PITTSBURGH -- At the company's recent annual meeting, PPG Industries’ Chairman and CEO Charles Bunch reviewed steps the company took in 2009 to respond to the global financial crisis that began at the end of 2008 and continued through the year in 2009.

“The strategic vision we have established is to continue to be the world’s leading coatings and specialty products company,” Bunch said. “We have continued to make progress toward achieving that vision. Yet, in 2009, we were clearly challenged with an uncertain and difficult global economy. At PPG, we responded quickly and decisively.”

Bunch said that during 2009, PPG shifted its priorities to respond to the difficult economic conditions.

“We placed greater emphasis on operating discipline. We worked on restoring margin leadership, especially in the coatings industry. We focused more on profitability than pure growth. We took steps to improve our cost structure, and we worked to leverage our global technological and manufacturing capabilities to the most efficient use of the entire company. We keyed in on costs, margins, working capital and cash flow,” he said. Bunch also noted two restructuring initiatives – one announced in September 2008 and one in March 2009 – that are expected to result in approximately $250 million in annual cost savings once completed.

“In addition to our cost-cutting measures,” Bunch said, “PPG benefited from actions it has taken over the past several years to grow the coatings and optical and specialty material components of our portfolio.” He said that the proportion of PPG’s sales in these businesses has grown substantially over the past few years. “These businesses saw continuously improving positive momentum throughout the year, and by the end of 2009 were delivering higher year-over-year earnings,” he said.

Bunch commented that the company also benefited from efforts to broaden the geographic reach of its business, and specifically its expanding footprint in the Asia/Pacific region, which posted record earnings for the year and now represents about 15 percent of the company. “Overall, our efforts to transform PPG have served us well in this downturn,” Bunch said.

In 2009, PPG posted sales of $12.2 billion, a decrease of about 23 percent versus the prior year. This was largely attributable to the contraction of demand in many of PPG’s key end-use markets, which in turn was driven by the global recession. Segment earnings for the year decreased by 25 percent. Again, lower demand negatively impacted the company’s earnings performance. Bunch said that while both sales and earnings were down versus the prior year, he believes these results are admirable given the circumstances.

Bunch told shareholders that one bright spot for PPG in 2009 and continuing in 2010 is its cash generation and cash on hand. “We began the year with approximately $1 billion in cash. During 2009, PPG generated about $1.3 billion of cash from operations.” Bunch said that PPG ended the year in the same solid cash position that it was in last year, with approximately $1 billion of cash on hand.

“We expect the business environment to improve gradually in 2010,” Bunch said. “Yet, it is critical that we remain vigilant in maintaining the operating discipline we displayed in 2009 in order to capitalize on gradual demand improvements as they occur this year.” He added, “We haven’t lost sight of our goal to grow, but we need to ensure that we’re growing profitably. We’ll adapt to market conditions as we did in 2009. And perhaps most importantly, we will continue to execute our transformational strategy.”

Also during the meeting, PPG shareholders elected three incumbent directors: James Berges, partner, Clayton, Dubilier & Rice; Victoria Haynes, president and CEO of RTI International; and Martin Richenhagen, chairman, president and CEO, AGCO Corp. Shareholders endorsed the appointment of Deloitte & Touche LLP as the company’s independent registered public accounting firm for 2010, and rejected a shareholder proposal requesting a report about the company’s community environmental accountability.