PPG 2026年第三季度业绩电话会议：每股收益创历史新高并上调业绩指引lg...

核心要点

• PPG公布创纪录的第三季度调整后每股收益为2.25美元，同比增长6%；净销售额增长7%至44亿美元。
• 有机销售额增长5%，其中包括2%的销量增长，标志着连续第七个季度实现有机增长。管理层表示，PPG的表现领先行业300个基点。
• 性能涂料业务引领增长，有机销售额增长8%，部门EBITDA增长21%。在接近3亿美元的积压订单支撑下，航空航天业务实现了两位数的有机增长。
• 商业举措（其中超过90%为提价）在公司层面完全抵消了销售成本的通胀。由于指数定价调整存在滞后，工业涂料成为唯一的例外。
• 今年迄今的经营现金流达到约12亿美元，同比增加约1亿美元。净杠杆率降至调整后EBITDA的1.8倍。
• PPG上调了全年调整后每股收益指引的中点，并将范围收窄至7.90-8.10美元。

关键财务数据

业务与经营表现

性能涂料

性能涂料实现销售额16亿美元，同比增长10%，有机销售额增长8%，其中包括5%的销量增长。该部门EBITDA增长21%，EBITDA利润率扩大220个基点至23.9%。

航空航天业务再次录得两位数的有机增长，将其连续增长纪录延长至22个季度。PPG预计该业务在2026年将产生超过20亿美元的销售额，并正在为其产能和生产力投资超过5亿美元，其中包括在阿拉巴马州亨茨维尔耗资7000万美元的航空透明件扩产项目。

汽车修补漆有机销售额实现了中单数的百分比增长。管理层将这一改善归因于经销商去库存结束、碰撞修复活动温和正常化、积极的提价以及在修理厂市场的持续净拓展。

防护和船舶涂料实现了高单数的有机增长，并连续第14个季度实现销量增长。船舶新建和进坞维修需求是最强劲的细分领域。

全球建筑涂料

该部门销售额增长4%至约11亿美元，有机销售额增长2%。所有地区的售价提高以及墨西哥市场的增长，抵消了欧洲销量的下滑。

该部门EBITDA增长19%，EBITDA利润率扩大300个基点至24%。管理层归因于定价、有利的产品组合、生产力举措以及欧洲的降本措施。墨西哥比索走强为同比收益增长贡献了约1500万至2000万美元。

管理层继续将全球建筑涂料视为能够维持20%以上EBITDA利润率的业务，尽管汇率波动可能会影响墨西哥的盈利能力。

工业涂料

工业涂料销售额增长5%至约17亿美元。有机销售额增长4%，提价和销量增长大致各占一半。

在粉末涂料、重型设备、通用涂料以及数据中心电力基础设施的推动下，工业细分业务实现了高单数的有机增长。管理层表示，预计在未来几个季度，新项目储备将为工业部门每季度带来约2500万美元的新业务。

包装涂料录得两位数的有机增长，两年复合销量增长超过20%。PPG表示，这得益于其无双酚A（BPA non-intent）技术带来的市场份额增长以及全球制造布局。

由于行业产量下滑，汽车原厂漆（OEM）涂料下降了低单数百分比，但PPG表示其销量表现仍优于全球汽车产量。

该部门EBITDA下降11%，利润率收窄260个基点至14.4%。成本通胀超过了基于指数的价格调整的时效性，大部分汽车OEM提价收益预计将在2027年第一和第二季度显现。

管理层业绩指引

对于2026年第四季度，管理层预计：

• 有机销售额将实现低单数百分比增长。
• 调整后EBITDA利润率同比持平至提高100个基点。
• 销售成本通胀将在高单数区间。
• 全球建筑涂料有机销售额将在持平至低单数增长之间，利润率实现同比增长。
• 性能涂料有机销售额增长将在低至中单数区间，利润率进一步扩大。
• 工业涂料有机销售额将在低单数下滑至低单数增长之间，利润率挤压环比放缓。

PPG收窄了全年调整后每股收益指引至7.90-8.10美元，并上调了中点。管理层表示，航空航天、拉丁美洲建筑涂料和包装涂料有望引领第四季度的有机增长。

对于2027年，管理层未提供具体指引，但表示在终端市场未出现严重恶化的前提下，预计有机增长和利润率扩展将继续。PPG还预计在2026年和2027年期间将实现总计约1亿美元的重组和生产力效益，其中欧洲建筑涂料重组的大部分效益预计将在2027年上半年显现。

风险与关注事项

• 由于基于合同的指数调整存在滞后效应，工业涂料的提价仍落后于成本通胀。
• 管理层预计2027年第一季度的同比通胀将相对较高，因为当前通胀周期在2026年底开始对业绩产生更大影响。
• 汽车产量下降（尤其是中国市场）是第四季度工业涂料前景放缓的主要因素。管理层引用标普（S&P）的预测称，中国汽车产量将下降约8%。
• 欧洲消费者信心和建筑需求仍存在不确定性。PPG在法国遭遇了物流中断，但在业绩电话会期间尚未看到对需求的直接影响。
• 墨西哥比索的波动可能会重大影响建筑涂料的利润率，因为该业务以美元采购并以比索销售。
• 受经销商返利门槛和库存管理影响，汽车修补漆订单在年底前后可能会有所波动。

分析师问答环节亮点

• 价格与成本平衡：管理层表示，商业举措中超过90%为提价。PPG在第三季度实现了公司层面的成本中性，但在原材料成本持续上涨的情况下，预计价格与成本的关系短期内不会成为顺风因素。
• 工业涂料利润率恢复：剔除汽车OEM压力后，工业涂料EBITDA本应实现同比增长。包装及其他采用指数定价的业务未来也有进一步价格恢复的空间。
• 建筑涂料盈利能力：管理层表示，该部门24%的利润率主要得益于定价、产品组合和生产力改善，其中墨西哥比索走强贡献了1500万至2000万美元。
• 2027年框架展望：PPG并未假设宏观经济会出现大幅复苏。尽管如此，在航空航天积压订单、包装业务增长、提价追赶效应以及重组效益的支撑下，管理层仍对持续的有机增长和利润率拓展表达了信心。
• 投资组合策略：欧洲建筑涂料仍是一项强劲的盈利和现金流生成业务，用于资助更高增长的业务。管理层表示，如果能够提升长期股东价值，仍会评估投资组合调整行动。
• 技术与生产力：PPG已利用人工智能对超过150种配方中的原材料组合进行了优化，在不影响客户性能的前提下帮助抵消通胀压力。

业绩电话会完整文字记录

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完整财报电话会议逐字稿

管理层陈述

Operator

Good morning. My name is Warren, and I will be your conference operator today. At this time, I would like to welcome everyone to the Third Quarter 2026 PPG Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Alex Lopez, Vice President of Investor Relations and Operational Finance. Please go ahead, sir.

Alejandro Lopez

Thank you, Warren, and good morning, everyone. This is Alex Lopez. Joining me today from PPG are Tim Knavish, Chairman and CEO; and Jamie Beggs, Senior Vice President and CFO. Our remarks relate to the financial information released on October 27, 2026. Supporting materials are available in the Investor Center at ppg.com, and we will take questions following our prepared remarks.

Both the prepared commentary and the discussion during this call may include forward-looking statements and non-GAAP financial measures. Forward-looking statements involve uncertainties and risks that may cause actual results to differ.

Please read our cautionary statement on Slide 2 of the presentation materials. Please refer to our presentation materials and SEC filings available on the Investor Center website for additional information and reconciliations of non-GAAP financial measures.

Tim, over to you.

Timothy Knavish

Thank you, Alex. Good morning, everyone. Welcome to our third quarter 2026 earnings call. I will begin with highlights from our record third quarter, and then we'll share our outlook for the remainder of the year.

Before reviewing our results, I'd like to once again thank our employees for their dedication and resilience during this challenging period in many regions of the world. Please continue to prioritize your safety and the safety of your families above all else.

This was an outstanding quarter for PPG. We delivered record third quarter earnings. And our teams around the world executed with exceptional discipline, driving a 5% increase in organic sales, including 2% volume growth. This marks our seventh consecutive quarter of organic sales growth. We outpaced the industry by 300 basis points, clear evidence of the quality of our businesses, our innovation, our technology and the value that we deliver to our customers.

As we discussed over the past several quarters, we have been systematically building our organic growth muscle, and the results are now clearly visible. Our strategy to deliver product innovation and productivity solutions for our customers is accelerating our momentum.

Third quarter net sales grew 7% year-over-year to $4.4 billion. Adjusted earnings per share increased 6% to $2.25, a third quarter record. And total company adjusted EBITDA margin was above 18%. Exceptional results in our differentiated aerospace and architectural coatings Latin America businesses led this performance.

Importantly, our commercial actions fully offset cost of goods sold inflation during the quarter, a significant milestone for us. We achieved this in just 6 months, half the time it took in the 2021 inflation cycle and 1/3 the time it took in the 2016 cycle. We remain focused on achieving appropriate value for our unique products and solutions with targeted actions where necessary to address inflation and market dynamics, all enabled by the innovative solutions that we provide to our customers.

We also repurchased approximately $150 million worth of shares during the quarter, and our year-to-date operating cash flow is approximately $1.2 billion, about $100 million higher than last year. Jamie will provide more detail on our balance sheet and cash shortly.

Turning to our segment performance. Global Architectural Coatings grew net sales 4% year-over-year to approximately $1.1 billion. Organic sales increased 2%, driven by higher selling prices in all regions. Lower sales volumes in Europe were offset by solid growth in Mexico.

Organic sales for architectural coatings Latin America and Asia Pacific increased by a mid-single-digit percentage, driven by higher selling prices and volume growth in Latin America. In Mexico, retail sales were robust and project-related sales grew at a moderate pace as foreign direct investment sequentially recovers.

In EMEA, organic sales increased by a low single-digit percentage as higher selling prices more than offset lower sales volumes. Our European architectural business continues to benefit from strong execution of our strategy. Productivity enhancements, footprint optimization and structural cost actions are improving efficiency and are driving year-to-date earnings and margin expansion. Segment EBITDA grew 19% and EBITDA margin expanded 300 basis points to 24%.

Looking ahead, we expect fourth quarter organic sales to range from flat to growth of low single-digit percentage year-over-year, along with EBITDA margin expansion versus prior year.

Our Performance Coatings segment delivered net sales growth of 10% to $1.6 billion. Organic sales increased an outstanding 8%, led by 5% sales volume growth. Aerospace delivered another exceptional quarter with double-digit organic sales growth, and our order backlog remained at near $300 million.

Demand for our unique aerospace products remains robust. And shortly, I will go into more detail about the investments we are making to support this outstanding growth for today and well into the future.

Automotive refinish organic sales increased by a mid-single-digit percentage, driven by both higher selling prices and higher sales volumes. In the U.S., collision claims versus prior improved sequentially from negative 6% in the second quarter to negative 4% in the third quarter.

Protective and marine Coatings organic sales increased by a high single-digit percentage, extending this business's streak to 14 consecutive quarters of sales volume growth. This included above-market marine volume growth in Asia Pacific, driven by our innovative technologies.

Segment EBITDA grew 21% and EBITDA margin expanded 220 basis points to 23.9%. In the quarter -- in the fourth quarter, we expect organic sales growth in the range of low to mid-single-digit percentage year-over-year with further EBITDA margin expansion versus prior year.

Now turning to aerospace, this business is a significant growth engine for PPG, delivering its 22nd consecutive quarter of organic sales growth with quarterly year-over-year growth during that period averaging above 10%. This year, we expect to generate more than $2 billion in sales in aerospace, making it one of our larger businesses.

We are investing more than $500 million to expand capacity and improve productivity across the business. This includes a recently announced $70 million expansion of our aerospace transparencies operations in Huntsville, Alabama. This project will increase operational efficiency and create additional manufacturing capacity to support growing customer demand for aircraft cockpit and passenger windows.

In addition to this CapEx, we continue to invest in aerospace R&D to further expand our technology offering. These ongoing investments, combined with our broad portfolio of highly specified products, technology leadership and global footprint and deep customer relationships; reinforce our confidence in the long-term growth outlook for this unique business.

In the Industrial Coatings segment, third quarter net sales grew 5% to approximately $1.7 billion. Organic sales increased 4% with equal contributions from higher selling prices and sales volumes, reflecting the benefits of new business wins and successful launches.

In automotive OEM coatings, organic sales declined by a low single-digit percentage as a result of lower industry builds. Importantly, our team drove a sales volume performance that outpaced global automotive industry production.

Industrial Coatings delivered strong organic sales growth of high single-digit percentage, driven by sales volume and selling price growth in all regions. This marks the second consecutive quarter of growth for this business with strength in heavy-duty equipment and general finishes, including electrical infrastructure for data centers.

Packaging coatings delivered outstanding double-digit organic sales growth with sales volumes now up more than 20% on a 2-year stack basis. PPG is benefiting from share gains driven by our advantaged BPA non-intent technologies, our global manufacturing footprint and our long-standing technical partnerships with our customers.

Industrial segment EBITDA declined 11% and EBITDA margin decreased 260 basis points to 14.4% as cost of goods sold inflation outpaced the timing of index-based pricing. Higher selling prices and volumes partially offset that pressure, and we are now beginning to realize the benefits of index pricing.

In the fourth quarter, we expect segment organic sales essentially flat year-over-year. We expect the pace of EBITDA margin compression to moderate sequentially as index-based pricing and our productivity initiatives take hold. In our Industrial segment, our team continues to win additional business driven by our technology solutions that enable our customers' success.

With that, I'll turn the call over to Jamie Beggs, our Senior Vice President and Chief Financial Officer, to discuss our balance sheet and cash flow as well as our fourth quarter and full year financial outlook. Jamie?

Jamie Beggs

Thank you, Tim, and good morning, everyone. Our robust balance sheet continues to provide financial flexibility to invest in our businesses and return cash to shareholders. We ended the quarter with cash and short-term investments of $1.6 billion. Net debt was $5.2 billion, a decrease of approximately $200 million from the third quarter of last year.

Year-to-date cash from operating activities was approximately $1.2 billion, about $100 million higher year-over-year. As a result, our net leverage moved lower to 1.8x net debt to adjusted EBITDA.

We repurchased approximately $150 million of shares during the quarter, bringing year-to-date repurchases to $320 million. We also paid more than $480 million in dividends through the first 9 months of the year. Our cash deployment remains focused on maximizing shareholder value creation and maintaining a strong balance sheet.

Looking ahead, our organic growth momentum and commercial actions position us well for the remainder of the year. For the fourth quarter, we expect organic sales growth of a low single-digit percentage, led by aerospace, architectural coatings in Latin America and packaging coatings. We expect total company adjusted EBITDA margin to range from a flat to an increase of 100 basis points year-over-year.

Within the segments, we expect Global Architectural Coatings organic sales to be in the range of a flat to up a low single-digit percentage. Performance Coatings organic sales are expected to grow by a low to mid-single-digit percentage, while Industrial Coatings organic sales are expected to be in the range of a down to up a low single-digit percentage.

We expect cost of goods sold inflation to be in the high single-digit range in the fourth quarter. We plan to offset this pressure through our pricing actions as we realize appropriate value for the unique products and productivity solutions we provide to our customers.

Considering our strong growth momentum and the execution of productivity programs, we are raising the midpoint of our full year adjusted earnings per share outlook and narrowing the guidance range to $7.90 to $8.10 per share.

With that, let me turn it back to Tim for closing remarks.

Timothy Knavish

Thank you, Jamie. In closing, we delivered record third quarter earnings, which reinforces our confidence in PPG's strategy and the strength of our business model. We delivered outstanding organic sales growth driven by both volume and price, fully offset cost of goods sold inflation, expanded earnings, delivered adjusted company EBITDA margin above 18% and generated robust cash flow through disciplined execution across our portfolio.

Additionally, our outside-the-can productivity solutions for PPG's customers are growing at 3x faster than the average growth rate of our portfolio and with a higher margin profile and now represent a solid double-digit percentage of our total sales. Our customers greatly value the innovative solutions that we provide.

Our investments in technology, brands, customer relationships differentiate us and enable us to solve some of our customers' hardest problems. Our field service capabilities and installed base keep us close to those customers, while our channel access and global reach provide a strong foundation to serve them with world-class effectiveness.

Combined with our flexible cost structure and solid financial position, these capabilities give us the capacity to invest and win. We see meaningful opportunities to drive further organic growth through innovation, share gains and continued investment in our differentiated businesses.

We will also selectively consider portfolio actions to accelerate our strategy and drive shareholder returns. We are focused on creating long-term shareholder value by both investing organically and by evaluating opportunities to enhance our mix of high-growth and high-margin businesses. We will continue to allocate capital with discipline, balancing investments in growth with maintaining a strong financial position and returning cash to our shareholders.

Thank you to our PPG team around the world for their focus and execution. Their dedication enables us to serve our customers and deliver on our purpose every day. We protect and beautify the world. And we appreciate your continued confidence in PPG.

That concludes our prepared remarks. Warren, we are now ready to begin the question-and-answer session. Please open the line for our first question.

Operator

[Operator Instructions] Your first question comes from the line of David Begleiter with Deutsche Bank.

分析师问答

David Begleiter

Tim, on Industrial Coatings, two things. Can you talk to when you expect the index-based pricing to catch up to the COGS inflation? In terms of your Q4 guide of roughly flat organic sales growth versus up 4% in Q3, can you talk to what's driving that more modest assumption in Q4?

Timothy Knavish

Sure, David. Thank you. So on Industrial Coatings index pricing, we started to see a little bit of that benefit in Q3 and Q4, but most of that benefit will come in Q1 and Q2 of next year just because of the structure of our contracts across our businesses. That said, we expect the margin compression to moderate as we move through Q4.

And beyond that, as far as when it exactly matches neutrality in that segment, while we have net neutrality across company, we'll have to see what our 2027 guide is and what happens to inflation in Q1 and Q2. But right now, our Q4 outlook is margin compression to be slightly better than it was in Q3.

As for volumes, most of that is based on automotive builds. And as you know, we use S&P's IHS, and they have reduced their builds in Q4 and in particular, in China. And most of what you see, the delta between Q3 and Q4 growth for that segment comes from that factor.

Operator

Your next question comes from the line of John McNulty with BMO Capital Markets.

John McNulty

So I wanted to unpack the refinish business a little bit. You did largely, as you called out. I think you had said you expected to kind of see an inflection. But clearly, the industry didn't. I mean, I think you cited claims were down 4% still and yet you were up. That seems like a bigger outperformance than what we normally see even from your refinish business.

So I guess, can you help us to understand what drove that on the volume front, if there were any kind of major account wins or if it was just some -- maybe some of the inventory timing? Maybe just a little perspective on what drove that kind of significant looks like mid-single-digit outperformance.

Timothy Knavish

Yes, John, first of all, you're right. This has played out -- it's been a painful 4 quarters for us since we first raised this issue last year that we would see 4 quarters' worth of destocking, and that's behind us now. And I would say that internally here, the quarter played out a little bit better than we expected, but not a huge amount better than we expected.

It's a couple of things. One, the destocking is behind us. So you do have some more normalization of purchase orders. Body shop activity, while still below where it was pre-COVID, incrementally sequentially improving a bit. From a share shift standpoint, this business always has share shift.

We track net body shop wins. And while we can't really point to anything huge for us, I know there's some other stuff happening out there, we still win a couple of hundred net body shops a month. But more than anything, it's the normalization of both the inventory patterns and slight normalization of the industry.

And the way I would summarize refinish going forward right now, clearly, activity levels at the end user are not back to where they were pre-COVID. We had throughout 2025, U.S. collision claims down like an average of 10% every single quarter. Q1 and Q2 of this year, it's been minus 6%; Q3, minus 4%.

So it's still an industry that is below 2019 activities. But some signs of normalization. The destocking is behind us. We've got net body shop share wins, positive price. We -- this is one of our business where we have a lot of outside-the-can solutions that drive additional revenue for us.

The other thing that's normalized, John, and then I'll move on is another factor that was really impacting 2025 was high auto insurance rates, and you've started to see those come down a bit. So a number of factors point to modest sequential normalization, our inventory issues behind us and net-net, we're winning. And -- but all in all, this was a little bit better than we expected, but not a ton.

Operator

Your next question comes from the line of Kevin McCarthy with Vertical Research Partners.

Kevin McCarthy

Tim, I was wondering if you could elaborate on the Industrial subsegment within your Industrial Coatings segment. As I look at Slide 8, you flagged that Industrial posted high single-digit growth at the subsegment level there. And if I'm not mistaken, I think that's probably the best in 4 years or so.

So I was wondering if you could kind of unpack how much of that is price acceleration versus volume acceleration and what your outlook is for that piece of the company?

Timothy Knavish

Yes. First, Kevin, you just made the day of Juliane Hefel, who runs that business for us by calling out the best in 4 years. So thank you for that. Yes, this -- I'm really proud of this team for sequential improvement here. Q1, minus low single digits, Q2 up mid-single digits and Q3 up high single digits, and we feel really good about new business wins and pipeline going forward.

So as far as the blend of how the team achieved that organic sales, it's almost exactly half volume and price. So we've got good momentum in the various pieces of that subsegment -- or I'm sorry, of that business.

Think about powder, for example, we had double-digit growth in powder. We called out heavy-duty equipment, mostly in the non-ag area. Transportation, we've got a nice little specialty business in there that's doing well. All regions grew, and we did get some nice bumps from data center-related electrical infrastructure.

So it's fairly widespread, and it's not like we've seen, as you know, any big hockey stick improvement in industrial production. I would say a lot of this is just execution of the selling machine, the commercial excellence that this team has been working on for a number of years, and now we're starting to see it on the P&L.

Operator

Your next question comes from the line of Mike Harrison with Seaport Research Partners.

Michael Harrison

I have kind of a two-part question on the Global Architectural Coatings business. First of all, the strength in margin there, just wondering if the 24% EBITDA margin is something that you feel like you can sustain going forward in these seasonally stronger Q2 and Q3 quarters? Or was there something unusual that helped to drive the margin strength and maybe suggest this is a high watermark?

And then just digging in on architectural EMEA, curious on how the situation in France is potentially going to affect volumes and demand into Q4.

Timothy Knavish

Yes. Mike, on the first one, we have said and I've consistently said that our Global Architectural business should be consistently 20% plus EBITDA business. And I believe that strongly.

Q3 was a combination of two things. Yes, we had great execution by the team. We've got really strong brands, really strong innovative products, great relationships with our distribution partners, and that helped us from a mix standpoint as well as a price standpoint. So that definitely helped, and that was the biggest contributor to the strong margin you saw.

Full transparency, if you look at our Mexico business here, we buy in dollars and we sell in pesos. So we did get some help in Q3 from the stronger peso. So going forward -- and I don't like to say high watermark because that implies that there's a cap on what we can do.

But what I will say is we -- our aspiration is this in total is a 20% plus-plus EBITDA business, but we did have a bit of help in Q3 that you just watch the peso, and that will give you a little indication of how much headwind or tailwind we'll have in our Mexico margin.

Now as far as France, obviously, it's terrible to watch on television and see the violence and destruction. So far, fortunately, none of our stores have been affected. Obviously, it's not likely to be a boost to consumer confidence or to construction activity. But so far, we have not seen a demand impact, but we're watching that closely. We are seeing logistics impacts, some ability to move product around.

So I'd say in the short term, Mike, that is -- that's all we're seeing. But obviously, longer term, it's not great for, first of all, the safety of the people on the ground there, but it's also not great for consumer confidence.

Operator

Your next question comes from the line of James Hooper with Bernstein.

James Hooper

I wanted to ask a little bit about industry consolidation. So clearly, the merger going on in your space has a couple of disposals been announced. How are you thinking about those in M&A? And just maybe as a follow-on, are your team seeing any changes to the competitive dynamics on the ground as we move towards these mergers completing?

Timothy Knavish

Okay. James, so the first part, there's -- what's happened in Brazil, I think it was last year. Obviously, what's happened with [ Cerventus ] and the legacy BASF business, and then you've got the pending merger of Akzo, Axalta.

So far -- and again, we're not -- we don't have a [ Deco ] business in Brazil. We have a tiny little boutique business basically in one state in the South. But nationally, we don't have a presence. So we're not really involved in whatever is going on there.

And from [ Cerventus ], so far, we really haven't seen any change in behavior in the marketplace. And then, of course, it's still early days on Akzo, Axalta because they're not officially together yet. So we haven't really seen any change there.

It's obviously -- we'll do what we can to take advantage of any distraction. We've been through those acquisitions ourselves in the past. So we'll do what we can to help customers that may be looking for opportunities. But I'd say so far, not much changing on the ground.

As for dispositions, I think the [ Cerventus ], just -- it's still fairly recent. So we'll see how that plays out over time. Nothing active now. With Akzo, we really weren't interested in their India business, weren't interested in their [ Deco ] Southeast Asia business.

And the only thing that we're aware of kind of officially is wood here in the U.S. and frankly, doesn't fit our enterprise growth strategy. I know there are some rumors about another part of their business in Europe. If and when those rumors become a reality, we'll take a look at it. But it's not what I think about every night or every morning.

Operator

Your next question comes from the line of Ghansham Panjabi with Baird.

Ghansham Panjabi

And first off, congrats on a strong 3Q. So Tim, as you zoom out a little bit and think about 2027, how are you thinking about the trend line for volumes across your major end markets? Because obviously, interest rates have gone up significantly since you last reported and growth in some of the international geographies seem a bit more challenged from a macroeconomic perspective, including in markets like China.

So how does that net out for PPG at this point is -- the way you see it at this point in context of some of the advantaged growth verticals you have, including in aerospace?

Timothy Knavish

Ghansham, first of all, thank you for the comment. I'm sure my team will appreciate it because they work really hard, not only in the quarter, but the last couple of years building up this muscle. So I appreciate that.

Look, it's early for us to give our 2027 guide. You'll hear that from me and Jamie at the end of January. But what you should -- first of all, we're not -- you're not going to hear from us that we're expecting any significant hockey-stick recovery across any of our markets. So from an end market standpoint, sitting here today, kind of more of the same.

But on the positive side, you should expect our organic growth momentum to continue, and we see that in our pipelines. You should expect our margin expansion to continue as we continue to execute the commercial actions, continue to drive a richer mix. And we're confident in not only the technologies out there today, but the technologies that are in our R&D pipeline.

So while we are not going to count on anything -- any macro help unless something changes between now and mid-January, the key themes will be organic growth momentum will continue, margin expansion momentum will continue. The rest of it will depend on what we learn in the next couple of months regarding inflation.

Operator

Your next question comes from the line of Aleksey Yefremov with Barclays.

Aleksey Yefremov

Tim, could you just provide us an update on what has been achieved in terms of cost actions in architectural EMEA overall? And what do you expect to happen for the remainder of this year and in '27?

Timothy Knavish

Yes. So first, I'll talk overall. I'll start there. And a high level, what you should expect in '26 and '27 is about $100 million combined between restructuring and productivity actions. And the mix between restructuring and productivity may shift a little bit, but that's how I think of it, Aleksey, is about $100 million total between those two for '26 and '27.

Now architectural EMEA specifically, we've been working on productivity throughout most of this year, and that's what's delivered some of our year-to-date margin expansion. But the bigger step-change for us will be execution of the 4 plant closures that we talked about earlier this year. You won't see much of that benefit in 2026. But as you're modeling out 2027, you should expect a significant portion of that restructuring benefit that I just mentioned to come out of that business in the first half of '27.

Operator

Your next question comes from the line of John Roberts with Mizuho.

John Roberts

Could I ask what your highest priced house paint is in Europe currently? And I ask that because before the pandemic, I think we went a couple of decades without volumes in the DIY business moving up or down more than a low single-digit percent. All the cyclicality was in the Pro business because it's new construction and high labor costs. But maybe it's not just this pull forward, maybe prices are now high enough that we've got some demand elasticity?

Timothy Knavish

Yes. I wouldn't say we have demand elasticity. I don't feel that's what's driving. I think it's more the underlying macro, John, that's driving the volume challenges.

As far as price point on the shelf, and this is not just for PPG, for industry, you know having traveled over there and looked at the products on the shelves in different countries that the -- first of all, the formulation costs and the preference of the local painters varies country to country, surprisingly enough. Even in the Benelux, if you look at the difference between what a painter in the Netherlands prefers versus a painter in Belgium, it is different.

And as a result, without going through all of the countries we operate in, off the top of my head, the highest price point would probably be in the Netherlands. And it's based on the, frankly, higher formulation cost in the Netherlands.

Alejandro Lopez

John, this is Alex. Just an additional data point. if you look at the savings rates of European consumers today versus pre-COVID level, 2.5x, 3x higher. So really, the issue that Tim is mentioning, it's not that much the elasticity, it's the consumer confidence.

Operator

Your next question comes from the line of Matthew DeYoe with Bank of America.

Matthew DeYoe

I'm going to be a bit annoying and ask a three-parter.

But I think it kind of gets at what most investors we're talking with, and I guess myself are maybe struggling with or want to know for the quarter.

So architectural EBIT up $40 million year-over-year. I know you mentioned the peso benefit, right? But like -- so if you have $1 billion of sales and price is 4%, that's $40 million. So that kind of covers the growth, but you also had higher raw material costs, which is maybe most of that $40 million and a 2% drop in revenues.

So it's almost like back to square one. I would almost look at that and say the peso benefit in and of itself could be $40 million. And I don't know if that's right or not, but that's kind of the hole that I'm looking at filling.

And I can almost run the same math on performance. But there, you have good volumes, right? So I can think of incremental margins of almost 80%. And I know refinish is a big incremental margin business, and that's growing again. But is that -- am I in the right ballpark?

And then last one, I know you talked about volumes in auto builds decelerating in 4Q, but you have implied volumes decelerating basically across the board in your business for 4Q. Like how should we read this? Is this more conservatism given the macro cross currents?

I mean it's particularly interesting in performance because some of these markets are conceptually more durable, right? But you're going from high single digit to low mid on the guidance. And so I think clarity on all these topics would be helpful.

Timothy Knavish

Okay. Matthew, let me do my best at that. And I'll look for my teammates to help me here. But first of all, Architectural Coatings, EBIT, the walk you described, the $40 million was not the benefit of the peso. It would be significantly lower than that, right? And so that plug, I think, would be a bit off.

I'd say it's a couple -- the big drivers there are volume in Mexico, mix in Mexico, price in Mexico, price in Europe and cost out in Europe. Those would be the biggest drivers, and then we got a little bit of help from the Mexico peso.

On performance, two things I'd say. First of all, your thesis on kind of refinish being a very rich business, dropping good EBIT to the bottom; yes, you're correct there. Aerospace is also a very -- a good business for us. So their growth drops at a good margin for us.

But to your point on volume being a bit softer there, remember, we have two businesses there that are lapping multiple double-digit quarters, multiple double-digit Q4s. So just by the laws of big denominators, it starts to get a little more high single digits and mid-single digits.

Volumes overall in Q4, it's largely two things. Automotive builds pretty significant reduction. If you look at just China alone, Matthew, China roughly builds 1/3 of all the new cars in the world. And S&P has reduced their build projection to China for something like minus 8%. And you might have seen the journal article this morning. And while export China is helping us pretty significantly, domestic China is a true headwind. That's the biggest.

And then the second one is contributing to overall volumes, just uncertainty in Europe. The European -- to the previous question, the problem is not only in France. There's problems across the continent affecting consumer confidence. And so we've built some of that concern into our Q4 guide. So hopefully -- team, did I miss anything that? Jamie?

Jamie Beggs

Sure. Yes. Let me just go back to architectural for just a moment. I think Tim highlighted a couple of the great things that, that business is doing between both Europe and Mexico. Part of it is pricing appropriately to cover inflation. The other part of it is about more than 50% of our productivity initiatives and restructuring actions are actually happening in the architectural business. So that's another reason for the uplift.

And Tim mentioned earlier of getting that to that sustained 20% EBITDA margin, which I do think based on what we're trying to do with the cost structure also allows us to be able to maintain those types of margins.

He also mentioned that the peso dynamic was a benefit to the quarter. That's about $15 million to $20 million of that bridge that we're talking about. So it definitely did impact the quarter. But like I said, the majority of that had to do with other pricing initiatives as well as some of those productivity initiatives.

And if I just touch real quickly on the Performance segment, half of that sales increase was related to volume, the other half related to price. And as you've seen and heard us talk about aerospace and also the impact of our refinish business, there's a really nice healthy mix associated with that. And that's another reason why those margins continue to improve on a year-over-year basis.

And then lastly, what I would say with those two segments in particular, we were able to cover net cost of goods sold inflation with our pricing initiatives, which I think is really important. The one that's slower based on index dynamics and pricing of our contracts is industrial, and that's the only segment that hasn't yet covered at this point.

Timothy Knavish

Great. Thanks, Jamie. Look, just to put a bow on it, Matthew, because I can read with all your questions a bit concerned over Q4; our Q4 guide, while not as strong as our Q3 performance is not a weak guide. It is in a world of difficult macro.

We're going to deliver organic growth. We'll deliver EBITDA margin expansion, and we will deliver at our midpoint double-digit EPS growth. So despite some of these comp challenges and auto builds and a little anxiety over Europe, it's still a good quarter for us.

Operator

Your next question comes from the line of Jeff Zekauskas with JPMorgan.

Jeffrey Zekauskas

I have a two-part question. You talked about strength in the Industrial Coatings subcategory. So if what we did is we excluded the performance of the auto OEM business in Industrial Coatings, where you have constraints because of index-based pricing, would Industrial Coatings operating income, would it have been up year-over-year in the quarter or down?

And secondly, various companies seem to want to buy architectural coatings businesses in Europe. Is that a business that you would consider monetizing at the right price? Or is it strategic and it holds a particular strong position within the overall PPG portfolio? How do you regard that business in the world we're in now?

Timothy Knavish

Yes. Thanks, Jeff. I'll take it. And then if anyone -- if Jamie or Alex wants to fill in gaps, fine. But look, on -- yes, Industrial Coatings subcategories I've already talked about.

Your question around if it weren't for the challenges in automotive OEM, would EBITDA have grown in that segment? The answer is yes, okay? But I will caution a little bit because auto OEM isn't the only one that has index pricing there. Packaging does as well. Packaging started to see some of their indices kick in, Jeff, where autos really will come in, in Q1 and Q2.

And even while we had positive price in both packaging and Industrial, because of the structure of those contracts, even those two still have more work to do relative to the rest of our portfolio. So a high-level answer is yes, you're correct, but I want to give you a little more color there.

And on architectural Europe, so look, we like this business, and here's why it's in our portfolio. It delivers really good earnings for us, really good cash for us. Clearly not a growth driver for us, Jeff, and you know that, and that's been the case for years.

But the role in the portfolio is get the margin to where we believe it should be and get us great earnings and great cash like we did just not that long ago, I think 2023 in a pretty difficult macro, we were spitting out records. And so the role in the portfolio is, while it isn't a great growth business for us, it is -- it should be -- it's a good margin business, should be a great margin business. It's a good cash generator for us, should be a great cash generator for us.

And that helps us fund a lot of what we need to do in our high-growth, high-margin businesses like aerospace. We're spending a lot of cash there. I got to get it from somewhere.

That said, every day, our job is to maximize long-term shareholder value. And I think you saw with what we did with architectural U.S., there's nothing that's sacred if we believe that we can maximize shareholder value some other way.

Now earlier this year, I lose track of time, there was talk of another architectural Europe business and the implied multiple that was being thrown around at that time would not have added long-term shareholder value vis-a-vis our organic strategy there. So every business has to earn its right to stay in the portfolio every day.

And -- but every business also at the right price, if it makes sense for long-term shareholder value, that's certainly a path we'll consider like we did with Architectural [ goose co ].

Operator

Your next question comes from the line of Duffy Fischer with Goldman Sachs.

Patrick Fischer

Question just on COGS and raw materials. So last quarter, you saw the forward quarter up high single digits in the year up mid-single digits on inflation. It's basically the same view today. But since that period, oil is up 30%.

So do you think that just your suppliers are going to eat that oil hit and that raw materials will roughly be similar to what you thought 90 days ago? Or is there some inflation yet to come, do you think in the raw materials if oil stays up at this $110 level and that will be a bigger issue? So maybe just kind of a view into the first half of next year, if oil stays flat, roughly what kind of raw material increase will you guys be looking at next year?

Timothy Knavish

Yes. Duffy, first of all, we were projecting in our last guide for Q3, we projected high single digits, and we actually came in at mid-single digits for actual Q3. Some of that is business and region mix and some of that is procurement excellence, arbitrage abilities of our team that was able to bring that in lower than we had estimated. We're guiding high single digits for the fourth quarter.

A bit early for us to guide for '27. But just mathematically, given that most of this inflation didn't really start kicking in until Q4, from a comp standpoint, we'll have some significant year-over-year inflation in Q1. And beyond that, it's really hard for me to project, Duffy. I don't know what's going to happen in the Middle East, what's going to happen the price of oil, what's going to happen to other supply/demand.

But what I will say is with our industry, the macroeconomic conditions always provide a bit of a shock absorber for coatings in that when macros are down, that typically drives some pressure for suppliers to go after volume. So that can be a bit of a hedge to some of what you see on the news.

But right now, I can't give you a guide yet for '27. I'll give you that in January. But just mathematically, we'll see high single digits in Q4. It will be relatively high in Q1 just from a comp standpoint. And from there, we'll see how the year plays out.

Operator

Your next question comes from the line of Frank Mitsch with Fermium Research LLC.

Frank Mitsch

Tim, in the prepared remarks and in the press release, you spoke about the performance -- I'm sorry, the protective and marine business with a special emphasis on the marine side. We've heard from others speaking about the protective side being a key area of growth. I wanted to give you an opportunity to expand upon all that might be going on, on the protective side and the sustainability of the growth that you might see there.

Timothy Knavish

Yes. Thanks, Frank. Look, we're performing on both sides of the business. We called out the marine, particularly in marine Asia because I would call it strong outperformance. And it's given that it's mostly technology-driven with some of our anti-filing and filing release technologies that super exciting for us.

But protective is doing well, too, around the world. Infrastructure, everybody talks about data centers. We're doing well there. You may have seen our article in The Times the other day. We're doing well with the infrastructure investments across the United States and other countries. So it's a mix of both. But if I were to rack and stack looking at our own results, marine new build, marine dry dock are our two strongest subsegments.

Data centers, yes, strong, but it's off a fairly small denominator. So even as good as the pipeline is, and I think we tripled our sales from 2025, but it's off of a small number. in total, data center protective coating sales are still low single-digit percent of our whole company. So that's exciting and fun to talk about. But with scale right now, it's marine new build and marine dry dock.

Operator

Your next question comes from the line of Josh Spector with UBS.

Joshua Spector

I wanted to ask a couple of follow-ups, if I could, kind of going down the line that Matt was going down. Just thinking about overall COGS and inflation, it looks like in 3Q, your COGS inflation was up less than what it was in 2Q, even though raw material inflation accelerated, albeit it sounds a little bit less than what you thought. Was there anything in there other than FX that would be a call out, either tariffs or LIFO or something else because it just doesn't seem to fit the narrative that we're seeing?

And then just a quick follow-up on FX. We're talking about that a lot in 3Q. It looks like the benefit would have been similar, maybe even better in the first half. So I'm not sure kind of what changed if there's a bigger impact now. So maybe you can help unpack that a little bit more, please.

Timothy Knavish

Sure, Josh. I might need some help from my team on this one because my recollection is Q2 COGS inflation, we saw mid-single digits. Q3, we thought we were going to see high, but we saw mid again. And the only unique factor that I can think of that would have held Q3 down was the peso strength.

As I mentioned on the previous question, though, our procurement team, I'll put against anyone as far as their ability to get the best deal and use our global footprint and our global arbitrage. So there may have been a little bit of that as well.

But the only one that hits my radar screen is some specifically Mexican peso FX because most of our businesses other than that one, buy and sell in the same currency, Josh. So it's really the peso, if you want to see an impact on our net raw material inflation, the Mexican peso is the one that we should watch.

Alejandro Lopez

Yes. And in reality, Josh, this is Alex; the impact that we saw in Q2, mid-single-digit inflation, let's call it, solid mid-single digits versus Q3 on the high end range of those mid-single digits. So it's higher in Q3 than Q2.

Probably without the peso, it will have been on the high single based just on pure math. So it's really the pricing action accelerated. If you look at pricing Q2 to Q3, pricing accelerated, and we expect similar acceleration going into Q4.

Operator

Your next question comes from the line of Salvator Tiano with KeyBanc Capital Markets.

Salvator Tiano

So I want to drill down a little bit more on the price/cost situation. And firstly, you said you reached net neutrality when you're taking into account commercial actions. I wanted to clarify, is this purely pricing? Or are there any other things that we were taking in the mix when we think about the neutrality?

And given that you've already reached the price/cost neutrality at this point in Q3, does this mean in the next few quarters, we're going to get actually a tailwind from price cost? Or as you're seeing the acceleration in rows a little bit later, I guess, than you expected, we're going to stay at that neutral place for Q4 and Q1?

Timothy Knavish

Yes. Salvator, first of all, the commercial actions are well over 90% price, okay? So that you can clear that one off the deck. There's a little bit of other mix elements in there, but it's well over 90% price.

Now as far as how to think about it going forward, we are at neutrality for COGS inflation as a total enterprise. But you heard me say mostly in the Industrial segment, we've still got some catching up to do within individual businesses, and we'll be holding in others depending on what happens to inflation.

So we've still got some catching up to do, but I would not expect a tailwind, again, dependent on what happens in inflation, and we just don't know that yet for '27, but I would certainly not assume price inflation to be a tailwind in the short term because we've still got some work to do.

Jamie Beggs

And the raw material basket continues to escalate. So the commercial teams are very focused on initiating new actions as needed as the dynamic environment continues to unfold. So we're a little cautious, I think, on saying there's a tailwind. Obviously, that would happen if raw materials stabilize, but that's not what we're seeing today.

Operator

Your next question comes from the line of Vincent Andrews with Morgan Stanley.

Vincent Andrews

Tim, I was wondering if you could comment a little bit about the European Union is set to put some quotas on Chinese automobile imports. And I know you obviously paint cars in both geographies. So there's probably a little bit of a wash on volume. But maybe you could just talk about what, if any, effect on PPG that will have, whether it's from a mix perspective or a margin perspective or just any thoughts on that?

Timothy Knavish

Yes. Vincent, so I would say very little impact on us because, to your point, we're well represented in every car producing country in the world. And what we care most about is net vehicle sales off a lot because that's what drives -- that's what drives the painting of cars.

The only asterisk I would put is EV penetration because per our earlier discussions, EVs give us content opportunity. And so to the extent that EV penetration accelerates as it is in some parts of the world, not here, but most parts of the world, it is, that's a content opportunity for us. But as far as whether the car is produced in China or Europe or Latin America or U.S., Canada, we're pretty agnostic to that.

Operator

Your next question comes from the line of Eric Boyes with Evercore.

Eric Boyes

Maybe another one on refinish, could rebate thresholds or year-end purchasing be cushioning some of the stabilization there? And what does that mean for comps in first quarter or first half for our expectations?

Timothy Knavish

That's a good question, a great question, Eric, because we really don't know how a lot of our distributors are going to play out at year-end because while the major destocking is behind us, each of these folks are independent private business owners and they manage their own cash flow. And so if they're within striking distance of a rebate, they may buy a lot in Q4. If they're not, they may say, "You know what, I'll just hold off till Q1 and make my '27 rebate."

So that is a dynamic that we watch very closely. It's still pretty early in the quarter here for us to say how that's going to play out. We've given the best guide we could possibly give. But you have nailed on a subject that always affects Q4, but it could bring in some variability -- some additional variability this Q4, given the two dynamics that we talked about earlier.

One, the kind of previous destocking in the first half of this year; and second, the really close monitoring that everybody is doing on what is happening with actual body shop activity and U.S. collision claims. So that is -- it's a good call out. It's a watch closely, and we've built our best possible estimate into our guide.

Operator

Your next question comes from the line of Arun Viswanathan with RBC Capital Markets.

Arun Viswanathan

If I could just maybe get your thoughts on maybe some initial framework for '27. So it sounds like you are implementing price increases that will flow through maybe in the low to mid-single-digit range, maybe mid-single-digit range. And then your volumes, it seems like your business wins and then strength in a few categories, maybe aerospace and packaging could lead you to also consolidated low single-digit volume growth.

And so that could put you maybe in the mid- to high single-digit EBITDA growth. And then maybe with some capital deployment, you get to high single-digit EPS growth. Is that a fair framework that we can keep in mind? Maybe just any help on that would be appreciated.

Timothy Knavish

Yes, Arun, I said a couple of times. It's a bit early for us to give granularity on our '27 guide. We're just early in a fourth quarter here, which in a world that has more volatility than normal from both a demand side, geopolitical side and an inflation side.

So I can't get into granularity yet, but the themes I mentioned earlier that I do feel confident in is we will continue our -- I mean, based on what we know today without something falling off a cliff, we will continue our organic growth because we've got a good pipeline. We will continue our margin expansion because we have some catch-up to do on pricing in some businesses. And we've got significant productivity and restructuring actions that will drive some margin enhancements for us across the business.

So we're expecting top line growth, and we're expecting EBITDA expansion, too early for me to quantify that. And if you look by business, I can talk about the ones that we have great certainty over and aerospace will continue to grow. I've got backlog that will last for years, unfortunately. I wish I could sell it all today, but that will continue to grow for us.

Now when you lap 22 quarters of averaging double digit, maybe it goes from double digit to high or mid, but that will still grow for us. Our packaging business, the same thing. Confident in our Mexico business because we've got retail sales being pretty robust. And while I mentioned in my opening remarks that we've seen sequential recovery in FDI, it's still not back to where it was pre-tariff and USMCA uncertainty.

So there's still upside in Mexico that's a potential as those things release. And the other businesses are a little more uncertain at this point until we see how consumer demand is, until we see how auto production is. So net-net, confident in the growth, confident in EBITDA expansion. And the rest of it, we'll share with you in January.

Operator

Your next question comes from the line of Abigail Eberts with Wells Fargo.

Abigail Eberts

Just a quick one on Traffic Solutions. Anything worth calling out there? Or was the mid-single-digit organic growth decline mainly weather related?

Timothy Knavish

Yes, Abigail, two things. You nailed part of it. Now this is a business -- first of all, it is by far our most seasonal business. So you really need to watch it in the summer months. That's when we make all of our money and there's -- you could call it [ one ] summer month in the quarter. And then it's a pretty volatile base then because you've got a small denominator as you move through September, October. That was one piece.

It was -- it's -- we don't like to call it weather because I don't like to be one of those people that blame things on weather and then take -- not take credit for it when weather is good. But the cycle of our customers actually, their buying patterns were different than what last Q3 would have been, which is what drove the minus mid-single digits.

Alejandro Lopez

Yes. And if you look at those buying patterns, Abigail, first half of Traffic Solutions was very strong. So I think that some of those customers were taking advantage of that nice [ spring ] we have.

Operator

Your next question comes from the line of Laurence Alexander with Jefferies.

Laurence Alexander

Just very quickly, most of our discussion in the past few years about the price versus cost has been about innovation or demand helping you get through pricing faster and be able to offset cost inflation.

But can you talk a little bit about what's happening structurally? That is when we look at moves in the oil price, the amount of inflation that flows through to you, is there anything that has strategically changed or is improving? Or are there moves that you can do over the next several years that could structurally change the sensitivity that you have to the kind of underlying moves in the raw commodities?

Timothy Knavish

Yes. A couple of things. We've been able to move much faster this time for a number of reasons. One, we learn. We learn from prior cycles, done well, do better. Our commercial excellence is much, much better than it was historically. Our selling machine, we're on top of what's happening to our COGS. We're armed to have earlier and better conversations with our customers.

Another reason I'll point to is our R&D investments eventually lead to better innovation. Better innovation leads to a better offering for our customer to help their businesses be more successful. So that's a very different discussion than just pure price versus inflation.

So we've kind of progressed all of those things as we've moved over the last couple of years, Laurence. But fundamentally, we're still going to be tied to certain commodity chemicals. I don't want to do anything that links 100% of our pricing directly to those chemicals because we have innovative products that provide value far beyond the combination of raw materials.

So we focus mostly on innovation excellence to bring value to our customers, commercial excellence to articulate that value to our customers. And that enables a much different discussion when you do have inflation and you're delivering good productivity to our customers and enables us to capture it faster.

Alejandro Lopez

Yes. And I think that structurally, Laurence, the industry -- the chemical industry is still long, still excess capacity. So we -- our procurement team is working on diversifying our supplier base to have better supplier for PPG.

Timothy Knavish

And then one last thing I will say because it's exciting and fun to talk about is I mentioned on one of my calls a couple of quarters ago, what we're doing with AI formulation. We use AI to optimize our raw material combinations without sacrificing performance for our customers.

And 100 years' worth of formulas scattered across 100 labs around the world, and AI has brought us that capability. And we're over 150 formulas now that we've done that with, and it delivers us good offsets to what happens out there from an inflationary standpoint.

Operator

Your next question comes from the line of Chris Parkinson with Wolfe Research.

Harris Fein

This is Harris Fein on for Chris. Just a quick one for me. You outpaced the industry by 300 basis points in the quarter. I guess how much of that was you being aligned with the right existing customers versus new incremental share gains that you can point to flowing through?

And across the portfolio, how much -- in the past, you've called out like dollar amounts on share gains that you see in the pipe. Just how much in terms of share gains do you have visibility to that still hasn't flowed through yet?

Timothy Knavish

Yes. So it's both, Harris. We have a win-with-the-winners strategy where that cuts across many of our businesses. And credit to Alicia, who started it in automotive, but we've spread it across many of our businesses where we try to pick the winners and deliver our value proposition to them and then ride their growth, right? So that's part of it.

But we also have talked about some pretty significant share wins, chunky ones. That's largely in the industrial segment just because of the nature of the customer. If you think about an architectural coatings customer, that takes hundreds and thousands of micro wins, and that's what we're fighting every day; whereas Industrial segment where you're factory to factory larger chunky wins, I think we've said we've got a pipeline that we'll get about $25 million a quarter of new Industrial segment wins, and that's been our run rate, and that's what you should expect to continue to see over the next several quarters.

Operator

Your next question comes from the line of Sean Gilmartin with Bloomberg Intelligence Research.

There are no further questions at this time. I will now turn the call back over to Alex Lopez.

Alejandro Lopez

Thank you, Warren. We appreciate your interest and confidence in PPG. This concludes our third quarter earnings call.

Operator

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

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