EXHIBIT 99.1
Published on November 6, 2017
Investor Presentation
Third Quarter 2017
Axalta Coating Systems Ltd.
Exhibit 99.1
2PROPRIETARY
Legal Notices
Forward-Looking Statements
This presentation and the oral remarks made in connection herewith may contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including those relating
to 2017 financial projections, including execution on our 2017 goals as well as 2017 net sales, net sales excluding FX, Adjusted EBITDA, interest expense, tax rate, as adjusted, free cash flow, capital expenditures,
depreciation and amortization, diluted shares outstanding, cost savings, contributions from acquisitions, raw material cost increases, and related assumptions. Any forward-looking statements involve risks,
uncertainties and assumptions. These statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “target,” “project,” “forecast,” “seek,” “will,” “may,” “should,” “could,” “would,”
or similar expressions. These statements are based on certain assumptions that we have made in light of our experience in the industry and our perceptions of historical trends, current conditions, expected future
developments and other factors we believe are appropriate under the circumstances as of the date hereof. Although we believe that the assumptions and analysis underlying these statements are reasonable as of
the date hereof, investors are cautioned not to place undue reliance on these statements. We do not have any obligation to and do not intend to update any forward-looking statements included herein, which speak
only as of the date hereof. You should understand that these statements are not guarantees of future performance or results. Actual results could differ materially from those described in any forward-looking
statements contained herein or the oral remarks made in connection herewith as a result of a variety of factors, including known and unknown risks and uncertainties, many of which are beyond our control including,
but not limited to, the risks and uncertainties described in "Non-GAAP Financial Measures," and "Forward-Looking Statements" as well as "Risk Factors" in our Annual Report on Form 10-K for the year ended
December 31, 2016 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017.
Non-GAAP Financial Measures
The historical financial information included in this presentation includes financial information that is not presented in accordance with generally accepted accounting principles in the United States (“GAAP”),
including net sales excluding FX, EBITDA, Adjusted EBITDA, Free Cash Flow, tax rate, as adjusted, and Net Debt. Management uses these non-GAAP financial measures in the analysis of our financial and
operating performance because they assist in the evaluation of underlying trends in our business. Adjusted EBITDA consists of EBITDA adjusted for (i) non-operating income or expense, (ii) the impact of certain
non-cash, nonrecurring or other items that are included in net income and EBITDA that we do not consider indicative of our ongoing performance and (iii) certain unusual or nonrecurring items impacting results in a
particular period. We believe that making such adjustments provides investors meaningful information to understand our operating results and ability to analyze financial and business trends on a period-to-period
basis. Our use of the terms net sales excluding FX, EBITDA, Adjusted EBITDA, Free Cash Flow, tax rate, as adjusted, and Net Debt may differ from that of others in our industry. Net sales excluding FX, EBITDA,
Adjusted EBITDA and Free Cash Flow should not be considered as alternatives to net income, operating income or any other performance measures derived in accordance with GAAP as measures of operating
performance or operating cash flows or as measures of liquidity. Net sales excluding FX, EBITDA, Adjusted EBITDA, Free Cash Flow, tax rate, as adjusted, and Net Debt have important limitations as analytical tools
and should be considered in conjunction with, and not as substitutes for, our results as reported under GAAP. This presentation includes a reconciliation of certain non-GAAP financial measures with the most directly
comparable financial measures calculated in accordance with GAAP. Axalta does not provide a reconciliation for non-GAAP estimates for net sales excluding FX, EBITDA, Adjusted EBITDA, Free Cash Flow or tax
rate, as adjusted, as-reported on a forward-looking basis because the information necessary to calculate a meaningful or accurate estimation of reconciling items is not available without unreasonable effort. For
example, such reconciling items include the impact of foreign currency exchange gains or losses, gains or losses that are unusual or nonrecurring in nature, as well as discrete taxable events. We cannot estimate or
project those items and they may have a substantial and unpredictable impact on our US GAAP results.
Segment Financial Measures
The primary measure of segment operating performance is Adjusted EBITDA, which is a key metric that is used by management to evaluate business performance in comparison to budgets, forecasts and prior year
financial results, providing a measure that management believes reflects Axalta’s core operating performance. As we do not measure segment operating performance based on Net Income, a reconciliation of this
non-GAAP financial measure with the most directly comparable financial measure calculated in accordance with GAAP is not available.
Defined Terms
All capitalized terms contained within this presentation have been previously defined in our filings with the United States Securities and Exchange Commission.
3PROPRIETARY
2014-2017
November 2014 IPO (NYSE: AXTA)
Expand capacity in China, Germany,
Mexico, Brazil, India and Argentina;
upgrade multiple other facilities
Build Asia-Pacific Technology Center in
Shanghai and Global Innovation Center in
Philadelphia, PA
Acquire Valspar’s Wood business (N.A.),
Dura Coat (U.S.), Spencer (U.K.) & other
smaller transactions
Introduce Ganicin™ corrosion-resistant
coating system for industrial applications
Launch AquaEC 6100 e-coat
Introduce SyroxTM mainstream waterborne
refinish solution
1866
Herberts founded - original
Standox® paints producer
2000-2012
Super-high solids OEM coatings introduced
Imron® Elite finishes introduced
ChromaPremier® Pro high productivity system launched
Acquire Plus™ EFX spectrophotometer launched
1900-1970s
1900s: Permanent colors® manufactured, the first breakthrough
lacquer enamel technology
1920s: Duco® paints (U.S.) and Spies Hecker® (Germany)
introduced as sprayables
1950s: Standox® paints launches premium line; First to develop
L,a,b color equations, the foundation of modern color science
1980-1990s
Imron® enamel introduced
Alesta® powder coatings launched
First spectrophotometer introduced
First waterborne OEM coatings in U.S.
Cromax® waterborne basecoat introduced
Herberts coatings (EMEA) acquired
2013
Axalta Coating Systems becomes an
independent company
New global headquarters in Philadelphia, PA
with substantially new executive leadership
Introduction of end-market focus and
leadership
Axalta: 150+ Years Of Coatings Excellence
2
0
1
4
4PROPRIETARY
Axalta’s Ongoing Transformation
Early Transformation
2015 - 2016
Significant Progress During Period of Emerging Markets and FX Turmoil
2013 - 2014
Carve Out
Completed separation
New leadership team
Initial growth strategy
Incentives realigned
Global re-branding
Ongoing Transformation
2017 +
Focus on profitable growth
Early productivity progress
First M&A transactions
PE sell-down & board
transformation completed
Ongoing cultural shift to focus
on profitable growth
Maturity of organization / team
The Axalta Way - next phases
Increased M&A cadence
Focus on capital allocation
5PROPRIETARY
Refinish
$1.7 B
(41%)
Industrial
$0.7 B
(18%)
Body Shops
Light
Vehicle
$1.3 B
(33%)
Comml Vehicle
$0.4 B (8%)
Performance Coatings
$2.4 Billion, 59% of Sales
General Industrial,
Electrical Insulation, Architectural
Transportation Coatings
$1.7 Billion, 41% of Sales
Adjusted EBITDA1,2 - $550 M (23% Margin) Adjusted EBITDA1,2 - $353 M (21% Margin)
Light Vehicle / Automotive OEMs Truck, Bus, Rail, Off-road OEMs
____________________________________________________________________________________________________________
1. Financials for FY 2016, all sales data refers to Net Sales 2. Consolidated Adjusted EBITDA reconciliation can be found in the Appendix
Axalta: A Global Leader In Coatings
6PROPRIETARY
Grow The Business, Refine The Cost Structure
Growth Supported by Clear Strategies,
Greater Resources
Market Share Gains in Core Markets From
Innovation, Service Execution
Emerging Markets Focus for Long Term
Opportunity
Globalizing Existing Products to Reach
Underserved Markets
Optimizing Procurement
Streamlining Organization
Refining Operating Model
Global Fit-For-Purpose Cost Structure
Profitable Growth Underpinned by Both Top and Bottom Line Initiatives
Enhance ProductivitySet a Cadence of Growth
7PROPRIETARY
Key Goals For 2017
Key Objectives for Growth & Value Creation
Axalta’s Vision
To maximize our customers’ productivity and product functionality by
offering them innovative coatings solutions and best-of-class service
Outgrow our End-markets
Execute on Structural Savings
Maintain Active Operating Cost Discipline
Drive Differentiated Customer Technical Service & Product Innovation
Disciplined Capital Allocation
Continue Balance Sheet & Cash Flow Discipline
8PROPRIETARY
Selected Acquisitions
GeographyEnd-Market Company OverviewTarget
Leading producer of refinish coatings in Malaysia and Indonesia
Leading N.A. supplier of automotive interior coatings; strong position with N.A. OEM’s
Leading independent supplier of coil coatings in N.A.
Refinish
Light Vehicle
Industrial
Asia Pacific
NA / LA / AP
North America
North AmericaInd/Ref
North AmericaIndustrial
Leading niche California-based industrial and refinish coatings manufacturer
Texas-based storage tank, hardboard, structure steel, wood and OEM coatings manufacturer
NA / LAIndustrial Leading provider of coatings for the OEM and aftermarket Industrial Wood Markets
EMEA / AP / NAIndustrial Leading manufacturer of coatings for heavy equipment, general industrial, O&G & glass
EMEARefinish Leading importer and distributor throughout Switzerland of Spies Hecker
Axalta’s exclusive distributor for Spies Hecker in the Netherlands and FlandersRefinish EMEA
EMEAIndustrial Leading supplier of thermoplastic powder coatings based in the United Kingdom
Cleveland-based refinish manufacturer focused on mainstream segmentNorth AmericaRefinish
9PROPRIETARY
Axalta Operates Fundamentally Strong Businesses
9
Global Market Leadership Positions
Significant Competitive Advantages
A Service-Led Business Model
Structurally Attractive Global End Markets
Highly Variable Cost Structure & Low Capital Intensity
10PROPRIETARY
Global Market Leadership Positions
Axalta’s Global Scale Enables Market Leadership
_______________________________________________
Net Sales as of FY 2016
1. Mexico is included in Latin America
2. Includes 12 JV facilities.
49 manufacturing
facilities
48 customer
training sites
4 technology
centers
~13,300
employees, ~130
countries
North America1
35% Sales
Latin America1
11% of Sales
Asia Pacific
18% of Sales
EMEA
36% of Sales
Manufacturing Facility2 Technology Center
11PROPRIETARY
Global Market Leadership Positions
Peer 1
Axalta
Peer 2
Peer 3
Other
~90% of Sales from Markets Where Axalta Has #1 or #2 Global Share
Axalta
Peer 1
Peer 2
Peer 3
Other
Performance Coatings: Refinish Transportation Coatings: Light Vehicle
#1
__________________________________
Source: Orr & Boss, Axalta estimates (2016)
#2
Performance Coatings: Industrial Transportation Coatings: Commercial Vehicle
#2 in powder coatings globally
#2 in industrial wood coatings in North America
#2 in energy solutions coatings globally
#2 in industrial e-coat globally
#1 supplier to North America heavy duty truck market
Leading supplier to other offroad vehicle niches
12PROPRIETARY
Significant Competitive Advantages
Differentiated Franchise with Global Scale and Strong Competitive Advantages
4+ million color variations
Hundreds of formulations in
automotive & industrial
Deep coatings heritage
Broad global brand
portfolio
1,300+ technology employees
$165+ million annual spend
Leading productivity
50 plants on 5 continents
Significant legacy capital
investment
Process technology has
solid competitive barriers
Dedicated employees in OEM
plants
Technical support to body
shops
Technology
Innovation
Extensive Formulation
Database
Deep Process
Technology Knowledge
Leading Brands
Differentiated
Technical Support
Product Process Service
13PROPRIETARY
Industry Trends Axalta Technologies
Vehicle Light-Weighting Broad substrate coating solutions for next generation materials
Body Shop Consolidation Axalta coatings technology and service drives customer shop productivity
Significant Competitive Advantages
Color Complexity OEMs linkage grows color library, advanced color matching a refinish differentiator
Axalta innovations reduce capital intensity, footprint, and energy use for customersOEM Productivity Requirements
Environmental Regulation Complete VOC-compliant portfolio for both Refinish and OEM
Broad Technology Portfolio Well-Positioned to Benefit From Industry Trends
14PROPRIETARY
Painter training
Shop productivity
Ongoing support
A Service-Led Business Model
Critical Functionality at a Relatively Low Cost
1
Compelling Value Proposition Where Product Cost is Not the Main Driver
Light & Commercial Vehicle:
<1% of new vehicle’s cost
Industrial: Critical to function,
durability, safety & compliance
Refinish: ~5% of total repair cost
Axalta’s First Product is Service
Paint mixing
Line service
Technical
services
Refi
n
is
h
T
ranspo
rta
tio
n
15PROPRIETARY
Structurally Attractive Global End-Markets
Strong Coatings Growth Outlook
Long Term Alignment With Global Growth
Refinish: Car parc, miles driven, and collision rates
Light Vehicle: Emerging markets & middle class
growth; developed markets consumer strength
Commercial Vehicle: Global consumer markets
expanding; infrastructure growth; professionalized
logistics management
Industrial: Global GDP and IP; technical &
application sophistication with enhanced
functionality and durability
Diverse Industry Growth Drivers
Commercial
Vehicle
Light
Vehicle
Refinish
Industrial
Coatings Industry Sales
($ billions)
_____________________________
Source: Orr & Boss (2016), Axalta estimates
7.7 8.6
7.775
8.725
3.3
3.8
23.3
28.8
2016 2020E
16PROPRIETARY
Highly Variable Cost Structure & Low Capital Intensity
~45-55% of COGS come from variable raw
material inputs
Utilize temporary labor to maximize flexibility
Toggle other costs as needed in a downturn,
including both variable and semi-fixed
Low Capital Intensity
2016 Capex at $136 million was 3.3% of sales, but
only 1.2% for maintenance capex
Batch production process is inherently flexible
Capacity additions are very modular to minimize
stranded cost impacts
Variable Cost Structure
Well Positioned to React to Cyclical Downturns
17PROPRIETARY
Axalta’s Evolution Is Grounded In Fundamental Goals
Focus on operational excellence and foster a culture of accountability
Axalta’s Strategy
Grow in targeted industrial coatings segments via organic growth and selective acquisitions
Move into attractive adjacencies by leveraging our global technology and service capabilities
Grow in existing markets with our industry-leading products and services
18PROPRIETARY
Axalta’s Strategy: Grow Core Products & Markets
Performance Coatings
Strong Momentum Driven by Customer-Centric Approach
Transportation Coatings
Geography
Product
Breadth
Customer
Consolidation
Premium
Mainstream
Economy
Existing
Customers
Under-served
Customers
Global CV
Markets
19PROPRIETARY
Axalta’s Strategy: Accelerate Growth In Emerging Markets
China Car Parc
(thousands)
Emerging Market Growth
Coatings Market
($ Billions)
Significant Emerging Markets Growth Opportunity
Growth Drivers
Growth of middle-classes in emerging economies
Increased vehicle penetration per capita & expansion of car parc
Elevated collision rates vs. developed markets
___________________________
Source: Orr & Boss (2016)
___________________________
Source: LMC Automotive (2016)
$21.1 $22.4 $23.8
$25.3 $26.8
2016 2017E 2018E 2019E 2020E
136
156
176
197
219
242
267
291
317
2013A 2015A 2017E 2019E 2021E
China opportunity to extend mainstream and economy refinish presence
LV share remains under-represented with domestic OEMs
Asia ex-China broader opportunity to grow across product lines
Opportunity to broaden geographic presence in South America, leverage
distribution strength in Mexico to cross-sell industrial products
Refinish opportunity to extend presence in mainstream and economy products
Underpenetrated in W. Europe periphery, E. Europe, Africa, Middle East
Concentration at premium end implies opportunity in growing mainstream segment
E
M
E
A
A
me
ri
ca
s
A
P
A
C
20PROPRIETARY
Architectural
Axalta’s Strategy: Targeted Industrial Coatings Expansion
Growth from Leveraging Our Product Portfolio in Underserved Markets
Targeting mid-single digit growth CAGR
Double digit growth in new customer adds 2015-17e
Added significant infrastructure and investment over 4 years
A Broad Industrial Portfolio
Electrical
Insulation
Agricultural,
Construction, &
Earthmoving (ACE)
Oil & Gas Coil
Industrial
Wood
Organic Growth Inorganic Growth
Targeting significant growth from acquisitions
Completed 6 transactions with $350+ million in net sales
M&A leverages procurement, distribution and R&D resources
21PROPRIETARY
Ongoing Axalta Way productivity
Axalta operating system rollout
R&D / Innovation enablers
Salesforce investment
Manufacturing footprint balancing
Enhanced IT tools
Product complexity reduction
Leadership & Culture
Tone set by senior leaders
Independence with accountability
Leadership stabilized across the matrix
Supporting and educating our people
Talent roadmaps to sustain and grow
Refining the culture deeper in the company
Organization & Operations
Employees Feel the Effect of Our Focus and Accountability
Axalta’s Strategy: Focus On Operating Excellence
Financial Overview
23PROPRIETARY
Axalta Today: Shifting Gears To Larger Projects
Underlying Market Growth
Core Market Growth
Operational Improvements Tuck-in
Organic Levers For
Growth
Inorganic / M&AMargin Levers
Growth + Margins + Allocation Focus = Best-in-class Shareholder Returns
Optimized Capital
Allocation & ROIC
Axalta Way Bolt-on
Strategic
Partnerships
Geographic Expansion
Globalize Local Products
Innovation / New Products
Business Mix Shifts
Complexity Reduction
24PROPRIETARY
Q3 Consolidated Results
CommentaryFinancial Performance
Net Sales Variance
$1,021
Price Acq. Q3 2017FXQ3 2016 Volume
Net sales growth driven by acquisitions
Acquisitions provided +9.7% growth in
Performance Coatings, mainly in North
America and EMEA
Net sales pressured by lower volumes in
North America and Latin America
Refinish, partially offset by solid growth
in Industrial and Commercial Vehicle
end-markets
Reduced average pricing in Light
Vehicle and Industrial, partially offset by
increased Refinish average price
1.9% favorable currency impact driven
by stronger Euro; an inflection point
following 2+ years of currency
headwinds
(3.9%) (0.7%) +1.9% +9.7% +7.0%
($ in millions) 2017 2016 Incl. F/X Excl. F/X
Performance 694 617 12.5% 10.4%
Transportation 398 404 (1.4%) (2.8%)
Net Sales 1,092 1,021 7.0% 5.1%
Net Income (Loss) (1) 55 (7)
Adjusted EBITDA 210 230 (9.1%)
(1) Represents Net Income (Loss) attributable to controlling interests
Q3 % Change
25PROPRIETARY
Cumulative Productivity Savings
($ millions)
“A focused approach to doing business that drives profitability by improving our efficiency, productivity, and
growth opportunities every day, wherever we do business”
2017E20162015 2018E2014
~$150
$89
~$200
$37
Continued progress
The Axalta Way: Driving Towards World Class Productivity
Commercial
Operations /
Procurement /
Technology
SG&A
Manufacturing support function review
Technology organization restructuring
Logistics and network optimization
Salesforce coverage realignment
Sales support simplification
Overhead expense reduction
Asset and footprint rationalization
Commercial process excellence
Dynamic pricing and consistent terms
Improved salesforce training / capability
26PROPRIETARY
Capital Expenditures
Capex by Year and Category
($ millions)
Commentary
$59 $60 $53 $50
$35
$12
$53
$39 $48 $80
$38
$75
$46 $39
$15 $109
$188
$138 $136 $130
2013 2014 2015 2016 2017E
Maintenance Growth Productivity
Prioritization Of Capital Spending; Focus On High IRR Capex
Major Capex projects completed in 2016
Asia Pacific Technology Center
Argentina – New Manufacturing Site
Major Capex projects planned for 2017
Philadelphia - Global Innovation Center
Jiading –WB Expansion
Savli – OEM Manufacturing & Laboratory
27PROPRIETARY
13.2% 13.2%
11.6%
10.2% 10.2%
PPG RPM AKZA SHW AXTA
Notes: 1) ROIC = Net Operating Profit After Tax (NOPAT) / (Total Debt + Preferred Stock + Minority Interest
+ Equity); 2) AXTA total capital excludes identified intangible assets; 3) Data as of LTM Q3 2017
Axalta’s ROIC is penalized by the February 2013 LBO and
related asset step-up from purchase price accounting
Drivers of ROIC upside:
Growth in NOPAT from ongoing business execution
Effective capital allocation: Organic investments,
return accretive M&A, and focus on asset efficiency
We believe that over time we can achieve returns in
excess of the peer group averages
Return on Invested Capital (ROIC) Commentary
NOPAT ROIC (LTM)
Effective Capital Allocation Should Drive Improved Returns
28PROPRIETARY
Debt Reduction
Organic Investment
Capex / R&D
M & A
Dividends
- No current dividend
Share Repurchases
- Offset dilution
- Opportunistic buys
Leverage in
excess of
target and no
immediate
investment?
Investment
opportunity that
exceeds hurdle
rate?
Share price
greater than fair
value?
Free Cash
Flow
No
Excess
Yes
Yes
Yes
No
Axalta Today: Focus On Capital Allocation
29PROPRIETARY
Debt and Liquidity Summary
Capitalization Comments
Leverage ratio stable relative to last
quarter due primarily to:
Increased debt balances from Euro
denominated instruments from
continued strength in the Euro
North American Industrial Wood
acquisition financed and completed in
June 2017 only contributes four
months to LTM Adjusted EBITDA
LTM Adjusted EBITDA impacted by
lower Q3 result versus prior year
Increase in cash balances partially
offset noted headwinds above
(1)Assumes exchange rate of $1.177 USD/Euro
(2)Total Net Debt = Total Debt minus Cash and Cash Equivalents
(3)Total Net Leverage = Total Net Debt / LTM Adjusted EBITDA
($ in millions) @ 9/30/2017 Maturity
Cash and Cash Equivalents $589
Debt:
Revolver ($400 million capacity) - 2021
First Lien Term Loan (USD) 1,972 2024
First Lien Term Loan (EUR)
(1)
464 2023
Total Senior Secured Debt $2,436
Senior Unsecured Notes (USD) 490 2024
Senior Unsecured Notes (EUR)
(1)
388 2024
Senior Unsecured Notes (EUR)
(1)
521 2025
Capital Leases 53
Other Borrowings 14
Total Debt $3,903
Total Net Debt
(2)
$3,314
LTM Adjusted EBITDA $864
Total Net Leverage
(3) 3.8x
30PROPRIETARY
Full Year 2017 Guidance
Comments on Revised Guidance($ millions) Q2 Guidance Revised
Net Sales, ex FX 8-9% 6-7%
Tax Rate, As Adjusted 22-24% 22-24%
Free Cash Flow $440-480 $360-400
Cash flow from operations less capex
Interest Expense ~$150 ~$150
Adjusted EBITDA $940-970 $870-900
Net Sales 7-8% 6-7%
Capex ~$130 ~$130
Diluted Shares (millions) 246-249 ~246
D&A $350 ~$350
Full year guidance has been revised to
reflect impacts from distributor working
capital adjustments, raw material costs, and
recent natural disasters
Net sales growth includes incremental M&A
contribution from completed acquisitions
Margin headwinds from input cost inflation,
certain pricing and mix differences
Tax rate, as adjusted, benefits from full year
effect of actions completed in mid-2016
Free cash flow expectation incorporates
reduced Adjusted EBITDA forecast
Performance Coatings: Refinish
32PROPRIETARY
Refinish
Axalta Refinish Overview
25% Global
Market Share
Service Led
Business
Innovation
Drives
Leadership
Global Strategy
& Support
33PROPRIETARY
Projected Industry Sales
($ billions)
APAC
EMEA
N.A.
___________________________________
Source: Orr & Boss; Axalta estimates
Lat. Am.
2016 2017E 2018E 2019E 2020E
$7.7 $7.9
$8.2 $8.4
$8.6
The Global Refinish Market Is Growing
Key Market Trends
Growing car fleet, miles driven, and accident rates
Globally stable competitive dynamics
Body shop consolidation & professionalization
Environmental regulation drives high-productivity coatings adoption
Extend leadership position in premium segments
Increase share in under-represented markets
Expand mainstream and economy products
Leverage customer consolidation trends
Focus on expanding our distribution partnerships
Axalta’s Strategies For Growth
34PROPRIETARY
Global Share Position
Refinish Industry Sales: ~$7.7 billion
Axalta 25%
Peer 1
19%
Peer 2
11%
Peer 3
11%
Peer 4
4%
Other
30%
#1
Axalta Has A Very Strong Position In Refinish Globally
___________________________________
Source: Orr & Boss (2016); Axalta estimates
Axalta Global Refinish Dynamics
Strong heritage through 1999 Herberts acquisition
Diverse region with both mature and developing markets
Leading waterborne coatings adoption
MSOs gaining share and Axalta benefits directly
Continued strong core products serve the entire collision market
Leading VOC-compliant products meet environmental regulation shifts
Chinese car parc drives growth for region
Significant OEM influence in collision repair industry
Opportunity for growth in mainstream and economy product lines
Mexico and Brazil represent Axalta’s largest markets
Economy segment represents growth opportunity longer-term
Strong local manufacturing base for Axalta products
EM
EA
N
A
A
PA
C
La
t
A
m
35PROPRIETARY
The Refinish Process At A Glance
Consumer
Body Shop
Accident Call Insurance Car to Body Shop Repair Performed Vehicle Returned
Prepare Surface Primer Surfacer
Color
Match
Basecoat Clearcoat
Paint
Mixed
Customer Satisfaction Depends on Quick, High-Quality, Cost-Effective Repairs
Performance Coatings: Industrial Coatings
37PROPRIETARY
Axalta Industrial Overview
Wood Powder Coatings Coil Energy Solutions
Industrial Coating
Systems
#2 North America Wood Coatings Supplier Global Supplier of Powder Coatings
Global Supplier to the
Electrical Insulation Sector
Global Supplier of Industrial
E-Coat
POWDER
LIQUID
E-COAT
38PROPRIETARY
($ in billions)
APAC
EMEA
N. A.
_____________________________
Source: Orr & Boss; Axalta estimates
Lat. Am.
Projected Industry Sales
The Industrial Coatings Market
2016 2017E 2018E 2019E 2020E
$28.8
$27.3
$25.9
$23.3
$24.6
Wood: Expand product line, channel access; expand segments
(furniture, distribution); broaden geographic reach
Powder Coatings: Expand distribution and marketing channels;
Expand color range to compete with liquid alternatives; build
metallic capability to world class level
Electrical Insulation Systems (EIS): Continue to build global
capability; extend into mainstream markets; target attractive sub-
segments; add product lines (ie. compounds, lubricants)
General Industrial: Accelerate globalization of acquired liquid
products and niche markets; develop industry leadership in key
value-added coatings; win approvals in agriculture, construction
and earthmoving (ACE) markets
Coil: A top 4 player in U.S. market; globalize; focus on value-
added premium segments
Strategies For Growth
39PROPRIETARY
General
Industrial $12.0
Electrical
Insulation $2.0
Architectual
Extrusions $1.5
ACE $1.5
Oil & Gas $3.5
Coil $4.5
Wood $4.5
*Coil and Wood North America only
($ billions)
Industrial Coatings: A $28B Market Opportunity For Axalta
Volume growth driven by global GDP and Industrial Production
China drives >40% of global industrial coatings consumption
Building construction is a key driver
Coatings suppliers are consolidating
Driven by scale advantages and globalization; some niches remain fragmented
Technology innovation is a catalyst for growth
Global increase in demand for electric vehicles, alternative energy sources, and
environmentally friendly coatings across all end user segments
Customers are globalizing
Local product must meet global specifications consistently
Global infrastructure growth is driving demand
High temperature resistance required for energy applications
Demand for electrical insulation products linked to infrastructure
Increased construction in developing markets
Oil and gas pipeline expansion
Boost in pipeline construction to connect existing infrastructure
Market DriversCurrently Served Sub-Markets
40PROPRIETARY
Leading In Product Innovation
HydroponTMGlass Coating Anti-Shatter Alesta® Lync
Matte Clear technology Voltahyd 2250 waterborne series ICONICA Collection
41PROPRIETARY
Monumental 2017 Wins
Transbay Transit
Center
Decor Cabinet Company Amazon warehouse
Philharmonie De Paris Concert Hall Lucid Motors Qualiform Metals
Transportation Coatings Overview
43PROPRIETARY
#2 global supplier
to OEMs
Transportation
Light Vehicle
Original Equipment
Manufacturers
Plastics and
composite materials
Metal coatings
#1 global supplier to
heavy duty truck and
bus segments
Commercial Vehicle
Commercial trucks
Rail
Bus
Utility trucks
Recreational / off-road
General aviation
Synergies
Global OEM
Alliances
Focused
Support Models
Market Drivers
Axalta’s Transportation Segment
44PROPRIETARY
Projected Industry Sales: Light Vehicle Projected Industry Sales: Commercial Vehicle
_____________________________
Source: Orr & Boss; Axalta estimates
($ billions) ($ millions)
_____________________________
Source: Orr & Boss; Axalta estimates
$1.5 $1.5 $1.5 $1.6 $1.6
$2.3 $2.3 $2.4 $2.5
$2.5
$0.5 $0.5
$0.6 $0.6
$0.6
$3.5 $3.6
$3.7
$3.9 $4.0
2016 2017E 2018E 2019E 2020E
$8.7
$8.5
$8.2$8.0
$7.8
$781 $799 $830 $862 $896
$588 $602 $620
$639 $658
$378 $398
$424
$472 $475
$1,519
$1,576
$1,634
$1,695
$1,756
2016 2017E 2018E 2019E 2020E
$3,785
$3,668
$3,508
$3,375$3,265
Structurally Growing Markets
APAC
EMEA
N. A.
Lat. Am.
APAC
EMEA
N. A.
Lat. Am.
45PROPRIETARY
17% global light vehicle market
share with strong OEM
relationships in all regions
#1 player globally in heavy duty
truck and bus
Extensive portfolio of technologies
fit for purpose in each market
Showing results to date through
business wins and global
launches
Significant improvement in profit
contribution from restructuring
Capacity investments to support
growth in all regions
Technology & innovation progress
underlies our strategy
Building capability and footprint in
high growth regions
Expanding global brand strategy
Solidifying global account
management
Demand drivers include
Global GDP
Vehicle replacement cycles
Growth in emerging markets
Infrastructure spending
The global transportation market
is projected to grow ~2.9% CAGR
through 2020
Axalta is actively transforming its
business for profitable growth
Axalta is a leading global OEM
coatings provider
Progress to date has been
strong
Transportation Summary
46PROPRIETARY
Volatile organic
compounds (VOCs)
Toxic substances
Coatings for new
lightweight materials
to improve fuel
economy
Government
Regulations
Emerging Markets Industry Globalization
Demand for
Productivity
Color and Protection
Near-term uncertainty
(Brazil, Russia,
China)
Long-term growth
Global vehicle
platforms
Global color palettes
Global (and local)
coating approvals
Improved first time
quality
Energy, capital, labor,
materials savings for
customers
Consumers demand
aesthetics and style
Extended vehicle life
/ warranty
Key Market Trends
47PROPRIETARY
Global Share Significant Progress Made…
Axalta
31%
HDT
and
Bus
Axalta
17%
Light
Vehicle
Transforming A Global OEM Coatings Supplier
Must continue to align technology with customer needs in key target areas
Axalta needs to continue to refine cost structure to meet future challenges
Opportunity remains to penetrate underserved customers
Axalta must focus on both quality and productivity to maximize returns
…But Opportunities Still Remain
Successfully added share with existing customers
Added significant business in China since carve-out
Added interior coatings to portfolio
Reduced cost structure substantially in lower margin areas
Numerous capacity investments addressed bottlenecks
Began implementation of Lean Enterprise
APPENDIX
49PROPRIETARY
Adjusted EBITDA Reconciliation
Note: Numbers might not foot due to rounding.
($ in millions) FY 2016 Q1 2016 Q2 2016 Q3 2016 Q1 2017 Q2 2017 Q3 2017
LTM
9/30/2017
Net Income (loss) $45 $33 $52 (5) $66 (19) $56 $68
Interest Expense, net 178 50 48 43 36 36 38 147
Provision for Income Taxes 38 14 17 (8) 10 10 2 37
Depreciation & Amortization 322 76 79 81 82 84 89 341
Reported EBITDA $583 $173 $195 $111 $194 $111 $185 $594
A Debt extinguishment and refinancing related costs 98 - 2 82 - 12 1 27
B Foreign exchange remeasurement (gains) losses 31 8 18 5 (1) 6 4 9
C Long-term employee benefit plan adjustments 2 1 1 1 - - - (1)
D Termination benefits and other employee related costs 62 2 7 16 1 - 6 44
E Consulting and advisory fees 10 3 3 3 - - - 1
F Transition-related costs - - - - - 4 2 6
G Offering and transactional costs 6 - 1 3 (1) 7 - 8
H Stock-based compensation 41 10 11 10 10 11 9 40
I Other adjustments 5 2 2 1 - 3 1 3
J Dividends in respect of noncontrolling interest (3) (2) - (2) - (1) (2) (2)
K Deconsolidation impacts and impairments 68 - 11 - - 74 4 135
Total Adjustments $319 $24 $56 $119 $9 $116 $25 $270
Adjusted EBITDA $902 $196 $251 $230 $203 $227 $210 $864
50PROPRIETARY
Adjusted EBITDA Reconciliation (cont’d)
A. During the year ended December 31, 2016 we amended our Credit Agreement and refinanced our indebtedness, resulting in losses of $88 million, and prepaid principal on our term loans, resulting in non-
cash extinguishment losses of $10 million. In 2Q and 3Q 2016, we prepaid principal on the Term Loans and recorded non-cash losses on extinguishment of $2 million and $4 million, respectively.
Additionally, in 3Q 2016 and 2Q 2017 we further amended our Credit Agreement and refinanced our indebtedness, resulting in losses of $78 million and $12 million, respectively. During 3Q 2017, we
recorded $1 million resulting from changes in estimates associated with the refinancing of our term loans during 2Q 2017. We do not consider these to be indicative of our ongoing operating performance.
B. Eliminates foreign exchange gains and losses resulting from the remeasurement of assets and liabilities denominated in foreign currencies, net of impacts of our foreign currency instruments used to
hedge our balance sheet exposures.
C. Eliminates the non-cash, non-service cost components of long-term employee benefits.
D. Represents expenses primarily related to employee termination benefits and other employee-related costs associated with our Axalta Way initiatives, which are not considered indicative of our ongoing
operating performance.
E. Represents fees paid to consultants for professional services primarily related to our Axalta Way initiatives, which are not considered indicative of our ongoing operating performance.
F. Represents integration costs related to the acquisition of the Industrial Wood business that was a carve-out business from Valspar. These amounts are not considered indicative of our ongoing operating
performance.
G. Represents acquisition-related expenses, including changes in the fair value of contingent consideration, as well as costs associated with the 2016 secondary offerings of our common shares by Carlyle,
both of which are not considered indicative of our ongoing operating performance.
H. Represents non-cash costs associated with stock-based compensation.
I. Represents costs for certain non-operational or non-cash (gains) and losses unrelated to our core business and which we do not consider indicative of ongoing operations, including equity investee
dividends, indemnity losses (gains) associated with the Acquisition, losses (gains) on sale and disposal of property, plant and equipment, losses (gains) on the remaining foreign currency derivative
instruments and non-cash fair value inventory adjustments associated with our business combinations.
J. Represents the payment of dividends to our joint venture partners by our consolidated entities that are not wholly owned, which are reflected to show cash operating performance of these entities on
Axalta’s financial statements.
K. As a result of currency devaluations in Venezuela, during the year ended December 31, 2016, we recorded non-cash impairment charges relating to a real estate investment for $11 million and long-lived
assets for $58 million. In conjunction with the deconsolidation of our Venezuelan subsidiary during 2Q 2017, we recorded a loss on deconsolidation of $71 million. In addition, during 2Q 2017 and 3Q
2017, we recorded non-cash impairment charges related to the closure and the sale of manufacturing facilities previously announced for closure of $3 million and $4 million respectively. We do not
consider these to be indicative of our ongoing operating performance.
Thank you!
Investor Contact:
Chris Mecray, VP IR
Christopher.Mecray@axaltacs.com
215-255-7970