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Dec 31, 2022
Axalta Q4 2022 Earnings Report
Axalta's Q4 2022 earnings were released, showing growth in net sales and adjusted EBIT.
Key Takeaways
Axalta Coating Systems reported a strong fourth quarter with earnings at the top of their guidance range, driven by pricing momentum and volume growth, especially in Mobility Coatings. Net sales increased by 8.7% year-over-year, and adjusted EBIT rose by 21.7%.
Volumes grew 2.4% year-over-year, with market recovery in Mobility Coatings offsetting softer demand in Industrial.
Price-mix increased by 11.7% year-over-year and 3.2% sequentially.
Income from operations increased by 15.9% to $109.8 million, while adjusted EBIT rose by 21.7% to $147.2 million.
Adjusted diluted EPS increased to $0.38 from $0.30 in Q4 2021.
Axalta
Axalta
Forward Guidance
Axalta anticipates continued momentum in Refinish, steady quarterly progress in Mobility Coatings, and modest deflation in elevated upstream commodities. They expect meaningful year-over-year growth given carry over pricing, market recovery, and a stabilizing cost environment.
Positive Outlook
- Momentum to continue in Refinish after record 2022 profitability
- Softer Industrial markets to be balanced by contribution from price-cost normalization and share gains
- Anticipate steady quarterly progress throughout 2023 vs. Q4 EBIT run-rate in Mobility Coatings
- Expect modest deflation in elevated upstream commodities
- Expect meaningful YoY growth given carry over pricing, Refinish and Mobility market recovery, and stabilizing cost environment
Challenges Ahead
- Anticipate typical seasonal Refinish volume decline to result in lower Performance Coatings EBIT sequentially from Q4 2022 despite improving Industrial contribution
- Stabilizing raw material environment with pressure anticipated to continue in specialties, labor and energy
- Expect high-single-digit % YoY raw material headwind in Q1 2023
- Potentially softer Industrial markets
- Expect currency headwinds