Axalta Coating Systems Ltd. · NYSE:AXTA
Axalta Coating Systems — Q2 2024 Earnings Presentation
22 slides from Axalta Coating Systems's earnings presentation, Aug 1, 2024
Slide 1: Axalta Coating Systems Q2 2024 Financial Results
August 1, 2024 Axalta Coating Systems Q2 2024 Financial Results
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, but not limited
Slide 3: Second Quarter 2024 Key Highlights
Second Quarter 2024 Key Highlights ■ Record quarterly net sales and Adjusted EBITDA $1.35B $291M 21.5% Net Sales Adjusted EBITDA Adjusted EBITDA Margin ■ 4% net sales growth with positive contributions from all end markets +4% YoY +28% YoY +400 bps YoY ■ Adjusted EBITDA margin improved by 400 bps to
Slide 4: Second Quarter 2024 Business Update
Second Quarter 2024 Business Update Q2 End Market Environment Completed Acquisition of CoverFlexx in July Net Sales YoY Refinish Growth through execution of strategic priorities 5% Industrial Accelerating margin improvement 2% Light Vehicle Volumes outpaced build rates in all regions 7% ■ CoverFlexx
Slide 5: Accelerating Performance
Accelerating Performance 2026 Targets GROWTH at attractive margins >$500M Net Sales1 MARGIN2 ENHANCEMENT through business simplification and operational excellence >21% Target Margin NET LEVERAGE target range 2.0x to 2.5x INVESTMENT DECISIONS deliver strong Return on Invested Capital ~15% VALUE CREA
Slide 6: Second Quarter 2024 Consolidated Results
Second Quarter 2024 Consolidated Results Financial Results Net Sales Variance ($ in millions) 5.1% 0.1% (0.8%) 4.4% ($ in millions, except per share data) Q2 2024 Q2 2023 % Change Net Sales 1,351 1,294 4% Net Income 113 61 85% Adjusted EBITDA 291 227 28% % margin 21.5% 17.5% 400 bps ■ Record quarter
Slide 7: Second Quarter 2024 Performance Coatings Results
Second Quarter 2024 Performance Coatings Results Net Sales Net Sales Variance ($ in millions) Q2 2024 Q2 2023 % Change ($ in millions) 4.0% 0.3% (0.7%) 3.6% Refinish 546 520 5% Industrial 341 336 2% Net Sales 887 856 4% Organic Net Sales Adjusted EBITDA Refinish: +LSD% ($ in millions) +$42M Industri
Slide 8: Second Quarter 2024 Mobility Coatings Results
Second Quarter 2024 Mobility Coatings Results Net Sales Net Sales Variance ($ in millions) Q2 2024 Q2 2023 % Change ($ in millions) 7.2% (0.1%) (1.0%) 6.1% Light Vehicle 354 330 7% Commercial Vehicle 110 108 3% Net Sales 464 438 6% Organic Net Sales Adjusted EBITDA LV: +HSD% ($ in millions) +$22M CV
Slide 9: Focused Capital Allocation Drives Shareholder Value
Focused Capital Allocation Drives Shareholder Value 2024-2026 2024 YTD Highlights Total Net Leverage Progression Capital Allocation Priorities Net Leverage at Record Low ■ Repriced term loan Debt Reduction Net Leverage target of 2.0x-2.5x ■ $75M debt prepayment Capital Expenditures ■ $50M share repu
Slide 10: Raising Full Year 2024 Earnings Guidance
Raising Full Year 2024 Earnings Guidance Net Sales Adjusted EBITDA (% Change YoY) ($ in millions) Q3 2024 FY 2024 Q3 2024 FY 2024 Flat to +LSD% +LSD% ~$275 ~$1,090 - $1,100 Prior Guidance: $1,050 - $1,080 Adjusted Diluted EPS Free Cash Flow ($ Per Share) ($ in millions) Q3 2024 FY 2024 FY 2024 ~$0.5
Slide 11: Appendix
Appendix Appendix Continued To Srengthen Balance Sheet
Slide 12: Full Year 2024 Modeling Assumptions
Full Year 2024 Modeling Assumptions Axalta does not provide a reconciliation for non-GAAP estimates for tax rate, as adjusted, on a forward-looking basis because the information necessary to calculate a meaningful or accurate estimation of reconciling items is not available without unreasonable effo
Slide 13: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation LTM ($ in millions) 6/30/2024 Q2 2024 Q1 2024 Q2 2023 Q1 2023 FY 2023 Net income $ 299 $ 113 $ 39 $ 61 $ 61 $ 269 Interest expense, net 214 50 54 55 48 213 Provision for income taxes 121 43 20 13 15 86 Depreciation and amortization 276 68 68 66 70 276 EBITDA $ 910 $ 27
Slide 14: 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 15: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation (in millions, except per share data) Q2 2024 Q2 2023 Net income 113 61 Less: Net income attributable to noncontrolling interests 1 — Net income attributable to common shareholders $ 112 $ 61 A Debt extinguishment and refinancing-related costs — 1 B Termination bene
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) Q2 2024 Q1 2024 YTD 2024 Q2 2023 Q1 2023 YTD 2023 Cash provided by (used for) operating activities $ 114 $ 34 $ 148 $ 131 $ (52) $ 79 Purchase of property, plant and equipment (23) (22) (45) (32) (42) (74) Interest proceeds on swaps designated as net inv
Slide 18: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation LTM ($ in millions) 6/30/2024 Q2 2024 Q1 2024 Q2 2023 Q1 2023 FY 2023 Income from operations $ 651 $ 205 $ 121 $ 138 $ 125 $ 588 Other expense (income), net 17 (1) 8 9 1 20 Total $ 634 $ 206 $ 113 $ 129 $ 124 $ 568 A Debt extinguishment and refinancing-related costs 10 —
Slide 19: 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 20: Return on Invested Capital
Return on Invested Capital ($ in millions) LTM Q2 2024 2023 Adjusted EBIT 783 674 Adjusted Tax Rate (1) 24.9 % 24.1 % NOPAT (2) 588 512 Total debt, opening balance 3,568 3,704 Axalta’s shareholders’ equity, opening balance 1,644 1,454 Less: Cash and Cash Equivalents, opening balance 518 645 Invested
Slide 21: Capitalization Table
Capitalization Table ($ in millions) Interest @ 6/30/2024 Maturity Cash and Cash Equivalents $ 840 Debt: Revolver ($800 million capacity) Variable 185 2029 First Lien Term Loan (USD) Variable 1,685 2029 Total Senior Secured Debt $ 1,870 Senior Unsecured Notes (USD) Fixed 496 2027 Senior Unsecured No
Slide 22: Thank You
Thank You Investor Relations Contact: Colleen Lubic Colleen.Lubic@axalta.com 610-999-9407
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