What caused PPG's net profit to drop sharply in Q4 2024?

PPG's net profit dropped sharply in Q4 2024 primarily due to weak Industrial Coatings sales and lower volumes, which were exacerbated by adverse business conditions, particularly in Europe. Despite these challenges, the company's Performance Coatings segment showed resilience, with higher prices and volumes driving growth in this area. 1. **Industrial Coatings Segment Challenges**: - PPG's Industrial Coatings segment faced a significant 9% sales drop, amounting to $1.59 billion. This decline was attributed to lower volumes and index-based pricing. - The Industrial Coatings segment's EBITDA margin reduced by 160 basis points for the quarter, indicating operational pressures and margin compression. 2. **Global Economic Challenges**: PPG operated in a challenging macroeconomic environment, with adverse conditions impacting demand and pricing in key segments like Industrial Coatings. This was particularly notable in Europe, where demand remained weak into 2025. 3. **Performance Coatings Segment Strength**: Despite the Industrial Coatings segment's struggles, PPG's Performance Coatings segment showed positive momentum, with a 4% increase in organic sales and double-digit percentage growth in Aerospace Coatings. 4. **Cost Management and Restructuring**: PPG implemented aggressive cost-cutting and restructuring measures to address the adverse business conditions. These efforts are likely to have had a lagged impact on financial results, potentially influencing the Q4 performance negatively. In summary, PPG's net profit decline in Q4 2024 was primarily due to weak Industrial Coatings sales and global economic challenges, despite positive contributions from its Performance Coatings segment and cost management efforts.