Axalta Coating Systems reported net sales of $1,063.6 million for the first quarter ended March 31, up 8.1% year-on-year, driven by higher volumes slightly higher average price and product mix. Volume growth across all end-markets was driven by ongoing recovery from pandemic-related macroeconomic impacts.
Performance Coatings first quarter net sales were $707.3 million, an increase of 9.2% year-on-year, and 5% in constant currency, driven by a 6.2% volume increase with strong contributions from both end-markets, offset partly by a decrease in average price and product mix.
Global refinish net sales increased 8.5% year-on-year to $399.0 million in Q1 with mid-single digit volume increases despite ongoing demand impacts from lower global vehicle traffic. Volume benefited from recovery in China, which was notably higher by 90.4% compared to pandemic-impacted levels seen in the prior year quarter. Volume growth was partially offset by slightly lower average price and product mix due to differences in geographic and product mix.
The 6.1% net sales increase for Mobility Coatings also benefited from Light Vehicle production comparisons in China, which saw pandemic impacts in the prior year quarter, offset partly by volume impacts from the ongoing semiconductor chip and other material shortages.
Income from operations for Q1 was $52.6 million versus $65.1 million in Q1 2020, and net income to common shareholders was $15.2 million for the quarter compared with $52.2 million in Q1 2020.
Robert W. Bryant, Axalta’s President and CEO, commented, “We are pleased to report excellent first quarter net sales, adjusted profit, and cash flow metrics, which were generated despite ongoing demand challenges in select business lines. We reported year-over-year growth from all end-markets in the quarter, which was particularly gratifying given ongoing headwinds from global Refinish, supply chain shortages related to severe weather in the US, and the semiconductor chip shortages impacting Light Vehicle production globally. Results were supported by strong demand conditions in global industrial coatings markets, and we expect ongoing market and demand stability for the balance of 2021.”
“Axalta is committed to driving organic growth as well as inorganic growth. We closed our first M&A deal in China in April. The Anhui Shengran acquisition substantially boosts our Energy Solutions business presence in China and helps enable sustainable infrastructure development, including electric vehicles and wind energy, among other markets,” added Bryant.
“We remain very focused on operating execution and are pleased that we had great progress on many ongoing productivity projects. This is evidenced by strong margin results in the period, including a 370 basis point increase for Adjusted EBIT margins to 17.2% versus the first quarter of 2020. This improvement included benefit from improved volumes, particularly in Asia Pacific, coupled with the ongoing execution of our structural cost savings programs. In addition, we also saw ongoing benefit from temporary savings continued from last year, a portion of which may remain out of our cost structure for some time.”