Axalta Coating Systems (AXTA) 1 May 242024 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to Axalta Coating Systems First Quarter 2024 Earnings Call. [Operator Instructions] Today's call is being recorded, and a replay will be available through May 8. Those listening after today's call should please note that the information provided in the recording will be -- will not be updated and therefore, may no longer be current. I will now turn the call over to Chris Evans. Please, go ahead, sir.

morning. good and you, Thank This is Relations. of Evans, VP Investor Chris and interest to conference We continued Axalta call. welcome results appreciate your financial in you quarter our first

Joining Relations this will this morning President; posted a which CEO We me we to be our our and Chris call. the website presentation Anderson, axalta.com, Investor released results during Carl of CFO. and financial quarterly slide today are section referencing and Villavarayan, at

statements discussion provide Our effect company's those reflecting actual company prepared from financial forward-looking materially forward-looking under slide involve may remarks, and obligation events on potential statements. and may to statements uncertainties the and the is no our view their today statements. updates forward-looking future and operating of performance. these Please current These differ that to results risks, contain presentation and Axalta's note

slide to various appendix reconciliations remarks also measures financial of Our directly measures. slide financial the of presentation, the presentation the we've included comparable GAAP the measures. non-GAAP In financial and contain most these non-GAAP

regarding statements Chris. our now and to measures, refer SEC. I please the with filings the additional forward-looking call over turn For non-GAAP to financial information will

and I'm report excellent sales quarter we we in proud at are improved, Thank morning, Margins an significantly was net you, have while and grow. were believe Axalta. for to Overall, adjusted flat any to first good quarter primarily more EBITDA Chris, record everyone. a Axalta's room history.

transforming year potential our consecutive company led this improve we're has free continued products, I'm cash sheet and year, balance of just net fiscal organizational ratio and with EPS to unlocking for for guidance getting Yet, flow. and tremendous diluted to has I our adjusted our capability. trajectory raise technology the us adjusted quarters. believe Our leverage the declining started EBITDA, very confident with X which

services, with with full $X.X therefore, mix. For of our increased committed year-over-year their in year-over-year Industrial positive Refinish macro record and the and realizing by the quarter, select $XXX offset portfolio. Vehicle year-over-year products value given to environment. declines pricing areas Adjusted evaluate Vehicle quarter. XX% billion, the net and first growth representing a targeted Light sales softer to to million, X% in flat was Volume remain in we continue price EBITDA first We increased to of approximately Commercial

due This team. quarter of execution ran global ahead outstanding the guidance from entire to

a for and teams did mix commercial our great accretive new of on winning focusing Specifically, support customers job value. more product pricing a areas that by profitable will

in performance journey, Our priority stemming our a the progress segments. Vehicle margin The products. XX% Light the strategic range. Profitability in with XX% traction. basis joined reflecting latter on moving improved Cost improvement Industrial will to end system operations teams focused and higher-margin to focus central towards gaining significant XX% XXX forward. to points largest and remain a margins towards unit substantially markets, contributions from profitability and increased better company which Procurement been overdelivered partly XX% is the historic reducing again, by margins optimization I return the Axalta driving shift EBITDA across from since cost. beginning both came backlog the Adjusted has high variable

contribution year-over-year. line roughly had performance for X% flat Market across and top Let's a FX. better Refinish from the North the EMEA. growth sales our segments. on volume of quarter This period quarter and Slide with another move strong was price-mix, straight prior America net details to business XXth higher with X versus balanced year represents

RAPTOR growth accessories in company-owned like body and given our performance bedliners getting above-market stores U-POL our adjacencies initiatives with sold the traction and XXX seeing also addition XXX-net are aerosol, we shop of points of strategic Europe. new However, win distribution. We're our through in

for and to prestigious pleased centered is the growth. around were us. continue mixing better has of integration, R&D technology plan. I efficient, supports that acquisition recognized with Koch I'm differentiated quarter, to pace completely sustainable which is that with competitive and all example the key refinish excellent several Irus is this foundation the strategic initiatives announce Axalta's Mix, happy we initial of awards transaction efficient I'm There ahead for believe André to our very automated we innovation. than fully machines a outpace an of fast, these Our advantage proved reason market no of and hands-free industry. a be and

seeing Edison category. addition solutions won demand it an customer in also to launching this environmental in strong industrial In Award and product, the

year-over-year, growth. X% Light auto Net spot Vehicle X% in to against in as growth production quarter prior China bright improved strong in China. XX% to by sales again, due quarter. growth, Volume year improved the the mostly compared Another was by particularly volumes,

the service our in sales partnered sales with We going driven which this and and year-over-year new has at XXXX. is by expected with year ahead emission with the in and soften from slowdown Industrial the consistent have wins. the net new year-over-year, General effect of OEM, North up and attractive us believe before of by net ramping activity We with solid win Vehicle EMEA, Motors business declined in Supplier will We construction North a into offset 'XX and is lasting improvement X% business which for technology, recent products, America further X% return. as into Year. Commercial standards fastest-growing declined 'XX this America Class an a exemplified in market partnerships in market business our back recognition soft this the X production. build in

and our to have global shift the of significantly in more but capacity focus X% actions very efficiency categories, low-margin This is of further results, proud a see to reduction date. We to been We're and Axalta performance across improve to main financial achievements company. agile. responsive have February profitability. My and we results, performance starting improved believe includes us come. To have of our and a to benefits strategically proactive, I'm yielding announced a in taken manufacturing there transformation our joining enable our since approximately in and has deselected we enhance capability. the is more program initiative which to be we workforce

expect yield to in $XX approximately run XXXX. in We million savings program annualized rate this

for the elected thank passing the want to has financial Carl performance, wish McLaughlin I of Board, including Chair for detailed is his and He Bob best. Audit Axalta Bob him on Board, to thought the General we of the the Committee. quarter a Meeting. call years very, after the first an month retire service more Annual to partner review for our Before XX as been incredible very next of

morning, good you, Thank Chris, and everyone.

X. Let's Slide turn to

flat a X% cost XXX by billion. Gross were to effective margins [ costs the categories labor current $X.X fully related year-over-year in points and in charge $XX demonstrating and pressure Europe, rate. such improved raw $XXX America initiative isolated material exit project noted. with XX% resin Chris million propylene which monomers transitory, was there accounted an favorable. million, are by benefit the material to in butyl to principally $X for offset availability sales these continue versus net cost category. a of full isocyanate, few epoxy Though strongly of by guidance. SG&A in year, and to as Income as pockets in stemming management year-over-year, temporary our the issues year-over-year XX% from pretax are severance which view increased inclusive XXXX from lower efforts, raw acetate situation, from are that the inflation supply stemming we quarter half. and a All the variable unit weighted we prior to environment, year to most driven comfortable lower employee basis operations million mid-single-digit transformation First declined Overall, North ] first

XXXX, in be with come actions $XX in savings in million We a $XXX expected and increased expense. year. Adjusted million, from $X.XX the million XX% XX% to per quarter first expect share run that XXXX, from above $XX adjusted $X.XX headwind higher tax and annualized the earnings this year-over-year rate diluted despite was interest EBITDA these will quarter to

year-over-year first were Performance Moving to net X. quarter $XXX million. sales Slide Coatings flat at

Refinish net price-mix X% a contribution Refinish were North quarter, in declined with lower is to growth and benefited growth While year-over-year business. strong in flat in weighed from sales as soft strategy volumes net able were and America with building sales portfolio to accelerate remained activity overall, solid the Europe on in due consistent in we the Refinish expectations. Industrial André the drive our from which stable Koch sales global demand construction net line market and by to our acquisition. X%, demand. primarily

improved in more America to by Class Vehicle. by reaccelerates. Performance material Adjusted Vehicle quarter, a contractual are we are team Industrial X a strategically Light offset from markets excluding XXXX declined were Light significant level, million, global XX% prior business. $XX solid Vehicle declines this strategy to by up now when favorably. Adjusted by offset volumes million, increased improved quarter year-over-year highlighted, also Vehicle XX% net the from lower-margin favorable X, cyclical better quarter exceeding both considerable in margin sales than million, is As with by Commercial year. On EBITDA our opportunity XXX with construction partially points truck Mobility improvement led mix lower the being well net Vehicle. EBITDA We growth sales Commercial production. Mobility a was And volumes below margin first global activity improvement. China. basis pass-through creating adjusted auto volumes executed in Coatings' driving to away is raw increase driven million, upside adjusted moving of year-over-year and margin EBITDA XX% impact primarily and EBITDA approximately as modestly to record X% rates again Chris year-over-year. $XXX effect, XX.X%, X% $XX basis believe Coatings XXX Coatings' first period. improved Light the North Mobility Slide end $XXX to in increased points expected, compared contributing price,

million. total X. working Slide balance to of million improved over first liquidity, cash seasonal Free billion quarter quarter as was an including capital Turning million, result of $X.X of The the strong with $XXX performance. a $XXX flow in year-over-year. free a increase $XX the approximately in flow We cash cash ended

also to During the interest took we expense. reduce quarter, action

First, debt XXXX. the million debt, building of $XXX we paid down from of gross executed prepayment $XX million in

loan points. basis successfully rate repriced effective we by our XX term lowering our Next,

last Taken together, that will are in year. versus expense confident we XXXX be interest lower

nearly X.Xx, year at prior total a was end full net quarter ratio the period. leverage below turn Our

current high of ratio we year Xx Given net target the X.Xx. should end to at our of trends, end leverage range the

this continues we balance our morning to As announcing share a sheet are million $XXX new strengthen, program. repurchase

closing expect continue years Chris will shareholders. I our the focus remarks. now time believe in drive to to an on back to coming as performance program the and creation forward with turn move optimal now for our and we to this financial accelerated value financial We is driving guidance for call

Thanks, Carl.

in X% in Commercial high to from growth Refinish by sales market-driven projected in turn percent are to expected Industrial to increase gain, acquisition. higher year-over-year, sales Light in X% the André and year-over-year stable Slide driven Let's net to given sales are X. growth Koch Net be share second the Vehicle. in and declines Refinish, Vehicle plus strong contributions QX, adjacencies, quarter by single-digit

Vehicle, We America. and ramps will slowing in the 'XX X net to to in Light margin current see year soft year Industrial, with our have Vehicle demand lastly, growth And should view are be build back We XXXX. sales macro in from growth is volume in a North issues through before Class flat and unchanged. benefit as Commercial expected also the lower priority lapping quarter American remain prior up environment. production North highest stable our price-mix. In strong robust another

Our remains full year unchanged. target low single-digit sales growth

year, typical quarter this out net versus trends play to expect QX. seasonal second leading step We in a up sales to

more Second earnings approximately EBITDA up to increase quarter Adjusted XX% projected an per roughly than share year-over-year. estimated adjusted million. $X.XX, to of be XX% diluted year-over-year is is to $XXX be

guidance. and to the start EBITDA, our EBITDA $X.XX the be have full to between year, year year $X.XX is we adjusted diluted and adjusted a billion increase free increased strong to million cash projected guidance. diluted EPS Full adjusted greater Given flow adjusted translates to range prior between to This midpoint. and increase than versus an EPS of billion, $X an midpoint per share, $X.XX the the our $X.XX $XX XXXX

the setting believe value on record Day on performance in we're flow We range guidance million have million. I'm start of a XX. We pace year, to foundation our $XXX $XXX are to sharing in to proud forward another look XXXX confident for our million new I'm performance and also cash the plan free $XX performance by our increased estimate trajectory. Axalta to of and with creation. our long-term for you on XXXX I May Strategy

For This Thank Operator, joining Q&A. for our website. prepared more refer line to please open contact detail, please Chris concludes Evans today. for the remarks. our or investor us you

first Our David [Operator from Begleiter Instructions] from question Deutsche Bank. comes

on EBITDA Huang This I Dave. sales benefit unchanged. I and here the guidance, David guidance, Does additional restructuring you is guidance any -- reflect guess, you and change first the guess for I left deflation? raised mean, basically your raw material the

Carl. we about far This the the million Yes. the is that $XX to expecting question. as of for as Thanks are look we as -- February. benefit we announced in Yes, guidance, restructuring program related

to referenced So of we But prepared first about mid-single the think materials. a is, the are on for that we the of digits full year. for planning raw percent raw a weighted it. that lower our perspective, year of lot as is remarks, we're the we year-over-year part And as that in still material half the about basis

second volume share trends activity underlying peers, expectation noted that's gains? talk about Refinish? guess trends prior demand in your Refinish. guess among this year. And the comp for about some then opportunity just you for I a I divergence Okay. probably can your further difficult and for just some Can you year in there's on talk your pre-buying creating

Sure, I'll take David. one. this And

happening last that's year. So X focused body X really what shop quarter about that look body focused building going which I'm what's doing. if have XXX on our X, had X wins, we elements of strategies, the over not we're I and to that We're And gotten on the won at last wins. with peers, of shops. last shops you shop talk the exceptional are we new an years, with XX,XXX we X,XXX rest around body on quarter And body think,

the So of shops. certainly body it. new it's wins That's and one element

or we XX,XXX element have the we with is our new RAPTOR whether of adjacent put and that that, bedliners, it's able then really products our our space. with have sell retail top through shelves of have the The acquisition, that also that going O'Reillys it AutoZone on with to our we we And shelves aerosols on. the shops. And been all second U-POL of through that

we push America and South that We in go able products our more move And of shops these have as today, Europe through. are And XX in XX% our really products we only through to shops. was we shops, then acquisition, well. And from opportunity that as André we're distribution well through the Koch. this as of plan. acquisition an ahead retail proceeding which With incremental our see here finally, it of

story. X As I to the of are look elements the at building it, all really

so And we're really that's why winning.

Christopher question our comes Wolfe from Capital. And next from Parkinson

This is Harris Fein on for Chris.

I heard XX% took cost unit out team variable say I before the level. a you procurement that think on

up could half for down raw the what's year, into year? of in about Just expectations that you full year. if the that the little more if maybe go implies raw material happening be a the could and wondering digits there, that detail for maybe curious flows into bit materials the if how you're full Because mid-single back

Certainly, this. I'll take

started in last team we of the here. program really accomplished So for And they year. saw year, of very we last what QX early actually and this we're proud benefit net actually starting the

QX had we've And then -- QX, of seeing the around so really first savings, industry-leading last QX QX we saw this drive was of P&L. what think which and objective elements. the it's we even whether And an the quarter through this or you're element again, two digits did I really performance, And was was year. -- performance, come to the in double incredible in what

saw we continuing that We our before into lapping we bit start of QX. in also performance benefit a see this QX,

as being of back start your point, we team's half we purchasing year. So this our muted believe do the think about performance to will

more of help little the to better would objective a the team through get us second in so was the manage contracts The really this or agreements bit and we saw volatility longer-term that marketplace. of cyclicality

that a be as really aren't months as there manage year-long but indexing to well to more are contracts with responsive productivity. these So long X X to -- and enables us contracts,

certainly of that in to of back at least benefit see can year. year. the the through year the been full about and we we X/X muted have and thing our good is the performance what that's material the through But get our both you driven those half basket, somewhat balance So X really expect elements of through through this

helpful. a XX% more detail it. little Got one, able you like that guess go I were just That's And then into the I how second business about it if excluding Light pricing was could price is looks up, Vehicle on because Maybe believe RMIs. to of you drive positive bit mix.

absolutely. Yes,

I kudos think to elements team. absolute really here. that just it's And think I X

first The and in that right great new capacities we really team a and about customer if put getting couple to around place. I in listening on back, I the think of the ago, focusing the one years really went is, driven leadership a was products right

So if exceptional talks being first XX%. a the you we example China, kind and at the team. It market is the that X%, by That's focus grew of drive to look one. of the up perfect

The market. the ensuring the the of really products reliability of for to Again, quality the that had it's is the right and second products led the one we the product. development

really Daimler I performance Now of the this, the here. And ability think award our color. accolades well lot difference it match well see of our I the you from plays finally, as is folks then can certainly that comes it a as whether to Year but our GM what's think say customer it's can award, the Supplier to to

our China, respond to customers certainly the XX realizing Axalta, of and I are regions especially we're am matching and there at good what it. at my are color. in color, developing months is like barriers really to think we in I And pushing

Capital. from is coming from next Our Aleksey question KeyBanc Yefremov

about buyback as thinking expect expect before flow the debt more X.Xx paying not go you any your we leverage? the towards year-end of if year you're the most to for rest free cash of And more should repay you're to down? debt Do

Yes, look we're forward Aleksey. -- sitting really leverage as we look X.Xs today. at if X the just months, Thanks, for you next about

going kind leverage of quickly guide what you, our see right EBITDA on below If X.Xx run cash the you are -- be you new net free we we're year-end. gave pretty can expectations at and our flow to

that really to look we objective. as down in any need more we forward, don't achieve to So debt pay order

new today So we obviously the program. are announcing repurchase million $XXX share

taking we forward this that at look go We year. as kind will a executing be of on closer

helpful. I for indices? And rest of indices? negative you then would where of And the point pricing hit some QX. in like this sort price the about where from ask Very of are had cost the you your to sort wanted to we prices index more It the pronounced year. expect impacts looks equivalent Can stable

Yes.

as we as then the shaped at up you to especially expected, quarter, the are think have think rest price-mix getting get really into dynamic, quarter it mix a about into equilibrium we point. RMIs, year, coupled that we being favorable place. this I is in if second say the price far expecting as with we where second would would And the to index start of the we I more relates as have the agreements

next with from Our Ghansham comes question Baird. Panjabi

sitting Krueger today. in Matt is This Ghansham for

on to wanted kick business. off So and Industrial I the just things touch

Industrial start then So a kind perspective? of activity? lapping can we segment already a should this are more business ongoing when bit base the is currently Axalta comparisons what to lap for you And that talk pruning normalized in inning pruning about specifically, from

Certainly, Matt.

and primarily in the here markets ready when been the what's focused have very, call managing That's essentially So the for business. driving for Industrial our margin I us inning return. very and third in getting the portfolio is our Certainly, we business focus enhancement. probably on what would

are can seen X we've our we're sure think about and and margin. business units, see make we side, the it driving certain choices What grow, I Mobility that we're on you significant making as on So growth. side shrinking I to on and call would to the Refinish call the right it, the would we Industrial side,

business significant Industrial I business. In the margin fact, QX one improvement that the seen our segments, if improvement has X the was margin most our by look at

making that and making So right making so we is doing doing the whether choices here we're customers, then in driving whether are the certainly right the it's direction. And What it's right in we're so prune -- that and what choices in here? forward. rest we're to the on the go have to the sure what right business, can long margin that calls the with tail of we at levels we make

to quite through Industrial, somewhat if business business, the solutions residential actually batteries year, we're more energy look the sales I flat, forecasting the especially rest coil. which for in a within sits certainly with for what at far Mobility obviously, volumes of And of year. China. products, Vehicle is And builds, business do margin is actually our improvement being terms construction in building as the somewhat I I Industrial, is which see except we Light with certainly Even balance or which doing the weak, and that this, are we're segments and up. industrials, specific the through the of picking rest with X driving we're those do that our motors, general believe supports year. quarter, this went in in of well year two 'XX the in But coatings

question So when profile get again, sure grow. to we a have that for business we're believe see but time, the of make I to it's do there certainly we margin going

it, with call in third would I we So Industrial. the are where we're inning of

sentiment your taking if across can to I'm talk rate can initial expectations the just higher-for-longer back, about specifically. environment you about And That's your higher-for-longer step a portfolio? impact interest year? interest then include And very or you're rate helpful. bit how Great. And from seeing compare talking this sort a where any a you for of would

flat we planning of gave we guess, at late it February, we January, a look If the back assumption, to Yes. that guidance in, be original at rates planning the from was time. were I -- period when for

baseline forecast. planning necessarily our in So a rate reduction we not were for

If at that's our we what fixed of have look about as out XX-XX debt we a float perspective date. expected kind we debt from is, how operate. obviously, in to percentage So I played

positioned So rates I just interest to we is appropriately if when, think last managing overall the that. And it to we're reduce, at as relates and if look think then ever I begin do point expense.

million did in our we what we quarter, And did well. better where our saw term of the of $XX updated term also we down loan. as first You we pay pricing kind loan got

So we of where feel rates good with higher-for-longer. we've pretty in able some environment able and that to actions being this operate the to execute been are looking to be

from Our next Mike from question comes Harrison Partners. Seaport Research

if mostly can I that little you Would bit this provide in more would helpful. a could million $XX are of mostly actions any costs? color savings come going provide the that you transformation for on us as guess or key was wondering you SG&A, be restructuring I where classify manufacturing buckets to XXXX from?

Sure, Mike.

-- regional driven from I was organization look a of think culture. And is example, there be teams the that into the this meant did years redrive customer we could few start coming culture more to agile I'll with noticed a as be it, more COVID. X.X I a through this financials. would stopped possible. back was corporate years individual after what the and somewhere up holding We right was, And functionally-driven overall, you ago, three perfect be so maybe flatter at it will just about nimble, So as like Axalta in more this Carl more as in the to I was drive that to pick was fast responsive And drive one the businesses. we've felt of of to from company size, and put and to things a were give for we the also a the standpoint to the was P&L-driven it, of wanted color call under that and more as operations objective top. And we we a one -- the to a and one on get But P&L what close smaller be that that with a go that our maybe organization efficient. really a organization as Axalta more example to organization, company pivot Axalta ago, of really --

So more our on well looking capacities I it in X/X and would there. in aspects manufacturing focused call corporate then calls the as business X/X our of and at SG&A, footprint then as certain making

project of that we couple the the years. next have going over So that's the of overall perspective

that last areas I -- element the with good the you hope we did of we manufacturing terms gives in. with it So this underinvested and structure what at were the is we need overinvest description. One really a areas in in it of where business side, or looking was of the that really to

I'll And at to we of period over that that time or Carl. the that, those drive of also so we're assets it looking so growth could With parts turn essentially some capacity moving in other of business. the

it. covered Chris, I No, think, you

we as through how will you Mike, at be savings lot referenced, look Chris in of P&L. that SG&A going a the expect come that think, as I forward will

in of be talk might the popping up vehicle government time saying morning autonomous over features X been is All little we a vehicles. out to years. headline covered vehicles kind this collision since Refinish and is of right. to you while technology business helpful. emergency on on try mandate about be automatic That's autonomous look very how maybe reducing or that U.S. this rates time? more a Can impacting, type then could how It's over kind all And the you braking going of that at

Mike. Certainly,

to, Apple, look out. Level I time, autonomous, going over we watched we've of start out, I X, if ADAS how is, further investments Level think further Until is forward. you I those and call concern let's X this been seeing think to which it, can this always think moving there's as going and Cruise I you get believe, affect collisions at or tapering

it, for term, being refinish the X, would in more shops in what's with minor for essentially which us. or Level driven think collisions, short call about the I let's X this Level work is to drive part what lead

and for gives the write-offs looking away, normally let's versus see. actually And us see do that months, and body are because chances of see at I've of go it, body the have that shops are can cars you had there's last shops. And believe of some number let's to more in of, call car some shops you So level that the an in couple in in a minor full to I write-offs is would opportunity what it's collisions that automation. or electric to that actually lot looking of out cars a takes many Carolinas couple body it, full -- the just cars call work

it's So folks. does protect ensuring it right thing benefit the in But it time, same that business. we I a the us think at great does provide because our for

question next Citi. Patrick from Cunningham Our from comes

Eric This on ] Patrick. is for Zhang [

targeted the can parts the of of mentioned were increases the across this of activity the was the continue call, targeted and remainder that products On is beginning about we at portfolio price year? like for expected to talk what the

businesses did the pricing. -- pricing. proud X board, across did We drove team actually, for we're all the essentially pure We of the very it

pricing pure was actually Our up X%.

stable we that XX% the here I Refinish efficiency think what efficient at our about that businesses. If is point If we're we product, think very sake obviously, proud previously. our And someone XP. the deflationary XX% customers. but this X more base price for But market, our than point of our efficiency the out. at to I I this business, the in business let we of waterborne as That so accomplishing team at productivity very for continue quickly, for very with Refinish me was very, just we're and in pointed the there's coats, customers. price, If pricing all here, what look differentiates Cromax our and a drive had we look chroma-based to it the is we're doing technology drives I really improvement it's currently to moving don't what

So there. and provide that efficiency we're the productivity pricing our for customers we the

So Refinish as at I look business. that's, the

we pockets still to On believe have we the to for more products we side, are that the value of there's Mobility where continue the that bring our customers. which business,

of elements is our certain of of finally, the that we're of also to in or Industrial sure that this impact certain of, a we have and getting in to can the which time right So to the then pricing. level price. And that it, pockets, we we something that making certain portion of business, invest over certain call segments basket choices and getting business, the in right we tail that out the out are drives customers continue of make And raws let's labor profitability. continue of

across is X So the pricing and right X%. we're pricing now, of business elements up all pure

next from America. Bank from Steve And our comes Byrne question of

guess, for from inform Rock additional Steve transformation gains Hoffman should we Could to there's been to I you launched come if expect productivity XXXX the guys, summer any initiatives that on Byrne. initiative? prior last

this for May discussion hoping I on Sure. the could I'm XX. save that

to there. the won't not might probably And So Otherwise, you transformation initiative show But too color, give that you umbrella. -- our two up much Obviously, about. talking Strategy operations a under we have more Day couple we're we're initiatives. then the

opportunities. as We've couple transportation program looking more we that a for to do believe facilities well our as distribution the more we work there's to of do from of going And that the XXX we're where that now. grown the time productivity as or years. then opportunities. through is about one element drive with about will over next second first some warehouses we're can And side, the of optimization centers process network think on that be the we -- and still pre-pandemic The

certainly on are to So the that going we're those work going elements forward.

Vehicle Light on business. And the just a follow-up

metrics either growth similar an there? Light give of versus kind just other magnitude you for extent or if in Vehicle us Light regions growth provide wondering on market idea the of non-China Just could of Axalta Vehicle

Sure.

through market, Vehicle In Light look X go all you give North I as just stable. for I'll for and that a perspective regions. as at overall the the call solid see market market and we being us. would America, So I the

about inventory We the are at stable. of up by pick starting days. dealers here kind volumes that to said, seem see XX quarter-over-quarter somewhat But

to up we're marketplace, up bit, picked wouldn't here. In gone very up here XX%. market that about but standpoint. China we I we've from markets a again, -- as a have stable our X%. stayed you as down in is Europe, significant And X%, say that's little know, So X% well and anything have

in America the Vehicle call Light North growth would bit growth I overall, in and performance solid of little with So a significant China.

We Wells have from Fargo. Sison from a Mike question

year. to start Nice the

markets of in of EMEA, flat the Refinish, sort the was guys be how again first America. And for the in unfolds rest you year? of And growth. quarter expect do think growth your XQ, you I think in you the said terms markets In for North XQ? Do flat for you had to nice the

up single that, say We would just the to that issues operational that I'd flat it's say, had On to flat slightly top strategic initiatives last working about are I also are and really, QX, in showing obviously going we we're we had in the high as I we on. digits X%. of growing, of X QX that it's Yes, said, year.

driving that our lapping growth performance in So is QX.

here we'll believe business. again QX in Refinish really do good I So our a quarter have in

probably and more Analyst And been that on again, productivity you to how of really sound longer-term getting of of think growth maybe long way you has you're And growth just think of a couple the to a What Day. do on like maybe it -- the sort a for focused addressed holding question, average. And where about that do at cost the phase. you which more years? does Is do the time. see it? But is over growth next of sort Axalta

Absolutely.

be focus through detail a what can significant in we or probably there's will the believe side, on margin that going growth that the XXth. X our honest, lot do we left think covering the certainly innings but And I side. to Strategy on So is more Day X on be we

providing doing X a targets from we'll so yearly the segments And we'll business across view be by is of will now where X in providing. be years what that be we

give a having measure we can think So the to where business just we with of perspective you take a that. and

Mike, operations, Chris in focus as then with lot coming to a of Yes. while I just add -- would been focus costs. that, there's And you if just improving far on as how

XX% If for The on to to going of the look year, EBITDA what XX% margin at year-on-year. XX%. referenced, as perspective. EPS team now back planning the expect up is we margin is implied just running you up business this EBITDA as be be step accomplish an we to as our and far is

where lot Strategy we think, weeks Day. is Chris as a of we the I the of said, time next like taking we're So in what when of pivot -- couple to with the will we have trajectory business. growth our And this spending

Mizuho. John question Our from next with comes Roberts

an Could than I'm update of sales? your give us mix quarter. the Nice may China thinking on geographic you auto guessing I bigger was that OEM be it was.

down. me yes, So let break it

$XXX and million North we're Vehicle America $XXX and about million about at Light for then if about -- in China. EMEA, is So look I then sorry, $XXX million

So you volumes It the didn't enough terms China total. out China in called in of -- was that's quarter's there. strength drive seem actually like the to big the it

Yes.

it region of at pure I China think, Vehicle bit of quarter, a is the for you is third little now was revenue. us $XX -- bit Which -- business from John, perspective. million it if a little north for Light just for a look perspective, the of us largest the

our in only the remarks, America way still largest continue in is if being prepared questions, just not But some in Chris with at the we far China. by strong So very, North see is to referencing specifically as very of second. Europe it, I in look performance,

from comes UBS. Joshua question from next Spector Our

on [ for is This Josh. ] Spillman Lucas

to costs, we So the I just could. want to if SG&A go back

the there So program, from kind single-digit it million in which they X%. of compares you're through sort is your going sort the savings get inflation high of only that -- kind of At we're the to like seeing to sounds productivity modestly of peers. kind across quarter about year cost of time, most first of are in same the $XX up the

guess just of you kind about are or up expecting net think factors, SG&A year? flat we single low that? growth How of this to So should digits these be of I kind

Yes.

It's we were able be we're the the as manage As up to proud And probably based SG&A, to the we SG&A at be look accomplish in on of we we able just that how kind we're low spend SG&A, you -- at at also of flat to what quarter, going transformation just -- in. environment look very year-over-year especially best referenced, how we in we hoping single really forward, in the were are that we're very digits business to first looking that, the we initiatives that as a very, but not look well operate are forward. only as year-on-year underway on off basis. to

very So we're us. focus start. that big is And a first off a to for quarter, good

back kind you quarter? much are how exits, are of deselecting on some timing to of And of if then each able And going Industrial the there just sort of how of scale to kind guess to... that's you give going volumes us you could for I quantify on kind kind the

the breaking see, much down we're we're out just tell but because choices not I We're of as of not now. you you that out. breaking out about can we're can X%, is, pulling But what how we're obviously, that right making

bit just little add a just But to further. to that,

a to of be going of least forward. some we look basis, to are to compare early on we especially going beginning on we're kind still perspective, type going the look year-on-year, year-over-year we out, I kind where that working comparison forward, be as as we think we're having believe as signs we as while see quarterly revenue at bottoming far of headwind of when kind portfolio, on

from Vertical Our Kevin comes Partners. next question from McCarthy Research

basket able Refinish grow business, call fast Refinish that how within And products? you nontraditional for of perhaps work, kind Chris, that to versus term over the think medium aerosols, shop of adjacent a you've might big would products, what lot your is do others. of basket body you got bedliners, example? be How I

to. love Sure,

million if market business is it, billion. think the is overall in million in -- about $X $XXX would say you then I call million the the about -- $XXX about So it's overall And $XXX and to would I total. market, total,

that we as see have here. we a So small where do something we portion play opportunity that

So we we do area time. see to this that grow continue can as an over

micro broadly, on level, million. your about range question. your X-part I associated you the then cash tuned raised the stay annual with initiative? is a million $XX to guess think cash We'll I for ask And new free Okay. -- flow, want Carl what But more maybe $XX cost by transformation May XX. I

Or upside that mainly is there? moving there flowing call other would that are through? you parts So the just care to earnings out

Yes.

flow. things a free maybe cash of on So couple

off I for start to cash think a we're million. very free a positive having year, one, the good of $XX about flow

total, restructuring, kind So in be capital drive basis. Specific a to in somewhere the to million year help -- you between for a several additional costs, your when then And expect capital of to costs. And especially a that question $XX compare severance working to really on can impact we over us over time cash period. strong million on to really performance that, there's does the also of some relate of type bulk that's as $XXX and there expenditures well. year-over-year including

in we 'XX will but all -- to as year, not restructuring related that or as cash year some the the obviously, we coming we'll some the -- that well. be will is in in will guide cash on -- cash so you only well. of of this have of also will come in And costs have, come kind that free of gave but flow be these incorporating this some costs higher that these raise EBITDA that the But

next And BMO. question comes our from McNulty from John

for on ] Caleb John. [ is This

your for So like but million $XX in about year quarter, I saw full million. maintained CapEx the your $XXX was you about guide

of how are year? guys that rest through thinking about you sequences how the So the

Yes, it's a good question.

I is timing. think to that of lot a due just

are diligently in kind working of for we of the here next X year. So months still up the to very CapEx order ramping be

kind year expect the for into carry get would of and the rest as of kind significantly quarter, that will to quite through we of begin I So as second really increasing the well. that

how in kind can Irus in the the just inning little et more And to X going? talk like over you lot bit a Okay. your of acquisition, is the And you years? now, in, expectations about for we're the maybe that Refinish about a talked next what right kind positives you And going that? rollout for X on then of cetera. U-Pol, But like then

Absolutely, love it.

XX,XXX have we here, look we if think in about manual of I machines most XX,XXX body So shops. those. about There's

now, right Irus We our machines have semi-automatic about XXX have X,XXX past. from we machines installed. And

for orders We XXX. have

So the now. that plus couple as is get X,XXX to years, to the driving I is look what objective up right team is at of the next

million, there just could and to just add accessory around a in $XXX size. an I if of that, on market maybe was the question that was that at earlier, of I of all market, the specifically Refinish. overall and also about In about asked but guess, ] Chris previously, referenced, And as a market is That in, opportunity these look some we do about all of as perspective, $X coatings total, what size billion. we not kind Refinish accessories, from only we're of [ overall packing

Our next question from comes from Jeff Zekauskas JPMorgan.

underperformed How period will its Axalta share of you a a determine market. because whether that, cyclicality. in volatility over price its In is There's repurchase the idea? X-year has good share

in now Why shares? you have a markets. idea the it? will to determine a it's to to And whether X% capital idea You how your good is repurchase get spend debt spent it good

underlying and for the there this value our to certainly Well, opportunity as overall, we there's believe performance, And I as not think journey do value, that Axalta I if is about -- point, think our will. that shareholders, of at quarter-over-quarter you to we us create look realized. especially just an for

that's So I think certainly one our of goals.

at in point, then an in your we we But there our again, we at elements the through CapEx. value, there's how this look share an we of at as debt, we shareholders. look that look do share back look to we value out, opportunity there's that's there's you and As how M&A., certainly And there's that certainly in how underlying played that journey our provide opportunity finally, X creating the is believe -- value something buybacks. in we opportunity at to how opportunity should in look an we've certainly an an

that certainly it's element So at. look we'll an

presentation. very much question-and-answer And today's the Thank this well our as session you attending concludes for conference. as

disconnect. a now may day. great Have You