Axalta Coating Systems (AXTA) investor relations material

Executive summary

• Q3 net sales rose 1.8% YoY to $1.311B; Adjusted EBITDA fell 4% to $282M, with a 21.5% margin, while free cash flow increased 3% to $92M.

• Record Mobility sales and EBITDA, cash generation and net leverage of 2.1x supported results despite weaker Europe Refinish volumes and higher input costs.

Financial highlights

• Net income was $95M versus $110M; diluted EPS was $0.44 versus $0.51, while Adjusted Diluted EPS was $0.63, down 6% YoY.

• Operating income was $165M versus $204M; higher costs and lower Performance Coatings volumes pressured earnings.

• Operating cash flow was $135M versus $137M; free cash flow was $92M, up 3%, including nearly $21M of merger-related payments.

• Operating expenses declined 3% YoY, with operating expenses $10M lower; SG&A rose 2%.

Outlook and guidance

• Q4 net sales are expected to be flat YoY; Adjusted EBITDA guidance is $254M–$264M and Adjusted Diluted EPS is ~$0.55.

• FY 2026 net sales guidance is low-single-digit growth; Adjusted EBITDA is $1.10B–$1.11B and Adjusted Diluted EPS is ~$2.45, down from prior guidance.

• FY free cash flow guidance is $450M, including $80M of M&A-related cash costs; excluding deal costs, free cash flow is expected to exceed $500M.

• Raw material inflation is exiting Q4 at a high-single-digit run rate; further pricing actions are planned.

• North American truck builds are forecast at 300,000 in 2027 versus ~270,000 currently.