Axalta Coating Systems Ltd. · NYSE:AXTA

Axalta Coating Systems — Investor Day (March 2018)

115 slides from Axalta Coating Systems's investor day presentation, Mar 8, 2018

1. Slide 1: 2018 Capital Markets Day

   Axalta Coating Systems Ltd. 2018 Capital Markets Day March 8, 2018

2. Slide 2: Legal Notices

   Legal Notices Forward-Looking Statements This presentation and the oral remarks made in connection herewith may contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including those relating to 2018 and longer term financial projections

3. Slide 3: Capital Markets Day Agenda

   Capital Markets Day Agenda 9:00 AM Introduction & Agenda Chris Mecray, VP, Strategy & Investor Relations 9:05 AM Axalta’s Value Creation Model Charlie Shaver, Chairman & CEO 9:40 AM Axalta’s Financial Progress & Outlook Robert Bryant, EVP & CFO 10:05 AM Performance Coatings: Refinish Joe McDougall,

4. Slide 4: Key Messages for the Day

   Key Messages for the Day  Axalta is a high-performing, world-class global coatings company  Axalta has established a strong track record over five years; we are building on that  Axalta’s is focused on growth, improved productivity, and increased shareholder returns  Effective capital deployment

5. Slide 5: Axalta's Value Creation Model

   Axalta’s Value Creation Model Charlie Shaver Chairman and CEO

6. Slide 6: Axalta's Customer Focused Organization

   Axalta’s Customer Focused Organization PERFORMANCE COATINGS TRANSPORTATION COATINGS SEGMENTS $2.7 Billion, 62% of Sales $1.7 Billion, 38% of Sales SALES BY END MARKET  General industrial powders  Automotive OEMs  Heavy duty truck, utility trucks  Independent body shops  Wood coatings END  Mult

7. Slide 7: Axalta is Focused on Shareholder Value Creation

   Axalta is Focused on Shareholder Value Creation Significant Progress… …with More to Come A Transformation Story Axalta’s Value Creation Model  Cultural shift; incentive alignment  Drive profitable growth with innovation, customer focus  TSR based long-term compensation and solid core market drive

8. Slide 8: We have Established a Track Record of Success

   We have Established a Track Record of Success 2013 2014 2015 2016 2017 Bond rating Carlyle exit, First share Finance Carve-out IPO upgrades Debt refinancing buyback M&A 3 deals 6 deals 8 deals (Annualized sales) +$70 million +$125 million +$365 million Axalta Way $37 million $89 million $153 million

9. Slide 9: Why Invest in Axalta Today?

   Why Invest in Axalta Today? Strong Free Focused End- Consolidation ROIC Growth Significant Axalta Way Cash Markets, Opportunity Focus, China Growth Driving Generation and Structural with Proven Shareholder Opportunity Productivity Allocation Volume Growth M&A Strategy Value Alignment Process PROPRIE

10. Slide 10: We are Focused on Structurally Attractive Coatings End-Markets

    We are Focused on Structurally Attractive Coatings End-Markets A $130 Billion Global Coatings Market Axalta’s Coatings Markets Coatings Industry Sales Coatings Industry Sales ($ Billions) CAGR 5.2% Industrial Commercial 3.9% Vehicle Light 2.9% Vehicle Refinish 2.7% ____________________ _____________

11. Slide 11: Axalta is a Global Leader in Many of Our Markets

    Axalta is a Global Leader in Many of Our Markets… Performance Coatings: Refinish Transportation Coatings: Light Vehicle #1 #2 Performance Coatings: Industrial Transportation Coatings: Commercial Vehicle  in Powder coatings globally     #1 Supplier to North American HDT Market  in Industrial Wo

12. Slide 12: Substantial White Space Growth Opportunities

    …But We also have Substantial White Space Growth Opportunities Refinish – Regional Car Parc Growth Light Vehicle – Cars Per Capita (in thousands) ’17-’22E CAGR 400 Growth in China 75% 1% Penetration rate gap will 1% 300 narrow across regions 11% 200 3% 37% 100 4% 18% - 11% 8% NA EMEA LA China AP ex

13. Slide 13: Refinish Offers Both Demand Stability and Global Growth Opportunity

    Refinish Offers Both Demand Stability and Global Growth Opportunity Market Share Product Breadth #1 #1 Premium #2 Mainstream #1 Economy __________________________________ Source: Orr & Boss, Axalta estimates (2016) Customer Consolidation Axalta Is Growing Global Refinish (Thousands) NA Body Shops NA

14. Slide 14: Axalta's Industrial End-Market is Rapidly Growing

    Axalta’s Industrial End-Market is Rapidly Growing with Focused Strategies Axalta Has Doubled Industrial Sales Over Five Years Industrial Coating Wood Coatings Powder Coatings Coil Energy Systems Organic Growth Inorganic Growth  Significant infrastructure investment completed 2014-16  Targeting sig

15. Slide 15: Our Commercial Vehicle Business is Growing and Diverse

    Our Commercial Vehicle Business is Growing and Diverse Market White Space Share Gain Technology  Growth opportunities:  Share of wallet opportunity in existing  We have leading technology to expand  Underpenetrated geographies (China) markets our business  Vehicles per customer  Bus  Aviation

16. Slide 16: China Represents a Huge Growth Opportunity

    China Represents a Huge Growth Opportunity Refinish Industrial  Car parc growth  China consumes >40% of global industrial coatings today  Mainstream and economy segment growth  Shift from export end users to domestic consumers  Follow market to Tier 2-4 cities  Importance of local production a

17. Slide 17: China Represents a Huge Growth Opportunity, Cont'd

    China Represents a Huge Growth Opportunity, Cont’d Light Vehicle Commercial Vehicle  Adding business with domestic OEMs  Huge truck market >1 million vehicles per year production  Automotive fleet penetration per capita drives market  Modernization of fleet drives demand for quality coatings gro

18. Slide 18: Focus on Operating Excellence, Axalta Way Savings Continue with Phase II

    Focus on Operating Excellence, Axalta Way Savings Continue with Phase II  Achieved Phase I $200 million target Axalta Way II  Axalta Way II target: $200 million over next four years Axalta Operating  Lean implementation in Wuppertal, Germany and Mt. Clemens, MI Excellence (AOE)  Global rollout t

19. Slide 19: M&A: Leveraging a Consolidating Coatings Sector

    M&A: Leveraging a Consolidating Coatings Sector 2017 Key Acquisitions Benefits  Provide access to new technologies, products, customers, and markets  Leverage combined supply chains and distribution channels  Develop process and marketing efficiencies Ellis Paint Century Industrial Coatings Spenc

20. Slide 20: Axalta Generates Strong Free Cash Flow; Disciplined Allocation

    Axalta Generates Strong Free Cash Flow; Disciplined Allocation Strong Adjusted EBITDA Margins A Sound Capital Allocation Process  Axalta is the margin leader and generates substantial free cash flow  We have organic and inorganic investment opportunities that we expect will enhance overall returns

21. Slide 21: Axalta is Squarely Focused on Shareholder Value Creation

    Axalta is Squarely Focused on Shareholder Value Creation Growth Productivity  Technology and innovation  Axalta Way II drivers  Axalta Operating Excellence  Evolution of culture and (AOE) rollout incentives  Inflation offset as starting point  Clear strategies by end-market with accountability

22. Slide 22: Key Goals for 2018

    Key Goals for 2018 Key Objectives for Growth and Value Creation Outgrow Our End-Markets  Mid-single digit organic net sales growth; higher with M&A Axalta Way II Execution  Ongoing savings from optimizing our organization Incremental Cost Actions  Closing any price-cost gap with focused actions D

23. Slide 23: Longer Term Targets

    Longer Term Targets Key Objectives for Growth & Value Creation Net Sales Growth  Mid-single digit organic net sales growth Adjusted EBITDA  Margin growth in core existing business Free Cash Flow  Conversion of ~45-55% to Adjusted EBITDA Working Capital  High single digits working capital / net s

24. Slide 24: Summary

    Summary  Axalta has developed a strong five year execution track record; we see significant upside in sales and profit growth, cash flow generation, and returns on capital  We lead in growing, strong, and stable coatings segments and are actively entering new close adjacent markets  Our technolog

25. Slide 25: Thank You!

    Thank You!

26. Slide 26: Axalta's Financial Progress and Outlook

    Axalta’s Financial Progress and Outlook Robert Bryant EVP and CFO

27. Slide 27: Axalta's Shareholder Value Creation Levers

    Axalta’s Shareholder Value Creation Levers GROWTH CAPITAL ALLOCATION  Technology and innovation drivers  Target increased return on invested capital (ROIC)  Evolution of culture and incentives  At least 50% of FCF deployed to M&A over time  Clear strategies by end-market with  Share buyback op

28. Slide 28: Axalta's Growth Algorithm

    Axalta’s Growth Algorithm Multiple Steps Support Results Improving Returns Over Time  Mid-single digit core growth includes market Mid-single digits Accretive M&A growth, modest share capture and incremental pricing in key businesses  Free cash flow allocation is primarily directed Inflation ‘plus

29. Slide 29: Axalta's Growth Drivers are Diverse

    Axalta’s Growth Drivers are Diverse Value Creation From Multiple Sources and Disciplined Process  Capex of ~$160 million and R&D of ~$180 million annually supports Growth Supported by Clear maintenance and strategic growth Strategies, Greater Resources  Growth strategies in place for each business

30. Slide 30: The Axalta Way: Driving Towards World Class Productivity

    The Axalta Way: Driving Towards World Class Productivity Cumulative Savings ($ millions)  Commercial process excellence Commercial  Dynamic pricing / contract guardrails  Salesforce training / tools  Manufacturing strategy and footprint Operations / changes Supply Chain /  Procurement optimizat

31. Slide 31: The Axalta Way: Opportunity Evolution and Beyond

    The Axalta Way: Opportunity Evolution 2018 2015-2016 2017 and Beyond  Headcount reduction  Technology – ongoing ERP  Complexity reduction ramps migrations  Functional overhead  Manufacturing footprint and AOE  Non-manufacturing footprint maturity curve  Procurement phase I efforts  Direct pr

32. Slide 32: Focus on Capital Allocation

    Focus on Capital Allocation Debt Reduction Yes Organic Investment Leverage in Capex / R&D excess of No Investment Free Cash Yes target and no opportunity that Flow immediate exceeds hurdle investment? rate? M&A Excess No Share Repurchases - Offset dilution Share price - Opportunistic buys greater th

33. Slide 33: Prioritization of Capital Spending; Focus on High IRR Capex

    Prioritization of Capital Spending; Focus on High IRR Capex Capital Expenditures Project Details Capex by Year  Major Capex projects in 2017 ($ millions)  Nanjing, China – land and authorizations  Jiading, China – WB expansion  Savli, India – OEM manufacturing and laboratory  Major Capex projec

34. Slide 34: M&A: Multiple Value Creation Levers for Axalta

    M&A: Multiple Value Creation Levers for Axalta Product Line Extensions Acquisitions Offer Multiple Benefits .  Synergies from procurement & supply chain, R&D, and back office support  Globalization of previously regional products by Geographic Expansion leveraging distribution channels  New marke

35. Slide 35: Effective Capital Allocation Should Drive Improved Returns

    Effective Capital Allocation Should Drive Improved Returns Return on Invested Capital (ROIC) Commentary NOPAT ROIC (LTM)  Axalta’s ROIC includes ~$3 billion asset “step up” from the 2013 LBO under purchase price accounting  Drivers of ROIC upside:  NOPAT growth from ongoing business execution  C

36. Slide 36: Net Sales to Date Show Solid Growth and Portfolio Diversification

    Net Sales to Date Show Solid Growth and Portfolio Diversification Net Sales Net Sales by Region ($ Billions) 2013 2017 Asia Pacific North Asia Pacific North America America 15% 17% 29% Latin Latin 37% 17% America 11% America 39% 35% EMEA EMEA Net Sales by End-Market 2013 2017 Commercial Commercial R

37. Slide 37: Axalta's Future Rests on a Foundation of Technology Investment

    Axalta’s Future Rests on a Foundation of Technology Investment Significant Technology Investment An Active Product Pipeline  We introduced >250 products in 2017 R&D / Net Sales  . over the next 3 years >800 new products to be introduced Investing for Growth  Philadelphia Global R&D Center – 2018

38. Slide 38: Adjusted EBITDA Results to Date Show Strong Core Progress

    Adjusted EBITDA Results to Date Show Strong Core Progress Adjusted EBITDA Growth Drivers  Adjusted EBITDA margins increased from 15.6% in 2012 to 20.3% in 2017  Pricing actions positively contributed to margin expansion  Volume growth and share gain provided operating leverage over. fixed costs 

39. Slide 39: Net Working Capital to Date Demonstrates Early Improvement

    Net Working Capital to Date Demonstrates Early Improvement Net Working Capital / Net Sales Comments  Working capital improvement from multiple initiatives  Short-term opportunities by forcing focus on capital efficiency  Long-term opportunity to lower working capital . turns and connectivity inte

40. Slide 40: Debt and Liquidity Summary

    Debt and Liquidity Summary Leverage Trends Interest Coverage (Adj. EBITDA) Cost of Debt Debt Maturity Profile Note: Balances reported on a US GAAP basis as of 12/31/2017 PROPRIETARY 40

41. Slide 41: Free Cash Flow Strong and Improving; Deployment Accelerating

    Free Cash Flow Strong and Improving; Deployment Accelerating Free Cash Flow Capital Deployment Cash Flow From Operations, less Capex Capital Allocation since 2014 ($ millions) ($ millions) Cumulative: 22 $1,821 11 825 $58 821 423 415 802 272 $466 $709 (173) (169) (130) (52) (39) (142) (90) (136) (12

42. Slide 42: Our Financial Scorecard is Focused on Profitable Growth

    Our Financial Scorecard is Focused on Profitable Growth Objective Grow The Business Grow Adjusted EBITDA Results 2018E Net Sales: +8-9% 2018E Adjusted EBITDA: $940-980 million  Refinish: Stable global market growth; Highlights & Challenges continued core market share gains; mainstream  Core growth

43. Slide 43: Summary of our Investment Case

    Summary of our Investment Case  Axalta operates a very strong core business model  We target solid organic growth and market outgrowth in each of our businesses  We seek enhanced productivity and core margin growth; Refinish provides a stable foundation  We still have years of self-help to execu

44. Slide 44: Thank you!

    Thank you!

45. Slide 45: Performance Coatings: Refinish

    Performance Coatings: Refinish Joe McDougall EVP, President, Global Refinish & EMEA

46. Slide 46: Axalta Refinish Investment Thesis

    Axalta Refinish Investment Thesis  The global automotive refinish market is stable, consolidated and growing  Refinish is highly stable, linked to global miles driven and accident rates  The top four Refinish players hold two-thirds of the global market  End-market growth ~3-4% per year expected

47. Slide 47: Axalta Had Many Successes in 2017

    Axalta Had Many Successes in 2017 Launched Innovative Products and Services to Address Customer Challenges Ultra-Productive, Low-Energy 40,000th Spectrophotometer Easy Application Ultra-Productive Clearcoats Shipped Waterborne Basecoat Primer New Training Center MSO Growth Drives Motorsports Partner

48. Slide 48: The Global Refinish Market is Attractive and Dynamic

    The Global Refinish Market is Attractive and Dynamic Refinish Industry Sales by Region Industry Trends Align With Core Competencies ($ Billions)  Growing eco-regulations require innovations  Performance needs drive technology improvements CAGR  Consolidation trend supported by field sales model 6

49. Slide 49: Net Auto Claims and Severity Rates in the United States

    Net Auto Claims and Severity Rates in the United States Change in Frequency and Severity U.S. Net Claims Incurred1 2016 vs. 2014 $ Billions Bodily Property Compre- 176 Collision 168 injury damage hensive 160 152 145 133 Severity +7.0% +11.0% +8.2% +8.3% Frequency +2.2% +2.9% +2.6% +2.6% 2014 2015 20

50. Slide 50: Net Claims Continue to Rise Globally

    Net Claims Continue to Rise Globally United Kingdom Net Claims Incurred1 Germany Net Claims Incurred1 $ Billions $ Billions +3% p.a. +4% p.a. 2014 2015 2016 2017 2018 2019 Average Cost Increase in per repair car parc rising SOURCE : Global Insurance Pools for UK and German Insurance Association (GDV

51. Slide 51: Drivers and Influencers of Global Growth

    Drivers and Influencers of Global Growth Major Major trends that impact Global Car Parc inputs Number of Growth of the car parc vehicles in use Number of miles driven per vehicle % of damaged +3% Safety features and AD/AVAS 1,411 1,368 vehicles Driver experience 1,283 1,326 Safety Regulations 1,199

52. Slide 52: Technology Impact on Refinish: ADAS and Autonomous Vehicles

    Technology Impact on Refinish: ADAS and Autonomous Vehicles ADAS1 Impact on Safety is Slow and Muted Connected Car Technology Increases Driver Distraction Potential impact to auto claim frequency from ADAS Drivers admit to distracting behavior % of newly registered vehicles equipped with crash preve

53. Slide 53: Axalta is The Leader in Global Refinish Coatings

    Axalta is The Leader in Global Refinish Coatings Refinish Market Share Leading a Growing Industry $6.9 Billion Total Sales  Leading market share position; industry sales estimated to grow at ~3% #1 CAGR through 2020  We are the Refinish technology leader, driving productivity and value for our cus

54. Slide 54: Our Strength can be Measured in Each Region

    Our Strength can be Measured in Each Region North America EMEA Asia Pacific Latin America  As the leading provider to  Strong market access  Growth driven primarily by  Well positioned in Mexico MSOs, Axalta benefits from through leading brands and expansion of the Chinese car and Brazil – the l

55. Slide 55: Refinish Growth Drivers Globally

    Refinish Growth Drivers Globally U.S. Body Shop Consolidation China Growth in Mainstream & Tier Cities Body shop paint sales Overall market expected to grow >5% 2015-2019 % of refinish market 100% 100% 100% 100% MSOs Faster growth in Core premium paints >10% CAGR in U.S. due to ~1-3% CAGR share grow

56. Slide 56: Axalta Often Uses a Sell-Through Model, Coupled with World Class Service

    Axalta Often Uses a Sell-Through Model, Coupled with World Class Service Product flow Product and service flow Distributors  Logistics  Inventory management Body shops Axalta maintains direct body shop relationships  Sales calls and ongoing customer relationships; call center support  Field serv

57. Slide 57: Axalta's Product Technology Addresses Customer Challenges

    Axalta’s Product Technology Addresses Customer Challenges Customer Challenges Axalta’s Product Innovation Response  Industry leading productivity  Insurance KPI performance  Color Match and OEM Approvals  Cycle time for vehicle delivery  Environmental compliance  Labor productivity / facility

58. Slide 58: Targeted M&A Supports our Refinish Evolution

    Targeted M&A Supports our Refinish Evolution Targeted M&A To Complement Organic Growth  Global M&A is part of our growth strategy  10 deals completed to date in three regions  Target profile: Attractive, bolt-on businesses offering new technology, incremental channels and/or expanded market  Tot

59. Slide 59: Refinish Summary

    Refinish Summary  Axalta is the undisputed global leader in the growing refinish market  Customer, technology and regulatory trends favor Axalta’s products and services  Axalta has the broadest and most productive product range in the industry  Axalta leads the industry in refinish technology, i

60. Slide 60: Thank you!

    Thank you!

61. Slide 61: Performance Coatings: Industrial

    Performance Coatings: Industrial Mike Cash SVP, President, Industrial Coatings

62. Slide 62: Axalta Industrial: Where We Have Come From

    Axalta Industrial: Where We Have Come From 2013 2016 - 2018 Industrial sales 2x since 2013 1960 - 2013 2014 - 2018 PROPRIETARY 62

63. Slide 63: Our Industrial Business Today

    Our Industrial Business Today Industrial Coating Wood Coatings Powder Coatings Coil Coatings Energy Solutions Systems  Kitchen cabinets  Auto metal parts  Metal building  Power tools  ACE  Building products  Appliances products  E-mobility  Oil and gas  Flooring  Architectural  Architect

64. Slide 64: Industrial Coatings: A $38 Billion Market Opportunity for Axalta

    Industrial Coatings: A $38 Billion Market Opportunity for Axalta Industrial Coatings Market Share Doubled in 5 Years ($ in billions)  Market growth of 5.4% CAGR (2013-20e)  Growth driven by global GDP and industrial production  Building and construction markets strong  Global infrastructure grow

65. Slide 65: 2017 Growth – By the Numbers

    2017 Growth – By the Numbers Growth Launched Secured Added 43% 160 919 65 In Net Sales New Products New Accounts Sales and Tech Service Reps PROPRIETARY 65

66. Slide 66: M&A – By the Numbers

    M&A – By the Numbers North America Leading independent supplier of coil coatings in N.A. North America Leading regional manufacturer of industrial and refinish coatings North America Leading storage tank, structural steel, and OEM coatings manufacturer NA / LA Leading provider of coatings for the OE

67. Slide 67: 2017 Our Place in the Market

    2017 Our Place in the Market Industrial Coating Wood Coatings Powder Coatings Coil Coatings Energy Solutions Systems #2 #2 #4 #2 #2 North American Global Powder North American Global Electrical Global Industrial Wood Coatings Coatings Supplier Coil Coatings Insulation Supplier E-Coat Supplier Suppli

68. Slide 68: Our Competitive Advantage: The Moat

    Our Competitive Advantage: The Moat Broader Portfolio Global Reach Playing Offense  Newly acquired assets  Global segment approach  Dedicated Industrial R&D and organically developed team driving innovation technologies to fill product  Fit-for-purpose and faster response to portfolio gaps manuf

69. Slide 69: Wood Coatings: Innovation and Growth Strategy

    Wood Coatings: Innovation and Growth Strategy ($ in billions) UV-Cure Clearcoat for Luxury Vinyl Tile Decor Wood Cabinets Strategies for Growth Key Technologies Key Technology Strategies Additions for Growth  Build on existing distribution; fill in “white spaces”  UV-Cure clearcoat for luxury viny

70. Slide 70: Market Indicators | Wood Coatings Business

    Market Indicators | Wood Coatings Business Housing Starts Expect Solid Growth Remodeling Stays Robust U.S. Housing Starts (SAAR, Thousands Units) 1,438 1,376 1,289 1,207 375 390 375 356 986 1063 851 914 2017 2018 2019 2020 2004 2006 2008 2010 2012 2014 2016 2018 2020 Single-Family Multifamily Source

71. Slide 71: Powder Coatings: Innovation and Growth Strategy

    Powder Coatings: Innovation and Growth Strategy ($ in billions) ICONICA Collection San Francisco Transbay Transit Center Strategies for Growth Key Technologies Key Technology Strategies Additions for Growth  Continue to penetrate higher margin segments  New range of metallics - ICONICA  Architect

72. Slide 72: Coil Coatings: Innovation and Growth Strategy

    Coil Coatings: Innovation and Growth Strategy ($ in billions) ACP ASPECT Peel and Stick Tiles Hydropon Spray PVDF Coating Strategies for Growth Key Technologies Key Technology Strategies Additions for Growth Key Technology Additions  Focused growth in high end market segments (e.g. architectural ex

73. Slide 73: Energy Solutions: Innovation and Growth Strategy

    Energy Solutions: Innovation and Growth Strategy ($ in billions) Voltahyd 2250 Waterborne series Lucid Motors Strategies forGrowth Growth Key Technologies Strategies for Key Technology Strategies Additions for Growth  Leverage growth in EV market with high performance impregnating resins  Voltahyd

74. Slide 74: Industrial Coating Solutions: Innovation and Growth Strategy

    Industrial Coating Solutions: Innovation and Growth Strategy ($ in billions) Patented Anti-Shatter Glass Coating Atomic Skis Strategies for Growth Key Technologies Key Technology Strategies Additions for Growth  Push acquired products into all regions  1K waterborne direct to metal topcoat for ACE

75. Slide 75: Summary

    Summary  Axalta is a global leader in the industrial coatings segments we serve, including the fast-growing electric motor market, the high- performance powder coatings market, and the industrial e-coat market  We have leveraged M&A to create market leading positions in coil and industrial wood co

76. Slide 76: Thank you!

    Thank you!

77. Slide 77: Transportation Coatings

    Transportation Coatings Steve Markevich EVP, President, Transportation Coatings and Greater China

78. Slide 78: Transportation Coatings | Segment Overview

    Transportation Coatings | Segment Overview Transportation Coatings Light Vehicle Synergies Commercial Vehicle  Original Equipment  Commercial truck Manufacturers Market  Rail  Plastic and Drivers composite coatings  Bus  Metal coatings  Utility vehicles  Interior coatings Global  RVs / off-

79. Slide 79: Transportation | Significant White Space Provides Growth Opportunities

    Transportation | Significant White Space Provides Growth Opportunities $7B ~ $2.5B $700M $600M $550M $500M $450M Total $400M Market ~$13B $200M Body LV Trucks Specialty Bus APC Builders Rail Aviation Marine* OEM MDT / HDT OEM +Trailers Customer Segment Core Developing Opportunity SOURCE: Orr & Boss,

80. Slide 80: 2017 Growth – By the Numbers

    2017 Growth – By the Numbers Launched Coated CV Grew Awarded 482 28M 9% $90M+ New Business New Products 1/3 of New Year-Over-Year and Colors Vehicles Globally PROPRIETARY 80

81. Slide 81: Share Gain Coupled with Market Growth Provides Significant Upside

    Share Gain Coupled with Market Growth Provides Significant Upside Transportation Growth Potential Multiple Growth Sources and Opportunities $ Billions  Light Vehicle  Strong global market; grow with existing OEMs; focus on underserved OEMs, regions, products  Increase content / vehicle with compo

82. Slide 82: Light Vehicle | Growing with a Strong Global Market

    Light Vehicle | Growing with a Strong Global Market Growth Opportunities Across Segments Per Capita Market Growth Market Size ($ billions) # Plants Product Content Region US Share Customer Segment EMEA Mexico Core ~$3.0 >25% ~200 SA Increasing to 2 vehicles per India Developing ~$1.5 >10% ~200 10 re

83. Slide 83: Light Vehicle | Increasing Content Per Vehicle with Components

    Light Vehicle | Increasing Content Per Vehicle with Components White Space in Exteriors and Interiors $30-50 / mirrors “small parts” vehicle bezels, handles, trim  Focus markets with global leadership and strategy interior  Exterior / APC a top 5 “customer” lenses  Adjacent to core products  Rel

84. Slide 84: Commercial Vehicle | Leveraging Proven Success to Address the Global Truck Market

    Commercial Vehicle | Leveraging Proven Success to Address the Global Truck Market Global Truck Market: $700 Million Significant China Opportunity 2017 Class 4-8 Estimated Paint Buy  Objective to triple volume by 2020 in Asia Pacific  Global and regional support teams in place Axalta >40% share  L

85. Slide 85: Commercial Vehicle | Expanding in the ~$2.5 Billion Market Beyond Trucks

    Commercial Vehicle | Expanding in the ~$2.5 Billion Market Beyond Trucks Broad and Diverse Vehicle Markets Motorcycle pic (honda)  Global strategy with local execution  Leveraging long-term relationships and proven technology to adjacent markets  Key wins in bus, rail and recreational vehicles 

86. Slide 86: Transportation | Re-Engineering the Coatings Value Proposition

    Transportation | Re-Engineering the Coatings Value Proposition Service At the Core Capturing the Value of Scope Changes  Clear statement of work and specifications  Scope management / change control  Optimizing formulations PRODUCT  Digital and AI driven development  Raw material movement / ind

87. Slide 87: No Matter Where the Market Goes, Coatings Play a Key Role

    No Matter Where the Market Goes, Coatings Play a Key Role Emerging OEMs Design & Consumer Advanced and Geographies Preferences Sustainability Manufacturing Future Mobility  New entrants  Styling trends  Environmental  Big data, line  Autonomous  Rising JVs  Consumer choice requirements servic

88. Slide 88: Emerging OEMs and Geographies

    Emerging OEMs and Geographies New Players New JVs Rising OEMs Mapping and Autonomous mobile services Driving Largest supplier of vehicle safety systems + New Geely Lynk Premium OEM brand  Emerging markets (India and China) growth boosts vehicle sales, rewards first movers  New and varied OEM playe

89. Slide 89: Design and Consumer Preferences

    Design and Consumer Preferences Changing Vehicle Preferences Styling and Personalization Trends  Model sizes increasing  Stronger consumer demand  Design impacts paintable for color customization surface  Strong SUV / crossover demand  Trend to multi-tone cars  Increased use of glass  Interna

90. Slide 90: Sustainability Driving Change

    Sustainability Driving Change Market Drivers Coatings Challenges  New corrosion challenges  VOC emissions and materials of concern  Multiple substrate uniformity  CAFÉ / CO2 / tailpipe emissions  Plastics heat distortion  Lightweight materials  Regulations for environment, health and safety 

91. Slide 91: Advanced Manufacturing and Industry 4.0

    Advanced Manufacturing and Industry 4.0 Using “Big Data” for Advantage Innovative Cloud- Sensor Data  More efficient use of coatings to Integrated based Data Technology Analytics improve quality and reduce Automation Collection application costs  Enhance quality systems to reduce defects  Line Se

92. Slide 92: Future Mobility | Pushing Autonomy and Shared Mobility

    Future Mobility | Pushing Autonomy and Shared Mobility Autonomous Driving Ride Sharing  Coatings for vehicle and infrastructure visibility  Higher utilization, shorter vehicle life  Specialty coatings for sensors and displays  Fleet owners and private owners  StarLite highlights autonomy, popul

93. Slide 93: Summary

    Summary  Axalta is a leader in the growing transportation coatings sector with best-in-class technology  Achieving a 20% market share in all of our Transportation markets could result in an incremental $1 billion in sales  Axalta has and will grow Light Vehicle via underserved customers globally

94. Slide 94: Thank you!

    y iN Thank you! AXALTA COATING SYSTEMS

95. Slide 95: Operations, Procurement & Supply Chain

    Operations, Procurement & Supply Chain Dan Key SVP, Operations, Procurement & Supply Chain

96. Slide 96: Axalta's Global Manufacturing Footprint

    Axalta’s Global Manufacturing Footprint $2.8 billion 50 Cost of Goods Manufacturing Sites Västervik Darlington Farnham ~50% Minneapolis Hilliard West Bromwich Houthwaite Zuidland Wuppertal Moscow NA Sites Ajax Tewksbury Mechelen Changchun Variable Inputs Sacramento Mt. Clemens Cornwall Montbrison Gu

97. Slide 97: Axalta Global Operations Journey

    Axalta Global Operations Journey Heritage Operations Priorities “Future State” Inwardly Focused Customer Focused  Restructure leadership Good Progress  Quality and delivery “Good to Great” Functionally Driven improvements Results Driven  Fit-for-purpose cost structure Siloed Thinking  Footprint

98. Slide 98: Priorities: Restructure Leadership

    Priorities: Restructure Leadership  70% of top Operations, Procurement and Supply Chain roles changed  New regional operations leaders  New global leaders in key functional roles  New site leaders at 7 of top 10 sites Servant Leadership Critical Thinker Customer Focused Operationally Excellent P

99. Slide 99: Priorities: Quality and Delivery Process Improvement

    Priorities: Quality and Delivery Process Improvement  Right First Time manufacturing metric drives desired behaviors, new process implementation, reduces waste  Focused on physical properties in the last two years +67%  Focusing on color for the next two years  Significant reduction in customer

100. Slide 100: Priorities: Fit-for-Purpose Cost Structure

     Priorities: Fit-for-Purpose Cost Structure  Emerging markets cost structure challenge  Local for local approach to manufacturing  Ratio of production to non- production staff to improve  Imperative to move closer to customer  Hub and spoke design of footprint GOAL Disparity in Plant Cost Struct

101. Slide 101: Priorities: Footprint Adjustments

     Priorities: Footprint Adjustments Acq  Localize production in-region C  Transformation over time  Shut down two sites in 2017 New New  One small site moved to a Hub Resin  One small site closed for supply chain Clearcoats savings Large Batches  New Sites: E-Coats  <50 employees – Flexible and

102. Slide 102: Priorities: Cost Reduction Actions

     Priorities: Cost Reduction Actions  Focus on Axalta Way projects to offset inflation as starting point  Focus on direct to indirect labor ratio – remove staffing layers  Focus on 10 largest sites (majority of our fixed costs)  Smaller, more flexible plants  Improve right first time to reduce ra

103. Slide 103: Priorities: Axalta Operating Excellence (AOE)

     Priorities: Axalta Operating Excellence (AOE)  Structured approach  Finds cause, not blame Sustainable solution  Enables prioritization delivery  Leverages employee knowledge  Solve their own problems  Reduces waste Engages employees, gives them tangible ways to solve challenges Improves  Vis

104. Slide 104: AOE Case Study: Large Plant Example

     Priorities: Axalta Operating Excellence (AOE) Case Study: Large Plant Example Site Challenges Impact On Performance  Needed a more effective problem resolution process Volume Increase on Filling Line Benefits Realized  Reactive culture; unfocused priorities for leaders  Downtime reduced  Volume

105. Slide 105: AOE Case Study: China Plant Example

     Priorities: Axalta Operating Excellence (AOE) Case Study: China Plant Example Site Challenges Impact On Performance  Seeking Right First Time improvement  Requirement for shorter cycle times  RFT increased by Approach / Solution six fold in two years  Looked for best practices within Axalta  Ka

106. Slide 106: Priorities: High Internal Rate of Return Capital Projects

     Priorities: High Internal Rate of Return Capital Projects Capex Projects Add Value Ex: Resin Capacity Ex: Tank Farm  Focus on high IRR projects  $1 million capital; two projects at  $275,000 invested in storage tanks different sites  Reduce raw material costs and/or labor costs  Allowed for bul

107. Slide 107: Procurement At A Glance

     Procurement At A Glance Axalta Spend as % of Sales Procurement Log & Pkg  $2+ billion in external buy addressed Indirect Logistics & Packaging  30,000+ 13% SKUs  Indirect 24% suppliers 14,000+  170,000+ purchase orders Direct  Direct Materials ~130 procurement professionals 63%  ~ 25% of spend

108. Slide 108: Raw Material Price Development: What's In A Can?

     “What’s In A Can?” and 2018 Pricing Trends Raw Material Price Development: Categories % of Volume* Industry Inflation Resins Acrylics, Polyester, Epoxy 15% - 25% Pigments TIO2, Organic Pigments , Others 15% - 20% Additives Light Stabilizers, Flow 15% - 30% Additives , Others Solvents 25% - 70% Water

109. Slide 109: Procurement Strategic Initiatives

     Procurement Strategic Initiatives Direct Materials Cost Modelling Business Collaboration Raw material price dynamically adjusted with market Cross-functional teaming to achieve results Global Price Benchmarking Comparing global price differences and Matched Pairs Team with R&D to pursue joint improv

110. Slide 110: Complexity Reduction

     Complexity Reduction Duplicate Chemistries Existing For Decades Create Opportunity to Remove SKUs Diluted Isocyanate Trimers Solvent Specifications UV Light Stabilizers  Reduction of active solvent codes  Patent expirations  Shift away from diluted trimer and by 20% Description focus on pure trim

111. Slide 111: Summary Of Key Messages

     Summary Of Key Messages  We are leveraging a legacy of focus on quality and safety to add new focus on productivity, cost structure and competitiveness  We will refine our processes and footprint to lower cost and to better serve our customers  We maintain a pipeline of high IRR capital projects

112. Slide 112: Thank You!

     Thank You!

113. Slide 113: Appendix

     y iN Appendix AXALTA COATING SYSTEMS

114. Slide 114: Adjusted EBITDA Reconciliation

     Adjusted EBITDA Reconciliation Successor Successor Successor Successor Successor Predecessor Combined Jan 1 - Jan 31, ($ in millions) FY 2017 FY 2016 FY 2015 FY 2014 FY 2013 2013 FY 2013 Net Income (loss) $48 $45 $96 $32 (222) $9 (213) Interest Expense, net 147 178 197 218 215 - 215 Provision (Benef

115. Slide 115: Adjusted EBITDA Reconciliation (cont'd)

     Adjusted EBITDA Reconciliation (cont’d) A. During 2017, 2016 and 2014 we refinanced our indebtedness, resulting in losses of $13 million, $88 million and $3 million respectively. During 2017, 2016, 2015 and 2014 we prepaid outstanding principal on our term loans, resulting in non-cash extinguishment

Axalta Coating Systems — Investor Day (March 2018) on 6ix