Refinish sales up 15.6% compared to 2021 and volume up 4%.
Axalta Coating Systems reported net sales of $1,174 million for its first quarter ended 31 March, an increase of 10.4% year-on-year, driven by 8.8% higher average price-mix, a 3.6% M&A benefit, 1.0% better volumes and a 3.0% FX offset.
Performance Coatings’ first quarter net sales were up 15.1% year-on-year, while Refinish net sales increased 15.6% year-on-year to $461.4 million in Q1 2022, including a 4.0% increase in volume versus the prior year and an 8.1% contribution from M&A, partially offset by a foreign exchange headwind of 4.1%. Average price and product mix increased high-single digits in the period offsetting the impact of continued variable cost inflation.
The industry recovery is steadily progressing driven by a return to in-person work, higher-miles driven, and increasing traffic congestion though supply chain constraints and customer labour availability headwinds persist.
Robert W. Bryant, Axalta’s President and CEO, commented, “Axalta’s first quarter results demonstrated solid execution in a still challenging global operating environment. I am proud of the team for delivering better than anticipated results despite unresolved supply chain challenges and a number of significant unforeseen global headwinds. Specifically I want to recognize the actions of our teams in China who have been able to safely operate and serve our customers during the ongoing lockdowns. We are proving every day that we have a dedicated and resilient organization committed to delivering on our strategic growth imperative.”
Despite the unprecedented breadth and rate of cost inflation, Axalta is increasing prices aggressively and working hard to ensure they are fully sourced to support their customers’ needs. Raw material availability remains challenged with the potential for areas of trade flow concerns if China COVID-19 lockdowns persist deeper into Q2. As a consequence of the Russia-Ukraine conflict energy surcharges are becoming more prevalent and impactful, particularly when sourcing materials from Europe. Nonetheless, Axalta has responded quickly to offset a significant portion of the cumulative impact, especially in Performance Coatings.
“Even in this dynamic environment we are delivering above-market growth rates across the portfolio, demonstrating the benefits of our leading technology platforms and myriad of new product launches. I expect us to continue to drive strong organic sales growth even as markets are slow to fully recover,” added Bryant. “Looking beyond the near-term, I am encouraged by the degree of pent-up consumer demand, low channel inventory levels, and successful pricing execution supporting a significant long-term growth potential for Axalta as end-markets normalize toward pre-pandemic levels of activity. “We see tremendous opportunity in the realization of our strategy and remain committed to the execution of our plans.”