Axalta Coating Systems Ltd., a leading global coatings company, announced its financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 Highlights:

• Net sales increased 4.4% year over year to $1.35 billion
• Net income increased $52 million year over year to $113 million
• Adjusted EBITDA increased $64 million year over year to $291 million with Adjusted EBITDA margin improving 400 basis points year over year to 21.5%
• Diluted EPS increased 89% year over year to $0.51 and Adjusted Diluted EPS increased 63% year over year to $0.57
• Net leverage ratio of 2.6x
• Repurchased $50 million of common shares
• Increased full year 2024 earnings and free cash flow outlook
• Hosted Strategy Day outlining three-year plan for accelerating performance

Second Quarter 2024 Consolidated Financial Results

Second quarter 2024 net sales increased 4.4% year over year to a quarterly record of $1.35 billion with positive contributions from all four end markets.

Net income increased by $52 million year over year to $113 million. Adjusted net income improved by $50 million year over year to $127 million driven by variable cost deflation and net sales growth. Adjusted EBITDA of $291 million was a quarterly record, compared to $227 million in the prior year period. Adjusted EBITDA margin expanded by 400 basis points to 21.5%. Diluted earnings per share increased by 89% to $0.51 compared to $0.27 in the prior year period. Adjusted diluted earnings per share improved by 63% to $0.57.

Second quarter 2024 cash provided by operating activities was $114 million versus $131 million in the same period last year. Cash and cash equivalents at quarter end were $840 million and total liquidity was over $1.4 billion. The sequential improvement in cash includes a $185 million draw on Axalta’s revolving credit facility to finance the previously announced acquisition of CoverFlexx, which closed in early July. Axalta’s net debt to trailing twelve month (“LTM”) Adjusted EBITDA ratio (total net leverage ratio or net leverage ratio) was 2.6x at quarter-end versus 3.6x as of June 30, 2023. Axalta repurchased over 1.4 million common shares for total consideration of $50 million.

Discussion of Segment Results

Performance Coatings second quarter 2024 net sales were $887 million, up 4% compared to the prior year period. Refinish net sales grew 5% year over year to $546 million driven by volume growth including contribution from the André Koch acquisition and new body shop wins. Industrial net sales increased 2% year over year to $341 million driven by modest volume improvement.

Performance Coatings generated second quarter Adjusted EBITDA of $223 million compared to $181 million in the prior year period, with Adjusted EBITDA margins of 25.0% and 21.2%, respectively. The increase in segment Adjusted EBITDA and segment Adjusted EBITDA margin were driven by variable cost deflation, volume growth and cost reduction actions.

Mobility Coatings second quarter 2024 net sales were $464 million, up 6% from the prior year period. Light Vehicle net sales improved by 7% year over year to $354 million driven by strong global volumes, with notable growth in China. Commercial Vehicle net sales increased by 3% year over year to $110 million led by solid volumes in North America and Latin America. Mobility Coatings price-mix was flat year over over, as positive price movement was offset by mix and contractual raw material pass through impacts.

The Mobility Coatings segment generated Adjusted EBITDA of $68 million in the second quarter compared to $46 million in the prior year period, with margins of 14.8% and 10.4%, respectively. The increases in segment Adjusted EBITDA and segment Adjusted EBITDA margin were driven by variable cost deflation, volume growth and cost reduction actions.

“Axalta continues to execute exceptionally well," said Chris Villavarayan, CEO and President of Axalta. "I am proud of our global team's dedication and effort in achieving the highest quarterly net sales and Adjusted EBITDA in the company's history. As One Axalta, we remain committed to driving accelerated performance and unlocking the robust earnings potential of our business. With the solid second quarter performance and better visibility into the second half of the year, we are raising our full year 2024 Adjusted EBITDA, Adjusted Diluted EPS and Free Cash Flow guidance.”

Third Quarter and Full Year 2024 Outlook 

LSD = low single digit

Axalta does not provide a reconciliation for non-GAAP estimates for Adjusted EBITDA, Adjusted Diluted EPS, Free Cash Flow or 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 effort. See “Non-GAAP Financial Measures” for more information.