Axalta Coating Systems Ltd. · NYSE:AXTA
Axalta Coating Systems — FY2020 Earnings Presentation
22 slides from Axalta Coating Systems's earnings presentation, Feb 17, 2021
Slide 1: Q4 & FY 2020 Financial Results
Q4 & FY 2020 Financial Results February 17, 2021
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 within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including our guidance, wh
Slide 3: Q4 & Full Year 2020 Highlights
Q4 & Full Year 2020 Highlights Fourth Quarter 2020 ▪ Strong earnings and cash flow driven by continued demand recovery and execution on cash and cost actions ▪ Q4 2020 net sales 4.6% higher than Q3 2020; decreased 2.2% year-over-year to $1,075 million ▪ Income from operations of $163 million versus
Slide 4: Business Conditions and Cost Structure Actions
Business Conditions and Cost Structure Actions Business Conditions ▪ Refinish recovery temporarily interrupted by incremental pandemic restrictions within EMEA and North America for November and December ▪ Industrial return remained solid, with higher year-over-year net sales in Q4 driven by strong
Slide 5: Q4 Consolidated Results
Q4 Consolidated Results Financial Performance Commentary Q4 % Change ($ in million, except Continued Q4 net sales recovery across per share data) 2020 2019 Incl. FX Excl. FX Performance 704 730 (3.5)% (6.0)% most end-markets Transportation 371 369 0.5 % 0.4 % ▪ Q4 2020 net sales included sequential
Slide 6: Q4 Performance Coatings Results
Q4 Performance Coatings Results Financial Performance Commentary Q4 % Change Net sales continue to improve each quarter ($ in million) 2020 2019 Incl. FX Excl. FX sequentially since Q2 low Refinish 418 466 (10.4)% (13.0)% ▪ November and December restrictions Industrial 286 264 8.6 % 6.2 % impact on
Slide 7: Performance Demand Environment
Performance Demand Environment Refinish ▪ Refinish Q4 net sales posted modest sequential quarterly improvement compared to Q3 despite mid-Q4 impact of restrictions on miles driven ▪ Traffic indicators showing improvement; some negative reversion in North America and EMEA later in period: – U.S. mile
Slide 8: Q4 Transportation Coatings Results
Q4 Transportation Coatings Results Financial Performance Commentary Q4 % Change Light Vehicle production recovery drove ($ in million) 2020 2019 Incl. FX Excl. FX YoY net sales growth in Q4 Light Vehicle 298 291 2.4 % 2.1 % ▪ Light Vehicle net sales led by EMEA, North Commercial Vehicle 73 78 (6.7)%
Slide 9: Transportation Demand Environment
Transportation Demand Environment Light Vehicle ▪ Repeated positive industry production forecast revisions since June driven by "V" shaped demand recovery and tight dealer inventories ▪ Global Light Vehicle production increased 3.2% YoY in Q4, declined 16.1% for the full year (revised from a decline
Slide 10: FY Consolidated Results
FY Consolidated Results Financial Performance Commentary FY % Change Net sales dramatically impacted by ($ in million) 2020 2019 Incl. FX Excl. FX Performance 2,516 2,923 (13.9)% (13.7)% pandemic effects, but strong recovery after Transportation 1,221 1,559 (21.7)% (19.7)% Q2 moderated full year imp
Slide 11: Debt and Liquidity Summary
Debt and Liquidity Summary Capitalization Commentary ($ in millions) Interest @ 12/31/2020 Maturity ▪ Over $1.7 billion in available liquidity at December 31, 2020 Cash and Cash Equivalents $ 1,361 ▪ Paid down ~$200 million of debt balance with Q4 Debt: 2020 debt refinancing Revolver ($400 million c
Slide 12: Financial Guidance Update
Financial Guidance Update Q1 2021 Guidance: Market Outlook: ▪ Net Sales: Increase of ~3-5% YOY ▪ Refinish: Expect Q1 net sales to be including favorable impacts of currency impacted by increased restrictions; expect recovery through year to follow ▪ All end-markets seeing positive net sales trends u
Slide 13: Appendix
A AXALTA Appendix AXALTA COATING SYSTEMS
Slide 14: Full Year 2021 Assumptions
Full Year 2021 Assumptions Macroeconomic Assumptions Currency Assumptions ▪ Global GDP growth of ~3.0% 2020 2021 USD % Impact 2020 Average Average in Q1 2021 and ~5.0% in FY Currency % Axalta Rate Rate of FX Rate Net Sales Change 2021 Assumption ▪ Global industrial production US$ per Euro 29.9% 1.14
Slide 15: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation ($ in millions) FY 2020 FY 2019 Q4 2020 Q4 2019 Income from operations $ 305.5 $ 488.2 $ 163.2 $ 108.7 Other expense (income), net 33.4 (4.4) 32.5 (0.6) Total $ 272.1 $ 492.6 $ 130.7 $ 109.3 A Debt extinguishment and refinancing related costs 34.4 0.2 32.0 — B Terminatio
Slide 16: 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 17: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in millions) FY 2020 FY 2019 Q4 2020 Q4 2019 Net Income $ 122.0 $ 252.6 $ 70.3 $ 42.2 Less: Net income attributable to noncontrolling interests 0.4 3.6 0.6 0.5 Net income attributable to controlling interests 121.6 249.0 69.7 41.7 A Debt extinguishment and refin
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 2020 Q3 2020 Q2 2020 Q1 2020 FY 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019 YTD 2019 Cash provided by (used in) operating activities $ 278.4 $ 233.4 $ (1.7) $ (0.8) $ 509.3 $ 283.3 $ 221.0 $ 126.7 $ (57.9) $ 573.1 Purchase of property, plant and equipment (2
Slide 20: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in millions) FY 2020 FY 2019 Q4 2020 Q4 2019 Net Income $ 122.0 $ 252.6 $ 70.3 $ 42.2 Interest Expense, net 149.9 162.6 37.5 40.1 Provision for Income Taxes 0.2 77.4 22.9 27.0 Depreciation & Amortization 320.3 353.0 76.7 85.7 Reported EBITDA $ 592.4 $ 845.6 $ 207.4
Slide 21: 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 22: Thank you
Thank you Investor Relations Contact: Chris Mecray Christopher.Mecray@axalta.com 215-255-7970
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