PPG Industries Inc (PPG) 2023 Q2 法說會逐字稿

Good morning. My name is Carla, and I will be your conference operator for today. Welcome to the Second Quarter PPG Earnings Conference Call. (Operator Instructions)

早上好。我叫卡拉，今天我將擔任你們的會議操作員。歡迎參加 PPG 第二季度收益電話會議。 （操作員說明）

I would now like to turn the conference over to John Bruno, Vice President of Investor Relations. Please go ahead, sir.

現在我想將會議交給投資者關係副總裁約翰·布魯諾 (John Bruno)。請繼續，先生。

Thank you, Carla, and good morning, everyone. Once again, this is John Bruno, and we appreciate your continued interest in PPG and welcome you to our second quarter 2023 financial results conference call. Joining me on the call from PPG are Tim Knavish, President and Chief Executive Officer; and Vince Morales, Senior Vice President and Chief Financial Officer.

謝謝你，卡拉，大家早上好。我是約翰·布魯諾（John Bruno），我們感謝您對 PPG 的持續關注，並歡迎您參加我們的 2023 年第二季度財務業績電話會議。與我一起參加 PPG 電話會議的是總裁兼首席執行官 Tim Knavish；以及高級副總裁兼首席財務官文斯·莫拉萊斯 (Vince Morales)。

Our comments relate to the financial information released after U.S. equity markets closed on Thursday, July 20, 2023. We have posted detailed commentary and accompanying presentation slides on the Investor Center of our website, ppg.com. The slides are also available on the webcast site for this call and provide additional support to the opening comments Tim will make shortly. Following management's perspective on the company's results for the quarter, we will move to a Q&A session.

我們的評論涉及 2023 年 7 月 20 日星期四美國股市收盤後發布的財務信息。我們已在我們網站 ppg.com 的投資者中心發布了詳細評論和隨附的演示幻燈片。這些幻燈片也可在本次電話會議的網絡廣播網站上獲取，並為蒂姆很快將發表的開場評論提供額外支持。在管理層對公司本季度業績的看法之後，我們將進入問答環節。

Both the prepared commentary and discussion during this call may contain forward-looking statements, reflecting the company's current view of future events and their potential effect on PPG's operating and financial performance. These statements involve uncertainties and risks, which may cause actual results to differ. The company is under no obligation to provide subsequent updates to these forward-looking statements.

本次電話會議期間準備的評論和討論可能包含前瞻性陳述，反映了公司當前對未來事件及其對 PPG 運營和財務業績的潛在影響的看法。這些陳述涉及不確定性和風險，可能導致實際結果有所不同。該公司沒有義務提供這些前瞻性陳述的後續更新。

The presentation also contains certain non-GAAP financial measures. The company has provided in the appendix of the presentation materials, which are available on our website, reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures. For additional information, please refer to PPG's filings with the SEC.

該演示文稿還包含某些非公認會計準則財務指標。該公司在我們網站上提供的演示材料附錄中提供了這些非公認會計原則財務指標與最直接可比的公認會計原則財務指標的調節表。如需了解更多信息，請參閱 PPG 向 SEC 提交的文件。

Now let me introduce PPG President and CEO, Tim Knavish.

現在讓我介紹 PPG 總裁兼首席執行官蒂姆·納維什 (Tim Knavish)。

Thank you, John. and good morning, everyone, and welcome to our second quarter 2023 earnings call. I would like to start by providing a few highlights on our second quarter record financial performance, and then I'll move to our outlook.

謝謝你，約翰。大家早上好，歡迎參加我們的 2023 年第二季度財報電話會議。首先，我想介紹一下我們第二季度創紀錄的財務業績的一些亮點，然後我將談談我們的展望。

The PPG team delivered all-time record financial results in the second quarter, including sales of $4.9 billion, adjusted earnings per diluted share from continuing operations of $2.25 and year-to-date cash generation of about $620 million. Our adjusted EPS is about 24% higher than the second quarter of 2022, and cash generation of $750 million higher year-over-year.

PPG 團隊在第二季度實現了創紀錄的財務業績，包括 49 億美元的銷售額、2.25 美元的持續運營稀釋每股收益以及年初至今約 6.2 億美元的現金生成。我們的調整後每股收益比 2022 年第二季度高出約 24%，現金產生量同比增加 7.5 億美元。

These strong financial results were achieved despite operating in an environment of variable global economic demand. Industrial production was muted, reflecting cautious consumer buying behavior in Europe and slower-than-expected recovery in China and softening demand in certain end-use markets in the U.S.

儘管在全球經濟需求不斷變化的環境中運營，但仍取得了這些強勁的財務業績。工業生產低迷，反映出歐洲消費者購買行為謹慎、中國復甦慢於預期以及美國某些最終用途市場需求疲軟。

Overall, our results were supported by good growth trends in several of our technology advantage businesses and leading brands. PPG's strong positioning in these end-use markets led to record second quarter sales in 5 of our 9 businesses: aerospace, automotive, automotive refinish, PPG Comex and our protective and marine coatings business. We implemented incremental price increases in the first half of the year, primarily in the Performance Coatings segment and our aggregate 2-year stack pricing for the company is now about 20%, which is offsetting historically high cost inflation. We expect selling prices to remain positive in the second half of 2023, recognizing prior year price increases will reach anniversaries as the year progresses.

總體而言，我們的業績得益於我們的幾個技術優勢業務和領先品牌的良好增長趨勢。 PPG 在這些最終用途市場的強大定位導致我們 9 項業務中的 5 項第二季度銷售額創下歷史新高：航空航天、汽車、汽車修補漆、PPG Comex 以及我們的防護和船舶塗料業務。我們在上半年實施了增量提價，主要是在高性能塗料領域，我們公司的兩年總定價目前約為 20%，這抵消了歷史上較高的成本通脹。我們預計 2023 年下半年銷售價格將保持正值，因為隨著時間的推移，去年的價格上漲將達到週年紀念日。

As I said in my CEO investor briefing in May, margin recovery is the top near-term priority and we have made great progress this year in improving our segment margins toward our historical profile. Our aggregate segment margins in Q2 were about 16%, which is 330 basis points higher than the second quarter of 2022. This included the Performance Coatings segment delivering margins of near 18%, the highest since 2016.

正如我在五月份的首席執行官投資者簡報中所說，利潤率恢復是近期的首要任務，今年我們在提高部門利潤率以達到歷史水平方面取得了巨大進展。我們第二季度的總細分市場利潤率約為 16%，比 2022 年第二季度高出 330 個基點。其中高性能塗料細分市場的利潤率接近 18%，為 2016 年以來的最高水平。

Another key priority for our team has been to return to our legacy of strong cash generation. And through the first half of the year, we delivered record operating cash generation of about $620 million. This was supported by our record net earnings, but we also lowered our inventory levels by about $100 million on a sequential quarterly basis. Despite this reduction, our raw material inventories remain elevated and we are executing various action plans to further reduce these inventory levels over the next several quarters as commodity supply availability has improved significantly this year.

我們團隊的另一個關鍵優先事項是恢復我們強大的現金生成傳統。今年上半年，我們創造了約 6.2 億美元的創紀錄運營現金生成。這得益於我們創紀錄的淨利潤，但我們也將庫存水平環比降低了約 1 億美元。儘管有所減少，我們的原材料庫存仍然很高，並且我們正在執行各種行動計劃，以在未來幾個季度進一步降低庫存水平，因為今年商品供應可用性已顯著改善。

Now I'd like to spend a few minutes on 3 key drivers that are contributing to our excellent financial results in 2023. First, while overall global industrial production is challenging, including in a number of industrial end-use markets that are already in recessionary tight demand conditions, our portfolio of business mix is providing great resilience. Through the best-performing global industries in the second quarter were aerospace and auto OEM, we have established leading global positions in each of these end markets by facilitating our customer success through innovative and sustainably advantaged products and much relied upon services.

現在，我想花幾分鐘時間談談為我們在 2023 年實現出色財務業績做出貢獻的 3 個關鍵驅動因素。首先，雖然全球工業生產總體充滿挑戰，包括許多已經處於衰退需求緊張狀況的工業最終用途市場，但我們的業務組合組合提供了巨大的彈性。第二季度表現最好的全球行業是航空航天和汽車原始設備製造商，我們通過創新和可持續優勢產品以及備受信賴的服務促進客戶成功，從而在這些終端市場建立了全球領先地位。

We expect demand for our aerospace and auto OEM coatings products to remain robust as they are both still below 2019 demand levels. Two data points are international flights remain 10% below 2019 prepandemic levels. And over the past several years, lower automotive OEM global builds have resulted in an estimated supply deficit of about 40 million cars versus historical build rates.

我們預計對我們的航空航天和汽車 OEM 塗料產品的需求將保持強勁，因為它們仍低於 2019 年的需求水平。兩個數據點是國際航班仍比 2019 年疫情前水平低 10%。過去幾年，汽車 OEM 全球產量下降導致與歷史產量相比估計供應短缺約 4000 萬輛汽車。

The second key driver is that we continued to deliver strong earnings performance in Europe as we achieved consecutive quarterly earnings records despite lackluster regional industrial production activity and weak aggregate architectural demand. This has been accomplished by our team's strong execution of cost and margin management. When this region begins to recover to any degree, PPG will be well positioned for solid top line and additional bottom line growth.

第二個關鍵驅動因素是，儘管地區工業生產活動低迷且總體建築需求疲弱，但我們在歐洲繼續實現強勁的盈利表現，連續實現季度盈利記錄。這是通過我們團隊對成本和利潤管理的強有力執行而實現的。當該地區開始復蘇到一定程度時，PPG 將處於有利地位，實現穩健的營收和額外的利潤增長。

The third key driver is our strong positioning in Mexico where current economic conditions remain robust, including expansive near-shoring related growth, solid consumer wealth growth and an appreciating local currency. We expect the near-shoring benefits to continue for a number of years, first with capital investment, and then through increased regional employment. PPG remains the clear leader in Mexico for architectural and automotive OEM, and we have actions underway to capture further growth in our other businesses where we will leverage our core strengths, including the best-in-class PPG Comex concessionaire distribution network.

第三個關鍵驅動因素是我們在墨西哥的強勢地位，墨西哥目前的經濟狀況依​​然強勁，包括近岸相關增長的擴張、消費者財富的穩健增長以及當地貨幣的升值。我們預計近岸效益將持續數年，首先是資本投資，然後是區域就業的增加。 PPG 仍然是墨西哥建築和汽車 OEM 領域明顯的領導者，我們正在採取行動，以實現其他業務的進一步增長，我們將利用我們的核心優勢，包括一流的 PPG Comex 特許經銷商分銷網絡。

I'd also like to comment on our enterprise growth strategy. A key pillar of this strategy is to partner with our customers to deliver superior service and products with a focus on enhancing their productivity and sustainability. In the second quarter, we continued to make advancements and earn several new customer wins. I'm excited about the opportunities we have ahead of us to win more customer value-driven business and grow our organic sales.

我還想談談我們的企業發展戰略。該戰略的一個關鍵支柱是與我們的客戶合作，提供優質的服務和產品，重點是提高他們的生產力和可持續性。在第二季度，我們繼續取得進步並贏得了一些新客戶。我對我們面前的機會感到興奮，可以贏得更多以客戶價值為導向的業務並增加我們的有機銷售。

Now some quick updates about our important ESG initiatives. As we communicated in our 2022 ESG Report, we've introduced 2030 greenhouse gas emissions reduction targets that have now been validated according to climate science through the Science Based Targets initiative. We plan to reduce our Scope 1 and Scope 2 absolute greenhouse gas emissions by 50% by 2030 and our Scope 3 greenhouse gas emissions by 30% within the same time frame.

現在簡要介紹一下我們重要的 ESG 舉措。正如我們在 2022 年 ESG 報告中所傳達的那樣，我們引入了 2030 年溫室氣體減排目標，這些目標現已通過“基於科學的目標”倡議根據氣候科學得到驗證。我們計劃到 2030 年將範圍 1 和範圍 2 絕對溫室氣體排放量減少 50%，同時將範圍 3 溫室氣體排放量減少 30%。

Moving to our outlook. We expect global industrial production to remain at lower levels in the third quarter, including similar demand activity in Europe, some further slowing in the U.S. and modest sequential improvement in China. We do expect certain pockets of industry activity to remain more resilient, including aerospace and automotive industries, where we are well positioned on a global basis. In addition, we expect economic activity in Mexico to remain solid.

轉向我們的展望。我們預計第三季度全球工業生產將保持在較低水平，包括歐洲的類似需求活動、美國的進一步放緩以及中國的適度環比改善。我們確實預計某些行業活動將保持更具彈性，包括航空航天和汽車行業，我們在這些行業在全球範圍內處於有利地位。此外，我們預計墨西哥的經濟活動將保持穩健。

In our architectural businesses, we expect demand conditions to be mixed by geography. In Europe, we anticipate demand will stabilize at current levels, resulting in year-over-year sales volume being much closer to the prior year. In the U.S., we anticipate DIY demand to remain at lower levels and PRO contractor residential repaint activity to begin the modestly decline sequentially with the backdrop of lower existing home sales. Finally, in Mexico, we expect our PPG Comex business to continue to post solid organic growth.

在我們的建築業務中，我們預計需求條件會因地理位置而有所不同。在歐洲，我們預計需求將穩定在當前水平，從而導致同比銷量更加接近去年。在美國，我們預計 DIY 需求將保持在較低水平，而在現有房屋銷售下降的背景下，專業承包商住宅重新粉刷活動將開始適度下降。最後，在墨西哥，我們預計 PPG Comex 業務將繼續實現穩健的有機增長。

In the third quarter, we expect to realize additional benefits from moderating cost inputs. At the peak of our supply disruptions, we had more than 160 force majeures in our global supply chain. That is now about 10, which is in line with our historical norms. To date, we have not yet recognized the full financial benefit of our commodity supply chain normalizing. From a financial realization perspective, through the end of June, our input costs were still 20% higher than the prepandemic levels. As we further reduce our inventories, we will realize additional earnings benefit.

在第三季度，我們預計將通過降低成本投入來實現更多收益。在供應中斷最嚴重的時期，我們的全球供應鏈出現了 160 多項不可抗力。現在大約是 10，這符合我們的歷史標準。迄今為止，我們尚未認識到商品供應鏈正常化所帶來的全部經濟效益。從財務變現的角度來看，截至6月底，我們的投入成本仍比疫情前高出20%。隨著我們進一步減少庫存，我們將實現額外的盈利效益。

We continue to work on our previously announced restructuring initiatives and expect an incremental $15 million year-over-year earnings benefit in the third quarter. Additionally, we will benefit from the recent paint film acquisition that we made in the second quarter. This business is uniquely positioned in the premium end of this new emerging market and has good customer pull and future growth prospects. Annual sales of this business are about $100 million. Despite the challenging environment, we have raised our full year earnings guidance and expect third quarter aggregated segment margins will be higher on a year-over-year basis for the fourth consecutive quarter.

我們將繼續致力於之前宣布的重組計劃，預計第三季度的盈利將同比增加 1500 萬美元。此外，我們還將受益於我們最近在第二季度進行的漆膜收購。該業務在這個新興市場的高端市場中處於獨特的地位，具有良好的客戶吸引力和未來的增長前景。該業務的年銷售額約為1億美元。儘管面臨充滿挑戰的環境，我們還是提高了全年盈利指引，並預計第三季度的細分市場利潤率將連續第四個季度同比上升。

Finally, I want to thank our team members around the world who support our customers, serve our communities and continually look for ways to do better today than yesterday every day. It is their dedication and commitment to helping make our customers successful that gives me continued confidence in our future. As we mark PPG's 140th anniversary in August, I firmly believe that our best days still remain ahead of us.

最後，我要感謝我們世界各地的團隊成員，他們支持我們的客戶，服務我們的社區，並每天不斷尋找今天比昨天做得更好的方法。他們致力於幫助我們的客戶取得成功，這讓我對我們的未來充滿信心。當我們在 8 月份慶祝 PPG 成立 140 週年之際，我堅信我們最美好的日子仍然在前方。

Thank you for your continued confidence in PPG. This concludes our prepared remarks. And now would you please open the line for questions.

感謝您對 PPG 的持續信任。我們準備好的發言到此結束。現在請您開通提問熱線。

(Operator Instructions) Your first question comes from the line of Christopher Parkinson.

（操作員說明）您的第一個問題來自克里斯托弗·帕金森。

Great. Can we perhaps just dissect the outlook for Industrial Coatings segment margins a little bit just based on what you're seeing for price cost for the second half of the year; end market mix, given the dichotomy of certain things moving in various directions for your 3Q outlook in your slide deck; comp accruals. Just anything else you think is worthwhile discussing as you progress back towards prior peak?

偉大的。我們是否可以根據您看到的下半年價格成本來稍微剖析一下工業塗料細分市場的利潤前景？終端市場組合，考慮到幻燈片中的第三季度前景中某些事情朝不同方向發展的二分法；應計費用。當你回到之前的巔峰時，你認為還有什麼值得討論的嗎？

I'll let Vince answer the comp accruals, but I'll take segment margins and outlook for some of the businesses. Segment margins in Industrial were still on the recovery journey. So we have continued to...

我會讓文斯回答應計費用，但我會考慮部分業務的利潤率和前景。工業部門的利潤率仍在復蘇過程中。所以我們繼續...

(technical difficulty)

（技術難度）

Okay. Thanks, Chris. So as I started to say, segment margins -- okay. Good. Segment margins in Industrial certainly have more room to grow and we expect that to continue, both from the price cost standpoint, but the other piece of recovery that is really not happened yet that will continue to improve the segment margins on industrial are volumes. Of course, right now, auto OEM is strong but still below 2019. And then we've got some pockets of weakness in industrial and certainly pockets of weakness in packaging. So we will get segment margins as those volumes stabilize.

好的。謝謝，克里斯。正如我開始說的，細分利潤——好吧。好的。工業部門的利潤率肯定有更大的增長空間，我們預計這種情況會持續下去，無論是從價格成本的角度來看，但實際上尚未發生的另一部分複蘇將繼續提高工業部門的利潤率，那就是銷量。當然，目前汽車原始設備製造商很強勁，但仍低於 2019 年。然後我們在工業方面也有一些弱點，當然在包裝方面也有一些弱點。因此，隨著銷量穩定，我們將獲得細分市場利潤。

The other thing is the operational challenge that we mentioned at our May event, have largely been in the industrial segment. So as we make progress on those initiatives, those 2 pieces will add to the improvements that will be realized from the continuing price versus cost recovery.

另一件事是我們在五月活動中提到的運營挑戰，主要是在工業領域。因此，當我們在這些舉措上取得進展時，這兩部分將有助於通過持續的價格與成本回收來實現的改進。

And then end markets, to your question, for the industrial segment, automotive has been very resilient, sometimes surprisingly so, despite everything that's happening in the world with interest rates and inflation and affordability. All of our major regions for automotive were up double digits for Q2. And we expect continued strong recovery as we move forward here. We'll be lapping a stronger Q3 for auto based on China, which had a strong Q3 last year. But overall, we'll continue to see good volume recovery.

然後，對於你的問題，終端市場，對於工業領域來說，汽車一直非常有彈性，有時令人驚訝地如此，儘管世界上發生了利率、通貨膨脹和承受能力方面的一切。第二季度，我們所有主要汽車地區的銷量均實現了兩位數增長。我們預計，隨著我們向前邁進，經濟將繼續強勁復甦。我們將在中國的汽車行業取得更強勁的第三季度，中國去年第三季度表現強勁。但總體而言，我們將繼續看到銷量的良好恢復。

(technical difficulty).

（技術難度）。

We expect that recovery to continue for years to come.

我們預計這種複蘇將持續數年。

(technical difficulty)

（技術難度）

Hi, everyone. Apologies. We have some issues with the phone lines. Bear with us a second whilst we gain reconnection with the speaker lines.

大家好。道歉。我們的電話線有一些問題。請耐心等待，我們將重新連接揚聲器線路。

We now have connection with our speaker lines. Please continue.

現在我們已經連接了揚聲器線路。請繼續。

Apologies, everybody. We're trying to sort through these issues. We'll continue the call right now.

向大家道歉。我們正在努力解決這些問題。我們現在將繼續通話。

Okay. Chris, I'm back. The positive of technical difficulty is we've had a long time to think about your question. I already answered the segment margin piece. And then from a segment volume and sales and outlook standpoint. Auto, we expect to continue to be strong, Q3 comp issue with China, but that will be -- the whole auto build recovery will continue for beyond '23 and into '24.

好的。克里斯，我回來了。技術難度的好處是我們花了很長時間來思考你的問題。我已經回答了段邊距部分。然後從細分市場的銷量、銷售額和前景的角度來看。汽車方面，我們預計第三季度與中國的比較問題將繼續強勁，但這將是——整個汽車製造復甦將持續到 23 年之後並進入 24 年。

Industrial is very mixed. Certain segments are doing well. I'll point to powder, for example, where we were up solid double digits, which, as you know from our May event is very important to our growth strategy. But subsegments that are closer to the consumer, electronic materials, appliance and even [coax] for construction are soft. But we do expect that to continue to be a mixed bag.

工業非常混雜。某些細分市場表現良好。例如，我會以粉體為例，我們的業績增長了兩位數，正如您從我們五月的活動中了解到的那樣，這對我們的增長戰略非常重要。但更接近消費者的細分市場、電子材料、電器，甚至建築用[同軸電纜]都很軟。但我們確實預計這將繼續是一個魚龍混雜的局面。

Packaging has been weak with both destocking but also end customer demand given what's happened from an inflation standpoint. So very much a mixed bag, but overall, the summary would be we are expecting industrial segment margins to continue to improve.

從通貨膨脹的角度來看，由於庫存減少和最終客戶需求的影響，包裝一直疲軟。好壞參半，但總的來說，總結是我們預計工業部門的利潤率將繼續改善。

Your next question comes from the line of Ghansham Panjabi.

你的下一個問題來自 Ghansham Panjabi。

Okay. I guess you had just given all the moving parts on a macro basis, just kind of building on your last few comments, Tim, can you just give us a sense as to how your volume outlook for 2023 has changed since the last time you reported? And which of the businesses are seeing the greatest variability relative to your previous view?

好的。我想您剛剛在宏觀基礎上給出了所有動態部分，只是在您最近的幾條評論的基礎上，蒂姆，您能否讓我們了解一下自上次報告以來您對 2023 年的銷量前景有何變化？與您之前的觀點相比，哪些企業的變化最大？

And then, separately, apart from packaging, are there still any businesses being impacted by inventory destocking in any material way?

那麼，除了包裝之外，是否還有任何企業受到庫存去庫存的實質性影響？

I'll answer your last question first and not really, Ghansham. Destocking is pretty much behind us. And even on the industrial side, they don't carry a lot of inventory anyway. So it's pretty much just-in-time. And then on our performance side, most -- any destocking that's occurred is largely behind us.

我會先回答你的最後一個問題，但不是真的，Ghansham。去庫存已經過去了。即使在工業方面，他們也沒有大量庫存。所以這幾乎是及時的。然後在我們的業績方面，大多數 - 任何發生的去庫存都已經過去了。

So what we see outlook-wise across the company, the things that have changed a bit is the recovery in China slower than what we had anticipated. And we're expecting continued improvement in China industrial activity, albeit at a more measured pace going forward. So sequentially improving but not as much of a V-shaped as what we had previously projected.

因此，從我們整個公司的前景來看，發生了一些變化的是中國的複蘇速度比我們預期的要慢。我們預計中國工業活動將繼續改善，儘管未來的步伐將更加謹慎。因此，依次改善，但不像我們之前預測的那樣呈 V 形。

Architectural Europe, I'd say the other one that was lower volume than what we expected in Q2. But a lot of that was driven by kind of one-off social and political events in France, which is one of our largest markets in Europe. So we do believe architectural Europe, I would call it bouncing off the bottom. And we'll start lapping weak comps from last year.

歐洲建築，我想說的是另一個數量低於我們第二季度預期的數量。但這在很大程度上是由法國一次性的社會和政治事件推動的，法國是我們在歐洲最大的市場之一。所以我們確實相信建築歐洲，我稱之為從底部反彈。我們將從去年開始進行較弱的比賽。

And then in the U.S., architecture -- the DIY, not just U.S., around the world, continues to be soft. But overall, we still got more than half of our portfolio that's very resilient, and I would say, has positive outlooks. Auto was stronger than we anticipated. Refinish was stronger than we anticipated. Aero was stronger than we anticipated. PMC was stronger than we anticipated. And Mexico continues to just shoot lights out. So a lot of positives there, but those are the ones that were a little different than what we had previously thought in our guide.

然後在美國，建築——不僅僅是美國，全世界的 DIY 都繼續疲軟。但總體而言，我們的投資組合中仍有一半以上具有很強的彈性，而且我想說，前景樂觀。汽車比我們預期的要強。修補漆比我們預期的要強。 Aero 比我們預期的要強。 PMC 比我們預期的要強。墨西哥繼續熄燈。那裡有很多積極因素，但這些積極因素與我們之前在指南中的想法略有不同。

Your next question comes from the line of Josh Spector.

你的下一個問題來自喬什·斯佩克特（Josh Spector）。

Congrats on a solid second quarter here. I just wanted to ask some questions on your 3Q assumptions. So specifically SG&A as a percent of sales and gross margin, I guess my math indicates that the midpoint of your guide to gross margins are maybe 40% or lower. You just printed about 41% in the second quarter and similarly in the first quarter.

祝賀第二季度表現出色。我只是想問一些關於你的第三季度假設的問題。因此，具體來說，SG&A 佔銷售額和毛利率的百分比，我想我的數學表明，毛利率指南的中點可能是 40% 或更低。第二季度的產量約為 41%，第一季度的產量也類似。

So what would drive gross margins to go down, especially when you're expecting some raw material benefit? Can you just walk through some of the moving pieces and your assumptions there?

那麼什麼會導致毛利率下降，特別是當您預計原材料會帶來一些好處時？您能簡單介紹一下一些令人感動的部分以及您的假設嗎？

Hey, Josh, this is Vince. On SG&A, let me take that one first. We did have a little bit of a higher SG&A in Q2 than the prior year. Really a couple of elements to that. We talked about higher performance-based incentive comp, including total shareholder return compensation. We did have, as we communicated in Q1 higher noncash pension expense for the balance -- for all of 2023 that falls in the SG&A bucket on a year-over-year basis, you could see that.

嘿，喬什，這是文斯。關於SG&A，讓我先談談這一點。我們第二季度的銷售及管理費用確實比去年有所提高。確實有幾個要素。我們討論了基於績效的更高激勵補償，包括股東總回報補償。正如我們在第一季度所傳達的那樣，我們確實有更高的非現金養老金費用餘額——對於 2023 年全年而言，這些費用同比都屬於 SG&A 類別，您可以看到這一點。

And just a reminder, a lot of our China business was shut down in Q2 of 2022. And some of this increased sales creates increased SG&A. So those 3 elements pushed our SG&A cost up year-over-year. And the incentive comp item was a catch-up for both Q1 and Q2. So again, that's the SG&A component.

提醒一下，我們的很多中國業務在 2022 年第二季度被關閉。銷售額的增長部分導致了 SG&A 的增加。因此，這三個因素推動了我們的銷售、管理及行政費用 (SG&A) 成本逐年上升。激勵補償項目在第一季度和第二季度都迎頭趕上。再說一次，這就是 SG&A 部分。

On the gross profit percent, we did, as you pointed out, we're averaging about 41% year-to-date. Q3 typically is a lower volume quarter for us. We don't have as much operational pull-through as we would on a higher volume quarter, specifically in Europe. So that's really the only delta I would point to. We do expect, as we said in our prepared remarks, higher or improved deflation capture. But again, the lower volumes are going to affect our manufacturing efficiency.

就毛利率而言，正如您所指出的，我們今年迄今為止的平均毛利率約為 41%。第三季度對我們來說通常是銷量較低的季度。我們沒有像銷量較高的季度那樣有那麼多的運營拉動，特別是在歐洲。所以這確實是我要指出的唯一三角洲。正如我們在準備好的發言中所說，我們確實預計通貨緊縮捕獲會更高或有所改善。但同樣，產量下降將影響我們的製造效率。

Your next question comes from the line of David Begleiter.

你的下一個問題來自 David Begleiter。

Tim and Vince, you mentioned the weakness -- potential weakness in Pro. Where are the backlog today? And are you actually seeing that weakness yet to come to fruition?

Tim 和 Vince，你們提到了 Pro 中的弱點——潛在的弱點。今天的積壓在哪裡？您是否確實看到了這一弱點尚未顯現？

Thanks for the question. I would describe the weakness in Pro to be sequentially down a bit, but not a tremendous amount. A lot of that Pro work is commercial and maintenance that still remains pretty resilient. But we have seen some reduction in backlog.

謝謝你的提問。我認為 Pro 中的弱點會逐漸下降，但幅度不會很大。 Pro 的大部分工作都是商業和維護工作，但仍然具有相當的彈性。但我們已經看到積壓有所減少。

But honestly, the painters are still, in some cases, having difficulty getting labor. So there are cases where they're passing on jobs because of that. So while we've seen DIY down fairly significantly, I would just say we're seeing just a bit of softness in the PRO backlogs.

但老實說，在某些情況下，油漆工仍然很難獲得勞動力。因此，在某些情況下，他們會因此而放棄工作。因此，雖然我們看到 DIY 數量顯著下降，但我想說的是，我們在 PRO 積壓訂單中看到了一點疲軟。

Your next question comes from the line of Jeffrey Zekauskas.

你的下一個問題來自杰弗裡·澤考斯卡斯 (Jeffrey Zekauskas)。

Two-part question. Can you talk about the state of the Chinese TiO2 industry in that there's enormous expense (inaudible). Can you use that product in China and in other regions of China chloride-based material. And is it the case that tariffs are just too high to use it in the United States?

兩部分的問題。您能否談談中國鈦白粉行業的現狀，即費用巨大（聽不清）。您可以在中國和中國其他地區使用該產品的氯化物材料嗎？是不是關稅太高而無法在美國使用？

And secondly, in your script, you say that 80% of your inventories are on FIFO. I thought most of your inventories in the United States were on LIFO. So does that mean that the inventory adjustments that you really need to make are in the offshore markets and your inventory control is pretty good in the U.S. and it's tougher abroad.

其次，在您的腳本中，您說 80% 的庫存採用 FIFO。我以為你們在美國的大部分庫存都是按照後進先出法計算的。那麼這是否意味著你真正需要進行的庫存調整是在離岸市場，而你的庫存控制在美國相當好，而在國外則更難。

Jeff, this is Vince. We had a little breakup on your question, but I think you asked about TiO2 oversupply in China. And we do -- we are able to take Chinese TiO2 and are and have been for quite some time, utilizing that. Certainly in Europe, certainly in Latin America, South America, and obviously in Asia. And there are tariffs that make it less cost-effective today to do so in the U.S. but we are fully utilizing our capabilities to move that TiO2 to other markets or other regions of the world outside of Asia and capitalizing on those lower prices.

傑夫，這是文斯。我們對你的問題有一些分歧，但我認為你問的是中國鈦白粉供應過剩的問題。我們確實能夠獲得中國的二氧化鈦，並且已經使用了相當長的一段時間。當然是在歐洲，當然是在拉丁美洲、南美洲，當然還有亞洲。目前，關稅使得在美國這樣做的成本效益較低，但我們正在充分利用我們的能力，將鈦白粉轉移到亞洲以外的其他市場或世界其他地區，並利用這些較低的價格。

Jeff, this is John. I'll take the FIFO question. So first start with the sales, we have our profile in the U.S. We're now about 35% sales in the U.S. And in the past 5, 6 years, as we've made acquisitions in the U.S., the companies we've acquired have been on FIFO. So we have not moved them to the LIFO accounting. So over time, the percentage of inventory that we have on the FIFO method has just incrementally increased due to those factors.

傑夫，這是約翰。我將回答 FIFO 問題。首先從銷售開始，我們在美國有自己的概況。我們現在大約有 35% 的銷售額在美國。在過去的 5、6 年裡，當我們在美國進行收購時，我們收購的公司都是先進先出的。所以我們沒有將它們轉移到後進先出會計。因此，隨著時間的推移，由於這些因素，我們採用先進先出方法的庫存百分比逐漸增加。

To just add on there -- I apologize. Just to add on, my apologies, just to add on, as John mentioned, we do have excess inventory, specifically in raw materials. If you look at our inventory historically, we've trimmed about 50% of the excess raw material inventory that we came into the year with -- in the first 6 months. So we'll be working in the balance of the year to trim the other portion to get back to our historical level.

在此補充一下——我很抱歉。補充一點，我很抱歉，補充一點，正如約翰提到的，我們確實有過剩的庫存，特別是原材料。如果你回顧一下我們的歷史庫存，就會發現我們在今年前 6 個月就削減了約 50% 的過剩原材料庫存。因此，我們將在今年剩餘時間裡努力削減其他部分，以恢復到歷史水平。

Your next question comes from the line of Stephen V. Byrne.

您的下一個問題來自斯蒂芬·V·伯恩 (Stephen V. Byrne)。

Yes. If I understood you correctly, Tim, you talked about raws and I believe it was in COGS still being 20% above prepandemic. And Vince, you just highlighted, you're still sitting on excess inventory of raws.

是的。如果我沒理解錯的話，蒂姆，你談到了原料，我相信 COGS 仍比大流行前高出 20%。文斯，您剛剛強調，您仍然持有過剩的原材料庫存。

My question would be for raws purchased today, what would be the cost relative to prepandemic? And how long do you think that it will take for that to flow through COGS?

我的問題是，對於今天購買的原材料，相對於大流行前的成本是多少？您認為需要多長時間才能通過銷貨成本？

Yes, Steve, I'll take the first stab at that and Tim will add some color here. So what we're seeing today on invoice costs, as we said last quarter, invoice to invoice year-over-year mid- to high single digit and maybe in some cases low double-digit deflation on certain raw materials. I would remind everybody, these raw materials went up 20%, 30%, 40%. So when you do it on a multiyear stack, we're still much higher, but we're seeing on a year-over-year basis on invoices mid- to high to low -- mid- to high single to low double-digit declines that typically would flow through in 30 to 60 days or even 90 depending on the raw material. And again, that's extended right now.

是的，史蒂夫，我將首先嘗試這一點，蒂姆將在這裡添加一些顏色。因此，正如我們上季度所說，我們今天在發票成本方面看到的情況是，發票與去年同期相比處於中高個位數，在某些情況下，某些原材​​料的通貨緊縮可能達到低兩位數。我提醒大家，這些原材料漲了20%、30%、40%。因此，當你在多年的堆棧上進行計算時，我們的價格仍然要高得多，但我們看到發票同比從中到高到低——中到高個位數到低兩位數下降，通常會在 30 到 60 天甚至 90 天內完成，具體取決於原材料。再說一次，現在已經延長了。

Yes. In bottom line, Steve, when you combine that with the additional $100 million or so of inventory that we've got to work through that we're sitting on now, you've got sequentially more raw material deflation combined with that additional inventory flow through. That's why I'm so confident that our margin recovery journey will continue.

是的。史蒂夫，總而言之，當你將其與我們現在必須處理的大約 1 億美元左右的額外庫存結合起來時，你會發現原材料通貨緊縮與額外的庫存流量相結合。這就是為什麼我對我們的利潤恢復之旅將繼續下去充滿信心。

Your next question comes from John McNulty.

您的下一個問題來自約翰·麥克納爾蒂。

So Tim, in your prepared remarks, you spoke to pricing continuing through the second half of the year. I guess, just because the comps are kind of pretty dramatic year-over-year, I guess can you help us to think about whether you're going to see pricing sequentially from 2Q to 3Q and how we should be thinking about that?

蒂姆，在您準備好的講話中，您談到了下半年持續的定價問題。我想，只是因為同比情況相當引人注目，我想你能幫助我們考慮一下是否會從第二季度到第三季度依次看到定價以及我們應該如何考慮這一點？

Yes. Most of what we're seeing, John, is a carryover impact. There will be some targeted pricing that we do in Performance Coatings. But a lot of what you'll see going forward here for the remainder of '23 will be carried over. And to your point, we are lapping some strong price quarters from last year.

是的。約翰，我們看到的大部分都是遺留影響。我們會對高性能塗料進行一些有針對性的定價。但是，您將在 23 年剩餘時間內看到的許多內容都將被保留。就您而言，我們正在經歷去年以來一些強勁的價格季度。

So if you look at -- we printed 8% for Q1, 6% for Q2. So you'll probably see low single-digit pricing printed in Q3. Still a little early to tell in Q4. We're confident it will be positive, but we'll see what happens and what other actions we might need to take.

所以如果你看一下——我們為第一季度打印了 8%，為第二季度打印了 6%。因此，您可能會在第三季度看到較低的個位數定價。第四季度的判斷還為時過早。我們相信這將是積極的，但我們將看看會發生什麼以及我們可能需要採取哪些其他行動。

And just to tag along here. We still expect that at price -- the raw material delta to expand as we talked about the prior question, which is we expect more -- to realize more deflation as we pull down our inventories.

只是為了標記在這裡。我們仍然預計，隨著我們減少庫存，原材料的增量將擴大，正如我們討論的上一個問題，即我們預期更多，從而實現更多的通貨緊縮。

The other thing -- I mean, the pricing has been holding up very nicely. I'm proud of how our teams are executing to that regard. And so our price story, someone earlier asked about what's different in our guide versus earlier, our price story is stronger than what our prior guides were.

另一件事——我的意思是，定價一直保持得很好。我對我們的團隊在這方面的執行方式感到自豪。因此，我們的價格故事，早些時候有人詢問我們的指南與之前的指南有何不同，我們的價格故事比我們之前的指南更強。

Your next question comes from the line of Vincent Andrews.

你的下一個問題來自文森特·安德魯斯。

Just a question on the wage inflation and I say it remain elevated for the next few quarters. Is that as you have to lap the flow-through of some wage increases from prior quarters? Or is there more going in? And if you can size it a little bit, just to help us understand how much of a headwind that is versus the raw material benefits that you're getting?

只是關於工資通脹的問題，我說未來幾個季度工資通脹仍然很高。這是因為您必須計入前幾個季度工資上漲的影響嗎？還是還有更多的事情要發生？如果您能稍微調整一下它的大小，只是為了幫助我們了解與您獲得的原材料收益相比，逆風有多大？

Yes, Vincent, we do have, no surprise, higher than normal wage inflation. I'd say in the mature markets average, you could call that about 3%, but higher than that on front-line workers like store workers. But 3% would be a good average. Emerging markets higher than that.

是的，文森特，我們的工資通脹確實高於正常水平，這並不奇怪。我想說，在成熟市場的平均水平上，你可以稱之為大約 3%，但高於一線工人（如商店員工）的水平。但 3% 是一個不錯的平均值。新興市場高於此。

And then from a raw material inflation standpoint, we're still at that 20%-ish number versus prepandemic. And we're expecting Q3 to see mid- to high single digits down. So we expect the combination of those 2 to still keep us at elevated cost versus prepandemic, but improving sequentially as we move through the rest of the year.

然後從原材料通脹的角度來看，與大流行前相比，我們仍然處於 20% 左右的數字。我們預計第三季度中高個位數將出現下降。因此，我們預計這兩者的結合仍將使我們的成本與大流行前相比較高，但隨著今年剩餘時間的推移，成本將逐步改善。

And as we look at the trend lines, we're not seeing the trends change in terms of increase or decrease of wages. We provided at our merit process or our wage increase process earlier in the year and we typically would do that once a year for most of our employees. So that trend should hold for the balance of the year.

當我們觀察趨勢線時，我們沒有看到工資增加或減少的趨勢發生變化。我們在今年早些時候的績效流程或加薪流程中提供了這些信息，我們通常每年為大多數員工提供一次。因此，這一趨勢應該會持續到今年剩餘時間。

Your next question comes from the line of Duffy Fischer.

你的下一個問題來自達菲·費舍爾（Duffy Fischer）。

Just a question around the EPS and the guide for Q3 and the implied for Q4. So in Q1 and Q2, your year-over-year number was up $0.45 and $0.44. The guide midpoint for Q3 and then the implied for Q4 is up $0.24 and $0.19 year-on-year. With raw material deflation accelerating for you guys and price still up in the back half, as you're commenting, why would the year-over-year EPS improvement decline in the back half versus the first half?

只是一個關於每股收益和第三季度指南以及第四季度隱含的問題。因此，在第一季度和第二季度，您的數字同比增長了 0.45 美元和 0.44 美元。第三季度的指導中點和第四季度的隱含值分別同比上漲 0.24 美元和 0.19 美元。正如你們所說，隨著原材料通貨緊縮加速，下半年價格仍然上漲，為什麼下半年每股收益同比改善會比上半年下降？

Duffy, the biggest driver to that would just be the quarter-over-quarter price actions. Most of the larger price increases for us started to kick in like Q3 of last year. So as we lap those and less new pricing, if you will, adding to the top, that's really the biggest difference.

達菲，最大的推動因素就是季度環比的價格走勢。我們大部分較大的價格上漲都是從去年第三季度開始的。因此，當我們採用這些定價並減少新定價時，如果您願意的話，將其添加到頂部，這確實是最大的區別。

Your next question comes from the line of Patrick Cunningham.

你的下一個問題來自帕特里克·坎寧安（Patrick Cunningham）。

So increasing interest rates are clearly showing up in existing home sales and you cited softness in resi repaint.

因此，利率的上昇明顯地體現在現有房屋銷售中，並且您提到了樹脂重新粉刷的疲軟。

Now I want to talk a little bit about non-resi. While it appears to be strong or maybe hanging in there, how should we think about the risk to commercial volumes in the back half and in 2024, given the higher interest rate environment and starting to see some deceleration in commercial construction and remodeling indices?

現在我想談談non-resi。雖然它看起來很強勁或可能會持續存在，但鑑於利率環境較高，並且商業建築和改造指數開始出現一些減速，我們應該如何看待下半年和 2024 年商業成交量的風險？

Well, I'd say in the short term, that's not -- frankly, for the rest of '23, not something we're particularly concerned about because there was such a backlog in those areas. If you think about the really bifurcation of painting activity that happened during COVID, you had a tremendous amount of resi painting happening but you had virtually no commercial and maintenance painting happening. So there's still a tremendous amount of pent-up demand in that space.

好吧，我想說，從短期來看，坦率地說，在 23 年剩下的時間裡，這不是我們特別擔心的事情，因為這些領域有如此多的積壓。如果你考慮一下新冠疫情期間繪畫活動的真正分歧，就會發現大量的預製繪畫發生，但幾乎沒有商業和維護繪畫發生。因此，該領域仍然存在大量被壓抑的需求。

Now eventually, we'll see what happens with interest rates and macros in the longer term. But that's -- we're just not seeing that right now being a major concern for us.

現在最終，我們將看到長期來看利率和宏觀經濟會發生什麼。但這是——我們現在還沒有看到這是我們主要關心的問題。

Your next question comes from the line of Michael Leithead.

你的下一個問題來自邁克爾·萊特黑德（Michael Leithead）。

Great. Just one question for me on traffic solutions. I think you expected sales to be up high single digits in 2Q and they were down low single digits. So just can you talk through what drove the delta versus what you thought [in April]?

偉大的。我只想問一個關於交通解決方案的問題。我認為您預計第二季度的銷售額將出現高個位數增長，但實際銷量卻下降了低個位數。那麼您能談談推動三角洲增長的因素與您[4 月份]的想法嗎？

Yes. So part of it was comp related. We had a really strong Q2, Q3 last year in that business. Secondly, it's still a new business for us and we're still learning the market a bit. And this is an area where we did see some, I'd say, temporary shift in paint volumes as activities picked up. And so we expect to get that back as we move forward through the rest of the year and certainly into next year. We have been focused very heavily on margin over volume in that business, and the team has done a great job there.

是的。所以其中一部分與補償有關。去年我們在該業務的第二季度和第三季度表現非常強勁。其次，這對我們來說仍然是一項新業務，我們仍在對市場進行一些了解。我想說，在這個領域，隨著活動的增加，我們確實看到了油漆量的一些暫時變化。因此，我們希望在今年剩下的時間裡，尤其是明年，能夠恢復這一點。在該業務中，我們非常注重利潤而非銷量，團隊在這方面做得非常出色。

And the last thing I'll say to that is while the volumes did come in a bit lower than we expected for the quarter, this business is generating good cash for us, really good cash, and it will be a good contributor to the enterprise from that standpoint.

我要說的最後一件事是，雖然本季度的銷量確實比我們預期的要低一些，但這項業務正在為我們創造大量現金，非常好的現金，從這個角度來看，它將為企業做出很好的貢獻。

Your next question comes from the line of Frank Mitsch.

你的下一個問題來自弗蘭克·米奇（Frank Mitsch）。

Nice results. Obviously, you guys generated some strong cash flow in the first half of the year, but the question on the use of cash. Debt paydown is part of it, but how do you think about buybacks versus M&A? I know, Tim, you've talked about right property, right price, right time. Is this the right time? Are you seeing the right price? Any thoughts there would be greatly appreciated.

不錯的結果。顯然，你們在上半年產生了一些強勁的現金流，但問題是現金的使用。債務償還是其中的一部分，但您如何看待回購與併購？我知道，蒂姆，你談到了正確的財產、正確的價格和正確的時間。現在是合適的時間嗎？您看到合適的價格嗎？任何想法將不勝感激。

Yes. Thanks, Frank. Proud of the team, great second quarter and getting back to one of our strong legacies of just really strong cash generation. And as you noted, our #1 priority was to pay down some debt. We said earlier this year we would pay somewhere between $500 million and $600 million down. We paid about $200 million of that down so far this year. So we've got a bit more of that to do.

是的。謝謝，弗蘭克。為團隊感到自豪，第二季度表現出色，並恢復了我們強大的遺產之一，即真正強勁的現金生成能力。正如您所指出的，我們的首要任務是償還一些債務。我們今年早些時候表示，我們將支付 5 億至 6 億美元的首付。今年到目前為止，我們已支付了約 2 億美元的首付款。所以我們還有更多的事情要做。

But I'll tell you, we're going to have a really good cash year. We're going to have a really good cash year, which gives us a lot of optionality. Probably not -- time to talk about specific actions on the M&A side, but that's clearly remains a priority for us. And we are seeing properties come across our desks there.

但我會告訴你，我們將度過一個非常好的現金年。我們將迎來一個非常好的現金年，這給了我們很多選擇。可能不是——是時候討論併購方面的具體行動了，但這顯然仍然是我們的首要任務。我們看到那裡的房產出現在我們的辦公桌上。

But bottom line, we're going to have a really good cash generation year. We're going to pay down some more debt. And then we're going to make decisions on how best to use that cash to deliver shareholder value based on what we see at the time.

但最重要的是，我們將迎來一個非常好的現金生成年。我們將還清更多的債務。然後我們將根據我們當時的情況決定如何最好地利用這些現金來為股東創造價值。

And just to reiterate what we said in May in New York, we're not going to -- after we pay down this debt, we're not going to let cash grow on the balance sheet.

重申一下我們五月份在紐約所說的話，在我們償還債務之後，我們不會讓資產負債表上的現金增長。

Your next question comes from the line Aleksey Yefremov.

您的下一個問題來自 Aleksey Yefremov。

We've recently seen somewhat better data on new residential construction in the U.S. What do you see in your business in this market? Have your expectations here improved at all in the last 3 months? And then separately, are you seeing any meaningful pickup in the U.S. infrastructure spending?

我們最近看到了美國新住宅建設的一些更好的數據。您對這個市場的業務有何看法？過去 3 個月裡，您對這裡的期望是否有所改善？另外，您是否看到美國基礎設施支出出現任何有意義的回升？

So on the new builds, we are starting to see a little bit better activity there on new home construction. We've said in prior calls it's a fairly small part of our overall business, but it's not zero and we've had a couple of nice wins recently with some new homebuilders. So bottom line, any walls -- any additional walls that get painted in the U.S., Mexico, Europe, Australia is good for us. That's upside to us. So that would be the first one.

因此，在新建築方面，我們開始看到新住宅建設活動有所好轉。我們在之前的電話中說過，這只是我們整體業務的一小部分，但它不是零，而且我們最近與一些新的住宅建築商取得了一些不錯的勝利。所以最重要的是，任何牆壁——在美國、墨西哥、歐洲、澳大利亞粉刷的任何額外牆壁對我們都有好處。這對我們來說是有利的。所以這將是第一個。

The second part of your question?

你問題的第二部分？

Infrastructure. It was about U.S. infrastructure.

基礎設施。這是關於美國的基礎設施。

All right. Thank you, thank you. U.S. infrastructure. We are starting to see, I would call it, upstream project activity and we're very active in the specification side of ensuring that our products are well specified, whether it's traffic or protective coatings or architectural coatings or industrial coatings. Typically, paint and coatings are late stage in those projects, sometimes last stage in those projects. So this is more of a '24 and beyond growth opportunity for us, but we're certainly seeing that upstream activity happening now. We're excited about it, and we're very active with it.

好的。謝謝謝謝。美國的基礎設施。我們開始看到，我稱之為上游項目活動，我們在規範方面非常積極，以確保我們的產品得到很好的規範，無論是交通塗料、防護塗料、建築塗料還是工業塗料。通常，油漆和塗料處於這些項目的後期階段，有時甚至是這些項目的最後階段。因此，這對我們來說更像是 24 年及以後的增長機會，但我們確實看到上游活動現在正在發生。我們對此感到興奮，並且對此非常積極。

And if I could add, it's not a U.S. comment, but it's a Mexico comment. We are seeing a significant amount of near-shoring occur in Mexico. Several hundreds of building permits for manufacturing facilities have been requested. Those will yield benefits for us, certainly in '24 and '25, as that manufacturing is put in place. And then as Tim mentioned earlier, we have a full-fledged array of PPG businesses in Mexico to facilitate further painting once that industrial activity picks up as well as our strong Comex brand.

如果我可以補充的話，這不是美國的評論，而是墨西哥的評論。我們看到墨西哥出現了大量的近岸外包。已申請了數百份製造設施的建築許可。隨著製造業的到位，這些將為我們帶來好處，尤其是在 24 和 25 年。正如蒂姆之前提到的，我們在墨西哥擁有一系列成熟的 PPG 業務，一旦工業活動回升以及我們強大的 Comex 品牌，就可以促進進一步的塗裝。

Yes, just to put some metrics around that Mexico near-shoring. In Q1 of this year, there's about $48 billion of near-shoring investments in Mexico. That's 3x, 3x Q1 of 2022. So we are really seeing that pickup and we're involved in the specification side of that business as well.

是的，只是為了對墨西哥近岸地區進行一些衡量。今年第一季度，墨西哥的近岸投資約為 480 億美元。這是 2022 年第一季度的 3 倍、3 倍。所以我們確實看到了這種回升，我們也參與了該業務的規範方面。

Your next question comes from the line of Mike Harrison.

你的下一個問題來自邁克·哈里森。

Wanted to ask about auto OEM and the price realization that you're seeing there. Is there more still to come on pricing in auto OEM? And are there any instances where you're starting to see some customer pushback related to raw material declines either in auto OEM or any other subsegment?

想詢問一下汽車 OEM 以及您在那裡看到的價格實現情況。汽車原始設備製造商的定價還有更多內容嗎？在某些情況下，您是否開始看到一些與汽車 OEM 或任何其他子細分市場中的原材料下降相關的客戶抵制？

Yes, Mike, this is Vince. Let me start and I'm sure Tim will add some color here. But it's taken us a while, as it typically does, during an inflation cycle to negotiate with our customers, get paid for the value we provide. So we had a lag on the way up in terms of the inflation versus price to our OEM customers. We're in a steady-state environment now. We're not seeing any pushback. We're still trying to capture -- as the volume grows, we're still trying to capture our margins back in that business. But we're not seeing any pushback at this point from the customers. And again, that's traditional lag effect that we would see in any inflation cycle.

是的，邁克，這是文斯。讓我開始吧，我相信蒂姆會在這裡添加一些色彩。但正如通常情況下，在通貨膨脹週期中，我們花了一段時間才與客戶進行談判，並為我們提供的價值獲得報酬。因此，我們的 OEM 客戶的通脹率與價格的上漲存在滯後。我們現在處於穩態環境中。我們沒有看到任何阻力。我們仍在努力奪回——隨著銷量的增長，我們仍在努力奪回該業務的利潤。但目前我們沒有看到客戶有任何反對。再說一遍，這是我們在任何通脹週期中都會看到的傳統滯後效應。

And to your broader question about other segments, I would say normal market dynamics, nothing significant, nothing material. There's been some intense competitive pressure just around the edges. But at the core, we haven't really seen anything that was unexpected or out of the normal.

對於你關於其他細分市場的更廣泛的問題，我想說的是正常的市場動態，沒有什麼重要的，沒有什麼實質性的。邊緣存在著一些激烈的競爭壓力。但從本質上講，我們還沒有真正看到任何意外或不正常的事情。

Your next question comes from John Roberts.

你的下一個問題來自約翰·羅伯茨。

Refinish organic sales were up mid-single digit. I don't know what pricing was up, but the Performance segment was up 6%. Refinish volumes globally flat. And when you talk about it being better than expected, was price better than expected? Or was volume better than expected?

修補漆有機銷售額增長了中個位數。我不知道價格上漲了多少，但性能部分上漲了 6%。全球修補漆銷量持平。當你說它比預期好時，價格比預期好嗎？還是成交量好於預期？

Yes. John, volume was positive here in the U.S., which, of course, is our most -- our largest and most critical market. And that was better than we expected. Volume in Europe, I would say, was worse than we expected. Volume down there a bit more than we thought. And then volume in China a little bit muted because of the slower recovery, but we see that sequentially improving as time goes on. But overall, a great quarter for that business, really bullish on particularly the U.S. side, and we're watching closely what happens on the Europe side.

是的。約翰，美國的銷量是積極的，當然，這是我們最大、最重要的市場。這比我們預期的要好。我想說，歐洲的銷量比我們預期的要差。音量比我們想像的要小一些。然後，由於復蘇速度較慢，中國的銷量略有下降，但我們看到隨著時間的推移，銷量逐漸改善。但總體而言，該業務的季度表現非常好，尤其是美國方面，我們正在密切關注歐洲方面的情況。

On the Europe side, we talked about destock earlier in the call here, and we think in Q2, there was some destocking with certain refinish customers. We think that's concluded by the end of Q2. So again, as we get to the back half of the year, we would expect the demand and the volumes to be more in sync.

在歐洲方面，我們早些時候在電話會議中談到了去庫存問題，我們認為在第二季度，某些修補漆客戶進行了一些去庫存。我們認為這將在第二季度末結束。因此，當我們進入今年下半年時，我們預計需求和銷量將更加同步。

Your next question comes from the line of Michael Sison.

你的下一個問題來自邁克爾·西森。

Nice quarter. In terms of the half of your portfolio that's in decline or weak, do you think those markets are bottoming or potentially bottom here in the third quarter? And then when I take a look at your volume outlook, third quarter seems to be down year-over-year again. And just wanted to get your thoughts on the fourth and how you see that sort of unfolding?

不錯的季度。就您投資組合中下降或疲軟的一半而言，您認為這些市場是否正在觸底或可能在第三季度觸底？然後，當我看一下你們的銷量前景時，第三季度似乎再次同比下降。只是想了解您對第四個方面的想法以及您如何看待這種發展？

Yes. So I'll take a few of the markets that were lower volume than what we expected for Q2 and how we're thinking about them going forward.

是的。因此，我將介紹一些第二季度交易量低於我們預期的市場，以及我們如何看待它們的未來。

First one, architectural Europe was -- that was clearly down more than we expected, but some of that isolated to France, as I mentioned earlier. I do expect that to start comping pretty close, maybe even a little upside from where we were at Q3 of last year. So I've used the term bouncing off the bottom. I do believe that Europe architecture is bouncing off the bottom and maybe a little bit of upside there.

第一個是歐洲建築——這顯然比我們預期的下降得更多，但正如我之前提到的，其中一些與法國無關。我確實預計，這一情況將開始與去年第三季度的情況相當接近，甚至可能略有上升。所以我使用了“從底部反彈”這個詞。我確實相信歐洲建築正在從谷底反彈，也許還有一點上行空間。

The China recovery, slower than we expected in Q2, no doubt. But the way we're thinking about that is -- that just stretches out the recovery, positive -- any stimulus that the government does in the industrial space will be a real positive for PPG. And we do expect China to sequentially improve. So those would be the 2 main ones I would point out as far as what we saw in Q2 and potentially improving in Q3 and beyond.

毫無疑問，中國第二季度的複蘇速度慢於我們的預期。但我們的想法是——這只是延長了復甦的時間，是積極的——政府在工業領域採取的任何刺激措施都將對 PPG 產生真正的積極影響。我們確實預計中國會逐步改善。因此，就我們在第二季度看到的情況以及第三季度及以後的潛在改進而言，我要指出的兩個主要問題。

Yes, Mike, and I think there is a comparable -- year-over-year comparable issue as you look at volume. So we do have improving volumes, as Tim mentioned, in China sequentially in Q3, but that was compared to a recovery from COVID shutdown last year Q3. So again, when you look at -- you mentioned year-over-year volume challenges, that's -- again, China is improving as we look Q2 to Q3, but it's against a tough comp.

是的，邁克，我認為當你觀察交易量時，存在一個可比的——逐年可比的問題。因此，正如蒂姆提到的那樣，我們第三季度在中國的銷量確實有所改善，但這是與去年第三季度因新冠疫情關閉而恢復的情況相比。所以，當你再次看到——你提到了同比銷量挑戰時——再次，當我們展望第二季度到第三季度時，中國正在改善，但這是面對艱難的競爭。

Your next question comes from the line of Kevin McCarthy.

你的下一個問題來自凱文·麥卡錫。

Yes. Tim, a two-part question for you on auto OEM volumes. So first, could you speak to the outlook for the back half of the year if some of the consultants are to be believed, it looks like there's quite divergent trends in Asia versus Europe, for example. So curious to understand what you're baking in there?

是的。蒂姆，關於汽車 OEM 銷量的問題由兩部分組成。首先，您能否談談今年下半年的前景，如果一些顧問可信的話，例如，亞洲與歐洲的趨勢似乎相當不同。很想知道你在那裡烤什麼？

And then longer term, you referenced the supply deficit of 40 million units. Is the implication that, that is the amount that needs to be recovered over some period of time? How do you view the medium to longer-term outlook for global production?

從長遠來看，您提到了 4000 萬台的供應短缺。這是否意味著，這就是需要在一段時間內收回的金額？您如何看待全球生產的中長期前景？

Kevin, this is Vince. I'll start and I'll let Tim add here. But just a reminder, again, just the same question we had the last -- the last question. China had a recovery in Q3 last year in auto production. So again, the numbers, when you look on a year-over-year basis are a bit skewed.

凱文，這是文斯。我先開始，然後讓蒂姆在這裡補充。但再次提醒一下，我們上次提出的問題是同樣的問題——最後一個問題。中國去年第三季度汽車產量出現復甦。再說一遍，當你逐年查看時，這些數字有點偏差。

Yes. So Kevin, we're bullish on auto despite some of the -- kind of affordability and interest rate questions. And here's why: we continue to be positively surprised by performance in Europe, for example, where macros are worse than anywhere and yet the builds and sales remain resilient. The U.S. SAAR when everybody was predicting that would drop was -- came in at a nice number of 15.8, which was a positive surprise, but still well below historical levels.

是的。因此，凱文，儘管存在一些負擔能力和利率問題，但我們仍然看好汽車。原因如下：我們繼續對歐洲的表現感到驚訝，例如，歐洲的宏觀經濟狀況比任何地方都差，但建築和銷售仍然保持彈性。當每個人都預測美國的 SAAR 會下降時，其結果是 15.8，這是一個令人驚喜的好數字，但仍遠低於歷史水平。

We're starting to see -- we're seeing really good numbers out of China. Double-digit builds in China growth Q2. As Vince mentioned, we have a little weird comp situation here in Q3, but we do expect that to recover. So we're bullish on auto. We are bullish on auto for both the short term and medium term.

我們開始看到——我們看到來自中國的數據非常好。中國第二季度增長兩位數。正如文斯提到的，我們在第三季度的比賽情況有點奇怪，但我們確實希望這種情況能夠恢復。所以我們看好汽車。我們短期和中期看好汽車。

Now the 40 million is just straight math. You take the 6-year average before COVID of annual builds and you take what happened during COVID and you come up with a 40 million deficit. I have no idea how long it's going to take to make up that deficit and how spread out that will be. But it's not going to be zero. That deficit will need to be made up because in many countries, you still have population growth. In many countries, you still have cars per capita or cars per household being much lower than the developed world. And you've still got aging fleets. In mature parts of the world, U.S., Europe, average cars in a row is like 11 or 12 years old.

現在4000萬隻是簡單的算術。計算新冠肺炎疫情發生前 6 年的平均年度建設量以及新冠肺炎疫情期間發生的情況，就會得出 4000 萬的赤字。我不知道需要多長時間才能彌補赤字，也不知道赤字將如何分散。但它不會為零。這一赤字需要得到彌補，因為在許多國家，人口仍然在增長。在許多國家，人均汽車保有量或每戶家庭汽車保有量仍然遠低於發達國家。而且您的機隊仍然老化。在美國、歐洲等世界成熟地區，汽車的平均使用年限約為 11 或 12 年。

So the fundamentals say, at some point, some significant part of that 40 million deficit needs to be made up. It's a question of how stretched out that will be.

因此，基本面表明，在某個時候，這 4000 萬赤字中的很大一部分需要得到彌補。問題是這會持續到什麼程度。

Your next question comes from the line of Aron Ceccarelli.

您的下一個問題來自 Aron Ceccarelli。

I have one on segment margins. So your segment margins expanded 330 basis points in Q2, and they were expanded 370 in Q1. I understand we are past the peak in terms of pricing initiatives, but we start to see really the widening gap of raw materials going down. And some of the volumes you are talking in the weak markets are bottoming. So what could prevent margins in Q2 and Q3 to expand -- to accelerate in terms of expansion again?

我有一個關於段邊際的內容。因此，你們的部門利潤率在第二季度擴大了 330 個基點，在第一季度擴大了 370 個基點。我知道我們已經過了定價舉措的高峰期，但我們開始真正看到原材料差距不斷擴大。您所說的疲軟市場中的一些交易量正在觸底。那麼，什麼會阻止第二季度和第三季度的利潤率擴大——再次加速擴張呢？

Yes. I mean I think we -- I think we talked about this a little earlier in the call. We do expect, again, incremental deflation to flow through to our P&L. We're starting to lap some pricing. We do -- especially in the industrial businesses, we do see volume as the biggest catalyst in the back half of the year or in 2024 to help improve the margins as well, as Tim mentioned earlier, manufacturing -- PPG manufacturing as a key element. And we laid that out in our May New York meeting.

是的。我的意思是，我認為我們——我想我們在電話會議的早些時候討論過這個問題。我們確實預計增量通貨緊縮將影響我們的損益表。我們開始製定一些定價。我們確實這樣做——特別是在工業企業中，我們確實認為銷量是今年下半年或 2024 年最大的催化劑，有助於提高利潤率，正如蒂姆之前提到的，製造——PPG 製造是一個關鍵要素。我們在五月的紐約會議上闡述了這一點。

So those would be the 4 key elements that I would point to that would impact our margins in the back half of the year.

因此，這將是我要指出的將影響我們下半年利潤的 4 個關鍵因素。

Your next question comes from the line of Laurence Alexander.

你的下一個問題來自勞倫斯·亞歷山大。

Just a quick one. What's the net drag for earnings and margins from the destocking you're doing this year? Just trying to think about kind of how that translates into the bridge for next year.

只是快一點。今年去庫存對收益和利潤率的淨拖累是多少？只是想想想這將如何轉化為明年的橋樑。

It's an interesting question, Laurence. I'm doing the math in my head as we speak. But again, what we're seeing is, let's call it, mid- to high single-digit deflation on our invoices. We're realizing mid-single-digit inflation through our P&L. So I'm going to guess that, that's $0.05 to $0.10 a quarter, looking at John here to make sure my math is proper. But that would be the delay that's not coming through on a real-time basis into our P&L.

這是一個有趣的問題，勞倫斯。當我們說話的時候，我正在腦子裡計算。但我們再次看到的是，我們稱之為中高個位數的發票通貨緊縮。我們通過損益表實現了中等個位數的通貨膨脹。所以我猜，每季度 0.05 美元到 0.10 美元，看看約翰這里以確保我的數學是正確的。但這將是延遲，不會實時反映到我們的損益表中。

Your next question comes from the line of Arun Viswanathan.

你的下一個問題來自阿倫·維斯瓦納坦 (Arun Viswanathan)。

Just wanted to understand kind of the volume outlook overall. It sounds like, obviously, aerospace and automotive OEM volumes have been trending positively and you expect that to continue. Now you're calling out some weakness in packaging and some of the other markets. So is there a path to -- maybe overall positive volumes by the first half of next year given some easier comps in some of these industrial businesses and maybe persistence of volume growth in auto and aerospace? How are you thinking about that kind of volume growth overall trends for the next couple of periods.

只是想了解總體銷量前景。顯然，航空航天和汽車 OEM 銷量一直呈積極趨勢，您預計這種情況將持續下去。現在你指出了包裝和其他一些市場的一些弱點。那麼，考慮到其中一些工業企業的比較容易實現，並且汽車和航空航天領域的銷量可能持續增長，那麼有沒有一條途徑——也許到明年上半年整體銷量將實現正增長？您如何看待未來幾個時期的這種銷量增長總體趨勢？

Yes, Arun, great question and when we talk about a lot, I'll first qualify it by saying -- it's still pretty early, given all the macro stuff that's happening around the world to really nail in our 2024 volume assumptions. But I will tell you that I'm optimistic based on a few things. We've talked a lot about auto and aerospace and Mexico and refinish and we fully expect those businesses to continue to perform.

是的，阿倫，這是一個很好的問題，當我們談論很多內容時，我首先會說——考慮到世界各地正在發生的所有宏觀事件真正確定了我們 2024 年的銷量假設，現在還為時過早。但我會告訴你，基於一些事情我很樂觀。我們已經談論了很多關於汽車和航空航天以及墨西哥和修補漆的問題，我們完全期望這些業務能夠繼續表現良好。

In addition to that, I've talked about a few businesses that we think are bouncing off the bottom and they're not small businesses for us. So eventually, bouncing off the bottom will turn to positive.

除此之外，我還談到了一些我們認為正在從谷底反彈的企業，它們對我們來說並不是小企業。所以最終，觸底反彈將轉為利好。

China. China, we have a really strong presence in China. China ramp-up and recovery has been slower than expected. But if you think about that for 2024, that's a positive, particularly with any government stimulus.

中國。中國，我們在中國擁有非常強大的影響力。中國的增長和復蘇速度慢於預期。但如果你考慮一下 2024 年的情況，就會發現這是積極的，特別是在政府採取刺激措施的情況下。

And the last one I would point out is Europe. And while Europe volume has been very muted for the first half of the year, we still printed all-time record earnings in Q1, all-time record earnings in Q2. So the team has done a great job of positioning from both a margin and cost base standpoint. So any incremental uptick in volume across any of those businesses in Europe will be a real positive for us.

我要指出的最後一個是歐洲。儘管今年上半年歐洲銷量非常低迷，但我們仍然在第一季度創下了歷史最高收益紀錄，在第二季度也創下了歷史最高收益紀錄。因此，從利潤和成本基礎的角度來看，團隊在定位方面都做得很好。因此，歐洲任何這些業務的銷量的任何增量增長都將對我們產生真正的積極影響。

So still a little early. We'll talk more about that in the next earnings call, but there are a lot of indicators that could point to positive volume for us for 2024.

所以還是有點早。我們將在下一次財報電話會議中詳細討論這一點，但有很多指標可能表明我們 2024 年的銷量將呈正增長。

There are no further questions at this time. I turn the call back over to John Bruno.

目前沒有其他問題。我把電話轉回給約翰·布魯諾。

Thank you, Carla. This ends our second quarter earnings call. We appreciate everybody's interest and confidence in PPG. Have a good day.

謝謝你，卡拉。我們的第二季度財報電話會議到此結束。我們感謝大家對 PPG 的興趣和信心。祝你有美好的一天。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連接。