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Tuesday Ticker: January 25, 2022

Toronto, Ontario ⁠— In this weekly Tuesday Ticker, PPG reports its Q4 2021 and full-year results, while Honda makes a deal with a lithium-metal battery supplier.

Picking up pace
PPG reported both its full-year 2021 and Q4 2021 results last Friday, reporting net sales of about US$4.2 billion for the final quarter of 2021, about 12 percent higher than in 2020.

“We achieved higher sales than we originally forecasted as demand for our products remained strong and we continued to rapidly implement additional selling price increases,” said Michael H. McGarry, PPG chairman and chief executive officer. “Our quarterly sales, which were a record for any fourth quarter, were aided by acquisition-related sales and above-market sales volume performance in several of our end-use markets, including automotive refinish, marine and PPG-Comex architectural coatings.”

PPG experienced organic sales growth of four percent, led by “higher selling prices,” it said.

The company also said raw material cost inflation was up 30 percent, year-over-year in the fourth quarter.

“From an earnings perspective, selling prices improved sequentially versus the third quarter and increased eight percent year-over-year, partially offsetting raw material and logistics cost inflation,” said McGarry. “However, we experienced significantly higher operating costs due to unpredictable manufacturing interruptions at both our facilities and our customers’ operations stemming from a rapid and substantial impact from labour availability due to COVID-19.

“Also impacting sales and earnings were ongoing raw material and transportation availability challenges resulting in continued difficulty fulfilling strong order books in several end-use markets, as we ended the quarter with order backlogs of over US$150 million.”

PPG’s full-year 2021 sales were US$16.8 billion, up 21 percent from 2021.

Banding together in the name of batteries
SES Holdings announced last week it has entered an agreement with Honda Motor Co. to develop lithium-metal batteries for the automaker.

Battery maker SES Holdings claims it is capable of manufacturing EV batteries with projected 400 Wh/kg and 1,000 Wh/L, providing a longer driving range to EVs. It also says its batteries are capable of reaching 80 percent charge capacity in 15 minutes.

Honda is the third global car manufacturer to enter an ‘A sample’ joint development agreement with SES, behind General Motors and Hyundai. Honda has previously agreed to invest in the combined company private investment in public equity (PIPE) financing in connection with SES’ pending business combination with Ivanhoe Capital Acquisition Corp. Other global automakers that invested in the combined company include GM, Hyundai, Geely Holding Group, SAIC Motor and Foxxconn.

Immediately following the business combination, PIPE proceeds are expected to total US$275 million and Honda will be the largest single PIPE investor, owning approximately two percent of the outstanding shares of the combined company.

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