Axalta Coating Systems Ltd. · NYSE:AXTA
Axalta Coating Systems — Q1 2023 Earnings Presentation
24 slides from Axalta Coating Systems's earnings presentation, May 3, 2023
Slide 1: Q1 2023 Financial Results
Q1 2023 Financial Results May 2, 2023 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 2023 Key Highlights
Q1 2023 Key Highlights ■ Adjusted EBIT increased 25% YoY to $149 million and exceeded the top end of Q1 2023 guidance ■ Pricing momentum continued in all end-markets, resulting in an overall price-mix increase of 9% ■ Above-market volume growth in Mobility Coatings offset macroeconomic headwinds imp
Slide 4: Focused Execution
Focused Execution 2023 Catalysts ▪ Strong Demand for Axalta Products and Services Price-Cost Raw Materials Recovery & Productivity ▪ Partnering With the Fastest Growing Customers Near Term ▪ Upside From Normalizing End-Market Activity Focus Operational & Improve Free Supply Chain Cash Flow and ▪ Tar
Slide 5: Q1 Volume Trends
Q1 Volume Trends PERFORMANCE COATINGS Europe, AP ex. Greater Americas Middle East Greater China(2) Refinish & Africa China(2) Industrial REFINISH 1.5% 0.5% (4.7)% 4.4% $3.4B in Net Sales(1) INDUSTRIAL -9.5% (9.5)% (7.8)% 5.3% MOBILITY COATINGS LIGHT VEHICLE 11.2% 22.3% 18.6% 12.4% COMMERCIAL VEHICLE
Slide 6: Refinish Business Review
Refinish Business Review GLOBAL LEADER IN AFTERMARKET AUTO COATINGS AND ACCESSORIES ▪ 10% price-mix growth YoY offset historically high inflation, labor and freight ▪ Volumes up slightly YoY reflecting market recovery and continued share gains ▪ North America growth offset a slow recovery in China ▪
Slide 7: Industrial Business Review
Industrial Business Review EXPANDING SALES PIPELINE ACROSS DIVERSIFIED GROWTH PLATFORM ▪ 11% price-mix growth YoY; 3% sequential improvement ▪ 9% volume decline YoY driven by softer global demand; 3% sequential improvement ▪ General Industrial lower across majority of regional exposures, particularl
Slide 8: Mobility Coatings Business Review
Mobility Coatings Business Review MARGIN RECOVERY THROUGH VOLUME AND PRICE-MIX GROWTH LIGHT VEHICLE 2016-2025 GLOBAL LV BUILDS(1) ▪ Price-mix growth of 6% YoY (Builds in millions) 95 ▪ Volume growth of 16% YoY 90 ▪ Outpaced global auto production of 85 ~6% 80 ▪ Axalta 2023 outlook for global auto pr
Slide 9: Q1 Consolidated Results
Q1 Consolidated Results Financial Performance Commentary ($ in millions, except Q1 % Change Net sales growth year-over-year driven primarily by price per share data) 2023 2022 Incl. F/X Excl. F/X realization and modest volume growth Performance Coatings 847 814 4.0 % 6.9 % Mobility Coatings 437 360
Slide 10: Q1 Performance Coatings Results
Q1 Performance Coatings Results Financial Performance Commentary Q1 % Change Net sales grew 7% year-over-year (ex-FX) as double digit ($ in millions) 2023 2022 Incl. F/X Excl. F/X price-mix growth in both end-markets was partially offset by Refinish 498 461 7.8 % 10.9 % lower Industrial volumes Indu
Slide 11: Q1 Mobility Coatings Results
Q1 Mobility Coatings Results Financial Performance Commentary Q1 % Change Net sales growth of 24% (ex-FX) from above market volume ($ in millions) 2023 2022 Incl. F/X Excl. F/X growth and strong price-mix in both end-markets Light Vehicle 329 276 19.2 % 22.1 % ▪ Light Vehicle and Commercial Vehicle
Slide 12: Debt and Liquidity Summary
Debt and Liquidity Summary Capitalization Commentary ($ in millions) Interest @ 3/31/2023 Maturity Focused capital allocation Cash and Cash Equivalents $ 512 Revolver ($550 million capacity) Variable — 2026 ▪ Paid down $75 million of long term debt in the period, with First Lien Term Loan (USD) Vari
Slide 13: Financial Guidance & Market Commentary
Financial Guidance & Market Commentary Axalta does not provide a reconciliation for non-GAAP estimates for constant currency net sales growth, Adjusted EBIT, Adjusted EBITDA, Adjusted Diluted EPS and tax rate, as adjusted, on a forward-looking basis because the information necessary to calculate a m
Slide 14: Appendix
Appendix 14
Slide 15: Q2 and Full Year 2023 Assumptions
Q2 and Full Year 2023 Assumptions Macroeconomic Assumptions Q2 2023 Currency Assumptions Q2 2023 Q2 2022 % Axalta Q2 2022 USD % Impact of Indicator Q2 2023 FY 2023 Currency Average Rate Net Sales Average Rate FX Rate Change Assumption Global GDP Growth(1) ~2.4% ~1.9% US$ per Euro ~26% 1.06 1.08 1.4%
Slide 16: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation ($ in millions) Q1 2023 Q1 2022 Income from operations $ 125.3 $ 86.3 Other expense, net 1.3 1.8 Total $ 124.0 $ 84.5 A Debt extinguishment and refinancing-related costs 1.8 — B Termination benefits and other employee-related (benefits) costs (0.2) 2.4 C Acquisition and
Slide 17: Adjusted EBIT Reconciliation (cont'd)
Adjusted EBIT 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 est
Slide 18: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in millions, except per share data) Q1 2023 Q1 2022 Net income $ 60.5 $ 40.9 Less: Net income (loss) attributable to noncontrolling interests — (0.6) Net income attributable to controlling interests $ 60.5 $ 41.5 A Debt extinguishment and refinancing-related cos
Slide 19: Adjusted Net Income Reconciliation (cont'd)
Adjusted Net Income 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
Slide 20: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ in millions) Q1 2023 Q1 2022 Cash used for operating activities $ (51.8) $ (43.9) Purchase of property, plant and equipment (41.4) (42.5) Interest proceeds on swaps designated as net investment hedges 5.6 6.2 Free cash flow $ (87.6) $ (80.2) 20
Slide 21: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation LTM ($ in millions) 3/31/2023 Q1 2023 Q1 2022 FY 2022 Net income $ 211.8 $ 60.5 $ 40.9 $ 192.2 Interest expense, net 155.4 48.2 32.6 139.8 Provision for income taxes 69.4 15.3 11.0 65.1 Depreciation and amortization 294.9 69.5 77.7 303.1 EBITDA $ 731.5 $ 193.5 $ 162.2
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: 2023 Guidance Supplement: Step-Up Depreciation & Amortization Decrease
2023 Guidance Supplement | 2023 Step-Up Depreciation & Amortization Decrease Relative to 2022 ($ in millions) Q2 Q3 Q4 Full Year Step-Up Depreciation & Amortization 2023 Guidance(1) $13 $13 $13 $55 2022 (As Reported) $23 $23 $23 $93 Variance(2) ($10) ($10) ($10) ($38) Total AXTA 2023 Adj. EBIT Impac
Slide 24: Thank You
Thank You Investor Relations Contact: Chris Evans Christopher.Evans@axalta.com 484-724-4099 24
Axalta Coating Systems — Q1 2023 Earnings Presentation on 6ix