Axalta Coating Systems (axta) First Quarter 2021 Financial Results
Q1 Consolidated Results
($ in millions, except
per share data)
Performance Coatings
Mobility Coatings
Net Sales
Income from ops
Adjusted EBIT
% margin
Diluted EPS
Adjusted EPS
$984
Financial Performance
Q1 2020
4.6%
2021
707
356
1,064
Volume
Sensitivity: Business Internal
Q1
53
183
17.2%
0.06
0.50
0.22
0.31
Net Sales Variance
2020
0.3%
648
336
984
65
133
13.5%
Price/Mix
Incl. F/X
3.2%
% Change
FX
9.2 %
6.1 %
8.1 %
(19.2)%
37.8%
(72.7)%
61.3%
Excl. F/X
8.1%
5.0 %
4.6%
4.9%
$1,064
|·
Slide 4: Q1 Consolidated Results
Net sales of $1.1 billion increased 8.1% year-over-year for the first quarter. Organic constant currency
net sales increased 4.9% overall during the period, with continued sequential volume recovery across
most end-markets Axalta serves despite ongoing pandemic-driven impacts seen in Refinish. Notable
continued strength was seen across most of Industrial, while commercial vehicle demand particularly in
North America truck markets also remained strong. Automotive demand at the retail sales level was
also solid, though production and Axalta's net sales volumes were impacted by the supply chain
shortages for semiconductor chips.
Q1 2021
Commentary
Net sales increased YOY from continued volume
recovery; China lapping Q1 2020 COVID impacts
• Q1 net sales growth YOY across all end-markets;
sequential growth versus Q4 2020 in Industrial and
Commercial Vehicle despite seasonal headwinds
YOY volume growth despite continued Refinish
headwinds from COVID restrictions, semiconductor chip
shortage, and U.S. severe weather supply chain effects
.
.
FX tailwinds driven by the Euro and Chinese Renminbi,
partly offset by Brazilian Real
Impressive Adjusted EBIT for the first quarter
Margin expansion of 370 bps driven by operating
leverage from ongoing cost and productivity progress,
improved sales volumes, and modest price-mix benefits
Modest YOY product price-mix benefit driven by Light
Vehicle; mix headwinds in Refinish and Industrial
.
3
The 4.9% growth in first quarter organic net sales, before FX impacts, included a 5.0% increase from
Performance Coatings and 4.6% contribution from Mobility Coatings.
AXALTA
The volume increase of 4.6% for the quarter was driven by rebounding net sales in China against the
prior year pandemic-impacted quarter, as well as by Industrial growth globally and further supported by
growth in North America in Commercial Vehicle. This was offset partially by continued Refinish
headwinds including in North America, and by pressure in Light Vehicle from the supply chain-driven
production cutbacks.
Price-mix contribution was slightly positive in the aggregate (up 0.3%) principally driven by Light
Vehicle which saw an increase in mid-single digits, offset by modestly negative price-mix in other end-
markets. As with prior recent quarters, the principal driver for other end-markets has been product mix
differences, largely within Performance Coatings, as pricing has remained positive.
FX translation was a tailwind of 3.2%, driven by the stronger Euro and Chinese Renminbi, offset by
weakness notably for the Brazilian Real - the same currency drivers as the fourth quarter.
First quarter Adjusted EBIT was $183 million versus $133 million in the prior year quarter, an
exceptionally strong result given ongoing Refinish volume headwinds in many markets. The substantial
earnings growth was driven principally by operating cost reductions, coupled with volume drop-through
benefit, as well as neutral income statement impact from variable input costs and by moderate FXView entire presentation