Professional Documents
Culture Documents
061813
061813
Information current as of
June 18, 2013
Forward-Looking
Forward Statements
Looking Statements
Statements 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, the
realization of anticipated cost savings from restructuring initiatives, difficulties in integrating acquired
businesses and achieving expected synergies therefrom, economic and political conditions in international
markets, the ability to penetrate existing, developing and emerging foreign and domestic markets, foreign
exchange rates and fluctuations in such rates, fluctuations in tax rates, the impact of future legislation, 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 and in PPGs Form 10-K for the
year ended December 31, 2012 are 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 June 18, 2013, 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, except as otherwise required by applicable law.
2
Welcome
3
Todays Timeline
7:15 - 8:00 Continental Breakfast
4
PPG Deep Dive Program
Meeting objective Provide a deeper understanding of the various PPG
businesses and coatings industry sub-segments in which we operate
Typical day:
o End-use segment / industry (i.e., packaging coatings) details
o Customers
o Products / complexities
o Competitive landscape
o Geographic differences
o PPGs participation in the segment(s)
o PPGs growth opportunities
o Site visit to visually see PPG products at work for our customers
5
PPG Deep Dive Program
PPG Deep Dive is NOT:
6
PPG Deep Dive Program
Year Topic(s) Location Details
Transitions HQ
2006 Transitions Overview of PPGs Transitions Optical joint venture
Tampa, FL
PPG Asia and PPG Provided details of PPGs Asian operations and rapid
BMW facility growth history/prospects. Overview of PPGs
2010 Auto OEM automotive OEM coatings business and auto OEM
Greenville, SC
Coatings end-market dynamics.
Detailed review of global coatings auto collision repair
PPG Automotive Penske Racing facility market, including distribution processes and key
2011 customer requirements. Review of PPGs new
Refinish Charlotte, NC
technologies addressing market needs.
Overview of the broad, consolidating general
PPG Industrial Harley Davidson industrial coatings market with various product
2012 segmentation around end-use, application
Coatings facility York, PA
methodology and substrate.
PPG Packaging Ball Container facility Discuss packaging coatings industry, current market
2013 and product trends and growth opportunities.
Coatings Williamsburg, VA
7
Packaging Coatings Industry
Industry End-Market Mix by Dollar Global Coatings Companies
Value of Sales (~$100B) Packaging Coatings Positions
Aerospace Packaging
2% 3%
Global Market Position
Packaging Coatings
(~$3B)
Protective
& Marine
13% PPG #2 Position
Valspar #1 Position
Packaging a key special purpose coating segment PPG has #2 global position
9
Presentation Agenda
10
Packaging Coatings
Definitions and Acronyms:
2 PIECE CAN (2Pc): A metal can that has two parts; a stamped and drawn body and a
can end. Two piece cans are either Drawn and Wall Ironed (DWI or D&I) or Draw-Redraw
(DRD), and are made from steel or aluminum
3 PIECE CAN (3Pc): A metal can, usually made of tinplate, whose body is welded at the
side seam and has two ends.
B&B: Beer and beverage
BPA: Bisphenol A, a major component of epoxy resins used in can coatings
BPA-NI: BPA Non-Intent reflects products with BPA not intentionally added
COMPOUND: Also called seaming compound; a sealing material consisting of a water or
solvent emulsion of latex or synthetic rubber. Seaming compound is placed in the curl of
the can end for an air tight (hermetic) seal
CSD: Carbonated soft drink
DRD (D.R.D. CAN): Draw-redraw can - a can produced by forming a cup and subjecting
the cup to one or more re-drawing processes. Each re-drawing operation reduces the
diameter and increases the height of the finished can
DWI (D.W.I. CAN): A drawn and wall ironed can - a two piece can made of aluminum or
tinplated steel that is produced by forming a cup and then drawing and ironing the sidewall
of the cup into a finished can
11
Packaging Coatings (continued)
Definitions and Acronyms:
EOE (EASY OPEN END): A can end typically made of steel or aluminum that has a self-
contained fixture for opening the can and permitting removal of the contents of the
container
FAEOE (FULL APERTURE EASY OPEN END): The full end of the can is opened by the
use of a pull ring
FAGL: Food, Aerosol and General Line
G1: PPGs solvent-based easy open end coating used in Beer & Beverage
GENERAL LINE & AEROSOLS: Cans for uses other than food and beverage
LAMINATES: A thermoplastic polymer system e.g. PET, polyolefins, nylon, etc., bonded
to the coil fed metal substrate (steel or aluminum)
MAT: Monobloc, aerosols and tubes
RETORT: When foods are sterilized in the can using superheated steam under pressure.
Conditions are usually specified by the customer (i.e.: 90' @ 250F)
UV RIMCOAT: A coating used to coat the bottom rim on a two piece beer and beverage
can. This coating, while giving protection to the metal substrate, is intended primarily to
improve the movement (mobility) of the can through the can filling line
W1: PPGs waterborne easy open end coating for Beer & Beverage
12
Global Packaging Mix
Metal
Flexible Other aerosol
packaging packaging Metal can
Metal tins
0.2%
39.9% 0.2% beverage 0.3%
can
Paper- 7.6% Aluminum
based trays
containers 0.1%
11.3% Collapsible
Metal Metal food metal
can tubes
10.9%
Liquid 2.3% Other 0.1%
metal
cartons
0.2%
4.9% Rigid
Glass plastic
10.4% 22.4%
Recyclability
Long shelf life Recyclability Cost Easy to use Resealable
Market
Portability Food Design Brand Pack
Advantages
Product content protection flexibility customization perishables
flexibility
Slower filling
Shelf life
Market Container not Freight costs Shelf life Recycling
Retort
Drawbacks resealable Energy Recycling Shelf-life
capability
intensity
Coating
Key Enabler N/A N/A Decorative if any Decorative if any
Importance
14
Source: CocaCola, Freedonia
U.S. Beverage Packaging Market
Unit Volume by Substrate
Paper, 6%
Glass, 16% Box/Pouch, 2%
Plastic, 35%
Cans, 41%
Cans are the main package in a developed market like U.S. beverage
Significant global can unit growth potential remains in other major regions
Source: Euromonitor, PPG estimates
16
Packaging Coatings Characteristics
Process-ability
Coatings must be able to Retorting sterilizes the
withstand heat and pressure packed food ensuring food
for cooking or retort safety
18
Resiliency of the Can
Packaging Can History
Beer
Can Al FAEOE Bottle
2pc PET
Metal Aerosol Tetra Bev Can Cans
Food DWI Food Container
Tube Pack
Can Can
100
UK 9%
25%
Spain 9% Spain, France
Japan 9%
66% Thailand
Atlantic & Med
Mexico 7% Philippines
9%
Pacific
Ecuador
Indian
20%
Other
1400 CAGR
4%
1200 Flexible plastic
5%
Billions of Units
1000 7%
Liquid cartons
800 2%
Glass
600
6%
400 PET bottles
200
3% Metal beverage
can
0
2004 2009 2013
Metal packaging remains one of the most utilized materials in growing industry
Source: Euromonitor
23
Metal Packaging Coatings Market Segmentation
Beverage Bodies = interior
& exterior coatings
Market Segmentation
Beverage EOE = end
coatings
Estimated Market $3B 20-25% 10-15% 5-10% 25-30% 5-10% 5-10% 15-20%
Top 3 Share % 65-70% 90-95% 95-100% 45-50% 70-75% 45-50% 55-60% 25-30%
Market Growth 3% 4% 5% 2% 2% 2% 4% 2%
PPG Position Top 3 Top 3 Top 3 Top 3 Top 3 Top 3 Top 3 Top 3
Beverage Monobloc
2Pc DWI 3Pc Aerosol
Closures Aerosol
Easy Open
Ends
General Line / 10-15%
FAEOE Food Closures Aluminum Tubes
Drums
3Pc Food
Draw-ReDraw
(DRD)
75% Aluminum
Substrate 90% Steel
100% Steel 25% Steel 100% Aluminum
Used 10% Aluminum
(NA 100% Al)
Coatings Interior Spray
Rollcoat Flat Interior Spray
Application Interior Spray Exterior -
sheet Exterior - Rollcoat
Method Rollcoat
Lowest cost - Beverage design
Lowest cost
Reason Aggressive food best for aerosol
(materials &
Utilized products low/medium higher end
efficiency)
aggressive foods packages/designs
28
Types of Coating Application
Roll Coating
Market Percent
Application 10-15%
Method Viable For:
For application of exterior
Primary Purpose:
coatings of preformed cans
Can coat non-planar surfaces,
Advantages:
100% transfer efficiency
Application High line speeds, transfer
Challenges: efficiency
2Pc bev, MAT
Major Segments
Used:
29
Types of Coating Application:
Coil and Sheet Coatings
Market Percent
Application 60-65%
Method Viable For:
For application of interior and
Primary Purpose: exterior coatings for
steel/aluminum coils and sheets
100% transfer efficiency, low
Advantages:
maintenance
Planar surfaces only, may require
Application
multiple layers, can formed after
Challenges:
coating applied
3Pc bev, 3Pc food, DRD, FAEOE,
Caps and Closures, General line,
Major Segments 3Pc Aerosol, Bev EOE
Used:
30
Typical Metal Can Coatings: 3 Pc Food
Ext. Clear -
Protects metal
from corrosion &
assists in can mobility
during processing
FAEOE Interior
FAEOE Ext.
Post Repair
Spray (PRS)
Inside Spray
Washcoat
Interior coating:
Protects metal
from corrosion
External coating:
Protects metal
from corrosion &
assists in can mobility
during processing
General Line Aerosol 34
Typical Metal Can Coatings: Monobloc & Tubes
Over Varnish
(OV) protects the ink,
allows movement in the
filling can line, prevents
scuffing during Over Varnish
transportation (OV) protects the ink,
and provides various gloss
effects
Monobloc Tubes
35
PPG Position
36
PPG Packaging Coatings Evolution
From the 1990s, several significant acquisitions
have turned PPG packaging coatings business
Dammam
unit into a key global business - Middle East
COURTAULDS 2012
PPG starts to produce - Europe
PACKAGING COATINGS, - North/South America BAIRUN
primarily in the USA - Asia - Asia
BASF
- Europe
1997 - North/South America
MAN-GILL CHEMICALS
1997 - North America
37
PPG Packaging Coatings
Gonfreville, FR Bodelshausen, GR
Oak Creek, WI Cieszyn, PL *
Suzhou, CH
Rubi, ES
Foshan, CH *
Dammam *
San Juan
del Rio, MX
Bangplee, TH
Sumare, BR *
Alrode, RSA *
Clayton, AU
* New in past 5 years
Complete systems
ranging from Caps &
pre-treatment, Closures
coatings,
compounds and
Aerosols and tubes inks, for aluminium
& steel cans and
ends.
Industrial
packaging
(General Line)
Specialty packaging
(General Line) Promotional packaging
(General Line)
39
PPG Packaging Value Chain
Value Chain
Coating Aluminum Brand
Can Maker
Supplier Supplier Owner
02/26/13
40
PPG Packaging Value Chain
Coatings Customers
Value Chain
Coating Aluminum Brand
Can Maker
Supplier Supplier Owner
02/26/13
41
Packaging Coatings Can Makers
02/26/13
43
Packaging Coatings Fillers
44
Customers Expected to Consolidate as Regions Mature
Total Packaging Coatings Industry Customers Mix by Region
Others
Top 10
Others Customers
Top 10
Customers
Top 10
Customers
Others
Top 10
Customers
Others
47
Global 2Pc Beverage Can Growth 2013-2018
& Per Capita Beverage Consumption
Per capita can Europe:
consumption = # 59B
+3%
+9bn
70
North America:
92B
350 17
0%
Flat 2
80 Asia Pacific:
Latin America: 75B
26B +6%
+8% +25bn
Global:
+12bn 2013 Can Production: 252bn
% CAGR 2013-2018: +3%
2018 Growth (cans): +45bn
60%
51.0% 50.0% 51.4% 51.9% 52.5%
49.0% 48.0% 48.0% 48.2% 48.4% 48.5% 49.3%
50%
42.0% 41.9% 42.0% 41.8% 40.9%
40.0% 41.0%
Billions of Cans
30%
20%
9.0% 9.0% 9.0% 9.0% 9.0% 9.2% 9.3% 9.5% 9.5% 9.4% 9.6% 9.6%
10%
0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Cans Bottles Draught
51
Source: CMI & Ball Corp
Brand Owners Using Can to Rejuvenate Products
52
Specialty Coatings Growth
Bottle Can Coffee Caps
New look for existing product Unique products for niche
Provides visual look of glass markets
bottle
Specialty Finishes
Innovative products, e.g. tactile / matte / soft
touch etc.
Brand owners looking for visual difference
makers
53
Metal Cans = Green Packaging
Carbon Footprint per Container
Recycling
Cuts CO2 up to 60%
Cans ~ 60%
Infinite
Grams of CO2
Plastic < 20%
Degrades
Source: Coca Cola study in Conjunction with Carbon Trust and Can Maker, April 2009 54
U.S. Recycling Rates (%)
Aluminum Beverage Can Steel Containers
100 100
90 90
80 80
70 70
60 60
50 50
40 40
30 30
20 20
10 10
0 0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2003 2004 2005 2006 2007 2008 2009 2010
Coatings are a fraction of total food dollar cost, but provide significant degree of
functionality, value and flexibility for the overall industry
56
Key Industry Trends
BPA-NI Development and Commercialization
Growth Opportunities in Emerging Regions
57
Package Coatings Long Product Life Cycles
SB
Bev OV Bev EOE 3Pc Food
Gold
2Pc Food
WB I/S SB 3Pc Food
Bev OV Bev EOE Bev EOE Gold
Competitor B 2Pc
Bev I/S
5 10 15 20 25 30
Age in Years
Pack Testing
Regulatory
FCN if required
Line Trials
Key Filler Trials 1-2 years
Other pack testing 1-2
years
Scale-up trials
Commerc-
ialization
Year 1 Year 2 Year 3 Year 4
Can
Manufacturer
(Customer)
Product X Y Z D F P R Product
E Q
61
Epoxy Coatings Attributes
62
Epoxy Synthesis
+
Bisphenol A Epichlorohydrin
Epoxy
63
BPA History
Professor Fredrick vom Saal in the 1990s tied low dose BPA to endocrine
disruption in studies that have not been repeated to date
CH3
HO C OH
CH3
64
Media Coverage on BPA
The media coverage with regard to BPA remains at a constantly high level
65
Media Coverage on BPA (Continued)
October, 2010 66
BPA is Almost Everywhere
Electrical boards, switches, Glazing, corrosion
lamps, parts for kitchen tools, protection, concrete Sports helmets,
hair dryers, razors reinforcement, flooring safety glasses,
visors, toys,
Leisure and safety racing boats,
ski/golf/tennis
House hold Architecture equipments
equipments
Medical practice Lenses,
dialysis
devices,
blood sample
reservoirs,
medical
equipment,
dental fillings
Automotive
Front & rear
light covers,
Food & beverage Household Entertainment & Communication interior
equipment equipment
parts, covers,
automotive
coatings
1998 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
115 BPA
studies France bans
globally BPA in all food
packaging
EFSA re-affirms
Europe
68
BPA Legislative Update
North America EMEA
All infant formula cans converted France is unmoved by EFSA
to BPA-NI (Connecticut law report findings and proposes
banning BPA in baby bottles, cups, BPA ban for:
and canned infant formula - January 1, 2013 infant
October 2011) formula
January 1, 2014 all canned
food products
30 BPA initiatives have been
introduced in 13 states plus one
Belgium has proposed a law
in Puerto Rico during 2013
banning BPA in food packaging
material for children. Effective in
Minnesota, Maine and Nevada January 2013
have all recently passed BPA
initiatives for 2014
69
BPA Legislative Update
Asia Pacific South America
China MOH: BPA banned in baby Brazilians Sanitary Agency ANVISA
bottles. BPA is permitted for the implemented national ban for BPA use
production of other food packaging in infant bottles on Sep 2011. The
materials, containers and coatings decision meet the precautionary
except for infant & young children principle and seeks to protect children
feeding bottles. -May 30,2011 from 0-12 months.
Thailand government decided to On April 2012, Mercosur (South
expedite conversion to BPA-NI American trading union) issued a
technologies to protect export resolution banning BPA in baby bottles,
food can sales. implementing as individual national
Currently worlds largest exporter of legislation by Nov 2012 with Argentina
canned sweet corn, canned postponing to Jan 2013.
pineapple and canned fish Colombia issued resolution banning
Conversions have started with BPA in materials with direct contact
completion in 2014 with food and beverages.
70
Washington Post - February 23, 2010
71
Can Customer Statements
72
North America Customer Actions
73
EMEA Industry Actions
74
Regional BPA Conversion Catalysts
Likely
regional Export
Legislative Consumer
conversion
catalyst
75
BPA NI Conversion in Stages*
* PPG Current Projection
Beverage
Pet Food
Food
76
BPA NI Conversion Complexity Will Require A Variety of
General Line (FAGL) Solutions and Technologies
Food, Aerosol,
Acrylics
Food FAEOE, 2pc DWI,
Staining
25-30% 3pc Food, Draw- Corrosion
Re-Draw (DRD) Polyesters
Acid Packs
High Salt
Vinyls
3Pc Aerosol &
Pitting
3Pc Aerosol,
General Line General Line / Flavor
5-10% Phenolics
Side stripes Aggressive
Packs
2Pc & 3Pc Long shelf life
Beverage
20-25% varnish
resistance
Coil coats
Easy Open Dusting
Ends Interior/exterior
10-15% EOE Ease of opening
Spray coatings
Package
integrity
Caps and Interior/Exterior Color intensity
Closures /Compounds UV-EB, powder
5-10% Durability
Other
Aluminum Chemical
Monobloc bottles and Water-based
Aerosol & Tubes
Tubes
resistance
5-10%
Solvent-based
Other Inks
15-20% 77
PPG BPA-NI Development Effort
Food Cans
3-Pc
2-Pc DWI Food Cans
Food EOE
Drawn Cans
Closures Twist Offs
PPG
Other Global
Competitors
Significant
Current Global Food Inside Can Market Share opportunity for PPG
with BPA-NI
PPG
Other Global
Competitors
Shift to best available BPA-NI technologies provides window of opportunity for PPG
79
Source: PPG Estimates
Inside a Beverage Can North America
PPGs history of no
PPG inside the can share
provides market share
Other Global upside as can makers
Competitors convert to best
available technologies
BPA-NI Demand
Converted using PPG
Legacy Products
BPA-NI technology (legacy & by new design) still small portion of total demand
BPA-NI products are starting to gain initial traction (speed will be determined by:
performance, pull & cost)
Several archived formulations are BPA-NI, but are considered a step back from current
products / functionality
82
Global 2Pc Beverage Can Growth 2013-2018
& Per Capita Beverage Consumption
Per capita can Europe:
consumption = # 59B
+3%
+9bn
70
North America:
92B
350 17
0%
Flat 2
80 Asia Pacific:
Latin America: 75B
26B +6%
+8% +25bn
Global:
+12bn 2013 Can Production: 252bn
% CAGR 2013-2018: +3%
2018 Growth (cans): +45bn
1.40 1.40
1.20 1.20
1.00 1.00
0.80 0.80
2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
By Region By Region
2013 2018
South South
America America
North
North America
America
Asia /
Pacific Asia /
Pacific
EMEA EMEA
CAGR > 3%
Excludes Japan
1,200
140
155 270
48
210 480 115
740
40
0
Food Bev GL
2012 2017 86
Source: PPG Estimates
Packaging Coatings Competitive Landscape
Others
Others
Akzo,
Akzo, PPG,
PPG, Valspar
Valspar
Others
Others
Top 5
Top 5
Others
Top 5
Others
Top 5
In addition to market growth, Asia remains the largest opportunity for share
gains for multi-national coatings companies
Source: PPG Estimates
88
PPG Packaging Coatings Number 1 in Asia/Pacific
PPG share in
Top 3
Korea
China
India
Malaysia
Indonesia ANZ
90
PPG Supplying Local Customers in China
91
Beer Market by Region / Can Concentration
10B % in cans
liters
USCA
EMEA
Brazil Key:
Country
China % share of global growth
China is fastest growing beer market and in early stages of can conversion aided by
desire to eliminate inefficient energy usage on glass bottle production
Source: PPG Estimates
92
China Can Growth to Continue
10 3PC
2PC 3PC
5 Niche
B&B Top Brands
Brands
0
2008 2010 2012 2014 2016 2018
Billion/Cans
Quality products,
strong customer
relationships,
broad regional
presence
Population growth
Higher disposable income
New investment in metal packaging industry
Increased sophistication of distribution and
retail channels
Beer glass bottle to beer can conversion
Seafood / crop yields (e.g. tuna, sardines, sweet
corn, pineapple etc.)
95
Emerging Region Growth Potential
Emerging Regions - Packaging
2 PC Can Market Growth
Coatings Market Size
160 70,000
140 60,000
120
Number of Production Plants
50,000
Number of cans-(Billions)
Asia (x-China &
100 Japan)
40,000
80
30,000
60 Latin America
20,000
40
China
20
10,000 Central &
Eastern Europe,
Middle-East and
0 0 Africa
2008 2009 2010 2011 2012 2013 2014
Year
Global reach
Long-term track record
Proven products with quality consistency
Diversified product portfolio
Strong customer relationship
Responsive technical service support
EHS compliance
Ethical culture
97
PPG Presentation Summary
98
Ball Corporation
99
Ball Williamsburg
Opened in 1972
4 line aluminum beverage can plant
Produces about 3B cans per year
Major labels are Budweiser, Bud Light, Coke,
Diet Coke, Sprite, Rockstar, Mountain Dew Kick
PPG Products
Clear over varnish
Matte over varnish
Bottom rim coat
Pre-treatment chemicals
100
Appendix
101
PPG Executive Profiles
102
PPG Executive Profiles
103
PPG Executive Profiles
104