Axalta Coating Systems Ltd. · NYSE:AXTA
Axalta Coating Systems — Q3 2024 Earnings Presentation
22 slides from Axalta Coating Systems's earnings presentation, Oct 30, 2024
Slide 1: Q3 2024 Financial Results
Axalta Coating October 30, 2024 Systems Q3 2024 Financial Results
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: Third-Quarter Highlights
Third-Quarter Highlights ■ Record third quarter net sales of $1.32B Growing Business with Innovative Solutions – Fifteen consecutive quarters of growth YoY and Strong Customer Relationships ■ New Refinish Top 5 MSO ■ Record third quarter Adjusted EBITDA of $291M - an increase of 12% YoY Business – N
Slide 4: Delivering Industry Outperformance
Delivering Industry Outperformance Refinish Performance Drivers Light Vehicle Performance Drivers $ Net Body Bolt On Grow in Selective New Raw Material Customer Shop Wins M&A Adjacencies Wins Indexation Partnerships YTD Results YTD Results Axalta Body Shop Axalta Light Vehicle Net Sales Activity1 Vo
Slide 5: Accelerated Performance in 2024
Accelerated Performance in 2024 2024 2026 A Plan Guidance Targets Net Sales Growth ~$100M1 >$500M1 Adjusted EBITDA Margin2 ~21% >21% Net Leverage Ratio ~2.5x 2.0x to 2.5x Return On Invested Capital ~13.1% ~15% Adjusted Diluted EPS Growth ~37%1 >60%1 (1) As compared to 2023 Actual Financial Results (
Slide 6: Third Quarter 2024 Consolidated Results
Third Quarter 2024 Consolidated Results Financial Results Net Sales Variance ($ in millions, except per share data) Q3 2024 Q3 2023 % Change ($ in millions) 0.6% (1.1%) (0.3%) 1.6% 0.8% Net Sales 1,320 1,309 1% $1,309 $1,320 Net Income 102 73 40% Adjusted EBITDA 291 261 12% % Margin 22.1% 19.9% 220
Slide 7: Third Quarter 2024 Performance Coatings Results
Third Quarter 2024 Performance Coatings Results Net Sales Net Sales Variance ($ in millions) Q3 2024 Q3 2023 % Change ($ in millions) (0.2%) —% 0.2% 2.4% 2.4% Refinish 554 529 5% Industrial 323 327 (1%) $856 $877 Net Sales 877 856 2% Organic Net Sales Adjusted EBITDA and Margin Refinish: (LSD%) ($ i
Slide 8: Third Quarter 2024 Mobility Coatings Results
Third Quarter 2024 Mobility Coatings Results Net Sales Net Sales Variance ($ in millions) Q3 2024 Q3 2023 % Change ($ in millions) 2.1% (3.0%) (1.3%) (2.2%) Light Vehicle 340 342 —% Commercial Vehicle 103 111 (8%) $453 $443 Net Sales 443 453 (2%) Organic Net Sales Adjusted EBITDA and Margin LV: +LSD
Slide 9: Balanced Capital Allocation
Balanced Capital Allocation Third Quarter Highlights Total Net Leverage Ratio YTD Capital Allocation 2.5x Expected By Year End ■ Share repurchases of $50M 16% 3.2x ■ Completed acquisition of CoverFlexx ■ Revolver pay down of $80M 2.7x 14% 52% ■ Invested $33M in capital expenditures 18% M&A Share Rep
Slide 10: Full Year 2024 Earnings Guidance
Full Year 2024 Earnings Guidance 2024 Guidance 2025 Considerations Raising Adjusted EBITDA, Adjusted Diluted EPS guidance and Accelerating 2026 A Plan Free Cash Flow guidance (+) Continued share gains and resilient pricing in Refinish Prior Updated FY24 Guidance FY24 Guidance (+) LV and CV business
Slide 11: Appendix
Appendix
Slide 12: Full Year 2024 Modeling Assumptions
Full Year 2024 Modeling Assumptions Axalta does not provide a reconciliation for non-GAAP estimates for tax rate, as adjusted, on a forward-looking basis because the information necessary to calculate a meaningful or accurate estimation of reconciling items is not available without unreasonable effo
Slide 13: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation LTM ($ in millions) 9/30/2024 Q3 2024 Q2 2024 Q1 2024 Q3 2023 Q2 2023 Q1 2023 FY 2023 Net income $ 328 $ 102 $ 113 $ 39 $ 73 $ 61 $ 61 $ 269 Interest expense, net 213 54 50 54 55 55 48 213 Provision for income taxes 131 40 43 20 30 13 15 86 Depreciation and amortizatio
Slide 14: 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 15: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation (in millions, except per share data) Q3 2024 Q3 2023 Net income 102 73 Less: Net income attributable to noncontrolling interests 1 1 Net income attributable to common shareholders $ 101 $ 72 A Debt extinguishment and refinancing-related costs — 4 B Termination bene
Slide 16: 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 17: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ in millions) Q3 2024 Q2 2024 Q1 2024 YTD 2024 Q3 2023 Q2 2023 Q1 2023 YTD 2023 Cash provided by (used for) operating activities $ 194 $ 114 $ 34 $ 342 $ 210 $ 131 $ (52) $ 289 Purchase of property, plant and equipment (33) (23) (22) (78) (31) (32) (42) (105) Interest
Slide 18: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation LTM ($ in millions) 9/30/2024 Q3 2024 Q2 2024 Q1 2024 Q3 2023 Q2 2023 Q1 2023 FY 2023 Income from operations $ 681 $ 193 $ 205 $ 121 $ 163 $ 138 $ 125 $ 588 Other expense (income), net 9 (3) (1) 8 5 9 1 20 Total $ 672 $ 196 $ 206 $ 113 $ 158 $ 129 $ 124 $ 568 A Debt exti
Slide 19: 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 20: Return on Invested Capital
Return on Invested Capital ($ in millions) LTM Q3 2024 2023 Adjusted EBIT 818 674 Tax Rate, As Adjusted (1) 24.5 % 24.1 % NOPAT (2) 618 512 Total debt, opening balance 3,543 3,704 Axalta’s shareholders’ equity, opening balance 1,604 1,454 Less: Cash and Cash Equivalents, opening balance 606 645 Inve
Slide 21: Capitalization Table
Capitalization Table ($ in millions) Interest @ 9/30/2024 Maturity Cash and Cash Equivalents $ 567 Debt: Revolver ($800 million capacity) Variable 105 2029 First Lien Term Loan (USD) Variable 1,682 2029 Total Senior Secured Debt $ 1,787 Senior Unsecured Notes (USD) Fixed 496 2027 Senior Unsecured No
Slide 22: Thank You
Thank You Investor Relations Contact: Colleen Lubic Colleen.Lubic@axalta.com 610-999-9407
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