Axalta Coating Systems Ltd. · NYSE:AXTA
Axalta Coating Systems — Q2 2021 Earnings Presentation
23 slides from Axalta Coating Systems's earnings presentation, Jul 26, 2021
Slide 1: Q2 2021 Financial Results
Q2 2021 Financial Results July 26, 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 Q2 Financial Highlights
Introduction and Q2 Financial Highlights Second Quarter 2021 Highlights ▪ Q2 2021 net sales increased 72.6% year-over-year to $1,127 million with substantial contributions from all end-markets versus last year's COVID-19-impacted results – Performance Coatings price-mix increased 14.0% including ~20
Slide 4: Business Conditions and Cost Actions
Business Conditions and Cost Actions Q2 Business Conditions Summary ▪ Continued recovery in Refinish with net sales 3.5% higher than Q2 2019 levels, though volume remains below 2019 levels by mid-single digits with global recovery from pandemic mobility curtailments ongoing ▪ Fourth consecutive quar
Slide 5: U-POL Acquisition Offers Strong Strategic Fit
U-POL Acquisition Offers Strong Strategic Fit ▪ Leading manufacturer of automotive refinish products and Net Sales Adj. EBITDA aftermarket protective coatings applications; UK-based 2021E: ~$145M 2021E: ~$38M ▪ Serves growing Mainstream / Economy and DIY segments with global customer base Adj. EBITD
Slide 6: Q2 2021 ESG Highlights
Q2 2021 ESG Highlights Environment Social Governance ▪ Jiading China coatings plant ▪ Continued strong global safety ▪ Tyrone Michael Jordan joins expansion completed to expand performance – YTD 0.15 total Axalta Board of Directors, sustainable waterborne coatings recordable incident rate bringing d
Slide 7: Q2 Consolidated Results
Q2 Consolidated Results Financial Performance Commentary ($ in millions, except Q2 % Change per share data) 2021 2020 Incl. F/X Excl. F/X Net sales increased YOY from continued volume Performance Coatings 806 482 67.1 % 61.6 % recovery, price-mix, and M&A Mobility Coatings 321 171 88.2 % 83.3 % ▪ Q2
Slide 8: Q2 Performance Coatings Results
Q2 Performance Coatings Results Financial Performance Commentary Q2 % Change ($ in millions) 2021 2020 Incl. F/X Excl. F/X Net sales growth driven by Refinish recovery, continued Industrial demand strength, and solid Refinish 463 262 76.8 % 70.4 % segment price movement Industrial 343 220 55.6 % 51.
Slide 9: Performance Coatings Demand Environment
Performance Coatings Demand Environment Refinish ▪ The refinish market showed sequential improvement in Q2 with traffic indicators improving across all regions – U.S. miles driven have returned to normal levels in Q2 with July expected to be ~5% above 2019 levels; body shop activity down ~10-12% ver
Slide 10: Q2 Mobility Coatings Results
Q2 Mobility Coatings Results Financial Performance Commentary Q2 % Change ($ in millions) 2021 2020 Incl. F/X Excl. F/X Net sales growth almost double from prior year lows, though hindered by customer supply constraints, Light Vehicle 244 126 93.1 % 87.7 % largely in semiconductors Commercial Vehicl
Slide 11: Mobility Coatings Demand Environment
Mobility Coatings Demand Environment Light Vehicle ▪ LV market recovery continues to be hindered by the semiconductor shortage; estimated impact of ~7 million deferred builds in 2021 ▪ Global LV production increased 48.6% YOY in Q2; forecasts call for a (4.5%) decline for Q3 and a 6.9% increase for
Slide 12: Debt and Liquidity Summary
Debt and Liquidity Summary Capitalization Commentary ($ in millions) Interest @ 6/30/2021 Maturity ▪ Net leverage of 2.6x at June 30, 2021 improved Cash and Cash Equivalents $ 1,231 from 3.2x at March 31, 2021 Debt: Revolver ($550 million capacity) (1) Variable — 2026(2) ▪ Over $1.7 billion in avail
Slide 13: Financial Guidance Update
Financial Guidance Update Full Year 2021 Guidance: Key Assumptions ▪ Net Sales: ~+20-22%, including ~3% FX and ~1% ▪ Raw material inflation expected at mid-teens growth M&A benefit YoY versus prior high single digit growth expectation; Q3 inflation at ~23% growth YoY ▪ Adjusted EBIT: $685-725 millio
Slide 14: Appendix
Appendix AXALTA COATING SYSTEMS
Slide 15: Full Year 2021 Assumptions
Full Year 2021 Assumptions Macroeconomic Assumptions Currency Assumptions ▪ Global GDP growth of ~5.0% for Q3 2021 and ~5.8% for FY 2021 2021 Average 2020 % Axalta 2020 Average USD % Impact of Currency Rate ▪ Global industrial production growth of ~6.3% Net Sales Rate FX Rate Change Assumption for Q
Slide 16: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation ($ in millions) Q2 2021 Q2 2020 Income (loss) from operations $ 190.4 $ (64.5) Other income, net (8.1) (2.2) Total $ 198.5 $ (62.3) A Debt extinguishment and refinancing related costs 0.2 — B Termination benefits and other employee related costs 22.7 15.2 C Strategic rev
Slide 17: 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 18: Adjusted Net Income (Loss) Reconciliation
Adjusted Net Income (Loss) Reconciliation ($ in millions, except per share data) Q2 2021 Q2 2020 Net income (loss) $ 126.4 $ (83.2) Less: Net income attributable to noncontrolling interests — (0.4) Net income (loss) attributable to controlling interests $ 126.4 $ (82.8) A Debt extinguishment and ref
Slide 19: Adjusted Net Income (Loss) Reconciliation (cont’d)
Adjusted Net Income (Loss) 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 c
Slide 20: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ in millions) Q2 2021 Q1 2021 YTD 2021 Q2 2020 Q1 2020 YTD 2020 Cash provided by (used for) operating activities $ 107.5 $ 39.6 $ 147.1 $ (1.7) $ (0.8) $ (2.5) Purchase of property, plant and equipment (28.5) (31.8) (60.3) (19.7) (22.7) $ (42.4) Interest proceeds on s
Slide 21: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation LTM ($ in millions) 6/30/2021 Q2 2021 Q1 2021 Q2 2020 Q1 2020 FY 2020 Net income (loss) $ 294.9 $ 126.4 $ 15.7 $ (83.2) $ 52.4 $ 122.0 Interest expense, net 144.2 33.4 33.5 36.1 36.5 149.9 Provision (benefit) for income taxes 82.5 38.7 3.8 (15.2) (24.6) 0.2 Depreciatio
Slide 22: 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 23: Thank you
Thank you Investor Relations Contact: Chris Mecray Christopher.Mecray@axalta.com 215-255-7970 23
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