Axalta announces second quarter 2024 results: record net sales!

On August 1, Axalta Coating Systems Co., Ltd. announced its second quarter 2024 financial results (ending June 30, 2024). Net sales in the second quarter of 2024 increased 4.4% year-on-year to a quarterly record of $1.35 billion, with positive contributions from all four end markets.

Net income increased $52 million year-on-year to $113 million. Driven by variable cost reductions and net sales growth, adjusted net income increased $50 million year-on-year to $127 million. Adjusted EBITDA was $291 million, a quarterly record high, compared with $227 million in the same period last year. Adjusted EBITDA margin expanded 400 basis points to 21.5%. Diluted earnings per share increased 89% to $0.51 from $0.27 in the same period last year.

Cash provided by operating activities in the second quarter of 2024 was $114 million, compared with $131 million in the same period last year. Cash and cash equivalents at quarter end were $840 million, with total liquidity exceeding $1.4 billion. Sequential improvements in cash included a draw of $185 million from Axalta's revolving credit facility to fund the acquisition of CoverFlexx, which closed in early July. Axalta's net debt to trailing twelve month (LTM) adjusted EBITDA ratio (total net leverage, or net leverage) was 2.6x at quarter end, compared to 3.6x in the same period of 2023. Axalta repurchased more than 1.4 million shares of common stock for total consideration of $50 million.

Performance Coatings second quarter 2024 net sales were $887 million, up 4% from the prior year. Refinish net sales were $546 million, up 5% year-over-year, driven by higher volumes, including contributions from the André Koch acquisition and new body shops. Industrial net sales were $341 million, up 2% year-over-year, driven by modest volume improvements.

Performance Coatings Q2 Adjusted EBITDA was $223 million, compared to $181 million in the prior year period, with an Adjusted EBITDA margin of 25.0% and 21.2%, respectively. The segment's Adjusted EBITDA and margin increases were driven by variable cost reductions, higher volumes and cost reduction actions.

Mobility Coatings Q2 2024 net sales were $464 million, up 6% from the prior year period. Light Vehicle net sales increased 7% year-over-year to $354 million, driven by strong global volumes, with significant growth in China. Commercial Vehicle Coatings net sales increased 3% year-over-year to $110 million, driven by strong volumes in North America and Latin America. Mobility Coatings' price mix was flat year-over-year as positive price changes were offset by the impact of product mix and pass-through of contracted raw materials. The Motor Vehicle Coatings segment's Adjusted EBITDA was $68 million in the second quarter, compared to $46 million in the prior year period, with margins of 14.8% and 10.4%, respectively. The increase in segment adjusted EBITDA and margin was driven by variable cost reductions, volume growth and cost reduction actions.

Chris Villavarayan, Axalta CEO and President, said. "Axalta continues to perform well and I am proud of the dedication and hard work of our global team, who achieved the highest quarterly net sales and adjusted EBITDA in the company's history. Axalta remains committed to driving accelerated performance and unlocking the strong earnings potential of the business. With a solid second quarter and a better outlook for the second half of the year, we are raising our full-year 2024 adjusted EBITDA, adjusted diluted earnings per share, and free cash flow expectations."