Axalta Coating Systems Ltd. · NYSE:AXTA
Axalta Coating Systems — Investor Day (2022)
34 slides from Axalta Coating Systems's investor day presentation, 2022
Slide 1: Welcome to Refinish Investor Day
WELCOME TO REFINISH INVESTOR DAY AXALTA
Slide 2: Notice Regarding Forward Looking Statements
NOTICE REGARDING 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, w
Slide 3: Axalta Speakers and Attendees
AXALTA SPEAKERS AND ATTENDEES RAKESH SACHDEV SEAN LANNON TROY WEAVER CHRIS EVANS CHIEF EXECUTIVE OFFICER SVP, CHIEF FINANCIAL OFFICER SVP, GLOBAL REFINISH VP, INVESTOR RELATIONS 3
Slide 4: Refinish Investor Day Agenda
REFINISH INVESTOR DAY AGENDA 01 PREPARED REMARKS ▪ Welcome Chris E. ▪ Introductory Remarks Rakesh S. ▪ The Axalta Refinish Difference Troy W. ▪ Q&A 02 REFINISH EXPERIENCE ▪ Single Visit Application Patricia M. ▪ Color Match Automation Matt B. ▪ Color Mix Automation Jim M. ▪ Data Automation Seth W. ▪
Slide 5: The Axalta Refinish Difference
AXALTA THE AXALTA REFINISH DIFFERENCE &
Slide 6: Axalta Refinish at a Glance
AXALTA REFINISH AT A GLANCE $1.8B1 85,000+ NET SALES CUSTOMERS 1,800+ 8,000+ EMPLOYEES STOCK POINTS OUR BRAND PORTFOLIO P Customer Experience Center (Charlotte, USA) M Global Innovation Center (Philadelphia, USA) Regional Technology Centers E (Mt Clements, USA / Wuppertal, DE Shanghai, CN) WE ARE TH
Slide 7: Axalta Refinish Speakers and Attendees
AXALTA REFINISH SPEAKERS AND ATTENDEES PATRICIA MORSCHEL JIM MUSE SETH WILCOX MATT BOLAND VP OF STRATEGIC MARKETING VP OF SALES VP OF SALES VP OF TECHNOLOGY GLOBAL REFINISH GLOBAL REFINISH REFINISH NA GLOBAL REFINISH 7
Slide 8: Topics for Today
TOPICS FOR TODAY 01 02 03 REFINIS H 101 SOLID TRACK RECORD GROWTH POTENTIAL ▪ Collision Industry Breakdown ▪ Current Market Position ▪ Market Recovery / Growth ▪ Key Players in the Value Chain ▪ Recent Wins and Reasons We Win ▪ Share Gain ▪ Mega Trends impacting the Industry ▪ Solid Financial Perfor
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Slide 10: Global Collision Repair Industry Breakdown
GLOBAL COLLISION REPAIR INDUSTRY BREAKDOWN STEP 2: STEP 3: AVG REVENUE BREAKDOWN: PAINT & MATERIALS REPRESENTS ONLY ~8% OF COLLISION REPAIR 78% $3,700 38% 42% 8% 12% STEP 1: REPAIRABLE COLLISION REVENUE PER REPAIR (AVG) LABOR PARTS P&M OTHER PRODUCTIVITY ~65% : ~35% C O L L I S I ON DRIVER PAINT
Slide 11: Global Refinish Customer Segmentation
GLOBAL REFINISH CUSTOMER SEGMENTATION NA EMEA LATAM APAC SEGMENT DESCRIPTION KEY SEGMENT NEEDS SIZE1 ▪ Growth oriented and competing ▪ Cycle Time / Productivity P for Insurance Workflow ▪ P&M Profitability Performance $2.8B 36% 58% 23% 37% ▪ Larger shops with 1 or more ▪ Total Cost of Ownership GLOB
Slide 12: Global Footprint for Local Market Access
GLOBAL FOOTPRINT FOR LOCAL MARKET ACCESS PRODUCT FLOW STOCK POINTS PRODUCT & SERVICE MARKET ACCESS NEEDS AVG P.O.1 (8,000+)2 P ▪ Mix Machine Customers ▪ 1.5 Week in Shop Inventory $450 11 AXALTA (MANUFACTURER) BODY SHOPS (85,000+)2 PER ORDER LINE ITEMS ▪ Purchase 1-2 x per week PREMIUM SERVICE
Slide 13: Insurance Companies Drive Workflow Allocation
INSURANCE COMPANIES DRIVE WORKFLOW ALLOCATION INSURANCE INSURANCE DRIVEN THIRD PARTY PAID INDUSTRY COMPANY ▪ Insurance Co pays for 91% of repairs BODY CAR DOWNTURN RESILIENT INDUSTRY SHOPS OWNER ▪ Cars can be repaired for cost of deductibles INSURANCE COs DRIVE COLLISION REPAIR SHOPS NEEDS CAR OWNER
Slide 14: Mega Trends – Industry Consolidation
MEGA TRENDS – INDUSTRY CONSOLIDATION DRIVERS ‘BIG 3’ GROWTH TRAJECTORY: INSURANCE KPIs1 ‘BIG 3’2 2006 2015 2019 2025 2030 Workflow Allocation Driven Allocation Acquisition Growth 2% 10% 18% 30% 38% OF MA9RKET OF MARKET OF MARKET OF MARKET OF MARKET 180+ 1,200+ 2,000+ 3,800+ 5,200+ LOCATION
Slide 15: Mega Trends – Labor Shortage
MEGA TRENDS – LABOR SHORTAGE DRIVERS LABOR SHORTAGE IN THE NEWS: FEWER MANUAL LONG Paint / Body Techs Processes Learning Curve CHALLENGE To attract and retain Paint & Body Technicians to support growth IMPACT ON CUSTOMER NEEDS ▪ Highly Productive Refinish Systems to maximize Labor Utilization ▪ Auto
Slide 16: Mega Trends – Sustainability
MEGA TRENDS – SUSTAINABILITY DRIVERS VOC REGULATIONS AROUND THE WORLD: EUROPE NA Western: Fully Regulated VOC1 ENERGY WASTE ▪ ▪ US: CA, DE, UT, MD ▪ Central: Partially Regulated ▪ CAN: Fully Regulated ▪ Eastern: Partially Regulated Regulations Consumption In Repair Process CHINA ▪ Ultra Low VO
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Slide 18: Axalta Market Position
AXALTA MARKET POSITION GLOBAL REFINISH COATINGS MARKET1 BREAKDOWN BY CUSTOMER SEGMENT1 P $2.8B 40% 65% Other Peers | 20% 26% MARKET SIZE AXTA MARKET SHARE AXTA NET SALES AXTA PREMIUM MARKET SHARE Peer D | 10% $6.8B ADDRESSABLE MARKET1 M $2.2B MARKET 19% AXTA 25% AXTA Peer C | 10% SIZE MARKET
Slide 19: Growth Trajectory in Premium Segment
GROWTH TRAJECTORY IN PREMIUM SEGMENT TOP PREMIUM CUSTOMER GAINS SPOTLIGHT: CALIBER PARTNERSHIP EV OEM BODY SHOPS PRODUCTIVITY 2014 2016 2018 2020 2022 Ability to increase same store sales 82 ▪ Single visit application LOCATIONS 2013 2015 2017 2019 2021 ▪ Streamlined product offer
Slide 20: Reasons We Win in the Premium Segment
REFINISH EXPERIENCE REASONS WE WIN IN THE PREMIUM SEGMENT SINGLE VISIT APPLICATION END-TO-END FULLY DATA INTEGRATION TO WATERBORNE SYSTEM AUTOMATED COLOR MATCH MAXIMIZE P&M PROFITABILITY Single visit to the spray booth is 55% faster than Digital Color Technology and Automation for Data analytics ena
Slide 21: Growth Trajectory in the Economy Segment
GROWTH TRAJECTORY IN THE ECONOMY SEGMENT REASONS WE WIN IN THE ECONOMY SEGMENT MARKET ACCESS EXPANSION COLOR CAPABLE REFINISH SYSTEM LOCAL ACCESS TO PRODUCT NEW STOCK POINTS FOR ECONOMY 75+ 900+ ▪ Easy and precise color match ▪ Leverage our extensive at the right price point Distribution Network 202
Slide 22: Adj. EBIT vs Volume Performance
SOLID TRACK RECORD ADJ. EBIT vs VOLUME PERFORMANCE 2017A-2019A ADJ EBIT1 vs VOLUME 2 0 2 0 A - C U R R E N T 2 A D J E B I T 1,3 v s V O L U M E 3 ADJ. EBIT ADJ. EBIT VOLUME VOLUME (in liters) (in liters) 20.0% -0.9% 27.9% 11.4% CAGR ‘17-’19 CAGR ‘17-’19 CAGR ‘20-’CURRENT CAGR ‘20-’CURRENT 2017A 201
Slide 23: Price vs Inflation Performance
SOLID TRACK RECORD PRICE vs INFLATION PERFORMANCE 2021-Q3 2022 PRICE vs COGS PROGRESSION1 Disciplined execution of Price Actions has fully offset VCOGS / VFPDE Inflation. YoY CUMMULATIVE Key factors enabling strong performance: PRICE / MIX VCOGS/VFPDE HIGH VARIABLE MARGIN ▪ High Variable Margi
Slide 24: Performance in a Recession
SOLID TRACK RECORD PERFORMANCE IN A RECESSION MILES DRIVEN & COLLISION CLAIMS Third-Party Payor Dynamics makes Collision Repair Industry downturn resilient. COLLISION CLAIMS MILES DRIVEN COLLISION CLAIMS MILES DRIVEN 2008-2009 DOWNTURN: 3.5 8.0 3.5 8.0 ▪ Miles Driven
Slide 25: Growth Potential
GROWTH POTENTIAL
Slide 26: Market Recovery / Growth
MARKET RECOVERY / GROWTH NA EMEA LATAM APAC MARKET RECOVERY 2.5% 1.5% 0.9% 4.3% BREAKDOWN BY REGION MARKET MARKET MARKET MARKET CAR GROWTH GROWTH GROWTH GROWTH PARC MILES $6.8B1 2.5% DRIVEN P PREMIUM GLOBAL MARKET GROWTH MARKET ACCIDENT (’19A-’24E CAGR) RATE M VOLUME MAINSTREAM PER REPAIR
Slide 27: Our Growth Vectors at a Glance
OUR GROWTH VECTORS AT A GLANCE STRATEGIC GOAL INCREASE REVENUE / PROFIT PER VEHICLE GLOBAL OPTIMIZE REDUCE PREMIUM SHARE GAIN ACCESSORIES U-POL TEAM PRICE COMPLEXITY LEADERSHIP IN M/E THROUGH COSs VALUE CREATION Shift from a Effectively raise price Align Offerings and Leverage Strong Capitalize on M
Slide 28: Expand Premium Leadership
SHARE GAIN EXPAND PREMIUM LEADERSHIP WHAT IS THE OPPORTUNITY SPOTLIGHT: MSOs GROWTH IN NORTH AMERICA MARKET SEGMENTATION Expand Global Market Leadership in Premium Segment across all Regions ▪ Insurance Co will continue to reward 64% 52% Premium Customers with more Workflow fueling MSO Growth P ▪ Bo
Slide 29: Share Gain in Mainstream / Economy
SHARE GAIN SHARE GAIN IN MAINSTREAM / ECONOMY WHAT IS THE OPPORTUNITY SPOTLIGHT: VOC REGULATIONS IN ASIA 3 Gain Market Share in the fast-growing MARKETS WITH VOC REGULATIONS Mainstream / Economy Customer Segments ▪ Leverage innovative VOC Coatings to $700M capture share from local suppliers MARKET S
Slide 30: Accessories Market Overview
MARKET EXPANSION ACCESSORIES MARKET OVERVIEW ACCESSORIES MARKET LIQUID PAINT ALLIED BODY ALLIED DETAILING ST&E SAFETY Materials used Materials used Small Tools and Paints and Materials used for Personal Protection Description by Paint Technician by Body Technician Miscellaneous Coatings Car Detailin
Slide 31: Accessories Through Company Owned Stores
MARKET EXPANSION ACCESSORIES THROUGH COMPANY OWNED STORES WHAT IS THE OPPORTUNITY SPOTLIGHT: COMPANY OWNED STORES IN EMEA ROUTE-TO-MARKET Expand TAM1 in EMEA by offering our COSs2 Customer Base a full range of Accessories 64% INDEPENDENT DISTRIBUTOR ▪ In EMEA, 36% of our route-to-market is true Axal
Slide 32: U-POL Value Creation
MARKET EXPANSION U-POL VALUE CREATION WHAT IS THE OPPORTUNITY SPOTLIGHT: EXPANDING INTO ACCESSORIES Integrate U-POL and Axalta strengths to GLOBAL MARKET SIZE: $300M expand Addressable Market entering Body ▪ Strong Body Filler, Putties and Glazes Fillers / Aerosols and Protection Coatings Offering e
Slide 33: Key Takeaways
KEY TAKEAWAYS PROVEN FINANCIAL PERFORMANCE IN RESILIENT COLLISION MARKET 1 MOMENTUM CONTINUING IN 2022 FOLLOWING RECORD 2021 PROFITABILITY INVESTED IN THE CAPABILITIES TO SUPPORT EVOLVING CUSTOMER NEEDS 2 WE ARE DRIVING INCREASED INTEGRATION WITH THE FASTEST GROWING AND MOST CAPABLE CUSTOMERS CONTIN
Slide 34: Session
SESSION