Axalta on target for 2015
Axalta Coating Systems one of the leading global suppliers of liquid and powder coatings, announced its financial results for the first quarter, ended 31 March 2015.
Key First Quarter 2015 Highlights:
• Net sales of US$1.0bn, an increase of 5.2% excluding negative currency translation compared to the first quarter of 2014
• Adjusted EBITDA of US$182.0m with an Adjusted EBITDA margin of 18.4%
• An increase of 60 basis points compared to 17.8% in the first quarter of 2014
• Jiading, China expansion operational and ramping up with Light Vehicle volumes
• Successful completion by Carlyle of the sale of 66 million shares in two transactions (20 million via private placement to Berkshire Hathaway, Inc.), increasing Axalta’s free float to approximately 55% of total market capitalisation
‘We have started 2015 with a solid quarter that met our net sales and exceeded our Adjusted EBITDA expectations, in spite of significant currency headwinds on a sequential and year-over-year basis. The global automotive refinish markets remain stable and supportive, while growing global new vehicle production has offered us opportunities to expand our business rapidly in emerging economies. We remain focused on transforming Axalta into a growth platform while making solid progress on our existing and new cost and productivity initiatives,’ said Charlie Shaver, Axalta’s chairman and chief executive officer. ‘With a fundamentally stable economic backdrop, we look forward to meeting our financial goals for 2015 with the help of proactive and managed cost reductions and in spite of our expectation for ongoing currency headwinds.’
First Quarter Consolidated Financial Results
Net sales were US$1.0bn for the first quarter of 2015, an increase of 5.2% excluding negative foreign currency translation, or a decrease of 5.6% on an as-reported basis. Drivers of net sales growth included 4.8% volume increases, reflecting strong growth in all regions, except EMEA, which saw a modest decline in the period largely due to lower sales in Russia and Eastern Europe. Higher average selling prices contributed to a modest 0.4% net sales growth, while unfavourable currency translation reduced net sales by 10.8% primarily due to the weakness of the Euro and some Latin American currencies compared to the US dollar.
Adjusted EBITDA of US$182m for the first quarter of 2015 decreased 2.5% compared to the first quarter of 2014. The decline is the result of negative foreign currency translation and certain operating investments made to support future volumes across multiple regions, including the Jiading, China plant ramp-up. These factors were partially offset by strong volume and price effects. The Adjusted EBITDA margin expanded 60 basis points to 18.4% compared to the first quarter of 2014, benefiting from cost reductions achieved over the last year and modest operating leverage.
Axalta is reiterating its outlook for the full year 2015, including:
• Net sales growth of 5%-7% in constant currency and flat to slightly down including the impact of currency
• Adjusted EBITDA of US$860-US$900m with an Adjusted EBITDA margin of approximately 20%
• Normalised effective tax rate of 27%-29%, capital expenditures of approximately US$150m, and net working capital of 13%-15% of net sales