CW: How did PPG fare overall in 2022?

Knavish: The challenges the industry faced were many, including unprecedented cost inflation, unexpected geopolitical issues in Europe, disruptive and unpredictable shutdowns in China, strong appreciation of the U.S. dollar and rapid escalation in interest rates in the United States.

However, the PPG team responded to these challenges, working more closely than ever with our customers to find new solutions and innovative products, including rapidly implementing real-time selling price increases to help offset cost inflation, focusing on the health and safety of our people, optimizing our manufacturing, and creating new innovations to support our customers’ needs.

One example is the efforts of our automotive refinish business. In 2022, the business completed the 1,000th installation of its award-winning PPG MOONWALK automated refinish paint mixing system at Group Perez Rumbao’s facility in Vigo, Spain. The innovative PPG MoonWalk system saves labor, reduces waste and transforms the refinish mixing room into a clean and safe environment, setting a new standard for the refinish market.

The PPG team also continued the integration of our recent acquisitions, and these businesses are all executing well and will provide increased organic growth prospects in the next few years. We also made some smaller, but strategically important powder coating acquisitions, which supported additional manufacturing capacity and greatly aids our technological capabilities in this fast-growing product category.

CW: What is your outlook for 2023?

Knavish: We expect the Q1 demand environment to remain similar to the fourth quarter. However, as the year progresses, we are more confident that we have several catalysts that will enable PPG to drive earnings growth, including improvements in the supply chain, which will further moderate raw material costs, and we expect to see this flow through our P&L more prominently starting in the second quarter.

Also, our strong position in China will benefit us as the COVID reopening progresses. With respect to Europe, we expect coatings demand stabilization beginning in the second quarter, resulting in higher year-over-year earnings. In the U.S., we will benefit from the continued recovery of the aerospace and automotive refinish businesses and the current strength of our order books in both of those businesses.

Also in the U.S., our recent share gains in the architectural business will help buffer lower demand from a softer U.S. housing market. As a reminder, our overall exposure to the U.S. new home construction market is relatively small, only about 1% of our global revenues.

As we said last quarter, we believe our global portfolio mix will prove more resilient in the coming quarters if we experience a broader global economic decline. We will be highly focused on controlling the controllables, including managing our costs and optimizing working capital.


CW: What is your current focus?

Knavish: As I begin my tenure as CEO, the PPG team is laser focused on delivering improved financial results, including recovering our historical margin profile, and executing on all levers to return our portfolio to mid- to high-teen percentage segment margins.

At a high level, you can expect me and the PPG team to elevate our collaboration with our customers, bringing them innovative, sustainable and differentiated products and solutions, which will enable our customers to improve their productivity and growth and allow us to improve our own organic growth performance.

We’ll simplify and optimize our manufacturing and supply chain to reduce complexity and deliver productivity for both PPG and our customers. And we will preserve our legacy of prudent management of our balance sheet, continuing to prioritize cash deployment for shareholder value creation. I plan to share more details on our key initiatives as the year progresses.

I am looking forward to leading this great team, 50,000 employees around the world, as we continue to partner with our customers to create mutual value. This year marks PPG’s 140th year anniversary, and I strongly believe that our best days are ahead thanks to our people, industry-leading products, innovative technologies and great customers.


CW: What are you most excited about for PPG’s future?

Knavish: I’m most excited about our growth opportunities. We’ve built a strong portfolio. We’ve got a fantastic footprint. We can service any customer anywhere in the world. We’ve got a great pipeline of technologies to add to the portfolio of technologies that we already have. And as we bring all that together to digitize, modernize, energize our company. When these initiatives are combined with our strong culture that is defined by the PPG Way, the future looks bright for PPG.