Axalta Coating Systems reported third quarter net sales overall decreased 7.2% year-over-year to $1,026.9 million, driven by 6.0% lower volumes and 1.4% lower average price and product mix, and a 0.1% FX gain.
Performance Coatings third quarter net sales were $682.7 million, a decrease of 5.7% year-over-year. Constant currency organic net sales decreased 6.9% in the period, driven by a 4.5% volume decline, as well as a 2.4% decrease in average price and product mix, including impacts from both end-markets, and a 1.1% FX loss.
Refinish net sales decreased 9.0% to $401.7 million in Q3 with high single digit volume decreases, including the impact from ongoing reduced global vehicle traffic, as well as low single digit average price and product mix decline. Refinish continued to recover during the third quarter in line with further improvement in global passenger miles driven, correlated with reduced COVID-19 restrictions.
Income from operations for Q3 increased by 15% and net income to common shareholders was almost 26% compared to Q3 2019. The increases were primarily driven by lower operating expenses inclusive of cost actions taken this year in response to COVID-19 and favourable variable input costs, offset partly by lower global net sales across all end-markets. Additionally, income from operations was adversely impacted by termination charges of $35.7 million associated with the recently announced restructuring plan.
Robert W. Bryant, Axalta’s President and CEO, commented: “Although economic impacts from the coronavirus pandemic persisted across our business in the period, we were very pleased to see rapidly improving demand, and the effectiveness of our cost management programs has continued to help offset volume impacts. We are proud to report stronger, and actually record-setting, operating earnings metrics thanks to the success we have had as a coordinated global team in responding to these considerable end-market demand challenges.”
Bryant continued, “Axalta saw ongoing demand recovery across all business lines and regions during the third quarter, and our team executed well on cost actions to deliver a result that surpassed expectations set in July. The global team produced year-over-year temporary operating cost savings of approximately $50 million in the quarter. Our operating results showcase the resilience of Axalta’s coatings businesses, which have provided superior service for customers throughout 2020. We also made good progress with structural cost savings, including ongoing Axalta Way incremental savings on track to meet our goal for the year, and early contributions from our incremental COVID-driven restructuring actions.”
Bryant concluded, “In addition to meeting delivery requirements throughout the pandemic, we have also enjoyed new business gains during the period from existing and new customers as we continue to commercialise new products from our innovation pipeline and drive overall execution of our organic growth plan. I remain thankful to work with a team of such dedicated professionals who continue to demonstrate the Axalta Way and prove that devotion to customer satisfaction produces results.”