Our Valued Shareholders,
I'm energized by our more than 50,000 PPG team members who delivered excellent results for the company in 2023, our 140th year. The resiliency of our global business portfolio combined with the efforts and determination of our people to "make it happen" for our customers were key factors in our ability to overcome a challenging macro environment and deliver on our purpose - to protect and beautify the world.
In 2023, the PPG team delivered:
• Record financial performance through margin recovery, full-year operating cash generation of $2.4 billion and delivery of organic sales growth by supporting our customers' productivity and sustainability needs. PPG achieved records in sales, adjusted earnings per diluted share (EPS) and operating cash flow in 2023.
• The implementation of our Enterprise Growth Strategy, which drove $150 million of incremental sales in the first year, including solid growth from sales of our innovative products for electric vehicles and powder coatings.
• Digital, customer-focused innovations that were adopted by customers. For example, our PPG LINQ™ cloud-based platform and PPG MOONWALK® paint mixing machines contributed to nearly 2,000 automotive body shop installations for PPG.
We divested several non-core assets, including our European and Australian traffic solutions businesses in 2023, and recently announced reviews of strategic alternatives for PPG's architectural coatings business in the U.S. and Canada and PPG's silicas product business. We've also made important progress in reducing complexity in our product offering, driving down working capital.
The success of the team's work throughout the year has enabled PPG to continue to reward our shareholders, as we paid about $600 million in dividends and completed about $100 million of share repurchases in 2023. PPG has raised its annual dividend payout for 52 consecutive years and has paid uninterrupted annual dividends for 124 years.
PPG also continued to take actions to further advance its sustainability commitments. In 2023, we became the first U.S.-based coatings manufacturer to receive validation from the Science Based Targets initiative (SBTi) for scope 1, 2 and 3 greenhouse gas emissions reduction targets. In addition, PPG announced 2030 sustainability goals that focus on driving sales of sustainably advantaged products that help our customers achieve their sustainability objectives while reducing the environmental impact of our products. In 2023, 44% of our sales were from products and processes that address multiple sustainability benefits, including lower volatile organic compound emissions, enhanced energy efficiency, improved durability, or the use of renewable raw materials. In addition, we completed our 500th COLORFUL COMMUNITIES® project. Over the course of 500 projects, PPG employee volunteers have reached diverse communities and important spaces in need of bright and colorful transformations, positively impacting more than 9.2 million people in 50 countries.
We are eager to build on the progress we’ve achieved in 2023. We are confident that we will deliver positive sales volume in 2024 and leverage key share gains in several businesses. We will benefit from executing on a significant order backlog in our aerospace business, growing our well-positioned businesses in Mexico and continuing to focus on various other key growth initiatives, including powder coatings, electric vehicle products and customerfacing digital solutions. Lastly, we entered 2024 with a strong balance sheet, which provides us with the flexibility for further shareholder value creation going forward.
I want to thank our employees across the world for positioning the company for growth and value creation in 2024 and beyond for the benefit of all stakeholders.
Thank you for your continued confidence and investment in PPG.
Tim Knavish
Chairman and Chief Executive Officer