Axalta Coating Systems (AXTA) investor relations material

Executive summary

• Achieved record Q3 2025 Adjusted EBITDA of $294 million and Adjusted Diluted EPS of $0.67, marking twelve consecutive quarters of year-over-year growth, with net sales at $1.3 billion, down 2% year-over-year due to North American softness but offset by gains in Europe, China, and Latin America.

• Net income for Q3 2025 rose to $110 million, with a net income margin of 8.5%, and for the nine months ended September 30, 2025, net income attributable to common shareholders was $318 million, up from $254 million in the prior year.

• Maintained net leverage at 2.5x, the lowest in company history, and executed $100 million in share repurchases in Q3, with up to $250 million planned for Q4.

• Transformation initiatives and operational rigor delivered $40 million in incremental savings year-to-date, supporting margin expansion and cost reduction.

• The 2024 Transformation Initiative continued, targeting organizational simplification, cost reduction, and improved cash flow, with expected completion by 2026.

Financial highlights

• Adjusted EBITDA margin reached 22.8% in Q3 2025, up 70 basis points year-over-year, with gross margin steady at 35%.

• Net sales for the nine months ended September 30, 2025, were $3,855 million, down from $3,965 million year-over-year.

• Net income for the nine months was $319 million, up from $254 million year-over-year; basic EPS was $1.47, up from $1.15.

• Operating cash flow for Q3 2025 was $137 million; free cash flow totaled $89 million, impacted by higher capex and working capital.

• Interest expense down 15% year-to-date; SG&A expenses declined 7% year-over-year.

Outlook and guidance

• Full-year 2025 adjusted EBITDA expected at ~$1.14 billion, at the low end of prior guidance, with net sales forecasted to exceed $5.1 billion and adjusted diluted EPS projected at ~$2.50, up 6% from 2024.

• Q4 2025 net sales expected to grow mid-single digits year-over-year; Adjusted EBITDA projected at ~$284 million and Adjusted Diluted EPS at ~$0.60.

• Free cash flow for 2025 anticipated around $450 million, with a significant Q4 improvement as working capital unwinds; capital expenditures projected at ~$180 million.

• Targeting $1.2 billion adjusted EBITDA for 2026, with continued focus on cost discipline and growth; Refinish revenue expected to turn positive in Q2 2026.

• Management believes current liquidity, cash flow from operations, and borrowing capacity are sufficient to meet obligations for the next twelve months.