Before reviewing our results, I want to welcome Jamie to her first earnings call as PPG's CFO. Now, I'd like to start by providing highlights of our second quarter 2026 financial performance, and then we'll share our outlook for the remainder of the year. I am proud to report that PPG delivered its sixth consecutive quarter of organic sales growth, a solid increase of 4%, with equal contributions from sales volumes and selling prices. As many of you know, we have been systematically building our organic growth muscle through commercial excellence, innovation excellence, and operational excellence.
This growth momentum was led by our strategy to deliver product innovation and productivity solutions both inside and outside the can for our customers. Adjusted EPS of $2.23 was slightly higher year-over-year, driven by strong results in our differentiated Aerospace and Architectural Coatings Latin America businesses, offsetting the expected lower sales volumes in Automotive Refinish. Our total company adjusted EBITDA margin was over 17%, reflecting solid commercial execution of both pricing and share gains, which partially offset portfolio mix dynamics. Turning to our segment performance, in Global Architectural Coatings, second quarter net sales rose 8% to $1.1 billion, with 2% organic growth driven by higher selling prices, partially offset by slightly lower sales volumes.
Organic sales for Architectural Coatings in Latin America and Asia-Pacific increased by a mid-single digit percentage, driven by volume growth in Latin America and higher selling prices. Segment EBITDA increased by 14%, and EBITDA margin improved 100 basis points to 19.4%, driven by the realization of higher selling prices and cost control actions, partially offset by cost of goods sold inflation. Importantly, we delivered EBITDA and margin expansion in both of our major regions this quarter. In Europe, in particular, our pricing and cost actions drove a return to margin expansion after several quarters of contraction, marking a change in trajectory for this business.
| Metric | Period | Current guidance |
|---|---|---|
| Adjusted EPS | FY2026 | $7.70-$8.10 reaffirmed |
| Organic sales growth (company) | Q3 2026 | Low-single-digit to mid-single-digit percentage |
| Adjusted EBITDA margin (company) | Q3 2026 | Flat to down 100 bps year over year |
| Global Architectural organic sales / margin | Q3 2026 | Flat to low-single-digit organic growth; EBITDA margin relatively flat YoY |
| Performance Coatings organic sales | Q3 2026 | Mid-to-high single-digit growth; segment EBITDA margin expansion returns in H2 on pricing and Refinish stabilization |
| Automotive Refinish volumes | H2 2026 | Return to growth (up low single digits) in Q3 and Q4 as U.S. destocking is now behind |
| Industrial segment new-business wins | ongoing | ~$25 million of new-business wins per quarter hitting the P&L across Auto, Packaging and Industrial |
| Aerospace capital investment | multi-year | ~$500M total ($380M new Shelby, NC plant + $120M debottlenecking at Huntsville, Mojave and others) |
| Metric | YoY | Note |
|---|---|---|
| Net sales | +7% to $4.5B | 6th straight quarter of organic growth (+4%) plus pricing and share gains across most businesses. |
| GAAP diluted EPS | $1.95 | Reported EPS below the $2.23 adjusted figure; adjusted EPS slightly higher YoY on Aerospace and Latin American Architectural strength. |
| Adjusted EBITDA margin | >17% | Solid commercial execution of pricing and share gains partially offset by portfolio-mix dynamics and neutral Q2 price/cost. |
| Global Architectural Coatings sales | +8% to $1.1B (2% organic) | Higher selling prices plus Latin America volume growth (strong Mexico retail and project sales), Europe organic growth turning positive. |
| Global Architectural EBITDA margin | 19.4% (+100 bps) | Higher prices and cost control, with Europe returning to margin expansion. |
| Performance Coatings sales | +7% to $1.6B (3% organic) | Aerospace, Protective & Marine and Traffic Solutions growth, partly offset by lower Automotive Refinish volumes. |
| Performance Coatings EBITDA margin | 22.7% (-300 bps) | Almost entirely the Automotive Refinish year-over-year comparison; pricing offset by lower Refinish volumes. |
| Industrial Coatings volume | +5% (best in 5 years) | Auto OEM and Packaging share gains launching into the P&L (~$25M of wins per quarter) plus an Industrial-business inflection. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Automotive Refinish normalization | Significant U.S. destocking through mid-2026 | Management declared the U.S. destocking behind it as promised; U.S. insurance claims are improving (down mid-single digits), auto-insurance premiums fell a low-single-digit percentage — the first year-over-year decline in five years — and Refinish volumes return to low-single-digit growth in Q3/Q4 with segment margin expansion resuming in H2. | — |
| Fast pricing execution | Reactive pricing in prior cycles | Learnings from prior inflationary cycles plus the abrupt Iran-conflict-driven raw-material spike let PPG cover ~90% of COGS inflation with price in a single quarter and pull forward its break-even, with more price actions coming in Q3; management says collaborative pricing has not cost it business. | — |
| Industrial share-gain harvest | Wins announced over 2+ years | Roughly $100M of Industrial-segment wins from last year (plus ~$100M this year) are now launching into the P&L at ~$25M/quarter — ~40% in Auto OEM (Auto outperformed the market by ~500 bps) — with Packaging step-change gains led by Europe and some wins not launching until 2027. | — |
| Aerospace as a growth engine | Deep dive held last month | Exceptional double-digit growth with a ~$300M backlog; ~$500M of capital investment (new Shelby, NC plant plus debottlenecking at Huntsville and Mojave) is starting to unlock capacity in a high-growth, high-margin business, with more building for the future. | — |
| Protective & Marine durability | Sustained upswing | 13 straight quarters of volume growth (again double digits, above the company's own high-single-digit expectation) driven by marine aftermarket/new-build in Asia and Europe, fire protection, and data-center demand (structural steel, insulative and dielectric coatings, flooring) — management sees no peak on the horizon, only tougher comps. | — |
| Portfolio and capital deployment | Post-divestiture cleanup | 'Nothing of size' is for sale; a few fringe businesses may be cleaned up; capital deployment stays disciplined (11 straight quarters of buybacks, raised dividend, one ~$65M bolt-on closed) with no large M&A in the pipeline and a policy of not letting cash build. | — |
| Europe Architectural inflection | Multiple quarters of margin contraction | A change in trajectory — share gains in ~75% of key countries, higher-margin sustainable products, pricing ahead of inflation, and RSG&A cuts — with a further step change in 2027 as European plant closures (Q4/Q1) execute. | — |