Slide 1: Q3 2021 Financial Results
Q3 2021 Financial Results October 25, 2021 1
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 our outlook, whic
Slide 3: Introduction and Q3 Financial Highlights
Introduction and Q3 Financial Highlights Third Quarter 2021 Highlights ▪ Q3 2021 net sales increased 6.0% year-over-year to $1,089 million with substantial growth from three of four end-markets; Light Vehicle continued to be impacted by auto OEM production constraints – Performance Coatings price-mi
Slide 4: Business Conditions and Cost Actions
Business Conditions and Cost Actions Q3 Business Conditions Summary ▪ Continued global recovery in Refinish demand drivers, including traffic and body shop activity following pandemic-driven mobility slowdown; net sales volumes remain mid- single digits below 2019 levels ▪ Strong continued growth in
Slide 5: Q3 2021 ESG Highlights
Q3 2021 ESG Highlights Environment Social Governance ▪ Broke ground on construction of ▪ Awarded 19 students studying STEM ▪ ESG Steering Committee completed state-of-the-art facility in Jilin City, and vocational fields the first annual materiality assessment; ESG goal Northern China to support gro
Slide 6: Q3 Consolidated Results
Q3 Consolidated Results Financial Performance Commentary ($ in millions, except Q3 % Change per share data) 2021 2020 Incl. F/X Excl. F/X Net sales increased from price-mix tailwinds and M&A Performance Coatings 779 683 14.1 % 12.9 % contribution; strong volume outside of Light Vehicle Mobility Coat
Slide 7: Q3 Performance Coatings Results
Q3 Performance Coatings Results Financial Performance Commentary Q3 % Change ($ in millions) 2021 2020 Incl. F/X Excl. F/X Despite ongoing supply chain constraints, net sales growth driven by volume recovery, pricing realization, Refinish 443 402 10.4 % 9.1 % M&A and FX tailwinds Industrial 336 281
Slide 8: Performance Coatings Demand Environment
Performance Coatings Demand Environment Refinish ▪ The global refinish market showed modest sequential improvement in Q3 traffic indicators – U.S. miles driven have returned to near normal levels as of September; body shop activity down ~12% versus 2019 levels – Europe miles driven continued to impr
Slide 9: Q3 Mobility Coatings Results
Q3 Mobility Coatings Results Financial Performance Commentary Q3 % Change ($ in millions) 2021 2020 Incl. F/X Excl. F/X Net sales reduction despite pricing actions as volumes were hindered by supply shortages Light Vehicle 235 276 (14.8)% (16.5)% ▪ Axalta volumes largely aligned with reductions in L
Slide 10: Mobility Coatings Demand Environment
Mobility Coatings Demand Environment Light Vehicle ▪ The LV market recovery continues to be hindered by the semiconductor chip shortage with an estimated impact of ~11 million deferred builds in 2021 ▪ Global LV production decreased 19.7% YOY in Q3; Axalta expects a 27.4% decline for Q4 and a 2.1% d
Slide 11: Debt and Liquidity Summary
Debt and Liquidity Summary Capitalization Commentary ($ in millions) Interest @ 9/30/2021 Maturity ▪ Net leverage of 3.5x at September 30, 2021 increased Cash and Cash Equivalents $ 628 from 2.6x at June 30, 2021, reflecting U-POL acquisition Debt: cash funding, share repurchases, and decline in LTM
Slide 12: Financial Guidance Update
Financial Guidance Update Full Year 2021 Guidance: Key Assumptions ▪ Net Sales: ~+19%, including ~+2% FX and ~+2% M&A ▪ Raw material inflation expected at mid-teens growth benefit YoY; Q4 inflation at ~20% growth YoY ▪ Semiconductors: ~11 million assumed market level ▪ Adjusted EBIT: $645-665 millio
Slide 13: Appendix
Appendix AXALTA COATING SYSTEMS
Slide 14: Full Year 2021 Assumptions
Full Year 2021 Assumptions Macroeconomic Assumptions Currency Assumptions ▪ Global GDP growth of ~3.8% for Q4 2021 and ~5.5% for FY 2021 2021 Average 2020 % Axalta 2020 Average USD % Impact of Currency Rate Net Sales Rate FX Rate Change ▪ Global industrial production growth of ~2.2% Assumption for Q
Slide 15: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation ($ in millions) Q3 2021 Q3 2020 Income from operations $ 124.7 $ 141.7 Other (income) expense, net (2.4) 2.3 Total $ 127.1 $ 139.4 A Debt extinguishment and refinancing related costs — — B Termination benefits and other employee related costs 9.6 35.7 C Strategic review
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, except per share data) Q3 2021 Q3 2020 Net income $ 68.9 $ 82.5 Less: Net income attributable to noncontrolling interests (0.2) — Net income attributable to controlling interests $ 69.1 $ 82.5 A Debt extinguishment and refinancing related costs — —
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) Q3 2021 Q2 2021 Q1 2021 YTD 2021 Q3 2020 Q2 2020 Q1 2020 YTD 2020 Cash provided by (used for) operating activities $ 142.9 $ 107.5 $ 39.6 $ 290.0 $ 233.4 $ (1.7) $ (0.8) $ 230.9 Purchase of property, plant and equipment (38.4) (28.5) (31.8) (98.7) (13.8)
Slide 20: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation LTM ($ in millions) 9/30/2021 Q3 2021 Q2 2021 Q1 2021 Q3 2020 Q2 2020 Q1 2020 FY 2020 Net income (loss) $ 281.3 $ 68.9 $ 126.4 $ 15.7 $ 82.5 $ (83.2) $ 52.4 $ 122.0 Interest expense, net 138.2 33.8 $ 33.4 33.5 39.8 $ 36.1 36.5 149.9 Provision (benefit) for income taxes
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 22