PPG Initiates Global Restructuring, Targeting $125 Million in Annual Savings
December 09 2016 - 6:51AM
Business Wire
Will take pretax charge of $190 million to $200 million in
fourth quarter 2016
PPG (NYSE:PPG) announced today that its board of directors
approved significant and broad restructuring actions to reduce its
global cost structure. The actions are focused on certain regions
and end-use markets where business conditions are weakest, and they
are targeting structural reductions in operating, functional and
administrative costs.
“Because of continued slow overall growth in global demand, we
are taking decisive action to adjust our cost structure,” said
Michael H. McGarry, PPG chairman and chief executive officer.
“These measures will better align our resources with anticipated
ongoing business conditions and will keep PPG competitive in the
end-markets in which we participate. Even with this broad effort to
reduce our total costs, we remain committed to continued investment
in growth-related initiatives and in geographies with continued
growth potential.”
PPG will record a pretax restructuring charge of $190 million to
$200 million, or 53-58 cents per diluted share, in the fourth
quarter 2016, of which approximately $140 million represents cash
costs and $50 million to $60 million is related to the write-down
of certain assets and other non-cash costs. Of the approximately
$140 million total cash outlay, about $110 million is expected in
2017, with the balance to occur in 2018.
In addition to the aforementioned pretax charge and cash costs,
approximately $15 million of incremental restructuring-related cash
costs are expected during 2017, for certain items that are required
to be expensed on an as-incurred basis.
When completed, the company expects the restructuring actions to
generate $120 million to $130 million in annual savings, with $40
million to $50 million of savings projected to be realized in 2017
and the remainder of the expected annual savings to be
substantially realized by year-end 2018.
PPG: WE PROTECT AND BEAUTIFY THE WORLD™
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 130 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 70 countries and reported net sales of
$14.8 billion in 2015. We serve customers in construction, consumer
products, industrial and transportation markets and aftermarkets.
To learn more, visit www.ppg.com.
Forward-Looking Statements
Statements in this news release relating to matters that are not
historical facts are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 reflecting
the company’s current view with respect to future events or
objectives and financial or operational performance or results. The
forward-looking statements contained herein include statements
relating to the timing of and ability to realize the anticipated
cost savings from the restructuring initiatives, the amount of the
anticipated earnings charge and the amount of the anticipated cash
and severance costs of the restructuring actions. Actual events may
differ materially from current expectations and are subject to a
number of risks and uncertainties, including the actual cost of the
restructuring actions and the ability to realize the expected cost
savings within the anticipated time frame, and the other risks and
uncertainties discussed in PPG Industries’ periodic reports on Form
10-K and Form 10-Q and its current reports on Form 8-K filed with
the Securities and Exchange Commission. Forward-looking statements
speak only as of the date of their initial issuance, and PPG
Industries does not undertake any obligation to update or revise
publicly any forward-looking statement, whether as a result of new
information, future events or otherwise.
We protect and beautify the world is a trademark and the PPG
Logo is a registered trademark of PPG Industries Ohio, Inc.
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PPG Media Contact:Mark Silvey, +1-412-434-3046Corporate
Communicationssilvey@ppg.comorPPG Investor Contact:Scott
Minder, +1-412-434-3466Investor
Relationssminder@ppg.cominvestor.ppg.com
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