https://assets.capyfin.com/instruments/678fdc13234e27009c5d5a00.png avatar
Axalta
🇺🇸 NYSE:AXTA
View Company
OverviewEarningsDividends
•
Jun 30, 2022

Axalta Q2 2022 Earnings Report

Axalta's Q2 2022 performance was driven by record pricing and strong volume growth.

Key Takeaways

Axalta Coating Systems reported a 9.6% increase in net sales year-over-year, driven by record pricing and solid volume growth. Mobility Coatings delivered significant above-market sales performance. However, income from operations decreased due to variable cost inflation, foreign currency headwinds, and elevated expenses.

Net sales increased 9.6% year-over-year (14.5% ex FX) led by record pricing and solid volume growth; Mobility Coatings delivered significant above-market sales performance.

Realized record 10.0% price-mix growth with double-digit year-over-year gains in Mobility and Industrial Coatings.

Volume increased 2.7% driven by 8.4% growth in North America and 14.8% in Latin America with strong contributions from both segments.

Income from operations of $103.6 million versus $190.4 million in Q2 2021; Adjusted EBIT of $150.6 million compared with $173.4 million in Q2 2021 despite $23 million of headwinds associated with the Russia-Ukraine conflict, China lockdowns, and FX.

Total Revenue
$1.24B
Previous year: $1.13B
+9.6%
EPS
$0.41
Previous year: $0.48
-14.6%
Net Debt / Adj. EBITDA
4.2
Adj. EBITDA / Interest Expense
5.8
Gross Profit
$349M
Previous year: $374M
-6.8%
Cash and Equivalents
$500M
Previous year: $1.23B
-59.4%
Free Cash Flow
-$13.5M
Previous year: $82.6M
-116.3%
Total Assets
$6.94B
Previous year: $7.21B
-3.7%

Axalta

Axalta

Forward Guidance

Axalta anticipates net sales to increase by 15-17% in Q3 2022, including a negative 6% foreign currency impact and a positive 2% acquisition benefit. Adjusted EBIT is expected to be $140-165 million, and adjusted diluted EPS is projected to be $0.37-0.45.

Positive Outlook

  • Net Sales: ~+15-17%, including, ~(6)% foreign currency impact and ~+2% acquisition benefit; pricing and volume expected to be up high single-digits year-over-year
  • Adjusted EBIT: $140-165 million
  • Adjusted Diluted EPS: $0.37-0.45; including a $0.05 year-over-year headwind from foreign currency and the Russia-Ukraine conflict
  • Raw material inflation in the high teens versus Q3 2021
  • Likelihood that company will be able to recover the majority of the cumulative price-cost gap by year-end

Challenges Ahead

  • Foreign currency impact of ~(6)%
  • Adjusted Diluted EPS includes a $0.05 year-over-year headwind from foreign currency and the Russia-Ukraine conflict
  • Interest Expense: ~$35 million
  • Adjusted Tax Rate: ~22%-23%
  • Raw material inflation in the high teens versus Q3 2021

Company Overview

Full financial data and analysis

View Axalta