PPG Industries, Inc. (PPG): BCG Matrix [Dec-2025 Updated]

PPG Industries, Inc. (PPG) is clearly executing a portfolio reset as we hit late 2025, moving capital from legacy areas to high-octane growth segments. You'll see their Stars like Aerospace and Protective Coatings are firing on all cylinders, while the reliable Cash Cows, such as Automotive OEM Coatings outpacing the industry by about 300 basis points, keep the lights on-and the dividend flowing since 1899. However, the BCG analysis also shows where they've cut the cord, like the recent sale of that $2 billion architectural unit, and where big bets are being placed, like New Tech R&D, which are currently burning cash as Question Marks. Let's dive into the specifics of this strategic sharpening to see exactly where PPG is doubling down for future profit.

Background of PPG Industries, Inc. (PPG)

You're looking to map out where PPG Industries, Inc. (PPG) stands strategically right now, late in 2025. To do that right, we need to ground ourselves in what the company actually is and how it's been performing this year. PPG Industries, Inc. is a global giant in paints, coatings, and specialty materials, a company that traces its roots all the way back to 1883.

Operationally, PPG structures its business around three main segments: Global Architectural Coatings, Performance Coatings, and Industrial Coatings. The company has been actively streamlining its portfolio; for instance, it divested its silicas products business in late 2024 and also exited the U.S. and Canada architectural coatings business in late 2024. This focus is clearly shifting resources toward higher-margin areas.

Financially, the picture for PPG in 2025 shows resilience despite some top-line volatility. For the trailing twelve months ending September 30, 2025, PPG reported revenue of about $15.69B. In the third quarter of 2025, net sales were reported at $4.1B, with organic sales growing by 2% year-over-year, driven by both volume and price increases. The adjusted earnings per diluted share (EPS) for that quarter hit $2.13, which was a 5% increase year-over-year.

When we look at the segments, the Performance Coatings division is definitely showing strength. Aerospace Coatings, for example, delivered high single-digit percentage organic sales growth in the second quarter of 2025, with customer order backlogs stable at around $300 million. Packaging Coatings also saw organic sales increase by a double-digit percentage, largely thanks to securing new market share. On the other hand, Industrial Coatings sales volumes were flat, as market share gains were canceled out by softer demand in certain regions like Europe and the U.S.

The balance sheet remains solid, which is important for navigating this environment. At the end of the third quarter of 2025, PPG held about $1.9 billion in cash and short-term investments. The net debt stood at $5.4 billion, and the company continues its capital return program, repurchasing about $150 million in shares during that quarter alone. Management expects the benefits from their aggressive self-help and cost management programs to keep driving results through the rest of 2025.

PPG Industries, Inc. (PPG) - BCG Matrix: Stars

Stars are the business units or products with the best market share and generating the most cash, operating in high-growth markets. PPG Industries, Inc. demonstrates this leadership in several key areas, which require significant investment to maintain their leading positions and eventually transition into Cash Cows as market growth matures.

The following business units are positioned as Stars based on their high market share and strong growth trajectory as of late 2025:

• Aerospace Coatings: Record sales with high single-digit organic growth in Q2 2025, backed by a $300 million order backlog in Q2 2025.
• Protective and Marine Coatings: Double-digit organic sales growth in Q3 2025, driven by global infrastructure and shipbuilding demand.
• Packaging Coatings: Double-digit organic sales growth in Q3 2025, reflecting significant recent market share gains.
• Technology-Advantaged Products: These solutions comprised 41% of 2024 sales, targeting 50% by 2030, showing high-growth investment.

The performance of these high-growth areas is a key driver for PPG's overall results. For instance, the Performance Coatings segment, which includes Aerospace Coatings, delivered record quarterly sales and earnings in Q2 2025, with organic sales increasing by 6% year over year. The strength in these areas is expected to continue, as management expressed confidence in delivering above-market growth based on this portfolio.

Here is a look at PPG Industries, Inc.'s recent consolidated financial snapshot, which reflects the underlying strength of these growth engines:

The investment required to keep these Stars at the forefront is substantial, which is why their cash flow is often near breakeven, despite high revenue generation. PPG is actively investing in growth-related areas, which is evident in the segment EBITDA margin improvement being balanced by these investments. The focus on technology-advantaged products, which already accounted for 41% of 2024 sales, is a clear strategic action to maintain market share leadership in these growing segments.

You can see the direct impact of these high-growth areas on the Performance Coatings segment results:

• Performance Coatings Net Sales (Q3 2025): $1,414 million, up 3% year-over-year.
• Aerospace Coatings Organic Sales Growth (Q3 2025): Double-digit percentage.
• Protective and Marine Coatings Organic Sales Growth (Q3 2025): Double-digit percentage.

Maintaining this leadership requires continuous support for promotion and placement, which is a key tenet of the growth strategy for PPG Industries, Inc. The $300 million backlog in Aerospace Coatings is a tangible measure of future high-growth revenue visibility. If these markets continue to grow rapidly, these units will solidify their position, but for now, they consume cash to fuel that growth.

PPG Industries, Inc. (PPG) - BCG Matrix: Cash Cows

Cash Cows are business units or products with a high market share but low growth prospects. PPG Industries, Inc. exhibits this characteristic in several mature segments that reliably fund other parts of the portfolio.

Automotive OEM Coatings: This area is a clear market leader, demonstrating an ability to grow faster than the overall market. For the third quarter of 2025, PPG automotive OEM coatings net sales increased by 8%. More specifically, PPG automotive OEM sales volumes outpaced the global automotive industry by about 300 basis points, showing dominant market share capture in a mature segment. This segment delivered above-market sales volume growth in all regions.

Industrial Coatings (General): This segment exemplifies the 'milk the gains' strategy. For the third quarter of 2025, Industrial Coatings segment net sales were flat compared to the third quarter of 2024, with net sales at $1.656 billion. However, operational efficiency translated directly to the bottom line: segment income surged 17% to $233 million, driven by improved productivity and a 4% increase in sales volumes. Segment EBITDA margin improved by 180 basis points compared to the third quarter of 2024.

The overall financial health supporting these units is evident in the consolidated results for the third quarter of 2025. Net sales reached $4.1 billion, a 1% increase year-over-year. The segment performance can be summarized as follows:

Global Scale and Pricing Power: PPG Industries, Inc.'s scale allows for consistent execution on pricing. For the third quarter of 2025, higher selling prices contributed 1% to the overall net sales growth. This pricing power helped offset factors like lower selling prices from certain index-based customer contracts and a 3% reduction from business divestitures, ensuring that organic sales grew by 2% overall.

The company's commitment to returning cash is a hallmark of a strong Cash Cow. PPG Industries, Inc. has paid uninterrupted annual dividends since 1899. For the third quarter of 2025, the company paid dividends of $160 million. The current Trailing Twelve Months (TTM) annual dividend payout as of December 03, 2025, is $2.84 per share. PPG Industries, Inc. has increased its dividends for 53 consecutive years. The current dividend yield is approximately 2.83%, and the payout ratio is about 62.85%. The next planned dividend payment date is December 12, 2025.

You can see the cash generation in action through capital allocation:

• Dividends paid in Q3 2025: $160 million.
• Share repurchases in Q3 2025: approximately $150 million.
• Total deployed to share repurchases and dividends year-to-date: $1.2 billion.

The company ended the quarter with cash and short-term investments totaling $1.9 billion.

PPG Industries, Inc. (PPG) - BCG Matrix: Dogs

When we look at PPG Industries, Inc. (PPG) through the Boston Consulting Group (BCG) Matrix, the 'Dogs' quadrant represents business units operating in low-growth markets and holding a low relative market share. Honestly, these are the segments that tie up capital without delivering significant returns. They frequently break even, neither earning nor consuming much cash, but they are prime candidates for divestiture because they act as cash traps, holding money that could be better deployed elsewhere. Expensive turn-around plans for Dogs rarely pay off, so the typical action is minimization or exit.

For PPG Industries, Inc. as of late 2025, the units fitting this profile-or those recently divested that fit the low-growth, low-margin profile-are clear candidates for this category, reflecting the company's active portfolio optimization strategy.

Here are the specific areas that align with the Dogs classification based on their characteristics or recent strategic actions:

• Global Architectural Coatings (Europe/EMEA): European volume trends are anticipated to remain 'tepid' in Q4 2025 due to soft consumer sentiment.
• Automotive Refinish Coatings: Lower sales volumes expected in late 2025 due to customer inventory management and lower industry collision claims.
• Divested US/Canada Architectural Business: The sale of this low-margin, low-growth segment removes a unit with 2023 revenue of about $2 billion.
• Silicas Products Business: Divestiture completed in late 2024, removing a non-core, lower-growth specialty materials operation.

To give you a concrete view of the financial profile of the units recently exited or facing headwinds, here is a snapshot of the data associated with these Dogs:

The strategy here is clear: you want to minimize exposure to these areas. The divestiture of the US/Canada Architectural Business, which had a low-single-digit EBITDA margin, and the Silicas Products Business, which was only 1-2% of 2023 sales, are textbook moves to shed low-return assets. For the remaining area like Automotive Refinish Coatings, which saw organic sales decrease by a double-digit percentage in Q3 2025, the focus must be on managing customer inventory patterns and adapting to lower industry collision claims, avoiding major investment until market dynamics fundamentally shift.

Finance: draft the projected cash impact of the Q4 2025 debt maturity of €600 million by next Tuesday.

PPG Industries, Inc. (PPG) - BCG Matrix: Question Marks

You're looking at business units that are in markets moving fast but haven't quite captured the lead yet. These are the cash consumers that need a big push to become Stars, or they risk fading into Dogs. PPG Industries, Inc. has a few areas fitting this profile, demanding careful capital allocation decisions right now.

Traffic Solutions

This area benefits from the strong infrastructure spending you see across the U.S. and Canada, which is a definite tailwind. Still, the segment's profitability took a hit in the third quarter of 2025. Segment EBITDA dropped by 9% compared to the third quarter of 2024. This dip was directly tied to higher growth-related investment spending, which is classic Question Mark behavior-spending cash now for future market share.

The segment EBITDA margin compressed by 280 basis points year over year, landing at 21.7% for Q3 2025. This margin pressure also came from lower automotive refinish coatings sales volumes, but the investment spend is the key driver aligning with the need to rapidly gain share.

Global Architectural Coatings (Mexico)

The outlook for the Mexican architectural coatings business shows potential, though it's not a sure thing yet. In the second quarter of 2025, retail demand was solid, but project-related spending was still lower year over year. Management anticipates that project-related demand will improve during the second half of 2025, with a modest improvement expected in the fourth quarter of 2025. This suggests the market growth is there, but PPG Industries, Inc.'s current share capture in the project space is uncertain.

For context, Latin America overall delivered comparable organic growth in Q2 2025, showing the region has momentum, but the specific Mexican project recovery is the variable here.

New Technology R&D

The commitment to next-generation coatings is significant, representing a major cash drain today for an unproven future payoff. PPG Industries, Inc. spent $420 million on research and development for the twelve months ending September 30, 2025. This spending represented approximately 2.7% of revenue in 2024, and the company is maintaining this high level of investment for innovation. You've got to fund the pipeline, but these unproven technologies are Question Marks until buyers adopt them at scale.

Industrial Coatings (General)

While the Industrial Coatings segment as a whole posted a strong Q3 2025 segment income increase of 17% on flat sales of $1.656 billion, the underlying regional performance in key developed markets signals uncertainty. Specifically, organic sales in Europe and the U.S. declined by a low single-digit percentage in Q3 2025. This decline, despite strength in areas like automotive OEM coatings (net sales up 8%), shows that parts of this segment are struggling to maintain traction in mature, high-share markets, fitting the low-share/high-growth-market uncertainty profile.

Here's a quick look at the key 2025 data points associated with these Question Mark areas:

The required actions for these units revolve around aggressive investment or divestiture, based on near-term potential. You need to watch the following:

• Determine the required investment level to turn Traffic Solutions into a Star, given the 9% Q3 EBITDA drop.
• Monitor if the expected modest improvement in Mexico project spending materializes in Q4 2025.
• Assess the market adoption rate for new technologies funded by the $420M R&D spend.
• Decide if the low single-digit organic sales decline in key Industrial Coatings regions warrants a strategic pivot.

Finance: draft 13-week cash view by Friday.