr. Bunch told analysts. “I find the pipeline somewhat encouraging … and I’m more optimistic today than six months ago.”
Prior to its annual meeting, PPG released first-quarter results and said a strong market for automotive and aerospace coatings and the early stages of an economic recovery in Europe helped boost sales to $3.6 billion, up 17 percent from a year ago.
Adjusted net income from continuing operations, not including costs related to acquisitions, was $279 million, or $1.98 per share, beating analysts’ average estimate of $1.89 per share.
Net income was $277 million, or $1.97 per share, up from $191 million, or $1.29 per share in the first quarter of 2013.
PPG reported a net gain of $946 million on the March sale of its 51 percent stake in the Transitions Optical joint venture and its sun lenses business.
At the meeting, a majority of shareholders voted against a proposal to adopt a policy that would require the board chairman to be independent instead of a company executive.
Also Thursday, PPG's board of directors authorized the repurchase of $2 billion worth of outstanding common share effective immediately. The board also approved a 6 cents-per-share increase in the company's quarterly dividend that would raise it to 67 cents.
PPG shares Thursday closed at $199.46, up $7.83 or 4 percent.
Joyce Gannon: email@example.com or 412-263-1580.