Axalta Coating Systems (AXTA) 30 Oct 242024 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to Axalta Coating Systems Third Quarter 2024 Earnings Call. [Operator Instructions]

Today's call is being recorded, and a replay will be available through November 6. Those listening after today's call should please note that the information provided in the recording will not be updated and therefore, may no longer be current.

the Relations. to turn President Lubic, now Investor of will call Colleen over Vice I ahead. go Please

Thank you, continued morning. our Investor Axalta and good and third Relations. President Lubic, story results We of quarter Vice XXXX appreciate conference you your welcome interest financial the This in to is call. Colleen

XXXX will our and Executive review referencing of financial our during financial this Officer, Chief our we an our which morning a a to Villavarayan; and and will released section at Chief website slide the third provide quarter outlook. Financial results this Today, presentation be axalta.com, Chris of Officer, quarterly Investor update our Carl We Anderson, posted the Relations call. to

may future statements view forward-looking is risks, may and uncertainties prepared to from company's statements. current and and the events financial company contain involve results obligated forward-looking note that on Our slide performance. discussion the remarks, Axalta's these of reflecting and update the actual not potential presentation those Please their effect and statements operating forward-looking statements. materially These today differ our

During GAAP the and the footnotes be non-GAAP the made the presentation in a release measures comparable tables and earnings for applicable most related Please measures. directly discussion, of references financial may see to reconciliations.

regarding financial information measures, with please forward-looking non-GAAP additional statements and filings For SEC. refer to the our

over call turn Chris. now to will the I

good and everyone. Colleen, morning, Thanks,

expanded third this our Axalta, employees quarter controllable. for move quarter adjusted to was I Let's for our a to exceptional our demonstrating margins like Adjusted thank EBITDA and drive sales who company ability This priorities to Slide also EBITDA. control would X. each execute net quarter year. helped and record the an

management net environment. billion. of a contributions the macroeconomic increased offset softer and sales consecutive mix from year-over-year. growth This In quarter represents Share acquisitions recent than $X.XX gains, quarter, more the net sales XXth to

points improvement ninth $XXX represents This EBITDA Adjusted quarter outstanding company a million result of of operating period third the introduced year-over-year reduction from EBITDA consecutive year. to and XXX contributions adjusted margin Margin year-over-year. a the EBITDA by last a in this basis growth quarter XX%, earlier same actions transformation year. record lower million. our Adjusted $XX costs, of an acquisitions from expenses increased variable of result to expansion was due was

Growth is a the A XXXX primary objective Plan. for

This achieving our target. quarter, should to we several achievements had contribute that growth

were and outstanding award we begin new the to a Refinish in by our was excited X MSO efficiency First, technology converting North America. driven portfolio. of top product This

continue in customers, to as business reinforcing the strategic position In awarded Building be with we our leader Products, this space.

growing we're wins a industry. XXXX to expectations. to expand Light capacity margin this customers' We technology due awarded are volumes the be color nice help softening and meet our Finally, in in should in to accretive. second with half tailwind new business were to This new expected growth our our the of Vehicle offset that ability

improve match that to enable delivers from and higher consistent to a technologies and the shops that handheld business, deliver leading every Irus efficiency, Nimbus tools Scan of terms an vehicle quality ensures Axalta readings. examples bringing innovations market. expand will Axalta color launched expect compares are scientifically productivity Irus Scan, are Nimbus each and of that new color tools formula retrieving and a advanced highly-accurate leading us enhance great we These that our measures Scan. Irus Upon for digitally time. perfect body tool In recently accurate data to These we innovative profitability. and is

coatings with Products, have including the Building we set surface. historically extension of finishes, coatings an launched Water-based issues way substrates for had for our In Cerulean, on platform interior the water-based wood cabinets.

in expertise and this developed a a solutions. touch coatings using sustainable Our our new developing smoother visual and We our that perspective. it are Coatings offers product Performance to commitment pleased extends from technology line

Within customer BYD, alongside the honors. Daimler, OEM awarded our General to Motors and early Ford from product, speaks and We're in of This product like relationships. and working stages their that development the have customer of collaboration incredibly extends excited recognized customers excellence our Mobility, us great quality, efforts service our paint multiple to shops.

This profitability alignment and demonstrate and clear our on our expand company. a on quarter's results resolve the priorities commitments deliver to across with focus

exceed we're $X.X third confident year better-than-expected EBITDA adjusted our that quarter our results, billion. Given full XXXX will

of to As strength increase year for EBITDA well such, reflecting and as business. the cash the diluted flow XXXX pleased outlook as for free full we adjusted the are underlying adjusted EPS

X. growing sales strong Let's posted The Slide move business another X% year-over-year. net Refinish to quarter with

We quarters Year-to-date, M&A with we XX by have new digits, macro a and net body have wins, environment. growth driven industry the year-over-year by soft of shop outperformed net achieved mid-single sales pricing.

our over position the focused economy we CoverFlexx shared, growth As efficiency-enhancing segment. to our our driving have segment, premium And North the we're expanded expanding customers. with we won position year, and new America's X,XXX body This recent economy on we shops. in segment have solutions and in delivering innovative the acquisition, net in

CoverFlexx still quarter. in expectations it the exceeded While is early in results the integration, our

not quarters. of volume We Light excellent Vehicle rates rates that in to as regions. growth our X% last the year-over-year This type have volume Year-to-date, another growth outpacing Light period. we had the all is X XX delivered outperformance quarter Axalta has also build new in declined against of builds in in Vehicle, X same X% production outpaced

revenue margin customer seen and business Lat growth our strategy we base of accretive I'm diversified China the and Our into brought portfolio. have expansion. have proud results and very Am in the

and quarters, have able through also has volatility between the by exceptional significant the these balance wins headwinds. By caused a healthy the help diversified This has on cost. build Despite business raw reducing industry commodity time us few our some us expect products base we expand in with auto price and the indexing, customer weather next their cycle relationships. and we focus the service. the to to the should team excellent and enabled of maintained delivering volatility customer dedicate I'm in material pleased over been new

focus. The This this Slide Plan on the is forward. going our A with X. as to to is Let's achievable is aiming We so our plan strategy well earlier than year We're consistent the the anticipated. way absolute deliver results. to move our we delivering far financial shown believe performance are

for far As the great want coalescing we I prouder to flawlessly approach I year out the XXXX. team, and not employees look be global preparing in executing strong the A of calendar closing forward year, the thank for end of this to thus I around could and Axalta's XXXX. Plan and

turn to Carl. call over I'll With the that,

good Chris, and morning, everyone. Thank you,

Let's turn Slide X. to

in an sales contractual pass-through by net quarter. X% $X.XX contributions increased quarter our billion, raw which the quarter year-over-year approximately recent Third to the in X% macro as and declined by by price headwinds within material primarily outweighed from positive Refinish. anticipated impacts unfavorable actions offset Price-mix the driven mix were acquisitions,

from Gross X% Improvement variable margins supported in the strong lower costs were management. by basis quarter, cost and XX% prior an year. XXX of was points increase

and Our team versus procurement year prior delivered raw expenses, costs with quarter period. the materials, freight another lower all great energy

from returns. productivity benefiting continued excellent programs are generating We on are which focus our

lap pockets view most time we slightly than supplied but remain on with of better softer fourth expecting material base. of markets quarter that as started inflation deflationary to year. we last are commodity well raws, at cost expected demand. balanced to In be we market remaining similar the the raw Regarding We to across this begin XXXX as overall impacts the late quarter, fourth

approximately supported to was prior by a that not operations quarter in third year. million This $XX decline and increased $XX did improvement improvements unit last consulting the compared third of from and Income ERP the repeat million from variable of cost in quarter productivity the mid-single-digit year. costs rates,

compared to last actively manage continue we year roughly to structure. our as was SG&A flat cost

impact expect our plan year, transformation in from savings initiative is financial to way the XXXX. annualized an ahead on coming of to $XX Additionally, achieve in we be the and million this of well

Adjusted lower by was diluted shares increased for performance. year, last million, per And driven in EBITDA to above the earnings another $X.XX, EBITDA higher adjusted quarter overall quarter outstanding. XX% $XXX share earnings and record marking XX%

from move net for grew to increased million, $XXX X. year-over-year $XXX to from driven line with in the and by new million net Net X% impact Performance unfavorable sales sales Let's net trends shop largely Industrial due body $XXX offset X% trends. mix to CoverFlexx partially and wins, incremental the Refinish million headwinds. acquisition. Slide year-over-year to industry macro Coatings contributions sales by to declined recent X%

be XXX through we consistent on track prior in While with remainder we deliver of margin conditions basis expect to continue to improvement remain the to this industry of muted the guide. XXXX, points our year,

incremental basis by revenue margin points, year-over-year million Performance EBITDA $XXX lower XX% costs, conversion lower variable Coatings on by increased to expenses. $XX increased operating adjusted driven primarily XXX million. and Adjusted EBITDA or

were sales Let's in decreased rates. Mobility regions. Coatings third growth on all quarter in rates $XXX Light X% Slide results net versus Volumes a despite X. net X% in to auto the of year-over-year move X%, XXXX sales grew decline the flat production build million. third outpacing quarter Mobility to Coatings Vehicle

As headwind actions quarter, by expected, last price-mix was pricing primarily material timing impacts year. the to pass-through compared driven a when single-digit low in raw and of

raw more the headwinds fourth by expect encouraged the sustained levels. price-mix mix material team results to to as relative these volume favorable can outperformance expected at favorable the and believe growth are we that pass-throughs. continue offset We quarter, In drive from is than

driven by by in primarily another Mobility variable by a operating expansion America in margin year-over-year of and businesses, a Class and industry with EBITDA in to XXX This by expectations. X to quarter XX% our drop reduction $XX driven year-over-year and margin Adjusted adjusted Vehicle North forecast was sales Commercial declined net with consistent EBITDA in Latin increased costs expanded basis X%, production America. million. expenses. XX.X% both points lower primarily Coatings

Total the at total end on to a end ended the $X.X of of cash consistent Total debt in than track leverage at sequentially be drive end quarter by gross and X.Xx, we leverage to are third the quarter X.Xx, strategy X.Xx over was in of billion with Turning lower XXXX, $XXX on inclusive liquidity, was gross improvement net X.Xx of third at hand. X.Xx a We and to X.Xx range our X. our million to Slide Xx. the year. quarter to a with leverage quarter

was we completed $XXX that finance In on the of revolving of million CoverFlexx purchase repaid $XX third draw credit used facility in the to quarter. our the the million quarter,

million announcing we this $XX repurchased shares to have date. we million Since program repurchase of $XXX the of shares repurchased this share Axalta $XXX Additionally, million earlier year, quarter.

quarter to spending in We on the deploy committed in manufacturing high-return efficiencies. business. improve third to our CapEx the remain $XX to facilities We and in year-to-date opportunities expenditures million, productivity investing see Capital and to drive many capital bringing were projects $XX million.

CoverFlexx acquisition. cash approximately $XXX $XXX Our year-to-date this have inclusive was the operating deployed flow and we of million year, million,

to Our XXXX. allocation approach at A executed is critical of our return XX% against we the speed achieve balanced have capital priorities target capital to on and the which in Plan invested

invested basis, of exceeded to As a capital on full an is on compared which increase basis XX% trailing return points XX-month of this XXXX. XXX year quarter,

increase Slide of to Let's Full earnings quarter increase projected completed, XX. XX% turn EBITDA our strong EBITDA of be With XXXX million in and pleased million, fiscal midpoint guidance we adjusted increase is XXXX year-over-year. to an to the approximately our are prior another a year $XX adjusted $X,XXX versus outlook.

share $X.XX, year. Additionally, XX% at be increase last to adjusted earnings is a per now representing to diluted forecasted compared approximately

net and approximately $XXX when compared expect net year sales full Our be up XXXX. sales unchanged, to to million we remains guidance

and we we XXXX, will believe most have in are with continue, our will next year, initiatives. As we excited suggesting to with macroeconomic expect of for half we made relative remain that trends progress the against Light indicators Plan outperformance the Despite the the soft remain start first economic prepare M&A. Vehicle Refinish A we and in to opportunistic

lastly, is initiative next we to a next help as benefit lower off reductions our further is $XX million great floating will nearly rate. transformation start, And interest million a rate year debt expense any expect Our XX% $XX of interest incremental and to year. our

our for XXXX another is remained record focused in have great be year, we believe Fiscal a The shape, is to has we flexibility we organization to financial deliver balance the year shareholders. and to XXXX. value record in year expect up shaping the and sheet deliver

prepared Thank open remarks. This you the for please concludes lines for our joining us Operator, Q&A. today.

BMO Our Instructions] McNulty Markets. will with [Operator John come question first from Capital

out on I side. can maybe margin start the So

incremental A So for XXXX sounds XXXX, -- long-term coming you've Plan. the in, your transformation incremental at one pretty like some initiative. least it And you're XXXX around got already guy much at good in

kind seem So to for like XXXX? looking you're way good can you you of does of guys pace other of speak expecting longer-term bad guys ahead already some the as the out it and were Because to your plans. that you're

to realize I'll it from having hope over full I'll XX% your for and as replaced. and got our Yes, hit that a then at great margin to didn't I we you're we name start, good a Carl. I here here. along come year. plan mean, see I week look John, hand it's the at have XXXX perspective

as chain can out productivity about the initiatives XX% and and actually go Again, that supply we that with plus we add had to we transformation sign also we see driving where we And a you if There's operational that. think when Plan, initiative there. that as that we're margin. rolled remember, the A can

at we said, we are drive was the quite that point we towards the growth. than are look where as do it essentially to actually with that. But So can comfortable pivoting that better margins

in, was And came some things historical certainly are we and like forward. would I strength of growth to what one the that focus the that margins, and pivot back sure towards we do in when I talked I the getting going of that back. that make to margin about is I we think have

ahead as think at 'XX. able us Plan. I million if years, We of over the $XXX last and story And there of is look X you A great million the were $XXX the have about we get to 'XX growth about

'XX, have believe -- to be foundation I we we So it the 'XX, do 'XX And get same there. to we have target, able with. can the certainly

margin and there. build focus, is from So that's our the stabilize then

it Carl. turn And over I'll to

else thing I the just we is what can only innings in do we add perspective. John, productivity from think would of the a we're I believe Yes, early

So of the over on about that initiatives. the in next the CapEx look business, big part several years, be if invest I really amount of expect we a productivity will to focused

early over think while us in several and some a it's we lot the have momentum, still next I front years. more So there's early of

it. Got

new auto Okay. auto That's you we question, spoke helpful have, color. the as should the year. some look the mark that then a auto next second guess know growth you you? what a of I is to If line wins we what based for be arena. thinking kind we the your OEM I to to And a just on how flat is as about had or in top wins wins environment, question new contribute

question. Well, it's a great

other above One Lat in you let as last is performing China And if the look as plant new a at project -- at Am. have is that In and that think we growth products year. these new But define I me in China, the look primarily market especially lot we've certainly of X full regions. the the and one we been year, about XX% forward, it's primarily that the fact full we I stimulus, I place. with upside. launched a put have

defining of that terms point. at In number, this not we're

probably we've grow Vehicle, had both in providing is growth is us that's Vehicle there. It we $XX could Commercial dynamic helped certainly the we opportunity about and that most we'll million Lat 'XX. the and certainly provide have call the it, that's, next next Light start of area with through a competitive Another in ramping change think What's of as of will I Am certainly to that a and up There, year, let's tailwind. year. see number north

David Our Begleiter Bank. from Deutsche next come question with will

in down volumes the quarter? were the Refinish, they on were what why Chris, in down quarter? And

things. of couple a primarily Well,

you've reported I it's X X seen folks think that as the things. have or of far, about so from most

came the all you it, came quarter, with that the it's bit. But created, is that essentially some you in X%, for believe as I X, call CoverFlexx X if I that us marketplace the to think, some as, about where if there consolidation X a growth are rates in destocking let's quarters think I said, at specific that if distributors I feels impacted quarter, with as about it, our driving, I insurance know, look the well And the some X and like it issue. call out last market looked a X%. point and it, that in, quarter to let's First, reason was the at

saw. up we So that were let's essentially we call a at QX softness we marketplace the you if X% where, X%. actually that But QX, lot against down were a it, of look X% took similar and to

it, a that will So outgrowth our of drive that X% if play softness X% we growth I drive, positioning dynamics. you to are that lot of we for what feel call the QX, let's the will seeing. Even we're forward offset believe

And on that longer? X%. 'XX to on even in forward activity X% shop Slide changes X, Chris, that or point, What down body going you mentioned

market. I a look the secular fact believe quarter-over-quarter -- at look And this pretty that Well, at I not it's basis. would if you a as

into need essentially interest high basis. it I think doing are, a as I forward a And believe shift, but think marketplace there's holding year as next think, uncertainty well, if of the with the repairs. full feeling full on with to also you I rates look being will they one. number the at I as as if And as in are folks that back consumer basis, a year, year more

insurance Number repairs entry that over different are a primarily knew And it. focus space, to money you enables and was on. to look save into us about the at outside aiming to those let's the that framework, really CoverFlexx two, we perspective this needed think folks some if that acquisition the in get something economy here to closer time our call we

grow. our is real the strategy we growth by believe being driven I So on how

Chris come Parkinson Wolfe Research. with Our next question will from

Great.

we if very the kind of helpful. on through little rollout? it's side. and Anything just continuous more very a cycle funneling wind kind could that's on Refinish be would into of there the but know Europe, I especially how talk Irus we can that in this about So preliminary, bit hit

Thanks Chris. the been Awesome, going It's for question. great.

launched have XXX. them Most about been have Europe. We of in

to by to to look objective year as about is get that X get XXX next -- Our multiply think and about we out.

What's, let's that bottling get we've love to really equipment our space. It's in that is just to out customers of we growth as had their piece It's of see Europe, the to able that well in call they them. few the our support limiting as -- be of actually them us as service the and speak really get machines the build what win capacity was -- quarter, and them it, ability capacity the the that. to teams last absolutely the with in and helped a launched opportunity I've one to

So a I as as us opportunity the well we with great as great, great see help in to to hold our premium that customers on set of growth space have.

helpful. there of very other your asset dramatic had say, is, And across closures, the some been, on optimization, have actions markets, That's fairly rationalizations. end question behalf I'd I various distribution asset

have of will that -- terms you future? own future the your servicing you you're actions as still that process growth you customers, In there given to optimally defined years? think other your about in multiple let's Or need foreseeable say, the, -- foreseeable management do positioned, are thought the the for do feel and outlook take

Chris. going towards growth the That's forward, our infrastructure thing supporting it foundation I really, the I one for we margin I the if the believe think a pivot did, in it, And as is we built forward. our then going let's initiative about really part look transformation now good and through story I to supporting XXXX. call think we've with is growth best pretty question, of And the that started

towards customers pivot approach putting the as our us transformation , grow more is then ground, And to business pivot going putting there. driving Irus investment more the are -- to helps to well service question, out in really as do can your about what on towards investments it the teams how technology, the it folks how service well really as initiative out with Chris, to Mix to as We now drive there. get we towards folks get

basis have part business. look that the the XXX grown at certainly towards the XXX earned the our looked just A grow, business Industrial is with points That I is business, The about points. Plan one years we was Refinish can points, the just cool XXX And basis and have the and margins is X pivot that. on to basis go. And just has certainly right We Industrial if target Industrial this business. to

up you if as that place, talked capacity also that in I if new whether you through whether But planning Cerulean, we're back next So residential on the products, or can it's putting of we we here think at there have Industrial certainly, point. point. the believe and for towards start interest really think rates about over that picking is year, well. process, stabilize launching fact stuff But with of is that really I this that an growth the half an dropping because not we think and at market opportune there, start volumes doing about investing the business this to opportunity China as it's there

Vincent Our with Morgan will from question Stanley. Andrews next come

Coatings, couple more of a on on Just flat. color like it where little you us a Performance was questions Could pricing give price. looks bit

what of Refinish happened you there interplay the in Industrial? sort what maybe Just between versus got in what was

flatten then it raw like XXXX. sort in you're I expecting sounds to materials guess into out And and XQ secondly, of

contracts where indexed or going are you to close in out raws? those so see terms indexes? Is you update we're price So are us catch-up are you pricing negative just on of that as of well? that to could Or another fattening on those have quarter you where there to

and look say very price-mix us. at hold I Refinish, we Yes, for to continues well would pricing as up

had movements I quarter on ago, compare mix some you when think far change year-over-year a is a did some as we through, that the kind in as of basis. implementation still ERP Don't have working we the what forget, you're were mix. seeing year which mostly just in

right we say coming of would where thought. kind I So is Refinish in pricing

as say it up a little on Industrial, well. actually, price-mix for bit I would And was

Industrial. able of So pretty I in we think to flattish benign, in execute there, just we're feel with market type good a how very

of is well. holding that up all So fairly think I

about of you the monomers, one, think said, of basket, look with very as pleased raw in third some see some kind which quarter, the isocyanates costs of I commodity seeing If the that. we X% year-on-year. kind at very, kind were the results of down variable continue material we to are our question, of favorability and the as in I And drivers

to year-on-year And the to we're believe we of into fourth have all in out do flatten for initiatives kind going maybe in quarter. X% currently But as XXXX. we X% as see year-on-year. hopefully some would in that it's We that continued just shift expect said, we productivity that inflation, Chris -- XXXX, do or to to normal offset maybe of planning some next

Just the it end turn we And last to on positive markets, you all to that, had add thing to indexing... I'll pricing. is across back Vincent, X

And just particular you Vehicle, the index kind on Light that to indexing, of were saw in kind we planning quarter, for in Yes. some specifically I pass as come of this that through. through then we said, as of

in little Mobility as next performance do well. margins at get a that not to of other I we're us we're into lot more we'll XX.X% really overall, see of we're year, and in a for there's can seeing headwind bit what think be provide as kind But showing you a quarter, we're year. that overall significant we driving the that. the color next think when think I on, initiatives I on it But that of focused

with Panjabi Baird. Our come from will Ghansham next question

sitting Ghansham. Krueger for in Matt is This

at gains lapping think first in great. detail better-than-market we that have But driving wins? we Mobility hoping in some the Mobility should any we little So point? ongoing these taking competitive bit the added been is exactly then on talked how And was standpoint a I detail about share market? already. my Axalta Are peers wins both a reacting XXXX more Refinish gains these in could what question, the on and from into Or growth about and share is for any to get share

And I'll cover this.

the of Am when competitors think a for leaving in let's serve look I customers to volumes and as space. we one an And opportunity opportunity in gave with well Commercial by Vehicle, opportunity wins, created call in to if to between at the Lat that earlier, at customers was as $XX business million an for coming us Light win the million we've we the what it that specific, and it see it, been $XX So us in come And $XX next plus as had -- new existing add million I I able Vehicle year, will to and I space, that win, I in. be exceptional. look about which said believe

focused. understanding quarters doing if this being feels I like X to the just row. have exceptional it focused started year. a When China, teams very quarters, started, said being They've -- at let's this X customers as the and is been what China, it with or call very, last we've an that in job for the move for team something And in I absolutely done and look it, isn't really it, it's

everything that of is do they color is what ensure OEMs teams really delivering our the one to our focus elements for create it's the that exceptional X that is implementing our service capabilities team; is that by fourth And element one is that do cars; third and facilities; build allow the quality we best, the which within they've needed customers' the the barriers marketplace. on of second in is our to one driven: China and and

And executing job just so an across there. done those X over elements, exceptional they've

from team going the lapping been to also continue and that volume I this we've plants, next able see capacity that if win. We to year, XX%. is X that's to believe Because don't year. at I and by winning. additional win between been just grow win, implemented you look

as that But any the side, very it this EV on you specified clear customers haven't made we're in play customers. top X on that the see, We can we've space.

win local if will been just stimulus that's with my growth that, story as think and of it's us. I great, will a go it's New know OEMs helping don't exceptional. our start Year. been think what Chinese tailwind through for And about the we I beyond but also next happen year, it So continue to And 'XX. and I The the is thoughts are about been also

very margin That's can Was contributors it. this Got essentially incrementally talk versus you original driver price-cost all the quarter positive record helpful. to switching some businesses? the the just the your about And of side self-improvement over third of things, then Or forecast? expansion primary is margin contributions? from during the to

Yes, a it's combination. Matt,

in So of cost also drove team from margins. obviously, benefit purchasing year-on-year the transformation improvement performance saw initiatives. also we the drivers some one the of the was large you the of variable that definitely I --

remarks, mentioned As line item little on originally are in we than that better my we as well. anticipated I a in prepared bit coming

I those, which drivers I those macro the So big environment. this in kind of between extremely X especially type think think of us, the helpful, was are of for

The purchasing X for last have, essentially, teams teams or materials least market above quarters. X, at look it, if performed we our at the

So been tailwind a here. helped that's that's certainly us

Our with next will question Barclays. Leithead from Mike come

good I ask here. on of Plan. you're a It wanted after about most year to the X-year to your goals the first A metrics, halfway like XXXX looks for

basis, should than if in what's XXXX? of the beyond other perhaps the Plan Plan Axalta? investors, A the think that's sales, on So most case, targets And how A think do a at preliminary least you for reachable about are

look have our A the is that on great at a a I going our main times, few we're the it as And to question, would remarks things Plan. you that's one accelerating of That's Mike. it, focus in -- noticed

XX% there. where, metrics, somewhere the sales on If between call we're, X the I of say, look rest it, metrics, would almost and XXX% XX% to on you the across let's

great it's So a story.

at I the $XXX able certainly view confidence is X growth. can drive the years, line you to there last been million look see my So to has company if can accelerate we item, of to this $XXX specific that million sales and it. And sales

So bit how the that our a with said, coming maybe pretty and A X I it's over contract we markets, of of that straightforward Plan in to new you is goal next little the pace of growth ensure bit accelerate and 'XX. years time. That 'XX wins the that believe in of with next to the favorable

from an seeing months the it, let's pull the picture now, will certainly let's A go XXXX a you'll time with Plan. call our based we on get we it, call at we'll out lay we X next that. to do we of where think we As look release investor And need if in forward 'XX, better the, guide

helpful. just your on super shares relative Great. are value own deployment. And levels? and That's the M&A looking How you back at current follow-up capital buying a pipeline guys maybe then at here the between

share buybacks, A and investing start Carl us that our let's then I'll over directed essentially on up, plans in and Plan pillars, here. X, point, working which hand And towards capital from But it bought I'll M&A, to it, call this that was the had at at if this what And in M&A. point, our the came million at, at even is it at we far. price where value. $XXX created we've I look certainly current perspective, so it share

So we're able we've accomplish what been of there. proud to quite

it deploy pretty I and it, off missed obviously, M&A investing to just unless would pillars we that. of maybe I'm call will But and something. certainly to equally going I Carl it across it, But business hand in the is

think going kind as will M&A we're as word gross things the reduction X the think on, on. of we balanced, going think little especially not repurchases. deploy we're But focused to that well is to in be No, we'll only how continue I share be bit more primary focused to there's a candidly, Those term. that well to be capital, debt about the I here as near on as

Markets. KeyBanc Yefremov with from Our next Aleksey comes question Capital

about I months? it shop or recent some improving body softening just stable, ask activity. wanted the to in Is the in recent trends more

it's I it, -- stable would It's softening. to call

a would a soft. So being I stable. Am is being Europe or China bit bit, China I -- would I'd yes, on region, is call and bit Aleksey. it I Lat then call soft strong. the call call America would depends North a

hope So a bit I that's helpful.

our to body at QX where a terms volumes time, full we're works perspective giving giving and of we're finished how next the are. we've the see I already a with comfortable month shop activity, year quite year guide In here, through. this and But want as

in And pressure the on other? you the economy Refinish same or year of premium? what pursuing differences the of terms the observed been than given sense. market? strategy your in did better do about Makes Okay. Has the the this economy Or market, one have

let's the think with segment. economy I just start

ahead as bottom performance just just the and is it. quarter we margin talk And it's on right started So call ahead plan, I it line of the plan, we itself, that economy, of revenue I would call plan. let's it, the don't but if with on call was our to approach deal a just forget, into And over this was ago. CoverFlexx. to

great against it's deal in So dynamics, our shape.

to execute. and André question think asked, and competency to I Mike think between about last if Koch ability seeing we certainly did a year, M&A -- I on So that the we're CoverFlexx the certainly, this recent our that

go us first acquisitions at, and next quarter have So first think Because I as to month's more Aleksey, that to stable look -- business the full call economy view. if the just the one adjacencies from will one -- half quarter's we it, at let's into through year. year looked get we bolt-on seems we that the half one somewhat to it, to space, about with continue or our

premium makes dynamic marketplace obviously, it competitive. current the competitive. The The quite is segment,

However, as being the earned we leader company won here. the experience, right difference the is MSO here, that to And Irus be to the that strength certainly new the premium a of the And space. the Axalta our in I I all of ecosystem, and certainly of service level, here. play the in XXX we years believe here segment, have here have this announced, we've builds

up we I look full at look, we'll If X,XXX that a get have body look shops. the as been body shops XX-year X,XXX If body we've at losses I year, look So to I we believe I -- X-year at a win to have here, still XX,XXX shops. sorry, able net that won.

So marketplace point, at win. this is competitive, continue though even to the we

confident feel quite here. So

next from Byrne with of Bank question Steve America. will come Our

compared a depending whether an or you're aware, expense your PE you're by is at peers interest and as multiple. on significantly rate? tax sure your multiple your valuation to EBITDA different, I'm largely your looking multiple Was that driven delta

be Carl, plans your on expense? any could of And a change about for XX% XXXX? floating. comment interest where debt a And tax have you structurally to Do expense is your you made view

with as we plans, will happens of year. fair rate interest the still be out Steve, say, subject kind front many in sub-$XXX finalizing look to -- expense be it would of I you the get would it's moves should next say we're to of I we definitely million how what Yes, that and there Fed right? as of XXXX, Some are. But

could we're in or it expense that where think be $XXX likely bit as million range -- think Most about interest below? little a I even we go. should

as maturity of So debt be well. profile we'll the kind we manage proactive as very

from So better where and about leverage I'm feeling a are we better perspective.

out and our the range we're -- can probably to see leverage I end to as if You be closer look tracking even year, target well. next of lower

So of little I Steve, a just next think from as you'll about interest we think bit see tailwind year. expense,

agree. And perspective, then a tax rate from obviously, I

more. drive we I have At all you continue of to initiatives think can where EPS, work to the feeds beginning trying -- as we down know. we're of how that a it's into that we're lot end, on determine to that

I those in items we're start, XX% also a can think is X doing lot year. we think being great to off I year-over-year, but be more a there up this next year,

has Axalta's too needs to Goldilocks, the be execution. cold. I multiple too to to I that. think If -- needs I And be just to believe needs add Steve, part be of -- been of or it cold or maybe about hot story, think on what the consistency it viewed as is

I and times. X X demonstrated changed. difference last here, all quarters to where the standard have think we is higher that the We're past a has and certainly through X, that's ourselves holding raised beat

growth be eliminating quarters should execution the there you hope through our and achieved few confidence Plan, my So is the that, will that that see on we need through through that that we get next A the the here. focus

simply to Very an up you earnings on flat? think would flat absolute dollar would doing there? And SG&A one reduction follow-up you are value, growth. that keep maybe year-over-year, comp good. headcount just that What SG&A. that's incentive Is the be enabling On one from

Yes.

it's then on couple I reduction we've incentive on I headcount been think think to year-over-year flat a it's quarters. of pretty of last year-over-year But a purely basis. a the combination basis, even that talking on comp,

So not -- through kind in it's come incremental expense XXXX. really you're seeing that not of

to the the this this job us are here So near structures in in a managing a term overall, managing decent as we about markets I as will done, we not continue think the of we've focus for where date, SG&A, just I But be business pretty to think year. all but only are. cost especially think, here,

come Kevin Vertical will from with Research question Partners. next Our McCarthy

sounds little quarter positive look And the last if yet, it been imply years. momentum of we fourth it lot evident Chris, in has guidance, than a like deceleration more seems you at the fundamental today. over have sequential marketplace into of bit a your year-end to couple

in puts and of takes that the you can profile? setting to impact of being think would and guide? view So you're And you near-term your do working conservative speak maybe seasonality how forth kind other quarterly that

year comp, in what we the was That's is on where is. America the XX% QX X from it a saw you where Vehicle QX, North down Class think from I with look Commercial side obviously, ago. if at about CV

seasonality shutdowns the our with second element down and the we see Vehicle trends that business see. The in that OE that Christmas we is this this of at period also Light obviously, normally and

So of that a that is lot dynamic. driven by

in with doing of in about here to to happening lot Israel a market I about The go in through watch we're, the elections. Ukraine. we North as have that in through It's America, dynamics and cautious being happening look even watching job that it terms good just we margins. if thing in you the careful We're here. sure. is something Is the maintaining we whether global in have certainly what's make there's a just -- think, think what's If dynamic, Obviously, good there being of I that, it's that or -- upside? crisis,

have of to so there's bit watch. that little uncertainty And we a

So also view to we it or That's want our of how done market. to our manage we've this volumes point.

in that's our sure that focus terms -- they be, make hit a we assumed We even yes. And I'll performance that clearly of margin drive wherever to perspective. our that markets, have but we would here, with

that's I think So what doing. we're

I if built is the with pointed out, even And the sure business the P&L. quite again, that for know margins this, about that you Mobility the of as the in tell stability the part bottom QX we Mobility the watch has into CV cool business again, The that should margins is making that, strong. you half

an than tracking on I all to is XX% minus. that margin margins And or segment there's the opportunity the XXX points in better discussion this the I secondly, history, year XXX Mobility. Fair we basis margin level XXXX just good up to follow Maybe for in as or the if go and to to frame. way time if plus precedent you're Yes. Mobility, And don't that EBITDA appreciate versus being I enough. specifically know, that. recent as may, back of, margin 'XX

years? several the one that changed levels, stretch the teens goal? if question do would terms kind global things auto of So to be of production in the high cycle think have an be, structure unrealistic over cooperated in would there's upside the the of you next whereby business, Or

-- ago. points, be and little and Venezuela South bit some think that years structured going there elements there of XX But in in in was would there that was we margin almost year. more certainly there a business was that Well, I differently say I upside next back the forward I into terms basis profile? should if America, think of parts of XXX would the were we go upside is see

is new winning business The the we overall are that accretive portfolio. to margin

upside in is continue long to going as So expectation that my forward. markets some support that business see as the will margin

in up element back see mean 'XX if back you the Commercial think of the half would of prebuy the 'XX emissions should Vehicle that for The is again. -- about and the probably this key other you is volume element of pick that 'XX, this change,

this where XXXX into trucks, you could XXX,XXX you of certainly -- I tailwind at 'XX. half about should where and and back are a if know projected margins we 'XX so assume the being look go is us 'XX And as good that at point into give

with from John come Our will Roberts next Mizuho. question

I their are you think Volkswagen about is a announcements? meaningful customer for How recent curtailment your segment. thinking Mobility

Yes.

these Even looking we've you transformation all look downsizing own at I so cost footprint by do. And the at doing. we structures in the volumes. -- us think obviously, the we is face, the customer, things our we're X with terms can that understand to footprint. are facilities, a But as of are, of that all at are have we're Volkswagen our looked I if initiative, what volumes

their at perspective, us, a facilities still volume levels supply we demand will into for this So from that point. have their they at

And even there let's more insuring we're customers where the coming moving call in back also it, of and out Lat with back, is for, regional or Chinese starting see coming Mexico. into coming dynamic, of OEMs moves coming view to new Am into customers or

established I is for the strength that at there that if business of as really see wins as our partners we something as call with let's Our is 'XX. growth driving look new it, well our, what's what strength

helpful, So that's I hope John. Yes.

question. think last I the this is So

Absolutely of you this much. the raises. continuing company. and progressing forward think our A As to very And the for certainly out X and we the talking I all just you we beats employees quarters excited XXXX for of beyond. about and to be -- be of thank of want since end we talking to investors until won't really close to a here, our on year, I won't Thank look as Plan future I lot

Third Earnings Thank Coating you. conclude This Systems the Call. Quarter Axalta XXXX does

time, at have a disconnect You your this may day. wonderful and line