PHILADELPHIA - Axalta Coating Systems Ltd. announced its financial results for the fourth quarter and full year ended December 31, 2015.
“Axalta finished the year with a strong fourth-quarter performance, highlighted by 4.5 percent net sales growth year-over-year excluding currency and continued margin improvement,” said Charles W. Shaver, Axalta’s Chairman and Chief Executive Officer. “Our team executed well on our core goal of delivering consistent and profitable growth throughout the quarter and the year despite headwinds from unfavorable currency exchange rates and economic pressures in emerging economies. We are proud of this progress and expect to continue to build on this in 2016.”
Shaver added, “We continued to make substantial progress towards optimizing our cost structure in 2015, nearly completing our Fit-For-Growth initiative while beginning to realize productivity savings from The Axalta Way. We also largely completed four major capital projects, each of which has been executed on time and on budget. We remain confident in our ability to exceed end-market growth and drive further improvements to our operating model despite uneven global macro demand and exchange rate pressures. We are encouraged that our end-markets remain stable in the aggregate, and our commercial progress has been strong as we grow market share with our existing customers and win new customers with our industry leading coatings solutions.”
Net sales of $1.0 billion for the fourth quarter of 2015 increased 4.5 percent year-over-year excluding unfavorable foreign currency translation (decreased 7.0 percent as-reported). Net sales growth was driven by 3.9 percent volume increases, indicating continued underlying strength in the company’s global coatings end-markets. Higher average selling prices in the quarter added 0.6 percent to net sales, while unfavorable foreign currency translation more than offset the volume and price gains.
Net sales in Performance Coatings for the fourth quarter of 2015 were $588.5 million, a 4.8 percent year-over-year increase excluding foreign currency translation (decrease of 8.1 percent as-reported). Net sales growth drivers included volume growth of 3.6 percent and higher average selling prices of 1.2 percent in the period, more than offset by 12.9 percent unfavorable foreign currency translation. Refinish end-market fourth-quarter net sales increased 4.8 percent on a constant currency basis (decreased 9.6 percent as-reported), while the company’s Industrial end-market grew 4.6 percent excluding the impact of currency (decreased 4.2 percent as-reported).
The Transportation Coatings segment reported net sales of $415.1 million in the fourth quarter, a 4.2 percent increase excluding foreign currency translation versus fourth quarter 2014 (decrease of 5.3 percent as-reported). Volume and price generated 4.2 percent net sales growth, offset by 9.5 percent unfavorable foreign currency translation versus the prior year. Light Vehicle net sales increased 5.5 percent on a constant currency basis year-over-year (decreased 3.7 percent as-reported). Commercial Vehicle net sales declined slightly by 0.5 percent on a constant currency basis versus last year (decreased 10.9 percent as-reported). Demand trends in Transportation Coatings were fairly consistent with the third quarter of 2015, though China saw a rebound of automotive production after the notable drop in the third quarter. North America and EMEA continued to drive growth in Light Vehicle, partially offset by ongoing weaker demand in South America.
“We achieved our financial goals for 2015 in spite of the challenging emerging market economic environment,” said Robert W. Bryant, Axalta’s Executive Vice President and Chief Financial Officer. “In our first full year as a publicly held company, Axalta produced solid volume growth well above end-market rates, strong ongoing margin expansion and solid free cash flow generation, which allowed us to reduce our financial leverage and to make two high-ROI bolt-on acquisitions in the U.S. and Europe. We look forward to more progress on each of these fronts in 2016.”
The company provided an outlook for the full year 2016 that included net sales growth of 4-6 percent in constant currency, flat to slightly down as-reported, and an adjusted EBITDA of $900-940 million.