Axalta Coating Systems Ltd. · NYSE:AXTA
Axalta Coating Systems — FY2021 Earnings Presentation
24 slides from Axalta Coating Systems's earnings presentation, Jan 31, 2022
Slide 1: Q4 & FY 2021 Financial Results
Q4 & FY 2021 Financial Results January 31, 2022 1 Sensitivity: Business Internal
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 and/o
Slide 3: Q4 & Full Year 2021 Highlights
Q4 & Full Year 2021 Highlights Fourth Quarter 2021 ▪ Net sales increased 5.8% year-over-year to $1,137 million with continued growth from three of four end-markets; ongoing Performance Coatings growth including fifth consecutive quarter of year-over-year Industrial end-market growth, partly offset b
Slide 4: Business Conditions, Inflation and Offsets
Business Conditions, Inflation and Offsets Business Conditions ▪ Continued global recovery in Refinish demand drivers, including traffic and body shop activity, but tempered by supply constraints; net sales volumes in Q4 remain below 2019 levels by high single digits ▪ Strong continued growth in Ind
Slide 5: Axalta's ESG Program
Axalta's ESG Program Progress To Date Establishment of New Goals 2030 Goals Highlights ▪ Initial Sustainability Report in 2013 ▪ Materiality assessment conducted, ▪ 2040 carbon neutral goal is one ▪ First set of sustainability goals incorporating key sustainability decade ahead of the deadline set b
Slide 6: 2030 Sustainability Goals
2030 Sustainability Goals Environmental Social Governance 50% 100% 30% 80% absolute reduction of Scope 1 of key suppliers assessed of management positions to be filled by women of new technology and and 2 GHG emissions, sourcing against a robust set of innovation developments will at least 50% of el
Slide 7: Q4 Consolidated Results
Q4 Consolidated Results Financial Performance Commentary ($ in million), except Q4 % Change per share data 2021 2020 Incl. FX Excl. FX Net sales growth from M&A contribution and price Performance Coatings 804 704 14.2 % 15.6 % realization as strong volume growth in Performance Mobility Coatings 333
Slide 8: Q4 Performance Coatings Results
Q4 Performance Coatings Results Financial Performance Commentary Q4 % Change ($ in million) 2021 2020 Incl. FX Excl. FX Net sales growth driven by M&A contribution, volume recovery, and pricing realization Refinish 471 418 12.8 % 14.7 % ▪ Increased volumes from both Refinish and Industrial despite I
Slide 9: Performance Coatings Demand Environment
Performance Coatings Demand Environment Refinish ▪ The global refinish market showed overall stability in Q4 demand indicators – U.S. miles driven remained around normal levels through Q4; body shop activity, however, remained down ~12% versus 2019 levels – Europe miles driven appeared to soften sli
Slide 10: Q4 Mobility Coatings Results
Q4 Mobility Coatings Results Financial Performance Commentary Q4 % Change ($ in million) 2021 2020 Incl. FX Excl. FX Net sales reduction despite pricing actions as volumes remain constrained by supply shortages Light Vehicle 255 298 (14.4)% (13.7)% ▪ Axalta volumes largely aligned with reductions in
Slide 11: Mobility Coatings Demand Environment
Mobility Coatings Demand Environment Light Vehicle ▪ The LV market was impacted during Q4 by the semiconductor chip shortage with an estimated reduction of ~2.1 million units, bringing the full year 2021 impact to ~9.6 million deferred builds (versus the Axalta assumption of ~11 million) ▪ Global LV
Slide 12: FY 2021 Consolidated Results
FY 2021 Consolidated Results Financial Performance Commentary ($ in million), except FY % Change per share data 2021 2020 Incl. FX Excl. FX Net sales increase reflects recovery from COVID-19; Performance Coatings 3,096 2,516 23.0 % 20.9 % customer supply shortages tempered growth for Mobility Mobili
Slide 13: Debt and Liquidity Summary
Debt and Liquidity Summary Capitalization Commentary ($ in millions) Interest @ 12/31/2021 Maturity ▪ ~$1.4 billion in available liquidity at December 31, 2021 Cash and Cash Equivalents $ 841 ▪ Weighted average cost of debt of 3.1% at December 31, Debt: 2021 Revolver ($550 million capacity)(1) Varia
Slide 14: Financial Guidance Update
Financial Guidance Update Q1 2022 Guidance FY 2022 Commentary ▪ Net Sales: ~+5% including ~(3)% FX, ~4% M&A benefit; ▪ Performance Coatings growth expected from continued anticipated price of mid- to high-single digits Refinish recovery, continued robust organic growth within – Performance Coatings:
Slide 15: Appendix
Appendix 15 Sensitivity: Business Internal
Slide 16: Q1 and Full Year 2022 Assumptions
Q1 and Full Year 2022 Assumptions Macroeconomic Assumptions Q1 2022 Currency Assumptions ▪ Global GDP growth ~4.2% for Q1 2022 and ~4.2% for FY 2022 Q1 2022 Q1 2021 % Axalta Q1 2021 USD % Impact of Currency Average Rate ▪ Global industrial production growth of ~2.6% for Net Sales Average Rate Assump
Slide 17: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation ($ in millions) FY 2021 FY 2020 Q4 2021 Q4 2020 Income from operations $ 462.4 $ 305.5 $ 94.7 $ 163.2 Other (income) expense, net (12.3) 33.4 (1.4) 32.5 Total $ 474.7 $ 272.1 $ 96.1 $ 130.7 A Debt extinguishment and refinancing related costs 0.2 34.4 — 32.0 B Termination
Slide 18: 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 esti
Slide 19: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in millions) FY 2021 FY 2020 Q4 2021 Q4 2020 Net income $ 264.4 $ 122.0 $ 53.4 $ 70.3 Less: Net income attributable to noncontrolling interests 0.5 0.4 0.2 0.6 Net income attributable to controlling interests 263.9 121.6 53.2 69.7 A Debt extinguishment and refin
Slide 20: 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 t
Slide 21: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ in millions) Q4 2021 Q3 2021 Q2 2021 Q1 2021 FY 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 YTD 2020 Cash provided by (used in) operating activities $ 268.6 $ 142.9 $ 107.5 $ 39.6 $ 558.6 $ 278.4 $ 233.4 $ (1.7) $ (0.8) $ 509.3 Purchase of property, plant and equipment (22.
Slide 22: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in millions) FY 2021 FY 2020 Q4 2021 Q4 2020 Net income $ 264.4 $ 122.0 $ 53.4 $ 70.3 Interest expense, net 134.2 149.9 33.5 37.5 Provision for income taxes 76.1 0.2 9.2 22.9 Depreciation and amortization 316.5 320.3 81.8 76.7 Reported EBITDA $ 791.2 $ 592.4 $ 177.9
Slide 23: 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 es
Slide 24: Thank you
Thank you Investor Relations Contact: Chris Mecray Christopher.Mecray@axalta.com 215-255-7970 24 Sensitivity: Business Internal
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