Record full-year net revenue of $5.3 billion and record full-year adjusted EBITDA of $1.1 billion in 2024 helped power Axalta Coating Systems Ltd. (NYSE: AXTA) to record profits of $391 million, a 45% increase over 2023, the company announced Feb. 4.
In the fourth quarter of 2024, the Philadelphia-based paint coating and tint manufacturing company posted year-over-year gains in its refinish and mobility coatings segments, and losses in its performance coatings and industrial units, according to released earnings results.
Fourth-quarter 2024 net sales were a record $1.3 billion, a roughly $13 million -- or 1% -- increase over the fourth-quarter 2023 amount, “inclusive of a 1% foreign currency headwind,” according to the company’s financial results.
Axalta’s full-year revenue jumped 2% from 2023, a $106-million boost from the prior year.
“Axalta's 2024 financial results were exceptional. We delivered record net sales and Adjusted EBITDA for the fourth quarter and full year in a challenging macro environment,” Axalta CEO Chris Villavarayan said in a statement. “Consistent outperformance in Refinish and Light Vehicle and excellent execution across the company, resulted in an Adjusted EBITDA margin of over 21% as we continue down the path to delivering against our commitments outlined in the 2026 A Plan.”
The “2026 A Plan” refers to the company’s three-year 2024-2026 strategy.
The A Plan covers the facets of cultural transformation, operational excellence, optimized portfolio growth strategy, sustainable innovation and effective capital allocation.
Axalta’s A Plan targets include net sales growth of more than $500 million compared to actual 2023 financial results, an adjusted EBITDA margin of greater than 21%, a net leverage ratio (net debt divided by adjusted EBITDA) of 2.0x to 2.5x, a return on invested capital of approximately 15%, and diluted earnings per share (EPS) of greater than 60% compared to actual 2023 financial results.
Diluted EPS refers to quality of EPS assuming all convertible securities have been exercised.
The 9% year-over-year growth of Axalta’s light vehicle unit in the fourth quarter helped drive the 4% year-over-year revenue increase in the company’s overall mobility coatings segment in the same quarter. That segment posted net sales of $468 million in the last quarter of 2024.
The 2% year-over-year increase in the company’s refinish segment translated to net fourth-quarter sales of $545 million for that business unit, which included favorable contributions by the company’s acquisition of The CoverFlexx Group. Axalta announced the completion of that acquisition on July 2. CoverFlexx manufactures coatings for automotive refinish and aftermarket applications, geared toward North American consumers.
As reported by Autobody News, 2023 saw 366 mergers and acquisitions in the automotive aftermarket totaling $11.2 billion, according to a January report by global investment bank Hamilton Lokey. The value was a five-year low, but the quantity of acquisitions was the second highest in five years, only surpassed by 2021’s 437 total transactions.
Lower sales volumes and unfavorable foreign currency impacts more than offset the positive additions of the CoverFlexx acquisition to Axalta’s performance coatings segment, as net sales in that unit slipped in the fourth quarter by 1% compared to 2023’s fourth quarter. Net performance coatings sales totaled $843 million in the fourth quarter of 2024.
Axalta’s industrial segment posted a fourth-quarter net sales drop of 5% compared to the same 2023 period, translating to $298 million in total revenue for 2024’s final quarter.
Brian Bradley