uploads/2016/08/part-5-1.png

Exploring PPG Industries’ Performance Coating Segment

By

Updated

Performance coatings segment

PPG Industries’ (PPG) biggest chunk of revenue comes from its performance coatings segment. According to the company’s 2015 annual report, this segment contributed 57%, or $8.8 billion, to PPG’s total revenue.

In 2010, the segment reported revenue of $6.2 billion. This implies a CAGR (compound annual growth rate) of ~7.1%. The revenue stream for this segment includes refinishing, aerospace, architecture, and protective and marine.

It’s worth noting that in 2014, PPG aligned its architectural segment with its performance coatings segment. The above graph factors in this change.

Article continues below advertisement

Market position

According to a recent PPG Industries presentation at an investors’ forum, the company is the leader in the refinish business and aerospace business, which have a combined estimated market of $9.0 billion. The global architectural coatings segment’s business is estimated at $50 billion. The market share of the top four businesses combined is estimated at 40%.

PPG holds the second position in the architectural business next to Sherwin-Williams (SHW). It holds third place in the protective and marine coatings space. It’s estimated that the protective and marine market is about $16 billion globally. AkzoNobel is the leader in the protective and marine segment. The other major competitors in this space include Valspar (VAL), RPM International (RPM), and BASF.

Investors can invest in the SPDR S&P Dividend ETF (SDY), which has 0.6% of its investments in PPG Industries as of August 26, 2016.

Advertisement

More From Market Realist