Slide 1: Q3 2020 Financial Results
Q3 2020 Financial Results October 21, 2020
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 regarding Axalta and its subsidiaries including our outlook, which includes net sales growth, currency effects, acquisition or divestment impacts
Slide 3: Introduction and Q3 Financial Highlights
Introduction and Q3 Financial Highlights Third Quarter 2020 Highlights ▪ Record adjusted operating earnings with broad demand recovery ▪ Sequential recovery from all end-markets; Q3 2020 net sales 57.3% higher than Q2 2020 ▪ Income from operations of $142 million versus $123 million in Q3 2019 ▪ Rec
Slide 4: Q3 Consolidated Results
Q3 Consolidated Results Financial Performance Commentary ($ in millions, except Q3 % Change Net sales showed continued recovery per share data) 2020 2019 Incl. F/X Excl. F/X Performance 683 724 (5.7)% (6.8)% across all end markets during Q3 Transportation 344 383 (10.2)% (8.6)% ▪ Q3 saw substantial
Slide 5: Q3 Performance Coatings Results
Q3 Performance Coatings Results Financial Performance Commentary Q3 % Change Ongoing COVID-19 impact on net sales ($ in millions) 2020 2019 Incl. F/X Excl. F/X but recovery continued through Q3 Refinish 402 442 (9.0)% (10.0)% ▪ Volume declines moderated through Q3 Industrial 281 282 (0.4)% (1.8)% as
Slide 6: Performance Demand Environment
Performance Demand Environment Refinish ▪ Refinish sales continued to improve through Q3 aligned with overall global traffic recovery ▪ Traffic indicators improving: – U.S. miles driven declined 12.3% YoY in August versus down 14.5% in June; U.S. gas consumption was down ~10% at quarter end; Axalta
Slide 7: Q3 Transportation Coatings Results
Q3 Transportation Coatings Results Financial Performance Commentary Q3 % Change Strong improvement from Q2 2020 net ($ in millions) 2020 2019 Incl. F/X Excl. F/X sales led by LV production recovery and Light Vehicle 276 296 (6.6)% (5.0)% including better than expected CV Commercial Vehicle 68 88 (22
Slide 8: Transportation Demand Environment
Transportation Demand Environment Light Vehicle ▪ LV net sales recovery continued during Q3 with production in North America and China most robust ▪ North America net sales increased in Q3 as production recovery exceeded expectations, including curtailed August maintenance shut downs ▪ Global LV pro
Slide 9: Debt and Liquidity Summary
Debt and Liquidity Summary Capitalization Comments ($ in millions) Interest @ 9/30/2020 Maturity ▪ Over ~$1.7 billion in liquidity at September 30 Cash and Cash Equivalents $ 1,341 ▪ Net leverage improved to 3.7x in Q3 from Q2 Debt: 2020 of 4.0x with increased cash and cash Revolver ($400 million ca
Slide 10: Financial Guidance Update
Financial Guidance Update Full Year 2020 Guidance: ▪ Net Sales: Expected to be down ~18% compared to FY 2019, including -2% FX and M&A impact ▪ Q4 Net Sales: Expected to be down ~6-8% compared to Q4 2019 ▪ Adjusted EBIT: $495-515 million ▪ Adjusted Diluted EPS: $1.15-1.20 ▪ Interest Expense: ~$155 m
Slide 11: Appendix
A AXALTA Appendix AXALTA COATING SYSTEMS
Slide 12: Full Year 2020 Assumptions
Full Year 2020 Assumptions Macroeconomic Assumptions Currency Assumptions ▪ Global GDP decline of 2020 2019 USD % Impact approximately ~(4.5%) 2019 Average Average Currency % Axalta of FX Rate Rate Rate Net Sales Change Assumption ▪ Global industrial production decline of approximately US$ per Euro
Slide 13: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation ($ in millions) Q3 2020 Q3 2019 Income from operations $ 142 $ 123 Other expense (income), net 2 (2) Total $ 139 $ 125 A Debt extinguishment and refinancing related costs — — B Termination benefits and other employee related costs 36 29 C Strategic review and retention c
Slide 14: 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 15: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in millions, except per share data) Q3 2020 Q3 2019 Net income $ 83 $ 66 Less: Net (loss) income attributable to noncontrolling interests — 1 Net income attributable to controlling interests 83 66 A Debt extinguishment and refinancing related costs — — B Termina
Slide 16: 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 17: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ in millions) Q3 2020 Q2 2020 Q1 2020 YTD 2020 Q3 2019 Q2 2019 Q1 2019 YTD 2019 Cash provided by (used for) operating activities $ 233 $ (2) $ (1) $ 231 $ 221 $ 127 $ (58) $ 290 Purchase of property, plant and equipment (14) $ (20) (23) (56) (27) (27) (21) (74) Intere
Slide 18: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation LTM ($ in millions) 9/30/2020 Q3 2020 Q2 2020 Q1 2020 Q3 2019 Q2 2019 Q1 2019 FY 2019 Net income $ 94 $ 83 $ (83) $ 52 $ 66 $ 100 $ 44 $ 253 Interest expense, net 153 40 36 37 40 41 41 163 Provision (benefit) for income taxes 4 17 (15) (25) 18 18 14 77 Depreciation and
Slide 19: 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 20: Thank you
Thank you Investor Relations Contact: Chris Mecray Christopher.Mecray@axalta.com 215-255-7970