Axalta's Revenue Grows to $5.3 Billion, Net Profit Jumps 45%, Strong Sales Growth in China

On February 4, Axalta reported its fourth-quarter and full-year financial results for 2024. Full-year net sales reached a record $5.276 billion, up 2% year-over-year. Net income was $391 million, up 45%, and net profit margin was 7.4%, an increase of 220 basis points from last year. The rise in net income was primarily driven by a reduction in variable costs, sales growth including contributions from acquisitions, lower spending on consulting and enterprise resource planning system implementation, and savings from 2024 transformation initiatives, partially offset by labor inflation and restructuring costs. The record full-year adjusted EBITDA was $1.116 billion, with an adjusted EBITDA margin of 21.2%. Diluted earnings per share grew 47% to $1.78, while adjusted diluted earnings per share increased by 40% to $2.35.

In the fourth quarter of 2024, net sales grew 1% year-over-year to $1.311 billion, including a 1% negative impact from foreign exchange. Net income increased 85% year-over-year to $137 million, with a net profit margin of 10.5%. This was mainly due to favorable pricing mix contributions, a reduction in income tax expense resulting from a $27 million deferred tax benefit recognized during the quarter, lower variable costs, and benefits from 2024 transformation initiatives, partially offset by volume decline and labor inflation. Adjusted EBITDA grew 10% to $275 million from $251 million in the same period last year. Adjusted EBITDA margin expanded by 170 basis points to 21.0%.

"Axalta's financial performance in 2024 was outstanding. In a challenging macro environment, we achieved record net sales and adjusted EBITDA for both the fourth quarter and the full year," said Chris Villavarayan, CEO and President of Axalta. "Strong performance in automotive refinish and light vehicle coatings, along with excellent execution across the company, led to an adjusted EBITDA margin exceeding 21%, as we continue on our path to deliver on our commitments outlined in the 2026 A-plan."

The High-Performance Coatings segment's net sales for the fourth quarter of 2024 were $843 million, down 1% year-over-year, as the contribution from CoverFlexx was offset by a decline in volume and unfavorable foreign currency translation effects. Automotive Refinish net sales grew 2% year-over-year to $545 million, driven by the contribution from the CoverFlexx acquisition, favorable pricing mix, and new business won with body shops, partially offset by lower sales in Europe and the negative impact of foreign currency translation. Industrial Coatings net sales decreased 5% year-over-year to $298 million, as favorable pricing was offset by weak demand in most end-use markets and the negative impact of foreign exchange on volumes.

The High-Performance Coatings segment's adjusted EBITDA for the fourth quarter of 2024 was $198 million, compared to $192 million in the same period last year. The adjusted EBITDA margin was 23.5% and 22.6%, respectively. Lower variable costs, favorable pricing mix, and the contribution from CoverFlexx drove the segment's adjusted EBITDA and margin growth.

The Mobility Coatings segment's net sales for the fourth quarter of 2024 were $468 million, up 4% year-over-year, driven mainly by strong light vehicle sales in China and Latin America and favorable pricing mix. However, the decline in commercial vehicle sales and negative foreign currency translation partially offset this impact. Light Vehicle Coatings net sales grew 9% year-over-year to $369 million, driven by 6% volume growth and a 5% favorable pricing mix, which more than offset the negative impact from foreign currency translation. Commercial Vehicle Coatings net sales decreased 10% year-over-year to $99 million, primarily due to lower expected sales of Class 8 builds in North America and Latin America, and foreign currency headwinds.

The Mobility Coatings segment's adjusted EBITDA for the fourth quarter of 2024 was $77 million, compared to $59 million in the same period last year. The adjusted EBITDA margin was 16.4% and 13.2%, respectively. The growth in adjusted EBITDA and margin was mainly driven by positive pricing mix, volume growth, and savings from 2024 transformation initiatives, partially offset by labor inflation.

Axalta provided financial guidance for the first quarter and full year of 2025. The company expects first-quarter net sales to be flat compared to the same period last year, with adjusted EBITDA of $265 million and adjusted diluted earnings per share of $0.54. For the full year, Axalta expects net sales to be between $5.35 billion and $5.4 billion, adjusted EBITDA to range from $1.15 billion to $1.175 billion, and adjusted diluted earnings per share to be between $2.50 and $2.60. Free cash flow is expected to be $500 million, and depreciation and amortization is expected to be $285 million.