Axalta Coating Systems reported its Refinish end-market net sales increased 11.5 percent to $440.7 million in the September quarter and increased 13.9 percent excluding foreign currency with significantly positive pricing coupled with mid-single digit volume growth.
Axalta’s overall third quarter net sales of $1,139.3 million increased 4.4 percent year-over-year after a 2.5 percent negative foreign currency impact. Constant currency net sales increased 6.9 percent in the period, driven by volume growth of 4.0 percent including 0.4 percent acquisition contribution and 2.9 percent higher average selling prices. Third quarter net sales growth was positive in nearly all regions, including higher average prices in all regions except Asia Pacific, which saw ongoing lower average prices resulting from Light Vehicle in China.
Net loss attributable to Axalta was $13.1 million for the third quarter compared to net income of $54.9 million in Q3 2017. The decrease was primarily driven by the announced closure of its Mechelen, Belgium manufacturing facility and the associated accounting impacts coupled with ongoing Axalta Way productivity initiatives approved in Q3 2018.
Adjusted EBITDA of $234.7 million for the third quarter increased 12.0 percent versus $209.5 million in Q3 2017. This result was driven by strong contribution from volume growth and price and product mix benefits, which were partially offset by inflationary raw material costs and negative impacts from foreign currency as the US dollar was relatively weaker compared to Q3 2017.
“Third quarter results were slightly above our expectations and previously provided guidance, and we are gratified by this result particularly given challenging elements of persistent input inflation, headwinds in certain emerging markets as well as renewed foreign exchange pressure,” said Robert W. Bryant, Axalta’s interim Chief Executive Officer.
“As expected, we saw a clear return to growth in Refinish, including double digit net sales growth in North America, which reflected fairly favourable year-on-year comparisons but also continued underlying share gains. We also witnessed strong pricing and product mix benefits in Performance Coatings markets. In Transportation Coatings, we saw volume growth in the quarter from our Light Vehicle market, including new product launches that started this year. While price and product mix does remain a headwind in Light Vehicle year to date, we continue to discuss with customers our need to cover the significant cost inflation we have absorbed this year and last. Our cost reduction efforts through our Axalta Way program are continuing and have been an important contributor to results so far in 2018 and helpful in offsetting cost inflation,” concluded Bryant.
This article courtesy of Russell Thrall III, publisher CollisionWeek. Check out their website at: www.collisionweek.com