Refinish sales up 6.2 percent after benefit from currency conversion.
Axalta Coating Systems Ltd announced first quarter net sales of $1.165 billion, an increase of 15.7 percent year-on-year, driven by volume growth of 8.6 percent primarily from acquisition contribution, 0.8 percent higher average selling prices and a 6.3 percent foreign currency benefit. First quarter net sales growth was positive in all regions and average prices increased in all regions except Asia Pacific.
Net income attributable to Axalta was $69.9 million for the first quarter compared to $64.1 million in Q1 2017. First quarter adjusted net income of $65.4 million increased 3.6 percent over $63.1 million in Q1 2017.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $220.0 million for the first quarter increased 8.3 percent versus $203.1 million in Q1 2017. This result was driven by contribution from acquisitions, benefits from foreign currency translation, positive price and product mix, and slightly lower net operating costs. These factors were partially offset by higher raw material costs.
“We are pleased to report financial results for the first quarter that are solidly on plan with our full year objectives, including strong top and bottom line performance across both segments globally,” said Charles W. Shaver, Axalta’s Chairman and Chief Executive Officer. “In spite of persistent raw material cost inflation, Axalta’s execution on our initiatives including targeted cost reduction, focus on customer service and commitment to innovation remains firm, giving us confidence in our outlook for the remainder of 2018.”
Performance Coatings first quarter net sales were $728.7 million, an increase of 24.3 percent year-on-year driven by acquisition contribution of 14.4 percent and a 7.3 percent foreign currency benefit. Refinish end-market net sales increased 6.2 percent to $412.6 million in Q1 2018 due primarily to foreign currency benefits. Sales decreased 1.2 percent excluding the foreign currency exchange benefit.
In a conference call with financial analysts, Shaver explained that refinish volumes were lower due to seasonal variation after a strong first quarter last year and timing issues. According to the company, it is gaining customer share with both MSO and independent collision repair facilities. According to Robert Bryant, Executive Vice President & Chief Financial Officer at Axalta, refinish had robust growth in their Europe, Middle East and Africa (EMEA) region that was offset by “…a challenging year-on-year comparison in North America.”
This article courtesy of Russell Thrall III, publisher CollisionWeek. Check out their website at: www.collisionweek.com