Trian Partners Activist Presentation Deck
But The Company Has Pulled Back on Organic Growth Investments
We question why PPG has slowed down store growth in recent years. Is it because
management is concerned about meeting Wall Street's estimates and cannot endure some
near term earnings dilution to make the right long term investments?
■
According to PPG's recent 10-Q / 10-K filings, comparable sales at the Company's paint
stores have been growing mid-to-high single digits, implying that store-level profits should
be improving
Under the current portfolio structure, PPG's paint store business has to compete for capital
with at least 11 other underlying businesses that serve well capitalized and demanding
customers (e.g. OEMs in autos, aerospace)(1)
PPG Paints Stores - North America
870
2013
900
2014
920
2015
920
2016
925 (2)
Source: Company SEC filings, Investor presentations.
(1) According to the most recent proxy filing (2018), PPG's compensation committee measures the performance of 12 "defined" businesses.
(2) Estimate based on a chart in PPG's March 2018 investor presentation.
2017
2017 metric is
estimated.
PPG stopped
disclosing this
metric in its
2016 annual
report.
Why did PPG stop disclosing the number of company operated paint
stores in 2016? Is there a more structural issue with its store network
that management is not disclosing to its investors?
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