Axalta Coating Systems Ltd. · NYSE:AXTA
Axalta Coating Systems — Q1 2022 Earnings Presentation
23 slides from Axalta Coating Systems's earnings presentation, Apr 25, 2022
Slide 1: Q1 2022 Financial Results
Q1 2022 Financial Results April 25, 2022 1
Slide 2: Legal Notices
Legal Notices Forward-Looking Statements This presentation and the oral remarks made in connection herewith may contain certain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 regarding Axalta and its subsidiaries including our outlook and/
Slide 3: Q1 2022 Key Highlights
Q1 2022 Key Highlights Volume growth continued across three of four end-markets despite supply chain 1 constraints; Light Vehicle volumes outpaced global auto production Realized 9% price-mix growth with double-digit gains in Performance Coatings and 2 momentum building in Mobility Coatings Executed
Slide 4: Strategic Growth and Innovation
Strategic Growth and Innovation Growth Actions Opportunities through Innovation Expanded our leadership position in the premium, 12 new product offerings Refinish mainstream & economy under the Raptor® aerosol markets; U-POL commercial line synergies gaining traction Organic growth in a Multiple new
Slide 5: Performance Coatings Demand Environment
Performance Coatings Demand Environment Refinish ▪ The global refinish market showed overall stability with only modest headwinds to our business from ongoing China COVID-19 lockdowns and Russia sanction impacts – U.S. miles driven have nearly recovered to pre-pandemic 2019 levels; Refinish body sho
Slide 6: Mobility Coatings Demand Environment
Mobility Coatings Demand Environment Light Vehicle ▪ Light Vehicle market recovery continues to be constrained by the semiconductor chip shortage – Light Vehicle volume declined 3.5% year-over-year but exceeded global auto production rates, which declined 4.5% to 19.7 million in Q1 2022 – On a seque
Slide 7: Prioritizing Margin Recovery
Prioritizing Margin Recovery Cumulative Price-Cost(1) Accelerating Price to Offset Cost ($ in millions) Price Cost ▪ Every business is focused on margin recovery; pricing expected to more than offset cost inflation in Performance Q2 2022 Coatings ▪ Q1 raw material and energy inflation of 29% year- o
Slide 8: ESG Highlights
ESG Highlights Environmental Social Governance ■ Launched new Imron® Industrial ■ Introduced Aspire, a digital platform for ■ Continue to work on the achievement of topcoat and primer – offers low VOC all employees globally to access learning our 2030 ESG goals announced in emissions and increased s
Slide 9: Q1 Consolidated Results
Q1 Consolidated Results Financial Performance Commentary ($ in millions, except Q1 % Change Strong Net sales growth driven by pricing actions and per share data) 2022 2021 Incl. F/X Excl. F/X Performance Coatings 814 707 15.1 % 18.6 % M&A contributions Mobility Coatings 360 356 1.0 % 3.0 % ▪ Benefit
Slide 10: Q1 Performance Coatings Results
Q1 Performance Coatings Results Financial Performance Commentary Q1 % Change ($ in millions) 2022 2021 Incl. F/X Excl. F/X Net sales growth driven by pricing actions, M&A contribution, and increased volumes, offset partly by Refinish 461 399 15.6 % 19.7 % FX headwinds Industrial 353 308 14.5 % 17.3
Slide 11: Q1 Mobility Coatings Results
Q1 Mobility Coatings Results Financial Performance Commentary Q1 % Change ($ in millions) 2022 2021 Incl. F/X Excl. F/X Net sales increase driven by pricing actions partly offset by customer production constraints within Light Light Vehicle 276 279 (1.2)% 1.0 % Vehicle and FX headwinds Commercial Ve
Slide 12: Debt and Liquidity Summary
Debt and Liquidity Summary Capitalization Commentary ($ in millions) Interest @ 3/31/2022 Maturity ▪ Over $1.1 billion in available liquidity at March 31, 2022; Cash and Cash Equivalents $ 576 includes $576 million of cash and cash equivalents on Debt: the balance sheet, and $528 million of availabl
Slide 13: Financial Guidance Update
Financial Guidance Update Q2 2022 Guidance FY 2022 Assumptions ▪ Net Sales: ~+11-13% including: ▪ Market recovery and modest relief from supply chain constraints support a healthy demand environment – Anticipate double-digit better price ▪ Strong double-digit organic growth expected in – ~+4% from a
Slide 14: Appendix
Appendix AXALTA COATING SYSTEMS
Slide 15: Q2 and Full Year 2022 Assumptions
Q2 and Full Year 2022 Assumptions Macroeconomic Assumptions Q2 2022 Currency Assumptions ▪ Global GDP growth of ~4.0% for Q2 2022 and Q2 2022 Q2 2021 % Q2 2021 USD % Impact of ~4.0% for FY 2022 Currency Average Rate Axalta Net Sales Average Rate FX Rate Change Assumption ▪ Global industrial producti
Slide 16: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation ($ in millions) Q1 2022 Q1 2021 Income from operations $ 86.3 $ 52.6 Other expense (income), net 1.8 (0.4) Total $ 84.5 $ 53.0 A Termination benefits and other employee related costs 2.4 2.8 B Strategic review and retention costs — 5.4 C Acquisition and divestiture-relat
Slide 17: Adjusted EBIT Reconciliation (cont’d)
Adjusted EBIT Reconciliation (cont’d) A Represents expenses and associated changes to estimates related to employee termination benefits and other employee-related costs. Employee termination benefits are primarily associated with Axalta Way initiatives. These amounts are not considered indicative o
Slide 18: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in millions, except per share data) Q1 2022 Q1 2021 Net income $ 40.9 $ 15.7 Less: Net income attributable to noncontrolling interests (0.6) 0.5 Net income attributable to controlling interests $ 41.5 $ 15.2 A Termination benefits and other employee related cost
Slide 19: Adjusted Net Income Reconciliation (cont’d)
Adjusted Net Income Reconciliation (cont’d) A Represents expenses and associated changes to estimates related to employee termination benefits and other employee-related costs. Employee termination benefits are primarily associated with Axalta Way initiatives. These amounts are not considered indica
Slide 20: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ in millions) Q1 2022 Q1 2021 Cash (used for) provided by operating activities $ (43.9) $ 39.6 Purchase of property, plant and equipment (42.5) (31.8) Interest proceeds on swaps designated as net investment hedges 6.2 3.5 Free cash flow $ (80.2) $ 11.3 20
Slide 21: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation LTM ($ in millions) 3/31/2022 Q1 2022 Q1 2021 FY 2021 Net income $ 289.6 $ 40.9 $ 15.7 $ 264.4 Interest expense, net 133.3 32.6 33.5 134.2 Provision for income taxes 83.3 11.0 3.8 76.1 Depreciation and amortization 317.8 77.7 76.4 316.5 EBITDA $ 824.0 $ 162.2 $ 129.4 $
Slide 22: Adjusted EBITDA Reconciliation (cont’d)
Adjusted EBITDA Reconciliation (cont’d) A Represents expenses and associated changes to estimates related to the prepayment, restructuring, and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance. B Represents expenses and associated changes to e
Slide 23: Thank you
Thank you Investor Relations Contact: Chris Evans Christopher.Evans@axalta.com 484-724-4099 23
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