Slide 1: Q2 2020 Financial Results
Q2 2020 Financial Results July 29, 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 Q2 Financial Highlights
Introduction and Q2 Financial Highlights Second Quarter 2020 Highlights ▪ Net sales down 39.7% ex-FX and M&A impacts ▪ Notable net sales recovery in sequential months during Q2; June net sales 82% higher than April 2020 ▪ Loss from operations of $65 million versus income of $158 million in Q2 2019 ▪
Slide 4: Q2 Consolidated Results
Q2 Consolidated Results Financial Performance Commentary ($ in millions, except Q2 % Change Net sales significantly impacted by per share data) 2020 2019 Incl. F/X Excl. F/X COVID-19 during Q2 Performance 482 757 (36.3)% (33.9)% Transportation 171 401 (57.4)% (53.7)% ▪ Volume reductions globally fro
Slide 5: Q2 Performance Coatings Results
Q2 Performance Coatings Results Financial Performance Commentary Q2 % Change Substantial COVID-19 impact on ($ in millions) 2020 2019 Incl. F/X Excl. F/X volumes, but improvement in June Refinish 262 447 (41.4)% (38.7)% ▪ Volume down globally due to lower Industrial 220 309 (28.8)% (27.1)% vehicle m
Slide 6: COVID-19 Impact: Performance Demand Environment
COVID-19 Impact: Performance Demand Environment YOY Monthly Net Sales Trends(1) Performance Market Commentary Refinish 10% 0% ▪ Refinish sales bottomed in April-May with recovery -10% beginning in June -20% ▪ Orders in June indicated low inventory on hand for many -30% distributors -40% -50% ▪ Traff
Slide 7: Q2 Transportation Coatings Results
Q2 Transportation Coatings Results Financial Performance Commentary Q2 % Change COVID-19 customer production ($ in millions) 2020 2019 Incl. F/X Excl. F/X shutdowns drove considerable sales Light Vehicle 126 306 (58.7)% (54.9)% impact Commercial Vehicle 44 95 (53.2)% (50.1)% ▪ Volumes lower from COV
Slide 8: COVID-19 Impact: Transportation Demand Environment
COVID-19 Impact: Transportation Demand Environment YOY Monthly Net Sales Trends(1) Transportation Market Commentary Light Vehicle 0% -20% ▪ Light Vehicle net sales tracking customer production by served geography; recovery continues solidly post April -40% shutdowns -60% ▪ China net sales declined 1
Slide 9: Debt and Liquidity Summary
Debt and Liquidity Summary Capitalization Comments ($ in millions) Interest @ 6/30/2020 Maturity ▪ June issuance of $500 million in aggregate Cash and Cash Equivalents $ 1,124 principal amount of 4.750% Senior Notes Debt: ▪ ~$1.5 billion in liquidity at the end of Q2 (1) Revolver ($400 million capac
Slide 10: COVID-19 Impact and Response
COVID-19 Impact and Response Mitigation Actions ▪ Exceeded expected savings and cash flow from actions during Q2 ▪ Expect to deliver over $130 million in temporary cost actions in 2020; achieved $75 million savings in Q2; Q3 savings expected to be greater than Q4 ▪ Expect to deliver over $140 millio
Slide 11: Financial Guidance Update
Financial Guidance Update Given limited current forecast visibility, we are not offering full year guidance, other than those discrete elements below: ▪ Q3 net sales: Expected to be down ~15-20% compared to Q3 2019 including -1% FX impact ▪ FY diluted shares: ~236 million ▪ FY capex: ~$80 million (5
Slide 12: Appendix
A AXALTA Appendix AXALTA COATING SYSTEMS
Slide 13: Full Year 2020 Assumptions
Full Year 2020 Assumptions Macroeconomic Assumptions Currency Assumptions ▪ Global GDP decline of 2020 2019 USD % Impact approximately ~(5.5%) 2019 Average Average Currency % Axalta of FX Rate Rate Rate Net Sales Change Assumption ▪ Global industrial production decline of approximately ~ US$ per Eur
Slide 14: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation ($ in millions) Q2 2020 Q2 2019 (Loss) income from operations $ (65) $ 158 Other income, net (2) (1) Total $ (62) $ 159 A Debt extinguishment and refinancing related costs — — B Termination benefits and other employee related costs 15 3 C Strategic review and retention c
Slide 15: 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 16: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in millions, except per share data) Q2 2020 Q2 2019 Net (loss) income $ (83) $ 100 Less: Net (loss) income attributable to noncontrolling interests — 2 Net (loss) income attributable to controlling interests (83) 98 A Debt extinguishment and refinancing related
Slide 17: 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 18: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ in millions) Q2 2020 Q1 2020 YTD 2020 Q2 2019 Q1 2019 YTD 2019 Cash (used for) provided by operating activities $ (2) $ (1) $ (3) $ 127 $ (58) $ 69 Purchase of property, plant and equipment (20) (23) (42) (27) (21) (47) Interest proceeds on swaps designated as net in
Slide 19: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation LTM ($ in millions) 6/30/2020 Q2 2020 Q1 2020 Q2 2019 Q1 2019 FY 2019 Net income (loss) $ 78 $ (83) $ 52 $ 100 $ 44 $ 253 Interest expense, net 153 36 37 41 41 163 (Benefit) provision for income taxes 6 (15) (25) 18 14 77 Depreciation and amortization 336 77 87 89 92 3
Slide 20: 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 21: Thank you
Thank you Investor Relations Contact: Chris Mecray Christopher.Mecray@axalta.com 215-255-7970