GLEN MILLS, Pa., Jan. 18, 2022 /PRNewswire/ -- Axalta
Coating Systems Ltd. (NYSE:AXTA) ("Axalta"), a leading global
coatings company, provided preliminary selected fourth quarter and
full-year 2021 unaudited financial updates. Results in the period
reflect impacts from greater than previously forecasted raw
material inflation and supply chain constraints relative to
guidance initially provided on October 25,
2021. Axalta expects Net Sales growth of 5.8% for Q4 (~7%
excluding foreign exchange) and 18.2% for 2021, including
moderately lower than forecasted foreign exchange tailwinds
(guidance was ~+19% Net Sales growth for FY 2021, including ~+2% in
FX). Limitations in availability of certain raw materials also
resulted in substantial unfulfilled orders during the fourth
quarter. Adjusted EBIT for the fourth quarter is anticipated to be
reported between $120-125 million,
with full year Adjusted EBIT expected to be approximately
$30 million below the midpoint of the
October guidance range of $645-665
million. Free cash flow for the full year 2021 is anticipated to be
above the prior guidance range of $410-430 million, with cash and cash equivalents
expected at approximately $840
million as of December 31,
2021.
Since Axalta's October guidance update, raw material
inflation and logistics costs have continued to increase while the
US dollar has also continued to strengthen above our guidance
expectations. Axalta now expects Q4 raw material inflation of
approximately 24% versus the prior year compared with the
assumption of approximately 20% included in our financial guidance.
Further inflationary pressure has also affected other cost
categories, including supply chain and logistics, while Axalta also
saw $3 million in incremental foreign
exchange headwinds to Adjusted EBIT versus prior implied 4Q 2021
guidance.
Given strong underlying demand conditions across Axalta's
end-markets, including expected improvement in Mobility Coatings
demand, Axalta believes 2022 should remain a year of recovery in
both volume and profit terms with the majority of recovery
reflected in the second half of the year. The company also remains
focused on addressing persistent inflationary pressures with price
increases. Axalta continues to expect to offset 2021 inflation
impacts during the first half of 2022. The Company also expects to
see continued inflation during 2022 from most categories, which
will require incremental price actions, though the inflationary
cost headwinds are expected to decrease sequentially during 2022
following the first quarter, when overall cost inflation is
expected to remain fairly consistent with the fourth quarter
2021.
Axalta expects to announce detailed Q4 and full-year 2021
results on January 31, 2022, after
the close of trading, with a call to be scheduled at 8:00 a.m. ET on February
1, 2022 to discuss these results as well as the financial
outlook for 2022.
Cautionary Statement Concerning Forward-Looking
Statements
This release may contain certain forward-looking
statements regarding Axalta and its subsidiaries within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995,
including our preliminary unaudited financial updates for the
fourth quarter and full-year 2021, 2022 business conditions and
related impacts and the effects of COVID-19 on Axalta's business
and financial results. Axalta has identified some of these
forward-looking statements with words such as "expects,"
"forecast," "anticipate," "assumption," "should," and "will" 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, including supply chain issues
and the effects of COVID-19, that may cause its business, industry,
strategy, financing activities or actual results to differ
materially. The impact and duration of COVID-19 on our business and
operations is uncertain. Factors that will influence the impact on
our business and operations include the duration and extent of
COVID-19, the extent of imposed or recommended containment and
mitigation measures, and the general economic consequences of
COVID-19. 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 in other
documents that we have filed with, or furnished to, the U.S.
Securities and Exchange Commission. 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
This release includes financial information that is not
presented in accordance with generally accepted accounting
principles in the United States
("GAAP"), including Adjusted EBIT. Management uses 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. Our use of the term Adjusted EBIT may
differ from that of others in our industry. Adjusted EBIT should
not be considered as an alternative to performance measures derived
in accordance with GAAP as a measure of earnings. Adjusted EBIT has
important limitations as an analytical tool and should be
considered in conjunction with, and not as a substitute for, our
results as reported under GAAP. Axalta does not provide a
reconciliation for non-GAAP estimates for Adjusted EBIT 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 US GAAP results
About Axalta Coating Systems
Axalta is a global leader in the coatings industry,
providing customers with innovative, colorful, beautiful and
sustainable coatings solutions. From light vehicles, commercial
vehicles and refinish applications to electric motors, building
facades and other industrial applications, our coatings are
designed to prevent corrosion, increase productivity and enhance
durability. With more than 150 years of experience in the coatings
industry, the global team at Axalta continues to find ways to serve
our more than 100,000 customers in over 140 countries better every
day with the finest coatings, application systems and technology.
For more information visit axalta.com and follow us @axalta on
Twitter.
Contact
Christopher
Mecray
D +1 267 703 8410
Christopher.Mecray@axalta.com
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SOURCE Axalta Coating Systems Ltd.