Recently, Axalta (USA) released its 2024 annual report. The company achieved a 1.8% year-over-year increase in net sales, reaching $5.276 billion, despite a 0.4% currency headwind. The growth in net sales was driven by a 1.1% increase in volume, including contributions from the acquisition of André Koch in October 2023 and CoverFlexx in July 2024, which contributed 0.7%, as well as a 0.4% increase in average price and product mix.
Annual net profit reached $391 million, up 45% year-over-year, with a net profit margin of 7.4%, an improvement of 220 basis points. The increase in net profit was mainly driven by lower variable costs, sales growth (including contributions from acquisitions), reduced consulting and enterprise resource planning system implementation expenses, and savings from the 2024 transformation initiatives, partially offset by labor cost inflation and restructuring expenses. Record-high adjusted EBITDA for the year was $1.116 billion, with an adjusted EBITDA margin of 21.2%.
In February 2024, Axalta announced its 2024 transformation plan aimed at simplifying the company’s organizational structure to enhance agility, responsiveness, and customer service while reducing cost structures, improving financial performance, and generating greater cash flow. The total cash outlay related to the 2024 transformation initiatives is expected to be around $100–110 million. Axalta estimates that once fully implemented, the plan will generate approximately $75 million in annual net savings, including non-labor savings and cost reductions from certain roles. The company achieved about $20 million in run-rate savings from the transformation initiatives in 2024, exceeding expectations, and anticipates achieving $30–40 million in 2025, with the full run-rate expected to be realized in 2026.
As of December 31, 2024, cash flow from operating activities reached $576 million. Net income before depreciation, amortization, and other non-cash items generated $699 million in cash, partially offset by a $123 million net use of working capital. The primary drivers included a $130 million increase in prepaid expenses and other assets and a $49 million decrease in accounts payable. These outflows were mainly influenced by the timing of commercial incentive program payments, procurement schedules, and supplier payments. Other accrued liabilities increased by $36 million, partially offsetting these outflows, primarily due to accrued items related to the 2024 transformation initiatives and customer rebates.
By the end of 2024, Axalta had 44 manufacturing sites (including two operated through joint ventures), four major technology centers, 45 customer training centers, and approximately 5,000 independent local distributors, serving around 93,000 body shops across more than 140 countries and regions. Globally, Axalta operated 28 manufacturing facilities, two technology centers, and 12 customer training centers, while the remaining facilities and centers were leased. As of the end of 2024, Axalta had approximately 12,800 team members, with 26% based in the U.S. and 74% in international locations.
By region, Axalta’s 2024 sales distribution was as follows:
For the Performance Coatings segment:
For the Mobility Coatings segment:
Performance Coatings Segment: Axalta sells coatings to customers in over 140 countries. By the end of 2024, the top ten customers accounted for approximately 20% of the segment’s net sales.
Mobility Coatings Segment: Axalta provides products and services to light vehicle and commercial vehicle customers across more than 220 assembly plants worldwide, including all of the top ten global automotive manufacturers. By the end of 2024, the top ten customers accounted for approximately 62% of the segment’s net sales.
As of the end of 2024, Axalta had seven joint ventures, with three focusing on the light vehicle market, two on the refinish market, and two on the industrial market. On December 31, 2024, Axalta was the majority shareholder and/or exercised control over five of these joint ventures, incorporating them into its financial statements. The fully consolidated net sales associated with these joint ventures were $62 million in 2024, $62 million in 2023, and $79 million in 2022.
By the end of 2024, approximately 1,300 Axalta team members were dedicated to technology development. The company operated four major technology centers worldwide, aligning technology investments with regional business needs, supported by approximately 25 regional laboratories. This includes the Global Innovation Center in Philadelphia, Pennsylvania, which opened in 2018 and serves as Axalta’s global headquarters, focusing on research, product development, and technology initiatives.
As of December 31, 2024, Axalta held approximately 680 granted patents and over 520 trademarks worldwide, with approximately 220 additional patents pending.
According to the annual report, Axalta's Performance Coatings segment achieved sales of $3.455 billion in 2024, marking a 1.4% year-over-year increase. Among this, Automotive Refinish coatings contributed $2.164 billion, growing by 3.8%, while Industrial Coatings saw a decline of 2.4%, with sales amounting to $1.291 billion. The increase in net sales was due to the contribution of CoverFlexx, which accounted for 1.1%, and an increase of 0.6% in average prices and product mix, though partly offset by a 0.2% decline in volume. The latter was influenced by the acquisition of André Koch completed in October 2023 and foreign exchange fluctuations. A part of the decline in industrial market sales was driven by unfavorable demand trends, but this was offset by new body shop acquisitions and contributions from André Koch in the Refinish market.
The increase in adjusted EBITDA and adjusted EBITDA margin was mainly due to the following factors: the benefits of deflation leading to reduced variable input costs, higher average prices and product mix in the Refinish market, a $17 million reduction in costs related to the multi-year ERP system implementation and productivity initiatives, and a $11 million decrease in inventory costs due to obsolescence, quality, and yield losses in manufacturing. The contribution from the CoverFlexx acquisition also played a role. However, these were partially offset by lower effective coverage of fixed costs due to declining sales and lower volume in the industrial end-market, partially compensated by new body shop wins and the contribution of André Koch in the Refinish market.
The annual report shows that Axalta’s Mobility Coatings segment achieved sales of $1.821 billion in 2024, reflecting a 2.5% year-over-year increase. Among this, Light Vehicle coatings contributed $1.405 billion, up 4.8%, while Commercial Vehicle coatings accounted for $416 million, a decrease of 4.7%. The increase in net sales was driven by a 3.4% increase in volume, though partially offset by a 0.9% unfavorable currency translation headwind, mainly due to the weakening of the Brazilian Real, Mexican Peso, and the Chinese Yuan against the U.S. dollar. The price and mix impact remained flat year-over-year.
The increase in adjusted EBITDA and adjusted EBITDA margin was mainly due to the following factors: the benefits of deflation leading to reduced variable input costs, higher sales in the Light Vehicle market, partially offset by lower sales in the Commercial Vehicle market, a $9 million reduction in costs related to the multi-year ERP system implementation and productivity initiatives, and a $2 million decrease in inventory costs due to obsolescence, quality, and yield losses in manufacturing.
Axalta entered China in 1984, with operations spanning automotive OEM coatings, automotive refinish coatings, powder coatings, insulation coatings, and other industrial coatings. Currently, Axalta has four wholly-owned factories in mainland China: in Changchun, Jilin; Jiading and Qingpu in Shanghai; and Hexian, Anhui. Additionally, the company has one Asia-Pacific regional R&D center, one global color development center, and four customer training centers, with more than 2,000 employees.
The financial report shows that from 2021 to 2024, Axalta's sales to external customers in China accounted for 10%, 10%, 10%, and 11% of its total sales, respectively. Based on this proportion, Axalta's sales in China for 2024 are approximately $580.4 million, a year-over-year increase of 11.96%. Converted to RMB, Axalta's 2024 sales in China reached 4.09 billion RMB, up from 3.653 billion RMB in the previous year, marking an 11.96% increase.
According to the annual report, Axalta's sales in China from 2015 to 2024 were as follows: $531.3 million, $529.6 million, $522.4 million, $513.7 million, $403.4 million, $336.4 million, $441.6 million, $488.4 million, $518.4 million, and $580.4 million. Notably, sales in 2019 and 2020 saw significant declines of 25.09% and 22.01%, respectively, while from 2021 to 2024, sales have experienced four consecutive years of growth. The data indicates that Axalta's sales in China are expected to reach a historical high in 2025.
Analysts suggest that the significant year-over-year growth in Axalta's sales revenue in China in 2024 was primarily driven by the growth in automotive production and sales, particularly in the new energy vehicle (NEV) sector. According to data from the China Association of Automobile Manufacturers, China’s automobile production and sales in 2024 reached 31.282 million and 31.436 million units, respectively, marking a year-over-year increase of 3.7% and 4.5%. This continued the country’s position as the world’s largest car producer and consumer for the 16th consecutive year. Among them, passenger car production and sales reached 27.477 million and 27.563 million units, up 5.2% and 5.8%, respectively. The strong demand in the passenger car market boosted the demand for automotive coatings.
Last year, China’s new energy vehicles continued to show high growth. Since 2021, the development curve of new energy vehicles in China has been on a strong upward trend, with annual production and sales growth exceeding 30% for four consecutive years. In 2024, the production and sales of new energy vehicles surpassed 10 million units for the first time, reaching 12.888 million and 12.866 million units, respectively, a year-over-year increase of 34.4% and 35.5%. The share of new energy vehicles in the total vehicle sales reached 40.9%, up 9.3 percentage points from 2023. In the passenger car market, the share of new energy vehicles in sales exceeded 50% for six consecutive months. In 2024, automotive exports set a new record, with exports reaching 5.859 million units, a year-over-year increase of 19.3%.
