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Axalta Coating Systems Ltd, a leading global coatings company, released its financial results for the fourth quarter and full year ended December 31, 2023.
Fourth Quarter 2023 highlights
- Net sales increased 4.9% yr-on-yr to US$1.3bn
- Net income increased US$30M yr-on-yr to US$74M and Adjusted EBITDA increased US$43M yr-on-yr to US$251M
- Adjusted EBITDA margin improved 250 basis points yr-on-yr
- Cash provided by operating activities of US$286M and Free Cash Flow of US$254M
- Paid down US$55M of principal on term loan and refinanced 2025 senior notes extending maturity to 2031
- Net Leverage Ratio of 2.9x, lowest in company history at year-end
Discussion of Segment Results
Performance Coatings fourth quarter 2023 net sales were US$849M, up 3.7% from the prior-year period driven by strong price-mix in both end-markets. Refinish volumes were up modestly year-over-year against a stable market environment. Industrial volumes were lower year-over-year as stable volumes in Europe were more than offset by soft macroeconomic conditions in North America, particularly in construction markets.
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The Performance Coatings segment generated Adjusted EBITDA of US$192M in the fourth quarter compared to US$169M in the prior-year period, with associated margins of 22.6% and 20.6%, respectively. The increases in segment Adjusted EBITDA and Adjusted EBITDA margin were driven by better price-mix and variable cost deflation, which more than offset higher labor expenses and lower Industrial volumes.
Mobility Coatings fourth quarter 2023 net sales were US$449M, up 7.3% from the prior-year period. Growth was driven predominantly by strong volumes with improvement in all regions. Price-mix was lower yr-on-yr from lower mix plus an unfavourable comparison given a one-time pricing benefit recorded in the prior-year period. Light Vehicle volume growth exceeded global auto production, especially in China. North America Commercial Vehicle class 8 production was down 7% year-over-year.
The Mobility Coatings segment generated Adjusted EBITDA of US$59M in the fourth quarter compared to US$39M in the prior-year period, with associated margins of 13.2% and 9.4%, respectively. The increases in segment Adjusted EBITDA and Adjusted EBITDA margin were driven by improved volumes and raw material deflation.
