Slide 1: Q1 2020 Financial Results
Q1 2020 Financial Results May 5, 2020
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 regarding Axalta and its subsidiaries including our outlook, which includes net sales growth, currency effects, acquisition or divestment impacts
Slide 3: Introduction and Q1 Financial Highlights
Introduction and Q1 Financial Highlights First Quarter 2020 Highlights ▪ Net sales down 12.1% (decrease of 8.5% ex-FX and M&A impacts); Price-mix increase of 1.8% ▪ Income from operations of $65 million versus $99 million in Q1 2019 ▪ Adjusted EBIT decreased 7.8% versus Q1 2019 while margins increas
Slide 4: COVID-19 Impact: The Demand Environment
COVID-19 Impact: The Demand Environment Performance Coatings Net Sales(1) Performance Commentary ▪ Refinish impact began in February for China, mid-March for 4.6% other regions (1.6)% 0.4% (3.0)% ▪ Miles driven declining to trough of 45-50% in many (2.5)% geographies starting in March; moderating in
Slide 5: COVID-19 Impact and Response
COVID-19 Impact and Response Mitigation Actions ▪ Axalta executing on aggressive cost structure reduction plan ▪ Actions across discretionary spend, salary reductions, furloughs, and other items ▪ Over $100 million expected benefit for 2020 ▪ Emphasis on cash flow to bolster liquidity position ▪ Red
Slide 6: Debt and Liquidity Summary
Debt and Liquidity Summary Capitalization Comments ($ in millions) Interest @ 3/31/2020 Maturity ▪ Over $1 billion in total liquidity available as of Q1 end Cash and Cash Equivalents $ 657 Debt: ▪ $361 million under undrawn revolver (1) Revolver ($400 million capacity) Variable — 2024 ▪ $657 million
Slide 7: Q1 Consolidated Results
Q1 Consolidated Results Financial Performance Commentary ($ in millions, except Q1 % Change Net sales down high single digits ex-FX per share data) 2020 2019 Incl. F/X Excl. F/X and M&A; continued price-mix Performance 648 713 (9.2)% (7.3)% Transportation 336 406 (17.3)% (14.7)% improvement Net Sale
Slide 8: Q1 Performance Coatings Results
Q1 Performance Coatings Results Financial Performance Commentary Q1 % Change Net sales reduction ex-FX and M&A ($ in millions) 2020 2019 Incl. F/X Excl. F/X driven by COVID-19 impact on volumes Refinish 368 406 (9.3)% (7.0)% ▪ Volume down globally as a result of the Industrial 280 308 (9.1)% (7.7)%
Slide 9: Q1 Transportation Coatings Results
Q1 Transportation Coatings Results Financial Performance Commentary Q1 % Change COVID-19 production shutdowns drive ($ in millions) 2020 2019 Incl. F/X Excl. F/X mid-teens net sales reduction, ex-FX Light Vehicle 260 316 (17.7)% (14.9)% ▪ Volume pressure driven by lower global Commercial Vehicle 76
Slide 10: Financial Guidance Update
Financial Guidance Update Given limited current forecast visibility, we are not offering full year guidance, other than those discrete elements below: ▪ Net sales: April and May expected to be down by ~50% compared to the same prior year two-month period ▪ Diluted shares: ~237 million ▪ Capex: ~$80
Slide 11: Appendix
A AXALTA Appendix AXALTA COATING SYSTEMS
Slide 12: Full Year 2020 Assumptions
Full Year 2020 Assumptions Macroeconomic Assumptions Currency Assumptions ▪ Global GDP decline of 2020 2019 USD % Impact (3.0%)(1) Currency (2) % Axalta 2019 Average Average of FX Rate Rate Rate Net Sales Change Assumption ▪ Global industrial production decline of (5.3%)(1) US$ per Euro ~28% 1.12 1.
Slide 13: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation ($ in millions) Q1 2020 Q1 2019 Income from operations $ 65 $ 99 Other expense (income), net 1 (1) Total $ 64 $ 100 A Debt extinguishment and refinancing related costs 2 — B Termination benefits and other employee related costs 20 1 C Strategic review and retention costs
Slide 14: 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 15: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in millions, except per share data) Q1 2020 Q1 2019 Net income $ 52 $ 44 Less: Net income attributable to noncontrolling interests — 1 Net income attributable to controlling interests 52 43 A Debt extinguishment and refinancing related costs 2 — B Termination be
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) Q1 2020 Q1 2019 Cash used for operating activities $ (1) $ (58) Purchase of property, plant and equipment (23) (21) Interest proceeds on swaps designated as net investment hedges 4 4 Free cash flow $ (20) $ (75) PROPRIETARY 17
Slide 18: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation LTM ($ in millions) 3/31/2020 Q1 2020 Q1 2019 FY 2019 Net income $ 261 $ 52 $ 44 $ 253 Interest expense, net 158 37 41 163 Provision (benefit) for income taxes 38 (25) 14 77 Depreciation and amortization 348 87 92 353 EBITDA $ 805 $ 151 $ 191 $ 846 A Debt extinguishmen
Slide 19: 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 20: Thank you
Thank you Investor Relations Contact: Chris Mecray Christopher.Mecray@axalta.com 215-255-7970