Our Valued Shareholders,
I continue to be inspired by the more than 50,000 PPG team members working every day to fulfill our purpose - to protect and beautify the world. The challenges we faced in 2022 were many - ongoing, historic cost inflation; geopolitical issues in Europe; COVID-19-related shutdowns in China; and impacts from supply disruptions and labor shortages. These challenges, however, sharpened our focus on creating increased value for customers, supporting our communities, and delivering results for shareholders.
The PPG team made it happen in 2022 by:
- Delivering financial results and rewarding shareholders. In 2022, we achieved record full-year net sales of approximately $17.7 billion, up 5% compared with 2021. Organic sales increased by 8% driven by higher selling prices. For shareholders, we raised our annual dividend for the 51st consecutive year and achieved our 123rd year of uninterrupted annual dividends.
- Driving our business strategy forward, continuing to integrate five recent strategic acquisitions that have annualized sales of about $1.7 billion. We also completed powder coating acquisitions that added manufacturing capacity in this fast-growing product category.
- Innovating sustainable paints, coatings and specialty materials, which comprised 39% of our sales in 2022. These solutions help our customers meet their sustainability goals. For example, PPG INNOVEL® PRO is an internal beverage can coating that does not contain bisphenol-A (BPA) and that provides enhanced application, leading to less waste for infinitely recyclable aluminum beverage cans. Also launched in 2022, PPG ENVIRO-Prime® EPIC 200R is an automotive corrosion protective coating that cures at lower temperatures, reducing customer energy use and lowering CO2 emissions.
- Advancing environmental, social and governance (ESG) commitments. We strengthened the governance and Board oversight of the company’s ESG program and submitted GHG emissions reduction targets to the Science-Based Target initiative for validation. We also plan to announce new 2030 sustainability goals in 2023. In addition, PPG continued its focus on diversity, equity and inclusion (DE&I) with actions that included publishing PPG’s first DE&I report and new DE&I commitments; scaling our recruiting efforts; and growing global participation in our employee resource networks.
- Supporting our communities where we operate. PPG’s global community giving totaled more than $16 million in 2022. We invested more than $9 million in advancing education in science, technology, engineering and math (STEM), reaching 70% of our commitment to invest $20 million by 2025 to advance racial equity in the U.S. by funding educational pathways for Black communities and people of color. We completed 87 COLORFUL COMMUNITIES® projects around the world in 2022, including 36 school makeovers as part of the program’s New Paint for a New Start campaign. Finally, we provided more than $820,000 in humanitarian aid for those affected by the war in Ukraine.
Our Focus on the Future
As I begin my new role as CEO, I've challenged our workforce to think big – prioritizing the investments that will differentiate us and move the needle for our customers and our business. We're continuing to look across our organization at ways to digitize our operations, modernize our manufacturing facilities and energize the PPG team around the world.
Our future holds so much promise with our team focused in the near term on:
- building momentum to restore margins in line with our operating standards,
- supporting our customers with superior service and products,
- leveraging continued recovery in key end markets, and
- executing our cost-savings initiatives and optimizing inventory.
I am energized to lead PPG and want to thank our customers for selecting PPG as their supplier of choice, our shareholders for their confidence and continued investment, and the global PPG team who demonstrates The PPG Way by making it happen every day.
President and Chief Executive Officer
Steven A. Davis
PPG director Steven A. Davis unexpectedly passed away in 2022. His leadership, contributions to PPG and partnership as a beloved member of our Board will be greatly missed.