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A Quick Look at PPG Industries’ Revenue Segments

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PPG Industries’ revenue segments

PPG Industries (PPG) classifies its revenue into the following segments:

  • performance coatings
  • industrial coatings
  • glass

This structure was first reported in 2014 after PPG sold its stake in the optical business. It also merged its architectural segment with its performance coatings segment. Prior to 2014, the company classified its revenue into five segments.

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Performance coatings segment

The performance coatings segment revenue streams include refinish, aerospace, protective, marine, and architectural businesses. The segment’s revenue is primarily driven by innovation, market demand, and a good distribution network to reach end users.

The segment is PPG’s number-one revenue generator, representing 57%, or $8.8 billion, of the company’s total 2015 revenue. The segment has fierce competition from Sherwin-Williams (SHW), Axalta Coating Systems (AXTA), and RPM International (RPM).

Industrial coatings segment

The industrial coatings segment revenue streams include automotive OEMs (original equipment manufacturers), industrial coatings, packaging coatings, and specialty coatings and materials. This segment caters to various industries.

This segment is PPG’s second-largest revenue generator, representing 36%, or $5.5 billion, of the company’s total 2015 revenue. The major competitors in this segment include AkzoNobel, Axalta Coating Systems Valspar, and Nippon Paint.

Glass segment

The glass segment is PPG’s lowest revenue generator, representing 7%, or $1.1 billion, of the company’s total 2015 revenue. The segment gets its revenue from commercial and residential construction, wind energy, energy infrastructure, transportation, and electronics industries. Its major competitors include Asahi Glass, Cardinal Glass Industries, and NSG Pilkington.

We’ll look at all these segments in detail in the upcoming parts of this series. You can get indirect exposure to PPG Industries by investing in the Vanguard Dividend Appreciation ETF (VIG). VIG invests 0.7% of its portfolio in PPG Industries as of August 26, 2016.

In the next part, we’ll look at PPG’s performance coatings segment.

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