Axalta Coating : First Quarter 2024 Investor Presentation

Axalta Coating Systems

Q1 2024 Financial Results

May 1, 2024

Legal Notices

Forward-Looking Statements

This presentation and the oral remarks made in connection herewith may contain certain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 regarding Axalta and its subsidiaries including, but not limited to, statements regarding the 2024 Transformation Initiative and our outlook and or guidance, which includes net sales expectations, Adjusted EBITDA, Adjusted Diluted EPS, Free Cash Flow, depreciation and amortization ("D&A"), step up D&A, tax rate, as adjusted, diluted shares outstanding, interest expense, capital expenditures, and Class 8 production, and the timing or amount of any future share repurchases. Axalta has identified some of these forward looking statements with words such as "outlook," "trajectory," "target," "expect," "estimates," "believe," "potential," "will," "look," "ahead," "can," "view," "project," "strategy," "opportunity," "should," "see," "plan," "assumptions," and "guidance," and the negative of these words or other comparable or similar terminology. All of these statements are based on management's expectations as well as estimates and assumptions prepared by management that, although they believe to be reasonable, are inherently uncertain. These statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of Axalta's control, as well as risks related to the execution of the 2024 Transformation Initiative, that may cause its business, industry, strategy, financing activities or actual results to differ materially. More information on potential factors that could affect Axalta's financial results is available in "Forward-Looking Statements," "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" within Axalta's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, and in other documents that we have filed with, or furnished to, the SEC. Axalta undertakes no obligation to update or revise any of the forward-looking statements contained herein, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

The historical financial information included in this presentation includes financial information that is not presented in accordance with generally accepted accounting principles in the United States ("GAAP"), including Adjusted EBIT, Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, total net leverage ratio, adjusted net income and Adjusted Diluted EPS. Management uses these non-GAAP financial measures in the analysis of our financial and operating performance because they assist in the evaluation of underlying trends in our business. Adjusted EBITDA, Adjusted EBIT and Adjusted Diluted EPS consist of EBITDA, EBIT and Diluted EPS, respectively, adjusted for (i) certain non-cash items included within net income, (ii) certain items Axalta does not believe are indicative of ongoing operating performance or (iii) certain nonrecurring, unusual or infrequent items that have not otherwise occurred within the last two years or we believe are not reasonably likely to recur within the next two years. We believe that making such adjustments provides investors meaningful information to understand our operating results and ability to analyze financial and business trends on a period-to-period basis. Adjusted net income shows the adjusted value of net income (loss) attributable to common shareholders after removing the items that are determined by management to be items that we do not consider indicative of our ongoing operating performance or unusual or nonrecurring in nature. Our use of the terms Adjusted EBIT, Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, total net leverage ratio, adjusted net income and Adjusted Diluted EPS may differ from that of others in our industry. Adjusted EBIT, Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, total net leverage ratio, adjusted net income and Adjusted Diluted EPS should not be considered as alternatives to net sales, net income (loss), income (loss) from operations or any other performance measures derived in accordance with GAAP as measures of operating performance or operating cash flows or as measures of liquidity. Adjusted EBIT, Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, total net leverage ratio, adjusted net income and Adjusted Diluted EPS have important limitations as analytical tools and should be considered in conjunction with, and not as substitutes for, our results as reported under GAAP. This release includes a reconciliation of certain non-GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP. Axalta does not provide a reconciliation for non-GAAP estimates for Adjusted EBITDA, Adjusted Diluted EPS, tax rate, as adjusted, or Free Cash Flow on a forward-looking basis because the information necessary to calculate a meaningful or accurate estimation of reconciling items is not available without unreasonable effort. For example, such reconciling items include the impact of foreign currency exchange gains or losses, gains or losses that are unusual or nonrecurring in nature, as well as discrete taxable events. We cannot estimate or project these items and they may have a substantial and unpredictable impact on our GAAP results.

Organic Sales

Organic net sales are calculated by excluding the impact of the change in average exchange rates between the current and comparable period by currency denomination exposure of the comparable period amount.

Segment Financial Measures

The primary measure of segment operating performance is Adjusted EBITDA, which is a key metric that is used by management to evaluate business performance in comparison to budgets, forecasts and prior year financial results, providing a measure that management believes reflects Axalta's core operating performance. As we do not measure segment operating performance based on net income, a reconciliation of this non-GAAP financial measure with the most directly comparable financial measure calculated in accordance with GAAP is not available. Beginning with the fourth quarter of 2023, we replaced Adjusted EBIT with Adjusted EBITDA as the primary measure of segment operating performance. As previously disclosed, we will continue publishing segment Adjusted EBIT through 2024 to allow for historical trend analyses.

Defined Terms

All capitalized terms contained within this presentation have been previously defined in our filings with the SEC.

Rounding

Due to rounding the tables presented may not foot.

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First Quarter 2024 Key Highlights

• 4% net sales growth YoY in Refinish and Light Vehicle
• 20% Adjusted EBITDA margin
• Expanded Adjusted EBITDA and diluted EPS by 22% and 37% respectively YoY
• Further strengthened balance sheet - paid down $75 million of debt and repriced term loan

$1.3B

Net Sales

+1% YoY

$0.48

Adjusted Diluted EPS

+37% YoY

$259M	20.0%
Adjusted EBITDA	Adjusted EBITDA Margin
+22% YoY	+340 bps YoY
Record
First
Quarter

$75M 2.8x

Debt Prepayment

Total Net Leverage Ratio(1)

Raising 2024 Earnings Outlook Following Strong Q1 Performance

(1) Total Net Leverage Ratio = Total Net Debt / LTM Adjusted EBITDA ;Total Net Debt = Total Debt minus Cash and Cash Equivalents

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First Quarter Business Review

Q1 End Market Environment

	Net Sales
Refinish	YoY
Positive price-mix and André Koch	4%

acquisition

Light Vehicle

4%

Driving margin improvement

Commercial Vehicle

North America Class 8 production	(4%)
12% lower YoY in Q1
Industrial
Focusing on margin	(6%)

Recent Highlights

Recognized With Multiple Prestigious R&D Awards

Received awards for innovative and sustainable solutions associated with the launch of Irus Mix, Raptor™ Flameproof, and Voltatex™

Named General Motors Supplier of the Year

Named Supplier of the Year highlighting Axalta's innovative products and services in the automotive OEM space

Announced Transformation Initiative

Estimated $75M annual run rate savings expected in 2026

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First Quarter 2024 Consolidated Results

Financial Results

($ in millions, except per share data)	Q1 2024	Q1 2023	% Change
Net Sales	1,294	1,284	1%
Income From Ops(1)	121	125	(3%)
Adjusted EBITDA	259	213	22%

Net Sales Variance

($ in millions)

(0.3%)

$1,284

0.4%

0.7%

0.8%

$1,294

% margin	20.0%	16.6%	340 bps
Diluted EPS	0.18	0.27	(33%)
Adjusted Diluted EPS	0.48	0.35	37%
Free Cash Flow	15	(88)	117%

Q1 2023

Volume

Price/Mix

FX

Q1 2024

• Net sales growth driven by Refinish and Light Vehicle, partially offset by lower volumes in Industrial and Commercial Vehicle
• Adjusted EBITDA and margin expansion driven by growth and variable cost deflation which more than offset higher labor expenses
• Expanded adjusted diluted EPS by 37%

(1) Includes $55 million of termination benefits and other employee-related costs relating to the 2024
Transformation Initiative announced in February 2024	5

First Quarter 2024 Performance Coatings Results

Financial Results

($ in millions)	Q1 2024	Q1 2023	% Change

Net Sales Variance

($ in millions)

(1.6%)

1.1%

0.7%

0.2%

Refinish	519	498	4%
Industrial	329	349	(6%)
Net Sales	848	847	0%
Adjusted EBITDA	196	169	16%
% margin	23.1%	20.0%	310 bps

Adjusted EBITDA and Margin Trend

($ in millions)

$189 $185 $169 $169 $181 $200 $192 $196

Q2 22	Q3 22	Q4 22	Q1 23	Q2 23	Q3 23	Q4 23	Q1 24
22.1%	22.1%	20.6%	20.0%	21.2%	23.3%	22.6%	23.1%

$847

$848

Organic Sales

Refinish: +LSD%

Industrial: (MSD%)

Q1 2023

Volume

Price/Mix

FX

Q1 2024

• Refinish net sales growth driven by positive price-mix and strong contribution from André Koch acquisition
• Industrial net sales decreased primarily due to continued softness in construction markets and deselection of low margin business
• Performance Coatings: Adjusted EBITDA and margin expansion driven primarily by variable cost deflation and Refinish growth

LSD/ MSD = low/ mid single digit

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First Quarter 2024 Mobility Coatings Results

Financial Results

($ in millions)	Q1 2024	Q1 2023	% Change

Net Sales Variance

($ in millions)

2.3%

(1.0%)

0.7%

2.0%

Light Vehicle	342	329	4%
Commercial Vehicle	104	108	(4%)
Net Sales	446	437	2%
Adjusted EBITDA	63	44	44%
% margin	14.2%	10.1%	410 bps

Adjusted EBITDA and Margin Trend

($ in millions)

			$44	$46	$61	$59	$63
	$25	$39
$24
Q2 22	Q3 22	Q4 22	Q1 23	Q2 23	Q3 23	Q4 23	Q1 24
6.3%	6.3%	9.4%	10.1%	10.4%	13.4%	13.2%	14.2%

$437	$446

Organic Sales

LV:+MSD%

CV:(MSD%)

Q1 2023

Volume

Price/Mix

FX

Q1 2024

• Light Vehicle net sales growth led by above market volumes in China. Price-mix was approximately flat despite modest impact from RMI's
• Commercial Vehicle net sales decreased primarily due to softer demand trends in North America and Latin America
• Mobility Coatings: Substantial adjusted EBITDA improvement and margin expansion driven primarily by lower variable costs and Light Vehicle net sales growth

MSD = mid single digit

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Focused Capital Allocation Drives Shareholder Value

Seasonally Strong Q1		Total Net Leverage Ratio(1)	Board Authorized
Free Cash Flow		Progression	$700M Share
($ in millions)					Repurchase
+$103M	4.2x	4.1x			Program
$15M		3.8x	3.7x	3.6x
				3.2x

2.9x	2.8x

($88M)

		Replaces current remaining
Q1	Q1	authorization
2023	2024

Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24

Leverage Target On Track Providing Opportunity to Allocate Capital to Shareholders

(1) Total Net Leverage Ratio = Total Net Debt / LTM Adjusted EBITDA

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Raising Full Year 2024 Earnings Guidance

	Net Sales	Adjusted EBITDA
	(% Change YoY)		($ in millions)
Q2 2024	FY 2024	Q2 2024	FY 2024
3% - 5%	+LSD%	~$275	$1,050 - $1,080
			Prior Guidance:
			$1,010 - $1,050

Adjusted Diluted EPS	Free Cash Flow
	($ Per Share)	($ in millions)
Q2 2024	FY 2024	FY 2024
~$0.50	$1.90 - $2.00	$425 - $475
	Prior Guidance:	Prior Guidance:
	$1.80 - $1.95	$400 - $450

Axalta does not provide a reconciliation for non-GAAP estimates for Adjusted Diluted EPS, Adjusted EBITDA or Free Cash Flow on a forward-looking basis because the information necessary to calculate a meaningful or accurate estimation of reconciling items is not available without unreasonable effort. See "Non-GAAP Financial Measures" for more information.

LSD = Low single digit

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Save The Date

Axalta Strategy Day 2024

15 May 15th 2024 | 9:30AM - 11:30AM

Axalta's management team will present three-year financial targets and a refreshed strategic plan to achieve attractive growth

Speakers:

• Chris Villavarayan, CEO & President
• Carl Anderson, CFO & Senior Vice President
• Dr. Robert Roop, CTO & Senior Vice President

Details:

• Event will be webcast live
• Registration and replay information can be found at ir.axalta.com

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