Axalta Coating Systems (axta) First Quarter 2021 Financial Results

Axalta Coating Systems (AXTA) First Quarter 2021 Financial Results April 26, 2021 Introduction and Q1 Financial Highlights First Quarter 2021 Highlights Q1 2021 net sales increased 8.1% year-over-year to $1,064 million with positive contributions from all end-markets Income from operations of $53 million includes a significant operating charge; Adjusted EBIT increased 37.8% to $183 million, a record for first quarter results . ■ - ■ ■ - Diluted EPS of $0.06 versus $0.22 in Q1 2020; Adjusted diluted EPS of $0.50 versus $0.31 in Q1 2020 Cash flow from operations of $40 million in Q1 2021; free cash flow of $11 million . A AXALTA Q1 Business Conditions and Cost Structure Strong economic market conditions across the majority of end-markets; excellent first quarter adjusted profit despite volume headwinds related to semiconductor chip shortage, supply constraints due to severe weather in the U.S., and the persistence of pandemic-related demand impacts in Refinish Acquired Anhui Shengran Insulating Materials Co. Ltd., a Chinese producer of wire enamels for electric motors on April 1, 2021 Repurchased $64 million of stock during Q1 2021 at an average price of $27.94 Raw material inflation impacts relatively neutral impact during Q1, expected to ramp in Q2 and FY. Q1 benefited from carryover of cost savings from 2020 slightly ahead of expectations AXALTA Slide 3: Introduction and Q1 Financial Highlights Net Sales: Axalta saw continued net sales recovery across most end-markets served during the first quarter, including the third straight sequential increase in net sales in Industrial. Consolidated Q1 net sales increased 8.1% year-over-year (including a 3.2% FX tailwind). This result included a 4.6% overall volume increase (the first overall volume increase since the onset of the pandemic) and a 0.3% positive price-mix contribution. Broad-based recovery continued from most coatings end-markets globally, with Refinish remaining stable though still below pre-pandemic levels of accident rates and collision shop activity due to ongoing COVID-driven lockdowns in key countries served. Demand from Refinish appears to be recovering as certain lockdowns have eased and vaccination rates are increasing. Beyond Refinish, there were moderate headwinds in the quarter including the automotive semiconductor chip shortage and the severe winter weather in the U.S. impacting the coatings raw material supply chain, but which collectively had a moderate impact on overall volumes. Adjusted EBIT: Adjusted EBIT for the quarter, which excludes the impact of the $94 million operating charges associated with the Mobility Coatings operational matter, was reported at $183 million (versus $205 million in fourth quarter), a record level for first quarter and an increase of 37.8% year-over-year despite ongoing Refinish volume and other headwinds for the period. This result reflected strong continued cost savings benefits, fairly neutral variable cost contribution, and modest benefit from price- mix in the quarter. Sensitivity: Business Internal Balance Sheet & Cash Flows: Axalta reported strong cash flow in Q1, with cash flow from operations of $40 million and record first quarter free cash flow of $11 million compared with a use of $20 million in Q1 2020. First quarter free cash flow is historically the weakest of the year due to substantial annual outflows related to incentive compensation, tax payments as well as payments on bond interest and other factors. Strong operating results and improved year-over-year working capital drove the beat in Q1 year-over-year, while net debt at quarter end also ticked lower to 3.2x from 3.3x at year-end, which still includes the impact of the weak Q2 2020 earnings results in the trailing twelve month calculation on

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