Axalta Coating Systems reported net sales of $1,158.1 million for the fourth quarter of 2018 ended December 31, 2018, a decrease of 0.6 percent, including 3.3 percent negative foreign currency translation impact. Constant currency net sales increased 2.7 percent in the period, driven by 4.4 percent higher average selling prices, offset partly by a 1.7 percent volume decrease inclusive of 0.4 percent acquisition contribution. For the full year, net sales were $4,669.7 million, up 7.3 percent and 6.7 percent on a constant currency basis.
Organic net sales were driven by growth in Performance Coatings with relatively equal contribution from both Refinish and Industrial end-markets, offset partly by lower net sales from Transportation Coatings. Average price and product mix contributed solidly in the quarter, adding 4.4 percent overall, including a 6.5 percent price contribution from Performance Coatings. Transportation Coatings saw positive price and product mix contribution of 0.8 percent in the quarter.
Net sales in Axalta’s refinish end-market increased 3.1 percent in the fourth quarter and were up 6.3 percent excluding foreign currency translation. The growth was driven by price and mix benefits from all regions, and a modest decrease in overall volumes. Industrial end-market net sales increased 3.9 percent in the fourth quarter (increased 6.6 percent excluding foreign currency translation) as organic volume grew in the low single digits and price increased in the mid-single digits.
Net income attributable to Axalta for the fourth quarter was $75.4 million compared with a loss of $61.5 million in Q4 2017, primarily driven by the absence of certain charges for restructuring, offerings and transactions, as well as US tax reform in Q4 2017 that did not recur to the same extent in 2018. Fourth quarter adjusted net income of $80.1 million decreased compared with $90.2 million in Q4 2017.
“Axalta ended the year in line with our communicated guidance from October, with both net sales and Adjusted EBITDA, reflecting strong execution by our team given continued currency and automotive challenges,” said Robert W. Bryant, Axalta’s Chief Executive Officer. “We saw continued pricing momentum in Performance Coatings, and a return to positive average price and product mix in our Light Vehicle end-market within Transportation Coatings,” Mr. Bryant noted.
Mr. Bryant continued, “In 2018, Axalta accomplished a great deal in the face of several headwinds, managing to offset input cost inflation as well as a slowdown in certain coatings markets in China with a combination of incremental global pricing actions and substantial productivity gains. This enabled us to hold margins nearly constant for the year, which was a meaningful accomplishment in this context. We also recorded high single-digit net sales growth, in line with our objectives, including strong contribution from both end-markets in Performance Coatings.”
“As we focus on 2019, we remain cautiously optimistic regarding key end-market drivers, with broad stability and supportive conditions in Performance Coatings globally, but flatter global demand in Transportation Coatings. We target ongoing market outgrowth through product innovation and strong execution against this backdrop, and we are highly focused on continuing to differentiate Axalta through speed, agility and focus on the customer,” Mr. Bryant stated. “Our key goals for 2019 include continued new business wins in core markets, execution to margin recovery targets and ongoing optimisation of overall business returns, including strong free cash flow generation.”
This article courtesy of Russell Thrall III, publisher CollisionWeek. Check out their website at: CollisionWeek