Axalta Full-Year Report 2023
Fourth Quarter 2023 Highlights
- Net sales increased 4.9% year-over-year to $1.3 billion
- Net income increased $30 million year-over-year to $74 million and Adjusted EBITDA increased $43 million year-over-year to $251 million
- Adjusted EBITDA margin improved 250 basis points year-over-year
- Cash provided by operating activities of $286 million and Free Cash Flow of $254 million
- Paid down $55 million of principal on term loan and refinanced 2025 senior notes extending maturity to 2031
- Net Leverage Ratio of 2.9x, lowest in company history at year-end
Fourth Quarter 2023 Consolidated Financial Results
Fourth quarter 2023 net sales increased 4.9% year-over-year to $1.3 billion. The increase in net sales was driven by a 2.3% foreign exchange benefit, 1.7% improvement in volumes, and 0.9% price-mix growth.
Net income increased 68% year-over-year to $74 million versus $44 million in the prior-year period. The increase in net income was driven by significant earnings improvement in both segments. Net income benefited from pricing actions executed throughout the year, positive mix impacts and variable cost deflation, partially offset by higher productivity investments and higher variable labor expense. Adjusted EBITDA improved to $251 million compared to $208 million in the fourth quarter of 2022.
Discussion of Segment Results
Performance Coatings fourth quarter 2023 net sales were $849 million, up 3.7% from the prior-year period driven by strong price-mix in both end-markets. Refinish volumes were up modestly year-over-year against a stable market environment. Industrial volumes were lower year-over-year as stable volumes in Europe were more than offset by soft macroeconomic conditions in North America, particularly in construction markets.
The Performance Coatings segment generated Adjusted EBITDA of $192 million in the fourth quarter compared to $169 million in the prior-year period, with associated margins of 22.6% and 20.6%, respectively. The increases in segment Adjusted EBITDA and Adjusted EBITDA margin were driven by better price-mix and variable cost deflation, which more than offset higher labor expenses and lower Industrial volumes.
Mobility Coatings fourth quarter 2023 net sales were $449 million, up 7.3% from the prior-year period. Growth was driven predominantly by strong volumes with improvement in all regions. Price-mix was lower year-over-year from lower mix plus an unfavorable comparison given a one-time pricing benefit recorded in the prior-year period. Light Vehicle volume growth exceeded global auto production, especially in China. North America Commercial Vehicle class 8 production was down 7% year-over-year.
