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Mar 31, 2021
Axalta Q1 2021 Earnings Report
Axalta's Q1 2021 earnings were released, showcasing strong adjusted earnings driven by demand recovery and strong execution despite macro headwinds.
Key Takeaways
Axalta Coating Systems reported an 8.1% year-over-year increase in net sales to $1,063.6 million for Q1 2021, driven by positive contributions from all end-markets. Adjusted EBIT increased 37.8% to $182.8 million, a record for first quarter results. Diluted EPS was $0.06, while adjusted diluted EPS reached $0.50. The company acquired Anhui Shengran Insulating Materials Co. Ltd. and repurchased $63.6 million of stock during the quarter.
Q1 2021 net sales increased 8.1% year-over-year to $1,063.6 million with positive contributions from all end-markets
Adjusted EBIT increased 37.8% to $182.8 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
Repurchased $63.6 million of stock during Q1 2021 at an average price of $27.94
Axalta
Axalta
Forward Guidance
Axalta provided full year 2021 financial guidance with net sales expected to increase by approximately 20-22%, including benefits from foreign exchange and M&A. Adjusted EBIT is projected to be between $715-755 million, and adjusted diluted EPS is expected to be $1.95 - 2.10. Free cash flow is estimated at $455-495 million, inclusive of $180 million in capital expenditures.
Positive Outlook
- Steady demand improvement sequentially in Refinish expected in the coming quarters.
- Largely stable and growing net sales from other businesses during the balance of the year.
- Anticipate ongoing deployment of capital to both M&A as well as share repurchases during the rest of 2021.
- Expect to work hard to pass on most of the input inflation through price increases.
- Board recently approved a $625 million increase in share repurchase program.
Challenges Ahead
- Some delay in sales from Q2 is expected in Mobility due to supply chain disruption and customer component shortages.
- Rising input inflation effects beginning in the second quarter.
- Some headwind from lower year-over-year temporary cost savings.
- Semiconductor chip shortage impact on Light Vehicle to continue throughout Q2.
- Constrained supply chain impact persists in early Q2 on Industrial volumes