Axalta Coating Systems Ltd. · NYSE:AXTA
Axalta Coating Systems — Q3 2019 Earnings Presentation
18 slides from Axalta Coating Systems's earnings presentation, Oct 24, 2019
Slide 1: Q3 2019 Financial Results
Exhibit 99.2 Q3 2019 Financial Results October 24, 2019
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 our 2019 financial projections, which incl
Slide 3: Q3 2019 Highlights
Q3 2019 Highlights ▪ Q3 2019 financial results ▪ Net sales of $1.1 billion, down 3.4% YoY (increase of 0.4% ex-FX and M&A impacts) ▪ Positive 3.8% price-product mix overall, including ongoing progress in Light Vehicle ▪ Income from operations of $123 million versus $48 million in Q3 2018; Adjusted E
Slide 4: Q3 Consolidated Results
Q3 Consolidated Results Financial Performance Commentary ($ in millions, except Q3 % Change Net sales flat excluding FX and China JV per share data) 2019 2018 Incl. F/X Excl. F/X sale - continued strong price-mix Performance 724 756 (4.3)% (2.0)% Transportation 383 390 (1.7)% —% ▪ Commercial Vehicle
Slide 5: Q3 Performance Coatings Results
Q3 Performance Coatings Results Financial Performance Commentary Q3 % Change Low single-digit net sales growth ex-FX ($ in millions) 2019 2018 Incl. F/X Excl. F/X and JV sale driven by strong price and Refinish 442 441 —% 2.5 % mix contribution Industrial 282 315 (10.4)% (8.4)% ▪ Refinish volume dow
Slide 6: Q3 Transportation Coatings Results
Q3 Transportation Coatings Results Financial Performance Commentary Q3 % Change Commercial Vehicle volume growth ($ in millions) 2019 2018 Incl. F/X Excl. F/X partially offset lower Light Vehicle Light Vehicle 296 304 (2.6)% (0.8)% volume Commercial Vehicle 88 86 1.7 % 2.9 % ▪ Light Vehicle volume p
Slide 7: Debt and Liquidity Summary
Debt and Liquidity Summary Capitalization Comments ($ in millions) Interest @ 9/30/2019 Maturity ▪ Net leverage of 3.2x sequentially lower from: Cash and Cash Equivalents $ 767 ▪ Higher cash position Debt: Revolver ($400 million capacity) Variable — 2024 ▪ Higher LTM Adjusted EBITDA First Lien Term
Slide 8: Full Year 2019 Guidance
Full Year 2019 Guidance ($ millions, except per share data) Jul. Guide 2019E Comments Net Sales ~(2%) ~(4%) ▪ Net sales guidance reflects May disposition of China JV with ~1% full year impact and minor Net Sales, ex FX1 ~0% ~(1%) Adjusted EBIT impact; net sales also reflects lower global auto produc
Slide 9: Appendix
A AXALTA Appendix AXALTA COATING SYSTEMS
Slide 10: Full Year 2019 Assumptions
Full Year 2019 Assumptions Macroeconomic Assumptions Currency Assumptions ▪ Global GDP growth of 2019 2018 USD % Impact approximately ~2.6% 2018 Average Average Currency % Axalta of FX Rate Rate Rate Net Sales Change Assumption ▪ Global industrial production growth of approximately US$ per Euro ~27%
Slide 11: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation ($ in millions) Q3 2019 Q3 2018 Income from operations $ 123 $ 48 Other (income) expense, net (2) 6 Total $ 125 $ 42 A Termination benefits and other employee related costs 29 82 B Consulting and advisory 3 — C Offering and transactional costs — 1 D (Gain) loss on divest
Slide 12: Adjusted EBIT (cont'd)
Adjusted EBIT (cont’d) A. Represents expenses and associated changes to estimates related to employee termination benefits and other employee-related costs. Employee termination benefits are associated with Axalta Way initiatives. These amounts are not considered indicative of our ongoing operating
Slide 13: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in millions, except per share data) Q3 2019 Q3 2018 Net Income (loss) $ 66 $ (12) Less: Net income attributable to noncontrolling interests 1 2 Net income (loss) attributable to controlling interests 65 (13) A Termination benefits and other employee related cost
Slide 14: Adjusted Net Income Reconciliation (cont'd)
Adjusted Net Income Reconciliation (cont’d) (1) For the three months ended September 30, 2018, the diluted weighted average shares outstanding represents the diluted share count if the period had been in a net income position, compared to 239 million diluted shares reported. A. Represents expenses a
Slide 15: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ in millions) Q3 2019 Q2 2019 Q1 2019 Q3 2018 Q2 2018 Q1 2018 Cash provided by (used in) operating activities $ 221 $ 127 $ (58) $ 125 $ 142 $ (21) Purchase of property, plant and equipment (27) (27) (21) (35) (35) (40) Interest proceeds on swaps designated as net inv
Slide 16: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation LTM ($ in millions) 9/30/2019 Q3 2019 Q2 2019 Q1 2019 Q3 2018 Q2 2018 Q1 2018 FY 2018 Net income (loss) $ 287 $ 66 $ 100 $ 44 $ (12) $ 77 $ 71 $ 213 Interest expense, net 164 40 41 41 40 39 39 160 Provision for income taxes 56 18 18 14 14 22 12 54 Depreciation and amor
Slide 17: Adjusted EBITDA Reconciliation (cont'd)
Adjusted EBITDA Reconciliation (cont’d) A. Represents expenses associated with the restructuring and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance. B. Represents expenses and associated changes to estimates related to employee termination b
Slide 18: Thank you
Thank you Investor Relations Contact: Chris Mecray Christopher.Mecray@axalta.com 215-255-7970
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