Axalta Coating Systems Ltd. · NYSE:AXTA
Axalta Coating Systems — Q2 2022 Earnings Presentation
23 slides from Axalta Coating Systems's earnings presentation, Jul 26, 2022
Slide 1: Q2 2022 Financial Results
Exhibit 99.2 Q2 2022 Financial Results July 26, 2022 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 and/
Slide 3: Q2 2022 Key Messages
Q2 2022 Key Messages Adjusted earnings above midpoint of expectations with 15% ex-FX net sales growth despite 1 Russia-Ukraine impact, extended COVID-19 lockdowns in China, and supply constraints Strong volume growth across three of four end-markets; significant above-market performance 2 in Light V
Slide 4: Q2 Volume Trends
Q2 Volume Trends PERFORMANCE COATINGS Europe, AP ex. Greater Americas Middle East Greater China(3) Refinish & Africa China(3) Industrial REFINISH 7.9% (1.5)% (9.8)% 9.1% $3.2B in Net Sales(1) INDUSTRIAL 7.5% (10.7)% (35.9)% 10.3% MOBILITY COATINGS LIGHT VEHICLE 12.4% (0.4)% 15.5% 22.0% COMMERCIAL VE
Slide 5: Refinish Business Review
Refinish Business Review MARKET RECOVERY AND SUSTAINED SHARE GAINS TO DRIVE CONTINUED GROWTH ▪ Successfully pricing in real-time to offset impacts of raw material and logistics inflation ▪ U-POL acquisition provided largest profit contribution to date since acquisition closed ▪ Continuing to drive s
Slide 6: Industrial Business Review
Industrial Business Review EXPANDING SALES PIPELINE ACROSS DIVERSIFIED GROWTH PLATFORM ▪ Achieved 15% YOY price-mix improvement in Q2 2022; prioritizing pricing as profitability remains well below normal levels following significant variable cost inflation ▪ Building and Construction demand in the U
Slide 7: Mobility Business Review
Mobility Business Review PENT UP DEMAND TO SUPPORT MARKET RECOVERY AS PRODUCTION CONSTRAINTS ALLEVIATE LIGHT VEHICLE 2016-2025 GLOBAL LV BUILDS(1) (Builds in millions) ▪ Q2 volume growth of 9% surpassed global 95 production, which was flat versus Q2 2022 90 ▪ Q2 price-mix growth stepped-up to 11% YO
Slide 8: Prioritizing Margin Recovery
Prioritizing Margin Recovery ($ in millions) Cumulative Price-Cost(1) Accelerating Price to Offset Cost Price Cost ▪ Pricing momentum continued with 2% improvement from Q1 2022 resulting in record year-over-year Performance price-mix growth of 10% Coatings ▪ Strong Performance Coatings pricing offse
Slide 9: Q2 Consolidated Results
Q2 Consolidated Results Financial Performance Commentary ($ in millions, except Q2 % Change Strong Net Sales growth despite FX headwinds driven per share data) 2022 2021 Incl. F/X Excl. F/X Performance Coatings 856 806 6.2 % 11.8 % by pricing actions, Mobility volumes, and M&A Mobility Coatings 379
Slide 10: Q2 Performance Coatings Results
Q2 Performance Coatings Results Financial Performance Commentary Q2 % Change ($ in millions) 2022 2021 Incl. F/X Excl. F/X Net sales growth driven by pricing actions and M&A contribution, offset partly by FX headwinds Refinish 491 463 6.0 % 12.1 % ▪ Price-mix momentum continues with 15% YOY growth I
Slide 11: Q2 Mobility Coatings Results
Q2 Mobility Coatings Results Financial Performance Commentary Q2 % Change ($ in millions) 2022 2021 Incl. F/X Excl. F/X Strong net sales growth driven by pricing actions and volume growth across both end-markets as share Light Vehicle 283 244 16.0 % 19.6 % gains come to fruition Commercial Vehicle 9
Slide 12: Debt and Liquidity Summary
Debt and Liquidity Summary Capitalization Commentary ($ in millions) Interest @ 6/30/2022 Maturity ▪ Over $1.0 billion in available liquidity at June 30, 2022: Cash and Cash Equivalents $ 500 Revolver ($550 million capacity) Variable — 2026 – $500 million of cash and cash equivalents First Lien Term
Slide 13: Financial Guidance Update
Financial Guidance Update Q3 2022 Guidance Perspective on Market Dynamics ▪ Net Sales: ~+15-17% including: ▪ Ongoing COVID-19 recovery expected to support – Anticipate high single-digit growth from price and stronger volumes in a durable Refinish market volume ▪ Pent-up demand projected to drive res
Slide 14: Appendix
Appendix AXALTA COATING SYSTEMS
Slide 15: Q3 and Full Year 2022 Assumptions
Q3 and Full Year 2022 Assumptions Macroeconomic Assumptions Q3 2022 Currency Assumptions ▪ Global GDP growth of ~2.9% for Q3 2022 and Q3 2022 Q3 2021 % Q2 2022 USD % Impact ~3.1% for FY 2022 Currency Axalta Net Q3 2021 Average Average of YOY FX Average Rate Rate Sales Rate Rate Change ▪ Global indus
Slide 16: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation ($ in millions) Q2 2022 Q2 2021 Income from operations $ 103.6 $ 190.4 Other expense (income), net 7.2 (8.1) Total $ 96.4 $ 198.5 A Termination benefits and other employee related costs 2.7 22.7 B Strategic review and retention costs — 2.2 C Acquisition and divestiture-r
Slide 17: Adjusted EBIT Reconciliation (cont'd)
Adjusted EBIT Reconciliation (cont’d) A Represents expenses and associated changes to estimates related to employee termination benefits and other employee-related costs. Employee termination benefits are primarily associated with Axalta Way initiatives. These amounts are not considered indicative o
Slide 18: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation ($ in millions, except per share data) Q2 2022 Q2 2021 Net income $ 44.1 $ 126.4 Less: Net income attributable to noncontrolling interests — — Net income attributable to controlling interests $ 44.1 $ 126.4 A Termination benefits and other employee related costs 2.
Slide 19: Adjusted Net Income Reconciliation (cont'd)
Adjusted Net Income Reconciliation (cont’d) A Represents expenses and associated changes to estimates related to employee termination benefits and other employee-related costs. Employee termination benefits are primarily associated with Axalta Way initiatives. These amounts are not considered indica
Slide 20: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation ($ in millions) Q2 2022 Q1 2022 YTD 2022 Q2 2021 Q1 2021 YTD 2021 Cash provided by (used for) operating activities $ 12.2 $ (43.9) $ (31.7) $ 107.5 $ 39.6 $ 147.1 Purchase of property, plant and equipment (29.5) (42.5) (72.0) (28.5) (31.8) (60.3) Interest proceeds on sw
Slide 21: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation LTM ($ in millions) 6/30/2022 Q2 2022 Q1 2022 Q2 2021 Q1 2021 FY 2021 Net income $ 207.3 $ 44.1 $ 40.9 $ 126.4 $ 15.7 $ 264.4 Interest expense, net 133.4 33.5 32.6 33.4 33.5 134.2 Provision for income taxes 63.4 18.8 11.0 38.7 3.8 76.1 Depreciation and amortization 316
Slide 22: Adjusted EBITDA Reconciliation (cont'd)
Adjusted EBITDA Reconciliation (cont’d) A Represents expenses and associated changes to estimates related to employee termination benefits and other employee-related costs. Employee termination benefits are primarily associated with Axalta Way initiatives. These amounts are not considered indicative
Slide 23: Thank you
Thank you Investor Relations Contact: Chris Evans Christopher.Evans@axalta.com 484-724-4099 23
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