Axalta Coating Systems Ltd. · NYSE:AXTA
Axalta Coating Systems — Q4 2023 Earnings Presentation
25 slides from Axalta Coating Systems's earnings presentation, Feb 8, 2024
Slide 1: Fourth Quarter and Full Year 2023 Financial Results
Axalta Coating Systems Fourth Quarter and Full Year 2023 Financial Results February 8th, 2024
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, but not limited
Slide 3: Fourth Quarter 2023 Key Highlights
Fourth Quarter 2023 Key Highlights ■ Five-percent net sales growth YoY $1.3B $251M 19.3% supported by positive volumes, Net Sales Adjusted EBITDA Adjusted EBITDA Margin price-mix and FX +5% YoY +21%YoY +250 bps YoY ■ Strong improvement in Adjusted EBITDA margin with significant contribution from all
Slide 4: Record 2023 Net Sales And Adjusted EBITDA
Record 2023 Net Sales And Adjusted EBITDA Net Sales Trend Adjusted EBITDA And Margin Trend Free Cash Flow Trend ($ in billions) ($ in millions) ($ in millions) $951 $811 $5.2 18.4% $447 % +6 4M 28 $4.9 16.6% +$ $163 2022 2023 2022 2023 2022 2023 ■ Positive price-mix contributions from ■ Pricing to o
Slide 5: Actions Driving 2023 Performance
Actions Driving 2023 Performance Pricing For Value Cost Optimization Strategic Investments Right-Sizing Inventory ■ Mid-teens percentage ■ Drove 12% variable cost ■ $106M purchase of Andre ■ 11% reduction in price realization on two improvement in Q4 2023 Koch, a long-term Refinish inventory levels
Slide 6: Fourth Quarter 2023 Consolidated Results
Fourth Quarter 2023 Consolidated Results Financial Results Net Sales Variance ($ in millions) ($ in millions, except per share data) Q4 2023 Q4 2022 % Change 1.7% 0.9% 2.3% 4.9% $1,297 Net Sales 1,297 1,237 5% $1,237 Net Income 74 44 68% Adjusted EBITDA 251 208 21% Q4 2022 Volume Price/Mix FX Q4 202
Slide 7: Fourth Quarter 2023 Performance Coatings Results
Fourth Quarter 2023 Performance Coatings Results Financial Results Net Sales Variance ($ in millions) ($ in millions) Q4 2023 Q4 2022 % Change (1.8%) 3.2% 2.3% 3.7% Refinish 537 492 9% $849 $819 Industrial 311 326 (5%) Organic Sales Net Sales 849 819 4% Refinish: +MSD% Industrial: (MSD%) Adjusted EB
Slide 8: Fourth Quarter 2023 Mobility Coatings Results
Fourth Quarter 2023 Mobility Coatings Results Financial Results Net Sales Variance ($ in millions) ($ in millions) Q4 2023 Q4 2022 % Change 8.7% (3.6%) 2.2% 7.3% Light Vehicle 340 320 6% $449 $418 Commercial Vehicle 109 99 10% Organic Sales Net Sales 449 418 7% LV: +MSD% CV: +HSD% Adjusted EBITDA 59
Slide 9: FY 2023 Consolidated Results
FY 2023 Consolidated Results Financial Results Net Sales Variance ($ in millions) ($ in millions, except per share data) FY 2023 FY 2022 % Change (0.6%) 5.8% 0.5% 0.4% 6.1% $5,184 Net Sales 5,184 4,884 6% $4,884 Net Income 269 192 40% Adjusted EBITDA 951 811 17% FY 2022 Volume Price/Mix FX One-Time
Slide 10: Focused Capital Allocation Drives Shareholder Value
Focused Capital Allocation Drives Shareholder Value Total Net Leverage Ratio(1) Debt Maturity Profile 2023 Capital Allocation Progression ($ in billions) 10% $2.0 Term Loan 4.1x 4.2x 4.1x 3.8x 3.7x 3.6x 3.2x 2.9x 21% ~$508M 42% Revolver (Undrawn) Senior $1.0 Notes Senior (USD) Senior Notes Notes (US
Slide 11: 2024 Guidance
2024 Guidance Net Sales Adjusted EBITDA (% Change YoY) ($ in millions) Q1 2024 FY 2024 Q1 2024 FY 2024 Flat +LSD ~$240 $1,010 - $1,050 Adjusted Diluted EPS Free Cash Flow ($ per share) ($ in millions) Q1 2024 FY 2024 FY 2024 ~$0.40 $1.80 - $1.95 $400 - $450 Axalta does not provide a reconciliation f
Slide 12: Save The Date: Axalta Strategy Forum 2024
Save The Date Axalta Strategy Forum 2024 15 May 15th 2024 | 8:00AM - 10:00AM Axalta's management team will present three-year financial targets and a refreshed strategic plan to achieve attractive growth Speakers: ■ Chris Villavarayan, CEO & President ■ Carl Anderson, CFO & Senior Vice President ■ D
Slide 13: Appendix
Appendix 13
Slide 14: Full Year 2024 Modeling Assumptions
Full Year 2024 Modeling Assumptions Axalta does not provide a reconciliation for non-GAAP estimates for tax rate, as adjusted on a forward-looking basis because the information necessary to calculate a meaningful or accurate estimation of reconciling items is not available without unreasonable effor
Slide 15: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in millions) FY 2023 FY 2022 Q4 2023 Q4 2022 Net income $ 268.5 $ 192.2 $ 73.6 $ 43.9 Interest expense, net 213.3 139.8 55.4 38.7 Provision for income taxes 86.2 65.1 28.2 13.5 Depreciation and amortization 275.6 303.1 68.7 73.6 EBITDA $ 843.6 $ 700.2 $ 225.9 $ 169.
Slide 16: 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 17: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in millions) FY 2023 FY 2022 Q4 2023 Q4 2022 Net income $ 268.5 $ 192.2 $ 73.6 $ 43.9 Less: Net income attributable to noncontrolling interests 1.1 0.6 0.5 0.3 Net income attributable to common shareholders 267.4 191.6 73.1 43.6 A Debt extinguishment and refinan
Slide 18: 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 19: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ in millions) Q4 2023 Q3 2023 Q2 2023 Q1 2023 FY 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 YTD 2022 Cash provided by (used for) operating activities $ 286.0 $ 210.1 $ 131.0 $ (51.8) $ 575.3 $ 245.6 $ 79.9 $ 12.2 $ (43.9) $ 293.8 Purchase of property, plant and equipment (3
Slide 20: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation ($ in millions) FY 2023 FY 2022 Q4 2023 Q4 2022 Income from operations $ 587.5 $ 423.2 $ 161.2 $ 109.8 Other expense, net 19.5 26.1 4.0 13.7 Total $ 568.0 $ 397.1 $ 157.2 $ 96.1 A Debt extinguishment and refinancing-related costs 9.9 14.7 2.9 15.3 B Termination benefits
Slide 21: 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 22: Adjusted Historic EBITDA Reconciliation
Adjusted Historic EBITDA Reconciliation ($ in millions) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Net income $ 40.9 $ 44.1 $ 63.3 $ 43.9 $ 60.5 $ 61.1 $ 73.3 $ 73.6 Interest expense, net 32.6 33.5 35.0 38.7 48.2 54.6 55.1 55.4 Provision for income taxes 11.0 18.8 21.8 13.5 15.3
Slide 23: Adjusted Historic EBITDA Reconciliation (cont'd)
Adjusted Historic 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 cha
Slide 24: Capitalization Table
Capitalization Table ($ in millions) Interest @ 12/31/2023 Maturity Cash and Cash Equivalents $ 700 Debt: Revolver ($550 million capacity) Variable — 2026 First Lien Term Loan (USD) Variable 1,761 2029 Total Senior Secured Debt $ 1,761 Senior Unsecured Notes (USD) Fixed 496 2027 Senior Unsecured Not
Slide 25: Thank You
Thank You Investor Relations Contact: Chris Evans Christopher.Evans@axalta.com 484-724-4099
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