Slide 1: Investor Presentation
Investor Presentation November 8, 2021 1
Slide 2: Legal Notice
Legal Notice Forward-Looking Statements This presentation 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 2021 outlook, which includes net sales growth, currency effect
Slide 3: Contents
Contents Overview of Axalta Q3 2021 Earnings Financial Forecast through 2024 Appendix 3
Slide 4: Strategic and Complementary Businesses
Strategic and Complementary Businesses 2021E NET SALES ~$4.4B BY GEOGRAPHY Latin America Refinish Light Vehicle 9% North 40% 39% America 23% Asia Pacific 15% 7% Commercial 30% Vehicle 37% EMEA Industrial Performance Coatings Mobility Coatings Refinish Industrial Light Vehicle Commercial Vehicle ▪ In
Slide 5: Well-Established Coatings Industry Innovator
Well-Established Coatings Industry Innovator KEY STATISTICS 50+ BRANDS 150+ 140+ Years in Coatings Countries 4% 32 R&D and Technical Global Laboratories Service Investment 50+ ~13,000 New Product Platforms Team Members per Year ~30M 47 Vehicles Coated per Year Manufacturing Sites 5
Slide 6: Well-Positioned for Favorable Macro Trends and Drivers
W e l l - P o s i t i o n e d f o r F a v o r a b l e M a c r o Tr e n d s a n d D r i v e r s Near-Term Trends 2021E Net Sales Total Addressable Market Position1 Market Benefits from ongoing traffic recovery REFINISH accelerated by the COVID-19 vaccination rollout, creating a 1–2-year demand tailwi
Slide 7: #1 Market Position in an Attractive Industry
#1 Market Position in an Attractive Industry Refinish Market Established & Emerging Markets 130bps market share expansion over the past three years Other Peers | 20% Emerging 26% Markets AXTA 23% MARKET SHARE Peer D | 10% $6.8B $1.8B Addressable Net Sales Market1 Well-established 77% Markets Pee
Slide 8: Industrial Coatings Snapshot
Industrial Coatings Snapshot General Industrial Building Products Energy Solutions ▪ Appliances ▪ Doors, Frames, and Trim ▪ Distribution Transformers 14,000+ ▪ Architectural Extrusions ▪ Furniture ▪ Electric Vehicles Customers ▪ Coil Coatings ▪ Kitchen Cabinets ▪ Energy Storage ▪ Heavy Machinery ▪ R
Slide 9: Mobility At A Glance
Mobility At A Glance 3,500 20 4 #1 #2 Employees Manufacturing Technology / in Truck & Bus in Light Vehicle Facilities R&D Centers 2021E Net Sales by Segment 2021E Net Sales by Region APAC Commercial Vehicle 16% 23% $1.3B $1.3B 56% EMEA 28% Americas 77% Light Vehicle 9
Slide 10: Shareholder Value Creation Algorithm
S h a r e h o l d e r Va l u e C r e a t i o n A l g o r i t h m Strategic Imperatives Advance Grow Above Innovation Market CREATING A VALUE COMPOUNDER Inspire Drive People Execution 10
Slide 11: Creating a Value Compounder: Advance Innovation
C r e a t i n g a Va l u e C o m p o u n d e r PRODUCT ▪ Rapid new product development and commercialization Advance • Color aesthetics, sustainability, productivity and performance Innovation SERVICE ▪ Expand service offerings to enhance value to customers • Innovative service models via digitizati
Slide 12: Creating a Value Compounder: Grow Above Market
C r e a t i n g a Va l u e C o m p o u n d e r GEOGRAPHIC EXPANSION ▪ Accelerate growth in underpenetrated markets Grow Above (e.g., China / Asia Pacific) Market DIVERSIFICATION ▪ Grow current business verticals and add new industrial end markets CUSTOMER REACH ▪ Expand market access via distributio
Slide 13: Creating a Value Compounder: Drive Execution
C r e a t i n g a Va l u e C o m p o u n d e r METRICS DRIVEN ▪ Safety, quality, service, cost, people Drive development Execution OPERATIONAL AND COMMERCIAL EXCELLENCE ▪ Drive productivity; Axalta Operational Excellence roll out ▪ Metrics driven accountability GLOBAL PRODUCTIVITY ▪ Axalta Way produ
Slide 14: Creating a Value Compounder: Inspire People
C r e a t i n g a Va l u e C o m p o u n d e r TALENT DEVELOPMENT ▪ Refreshed leadership team and added new board members with diverse, relevant skill sets Inspire People CULTURE ▪ Performance-driven culture that fosters empowerment, innovation and calculated risk taking ACCOUNTABILITY ▪ Driving own
Slide 15: Global and Diverse Operating Footprint
Global and Diverse Operating Footprint Wuppertal Mt Clemens Front Royal Jiading Largest Manufacturing Sites Manufacturing Sites Current State Opportunities ▪ 30 liquid paint manufacturing sites ▪ Deepen footprint in Asia ▪ 8 resin manufacturing sites (1 ▪ Integrate and simplify acquired networks sta
Slide 16: Active Pipeline with Proactive Approach to Strategic M&A
Active Pipeline with Proactive Approach to Strategic M&A Track Record 25 >$780M >$160M Acquisitions since Annual Revenues Incremental EBITDA1 20151 Attractive Markets Technology / Capability Acquisition Benefits: Strategic ▪ Growth and cost synergies Bolt-ons Systematic ▪ Globalization of regional p
Slide 17: World-Class Technology Organization
W o r l d - C l a s s Te c h n o l o g y O r g a n i z a t i o n Global Infrastructure and Coatings Expertise Wuppertal Detroit Philadelphia Shanghai Global Innovation Center Regional Technology Center Regional Laboratory Global technology community of Focused teams for product Focus on color techno
Slide 18: Product Innovation Drives Organic Growth
Product Innovation Drives Organic Growth > 50 New Platform Innovations Per Year 2021 Technology Investment >500/yr Product Modifications ▪ $183M/year estimated R&D and technical services investment ▪ Investment across all business ~20,000/yr segments Service Requests ▪ Introduce over 50 new product
Slide 19: Differentiated Technology Across End-Markets
D i f f e r e n t i a t e d Te c h n o l o g y A c r o s s E n d - M a r k e t s ▪ Industry leading color capability Refinish ▪ Most productive waterborne basecoat technology ▪ Develop tailored technology for Premium, Mainstream and Economy segments ▪ Low emission electrical insulation materials for
Slide 20: Contents
Contents Overview of Axalta Q3 2021 Earnings Financial Forecast through 2024 Appendix 20
Slide 21: Q3 2021 Consolidated Results
Q3 2021 Consolidated Results Financial Performance Commentary ($ in millions, except Q3 % Change per share data) 2021 2020 Incl. F/X Excl. F/X Net sales increased from price-mix tailwinds and M&A Performance Coatings 779 683 14.1 % 12.9 % contribution; strong volume outside of Light Vehicle Mobility
Slide 22: Q3 2021 Performance Coatings Results
Q3 2021 Performance Coatings Results Financial Performance Commentary Q3 % Change ($ in millions) 2021 2020 Incl. F/X Excl. F/X Despite ongoing supply chain constraints, net sales Refinish 443 402 10.4 % 9.1 % growth driven by volume recovery, pricing realization, M&A and FX tailwinds Industrial 336
Slide 23: Q3 2021 Mobility Coatings Results
Q3 2021 Mobility Coatings Results Financial Performance Commentary Q3 % Change ($ in millions) 2021 2020 Incl. F/X Excl. F/X Net sales reduction despite pricing actions as Light Vehicle 235 276 (14.8)% (16.5)% volumes were hindered by supply shortages Commercial Vehicle 74 68 9.0 % 8.2 % ▪ Axalta vo
Slide 24: Debt and Liquidity Summary
Debt and Liquidity Summary Capitalization Commentary ($ in millions) Interest @ 9/30/2021 Maturity ▪ Net leverage of 3.5x at September 30, 2021 increased Cash and Cash Equivalents $ 628 from 2.6x at June 30, 2021, reflecting U-POL Debt: acquisition cash funding, share repurchases, and Revolver ($550
Slide 25: Full Year 2021 Guidance
F u l l Ye a r 2 0 2 1 G u i d a n c e 2021 Targets Strong Sales ▪ Includes ~2% FX and ~2% M&A benefit vs. Growth Net Sales: up ~19% 2020 Adj. EBIT / Adj. ▪ 2021 Adj. EBIT and Adj. EPS at mid-point Adj. EBIT: $645-$665M EPS up 22% and 32% respectively versus 2020 Adj. EPS: $1.70-$1.80 Robust Cash ▪
Slide 26: Resilient Financial Performance
Resilient Financial Performance Net Sales Adj. EBITDA & Margin Adj. EPS ($M) ($M) 120 0 $4,696 29% $4,482 $4,435 $1.80 $1.75 $4,377 100 0 $937 $939 $1.70 $902 $885 $885 27% $4,093 $760 $3,738 800 $864 25% $1.33 $3,968 600 22% 23% 21% 20% 20% 20% 20% 21% 400 19% 200 17% 0 15% 2016 2017 2018 2019 2020
Slide 27: Strong Free Cash Flow Generation
Strong Free Cash Flow Generation ($M) $475 500 100% $442 Key Points $423 450 90% $415 $420 400 80% ▪ Targeting FCF conversion of 45-50% $362 350 70% ▪ Robust and consistent free cash flow 58% bolstered by relatively low capital intensity 300 60% 51% 250 47% 47% 48% 50% ▪ Anticipate improving convers
Slide 28: Capital Structure and Credit Metrics Overview
Capital Structure and Credit Metrics Overview Leverage Trends1 Interest Coverage (Adj. EBITDA)2 65.0% 62.0% 60.5% 62.5% 60.7% 4.5x 55.1% 6.7x 4.0x 55.0% 48.5% 6.0x 3.5x 5.9x 5.8x 45.0% 3.6x 3.5x 5.1x 3.4x 3.3x 3.0x 5.1x 35.0% 3.0x 3.0x 2.5x 25.0% 2.0x 2016 2017 2018 2019 2020 Q3 2021 Net Debt / Tota
Slide 29: Disciplined Capital Allocation Framework
Disciplined Capital Allocation Framework Uses of Cash 2016-2020 Capital Allocation Priorities Debt ▪ CapEx Paydown ─ Maintenance CapEx of $30-50M per annum M&A 18% ─ Ongoing productivity and footprint optimization ─ S/4HANA implementation 35% ▪ M&A ─ Disciplined approach to strategic bolt-ons and Sh
Slide 30: Contents
Contents Overview of Axalta Q3 2021 Earnings Financial Outlook through 2024 Appendix 30
Slide 31: Mid-Term Portfolio Focus through 2024
M i d - Te r m P o r t f o l i o F o c u s t h r o u g h 2 0 2 4 Targeting above market organic growth and a more diversified portfolio through strategic M&A Annual Targets Growth Drivers ▪ Market recovery tailwinds with ongoing economic recovery Organic ▪ Innovation driven growth from new products
Slide 32: 4-Year Financial Outlook to 2024
4 - Ye a r F i n a n c i a l O u t l o o k t o 2 0 2 4 2024 TARGETS ▪ Ongoing market recovery and share opportunities (~45%) ▪ Increased revenue from new markets and products (~30%) 4-5% Organic Growth Net Sales ▪ Increased revenue from emerging markets (~25%) ( R ‘19-’24) ▪ M&A: strategic bolt-ons
Slide 33: Well-Positioned for Growth Given Demand through 2024
Well-Positioned for Growth Given Demand through 2024 Industry Demand Trends Net Sales Net Sales ( R ‘19-’24) ( R ‘20-’24) REFINISH Market recovery aligned with traffic normalization and $1.8B1 GDP growth; 2–year tailwind expected ~3.5% ~9.5% INDUSTRIAL Continued global industrial production recovery
Slide 34: Contents
Contents Overview of Axalta Q3 2021 Earnings Financial Forecast through 2024 Appendix 34
Slide 35: Adjusted EBIT Reconciliation
Adjusted EBIT Reconciliation ($ in millions) Q3 2021 Q3 2020 Income from operations $ 124.7 $ 141.7 Other (income) expense, net (2.4) 2.3 Total $ 127.1 $ 139.4 A Debt extinguishment and refinancing related costs — — B Termination benefits and other employee related costs 9.6 35.7 C Strategic review
Slide 36: Adjusted EBIT Reconciliation (cont'd)
djusted B 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 estimat
Slide 37: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation Year Ended December 31, ($ in millions) 2018 2019 2020 Q3 2020 Q3 2021 Net income $213.3 $252.6 $122.0 $82.5 $68.9 Less: Net income attributable to noncontrolling interests 6.2 3.6 0.4 - (0.2) Net income attributable to controlling interests 207.1 249.0 121.6 82.5
Slide 38: Adjusted Net Income Reconciliation (cont'd)
Adjusted Net Income Reconciliation (cont’d) A Represents expenses and associated changes to estimates related to the prepayment, restructuring, and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance. B Represents expenses and associated changes
Slide 39: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Year Ended December 31, ($ in millions) 2016 2017 2018 2019 2020 LTM 9/30/2021 Net income $44.6 $47.7 $213.3 $252.6 $122.0 $281.3 Interest expense, net 178.2 147.0 159.6 162.6 149.9 138.2 Provision for income taxes 38.1 141.9 54.2 77.4 0.2 89.8 Depreciation and amortiz
Slide 40: Adjusted EBITDA Reconciliation (cont'd)
djusted B D Reconciliation (cont’d) A Represents expenses and associated changes to estimates related to the prepayment, restructuring, and refinancing of our indebtedness, which are not considered indicative of our ongoing operating performance. B Represents expenses and associated changes to estim
Slide 41: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation Year Ended December 31, ($ in millions) 2016 2017 2018 2019 2020 Cash provided by operating activities $559.3 $540.0 $496.1 $573.1 $509.3 Purchase of property, plant and equipment (136.2) (125.0) (143.4) (112.5) (82.1) Interest proceeds on swaps designated as net invest