Trian Partners Activist Presentation Deck
3. Commence Strategic Portfolio Review: PPG Should Consider Separating into an
Architectural Coatings Company and an Industrial Coatings Company
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We believe that PPG is comprised of high quality businesses that lose their strategic value
when operated as part of one company
Separating into a "Global Architectural" company and "Industrial" company could enable PPG
to unlock value by creating leading, pure play businesses
A separation also increases the probability of optimizing the US architectural coatings
business, which has underperformed peers in recent years
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Global Architectural Coatings Co.
$5.5bn sales / $0.8bn EBITDA (15%
margin)
#1 / #2 in every business
Addressable market size: ~$60bn
Pure play coatings business with
fragmented customer base (strong
pricing power and margins)
Better able to fix the struggling US
architectural coatings business
Opportunity to build brand equity
through paint store investment and
advertising commitments
Low R&D/capital intensity spending
(high FCF conversion)
Platform for strategic acquisitions in
architectural space
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Industrial Coatings Co.
$9.2bn sales / $1.9bn EBITDA (20% margin)
#1 in Auto OEM and Aerospace
#2 in Auto Refinish and Packaging
#3 in Industrial with significant opportunity
to grow through consolidation
Addressable market size: ~$80bn
Higher cyclicality
More customer concentration
Stickier, long-term relationships
Innovation driven investment cycles
(R&D/Capital expenditures)
Leading service capabilities
Platform for strategic acquisitions in
industrial space
Source: Wall Street research and Trian estimates. Financial estimates for the year ended December 2017.
Note: We would assume that the architectural business would be spun-off from the industrial business and that based on our experience, a significant majority of the existing PPG board would continue as the
directors of PPG following a separation.
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