Auto Presentation Finalprint
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Automotive OEM CoatingsBill Wulfsohn Sr. VP, Industrial Segment Tim Knavish VP, Automotive Coatings - AmericasFebruary 23, 2010
PPG Industries, Inc. 1
Core ThemesAt $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
February 23, 2010
PPG Industries, Inc. 2
Coatings IndustryGlobal Coatings = $87BGlobal Coatings by Region Global Coatings by Mix
Others 11%
North America 24%Special Purpose 49% Arch 51%
Aero 5% Pkg 6% Auto OEM 9% GI 44% Refinish 18%
Asia Pacific 35% Europe 30%
M&P 18%
Automotive Coatings is a $4B - $6B marketSource: Orr & Boss February 23, 2010 PPG Industries, Inc. 3
Automotive Coatings IndustryGlobal Coatings = $4B - $6BGlobal Coatings by RegionSouth America 4%
Other 6% North America 18%
Asia Pacific 36% Europe 37%
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
Automotive Coatings IndustryBusiness OverviewPretreatment Electrocoat Primer Basecoat Clearcoat
Excluding Japan and Adjacencies
Core LayersPretreatment Electrocoat Primer Surfacer Basecoat ClearcoatSource: PPG Estimate
DescriptionConversion 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 finishFebruary 23, 2010
Size (MM)$150 $900 $500 $1,750 $750PPG Industries, Inc. 5
PPG Automotive CoatingsOEM Process
Movie Clip
February 23, 2010
PPG Industries, Inc. 6
PPG Automotive Coatings2009 PPG Coatings Sales = $9B
Auto OEM
Automotive Coatings Is Core to PPGs Portfolio
February 23, 2010
PPG Industries, Inc. 7
PPG Competitive AdvantagesStrong market position..All geographies All technologies Customer mix
History of sustained investment in capabilities and technology leadership Well positioned Joint Ventures and Partnerships
February 23, 2010
PPG Industries, Inc. 8
Strong market positions..
PPG Industries, Inc. 9
Automotive Coatings IndustryCompetitive LandscapeNorth AmericaOther Other PPG DuPont PPG DuPont
Europe
BASF
BASF
Asia PacificOther KCC BASF Nippon DuPont PPG
South America
Other
PPG
BASF DuPont Kansai
Ex - Japan
Source: PPG Estimates
February 23, 2010
PPG Industries, Inc. 10
Automotive Coatings IndustryCompetitive LandscapeNorth AmericaOther Other PPG DuPont PPG DuPont
Europe
BASF
BASF
Asia PacificOther KCC BASF Nippon DuPont Nippon PPG
ChinaOther KCC PPG
South America
Other
PPG
BASF Kansai Kansai DuPont Ex - Japan
BASF DuPont
Strong Market Position in All RegionsSource: PPG Estimates February 23, 2010 PPG Industries, Inc. 11
Automotive Coatings IndustryIndustry Sales by LayerPT Clear E-Coat Clear E-Coat
PPG Sales by LayerPT
Primer Base
Base Primer
Strong Position in All Layers
Source: PPG Estimates
February 23, 2010
PPG Industries, Inc. 12
Automotive Coatings IndustryCustomer BaseNorth American Based European Based
PPG Other Other
PPG
Japanese / Korean Based in NA
Chinese / Indian Domestics
PPG Other Other
PPG
Broad Mix of CustomersSource: PPG Estimates February 23, 2010 PPG Industries, Inc. 13
History of investment in capabilities and technology leadership
PPG Industries, Inc. 14
PPG Automotive CoatingsPPG Structure1975
1980
1985
1990
1995
2000
2005
2010
PPG Innovations
Continuous Strategic Investment and InnovationFebruary 23, 2010 PPG Industries, Inc. 15
PPG Automotive CoatingsResearch & DevelopmentPPG has been awarded an R&D 100 Award 9 times in the last 14 yearsPresented annually by R&D Magazine for most significant technology-related new products and processes
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
February 23, 2010
PPG Industries, Inc. 16
Well Positioned Joint Ventures
PPG Industries, Inc. 17
Joint VenturesPKAF Asian PPG PPG Helios
2003 2004 2005 2006 2007 2008
2003 2004 2005 2006 2007 2008
2003 2004 2005 2006 2007 2008
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
North America and Europe
transportation markets
Russian Domestic and Eastern Europe OEMs
February 23, 2010
PPG Industries, Inc. 18
Historical Performance
PPG Industries, Inc. 19
PPG Automotive CoatingsHistorical PerformanceGlobal Builds70 60 50MM Builds
PPG SalesNA EMEA AP SA
NA
EMEA
AP
SA
40 30 20 10 0 2005 2006 2007 2008 2005 2006 2007 2008
PPG Growth Outperforms the MarketSource: CSM Worldwide February 23, 2010 PPG Industries, Inc. 20
Automotive CoatingsGlobal Chaos
Brazil auto sales fall sharply in OctoberFebruary 23, 2010 PPG Industries, Inc. 21
PPG Automotive Coatings2009 Dynamics16 14 12 10 8 6 4 2 02007
2007-2009 North America Builds
MM Builds
Builds
Clunkers
Other
2009
EMEA Builds25 20MM Builds
Asia BuildsExcluding Japan
SalesMM Builds
25 20 15 10 5
15 10 5 0 2005 2006 2007Europe Other
2008
2009
0 2005China
2006India
2007Australia
2008Korea Other
2009
Source: CSM Worldwide
February 23, 2010
PPG Industries, Inc. 22
Aggressive Response to Restore Profitability
PPG Industries, Inc. 23
PPG Automotive CoatingsAggressive Cost and Business MeasuresRestructuring Actions
Manufacturing RationalizationFacilityClarkson, Ontario Baton Rouge, LA Saultan, FR European Mfg Satellites (3) North America Mfg Global Tech Labs Sales and Admin
Overhead Reduction
ActionClosed Closed Exited Paint Mfg Headcount Reduction Closed Headcount Reduction Footprint Reduction Headcount Reduction
20%
2008
2009
Lean and Cost FocusKey ProjectsLocalization of resins and products Logistics Efficiencies Receivable past due reduction 5S system for waste elimination Material Utilization Optimization: Yield loss, Sample expense, Inventory loss
Global Build Breakeven ReductionTiming2010 2010 2010 Ongoing 2010
15%
February 23, 2010
PPG Industries, Inc. 24
PPG Automotive Coatings100 80 60 40$ MM
Industrial Coatings Segment Earnings Improvement
20 0 -20 -40 -60 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009
Aggressive Restructuring Drives Profit ImprovementFebruary 23, 2010 PPG Industries, Inc. 25
Automotive CoatingsRebound Build ForecastExcluding Japan
10% Growth CAGR
China's auto sales hit record high in JanuaryMM Builds
60 50 40 30 20 10 02009
NA
EMEA
AP
SA
2010
2011
2012
Source: PPG
February 23, 2010
Source: CSM Worldwide 26 PPG Industries, Inc.
Looking ForwardLeverage market demand growth with strong focus on the BRIC countries Sustain profitability with content growth, cost reduction, pricing discipline and new valueadded technology
February 23, 2010
PPG Industries, Inc. 27
Industry OutlookNorth America: Demand Recovery16 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
EMEA: Sub-Region ShiftW. Europe Other
Builds MM
Builds MM
Asia: Sustained Growth30 25Builds MM
SA: Incremental Growth6ChinaBuilds MM
India Korea
20 15 10 5 0 2007 2009 2011 2013
5 4 3 2 1 0 2007 2009 2011 2013PPG Industries, Inc. 28
Excluding Japan
Source: CSM Worldwide
February 23, 2010
Leverage Growth in BRIC
PPG Industries, Inc. 29
Accelerate Growth in Asia14 12 10 8 6 4 2 0 2004 2006 2008 2010 2012 2014E-coat WaterborneLargest Supplier in China
MM
China Builds Impact
Asia Capacity ExpansionTechnology Action Plan Timing
Solventborne
Wuhu Phase II Add WB Capability in Tianjin New ZHG Plant
2010
2010 2011
India BuildsBuilds 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 - TalegaonFebruary 23, 2010 PPG Industries, Inc. 30
5 4 3 2 1 0 2009Source: CSM Worldwide
2010
2011
2012
Automotive Coatings Industry Over 80 OEMs PPG is fully owned Global OEMs require Chinese partner (max 50% ownership)
Asia Pacific Perspective: ChinaToyota Chandchun II Hyundai Shunyi III BAIC BDA Hafei Auto FAW-VW
New plants announced to be built between 2010 and 2014Beijing-Hyundai FAW Tianjin SGM-Dong Yue BYD Xian II R/Nissan Zhengzhou II Ford Chingqing II BBDC Chery
Changcheng Greatwall SGM Beisheng Auto NJ-Iveco Anhui Jianghuai
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
Top 20 Customers New OEM plants
BYD Changsha Zotye Changsha
Note: Map is a sample of OEM plants
February 23, 2010
PPG Industries, Inc. 31
Automotive Coatings IndustryAsia Pacific Perspective: IndiaTata Maruti Suzuki Honda Honda Force Motors Man Force Tata ULCC
Top APPG Customers New OEM plants
15 new plants announced to be built between 2009 and 2014GM ` Tata
Mahindra Renault Mahindra Tata GM Bajaj Renault Bajaj Tata Fiat VW Mercedes Mahindra Toyota Ashok Leyland Ford Nissan Renault Hyundai Motor Ford
Daimler Hero
Nissan Ashok Leyland
India Will Become a Leading Exporter of Vehicles Industries, Inc. 32 February 23, 2010 PPG
Automotive Coatings IndustryEmerging Regions Driving Growth in Small and Midsize Segments2007 2010 20142007 vs. 2014 Builds
37% 34% 29%Source: CSM Worldwide Large Vehicle
30% 41% 29%Mid Size Vehicle Small Vehicle
40% 29% 31%
Small Medium Large
+7.8 MM +6.2 MM +0.6 MM
PPG Maintains Content Per VehiclePretreatment Electrocoat Primer Basecoat Clearcoat Products Pretreatment Electrocoat Primer Basecoat Clearcoat PPG DuPont BASF Henkel X X X X X X X X X X X X X X
February 23, 2010
PPG Industries, Inc. 33
Automotive Coatings IndustryEmerging Regions Driving Growth in Small and Midsize Segments2007 2010 20142007 vs. 2014 Builds
37% 34% 29%Source: CSM Worldwide Large Vehicle
30% 41% 29%Mid Size Vehicle Small Vehicle
40% 29% 31%
Small Medium Large
+7.8 MM +6.2 MM +0.6 MM
Sealants Services DurabedSprayable Bedliner Specialty Products
PPG Maintains Content Per VehicleProducts Pretreatment Electrocoat Primer Basecoat PPG DuPont BASF Henkel X X X X X X X X X X X X X X X X X X X X X X PPG Industries, Inc. 34 X
Adhesives
Clearcoat Acoustic Sealants Bedliner
AudioguardAcoustic Coatings Systems
Services Specialties February 23, 2010
PPG Automotive CoatingsSustain Profitability Drivers Actions
February 23, 2010
PPG Industries, Inc. 35
PPG Automotive CoatingsSustain Profitability Drivers Actions
February 23, 2010
PPG Industries, Inc. 36
Automotive Market TrendsEnvironmental Eco-efficiency to improve resource use Vehicle interior emissions Resource availability Product positioning based on Green
Energy Move to fuel efficient platform designs, conservation approaches Shift in vehicle segment sales Local production Alternative fuel sources
Technology Political / Commerce Government mandates, regulation Government involvement in car cos Cost to supply globally Rise of China and India IP Protection Technology transfer Demographics Light weight materials Nano technology New processes and designs
Builds growth in the emerging regions
Urbanization movement Consistent quality standards Personal customization, convenienceFebruary 23, 2010 PPG Industries, Inc. 37
Sustain profitability with
PPG Industries, Inc. 38
PPG Automotive CoatingsNew Product Technology 2010 - 2014Pretreatment Electrocoat Primer Basecoat Clearcoat Compact Process ZircoBond 2 High Throw ED7000 / Dura-Prime Waterborne OPP3e / OPP4 Next Gen Topcoat System Increased Scratch Resistance / Self Healing Clear / UV Cure Clear B1:B2 & 3C1B: Solventborne & Waterborne
Market DriversEnergy Cost / Durability / Environment Appearance / Chip / Environment Cost / Energy / Appearance Appearance / Environmental Energy
February 23, 2010
PPG Industries, Inc. 39
Automotive Coatings IndustryIndustry TrendsConventional Process
E-Coat
Rinse Cycle
Cool
Bake
Primer
Sealer + Gel Bake
Sanding
Sanding
Basecoat Booth
Inspection
Cool
Bake
Clearcoat
Pick-Up
February 23, 2010
PPG Industries, Inc. 40
Cool
Clean, Pretreated Body-in-White
Bake
Automotive Coatings IndustryIndustry TrendsConventional Process
Compact Process
E-Coat
Rinse Cycle
Sealer + Gel Bake
Sanding
Compact Process Booth
Inspection
Cool
Bake
Clearcoat
Pick-Up
Eliminates ~20% of the Automotive paint line cost BMW exampleFebruary 23, 2010 PPG Industries, Inc. 41
Cool
Clean, Pretreated Body-in-White
Bake
PPG Automotive CoatingsIndustry TrendsCompact Process Impact Customer Cost Model$255 / unit Customer Value: Reduced Footprint Reduced Capital Less Paint Usage PPG Value Differentiated Coatings Technology Driven $227 / unitIndirect Mat'l Energy Labor Capital Paint
Conventional
Compact Process
Compact Process Generates $28 / unit SavingsSource: PPG Estimate February 23, 2010 PPG Industries, Inc. 42
Strategic SummaryAt $4B - $6B, Automotive Coatings is a key coatings segment PPG has broad strength and balance within the Automotive industryStrong global presence utilizing technology with a healthy mix of customers
PPG has a long history of aggressive actions driving profitable growth and successful leadershipTough restructuring actions combined with an energized focus on Joint Ventures Proven sustainability through investment in capabilities and technology
PPG has clear strategies to capitalize on significant growth opportunitiesLeverage growth in BRIC countries Mitigate margin pressure with content growth, cost reductions, pricing discipline and technology
February 23, 2010
PPG Industries, Inc. 43
PPG Automotive CoatingsRecent Successes at BMW Compact Process Paint share gain
Mini Cooper in Oxford
Launch of Compact Process Basecoats Spartanburg
APO Clearcoat at BMW Munich Spartanburg
Early Technology Adopter Powder Clearcoat
Waterborne Primer APO Clearcoat B1:B2 Compact ProcessFebruary 23, 2010 PPG Industries, Inc. 44
ForwardForward-Looking StatementStatements 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