On July 30, Axalta announced its operating results for the second quarter of 2025. In the first half of this year, net sales reached $2.567 billion (approximately RMB 18.652 billion), down 2.95% year-on-year; operating profit was $369 million, up 13.19% year-on-year; pre-tax profit was $272 million, up 26.51%; and net profit attributable to the parent company was $208 million, up 35.95% year-on-year.
By business segment revenue, in the first half of 2025, the high-performance coatings segment generated sales revenue of $1.658 billion, down 4.44% year-on-year, including: automotive refinish coatings revenue of $1.025 billion, down 3.76%; and industrial coatings revenue of $633 million, down 5.52%. The transportation coatings segment sales revenue was $909 million, down 0.11% year-on-year, including light vehicle business revenue of $702 million, up 0.86%; and commercial vehicle business revenue of $207 million, down 3.27%.
According to the financial report, net sales in Q2 2025 decreased 3% year-on-year to $1.305 billion, with volume declines (mainly from high-performance coatings) outweighing contributions from the CoverFlexx acquisition and favorable currency conversion. Operating profit was $193 million, down 5.85% year-on-year; pre-tax profit was $143 million, down 8.33%; adjusted EBITDA set a new quarterly record at $292 million, up $1 million year-on-year. Adjusted EBITDA margin expanded 90 basis points year-on-year to 22.4%.
Net profit fell 3% year-on-year to $110 million, with a net margin of 8.4%. The decrease was mainly due to costs from a restructuring plan launched this quarter aimed at improving efficiency, partially offset by lower operating expenses and reduced interest and tax expenses. Adjusted net profit increased $4 million year-on-year to $139 million, benefiting from reduced operating expenses, lower interest costs, and improved variable costs. Diluted earnings per share decreased 2% to $0.50, while adjusted diluted earnings per share rose 5% to $0.64.
In Q2 2025, Axalta generated $142 million in cash from operations, a significant improvement from $114 million in the same period last year. This year-on-year growth reflects the company's focus on margin expansion and operational discipline. Free cash flow in the quarter was $101 million, higher than $95 million a year ago, driven by stronger operating performance partially offset by increased strategic capital expenditures to support productivity and long-term growth.
Axalta CEO and President Chris Villavarayan said: “We delivered another strong quarter, with adjusted EBITDA and adjusted diluted EPS both reaching new highs. Our results reflect Axalta's commitment to operational excellence and our dedication to achieving financial goals and creating value through the 'Excellence Plan.'”
According to the report, Axalta's high-performance coatings segment achieved net sales of $836 million in Q2 2025, down 6.0% year-on-year. Contributions from the CoverFlexx acquisition and favorable exchange rates partially offset the decline in organic net sales. Automotive refinish net sales declined 6% year-on-year to $514 million, mainly due to a decline in organic net sales in North America. Industrial coatings net sales decreased 6% year-on-year to $322 million, as positive price mix and favorable forex translation were offset by volume declines.
Adjusted EBITDA for the high-performance coatings segment was $200 million, down 10.0% year-on-year, reflecting resilience in profitability amid weak volumes. Despite the slowdown in organic net sales, the segment maintained a healthy adjusted EBITDA margin of 23.8% due to lower operating and variable expenses compared to the prior year.
Axalta's transportation coatings segment recorded net sales of $469 million in Q2 2025, up 1% year-on-year. Organic net sales grew in three of the four regions, with light vehicle business net sales increasing 2% year-on-year to $362 million, more than offsetting declines in North America. Commercial vehicle net sales decreased 4% year-on-year to $107 million, due to lower sales of Class 8 vehicles, partially offset by positive price mix mitigating adverse forex effects. The transportation coatings segment's price mix grew 4% year-on-year.
The segment performed strongly in Q2, generating $92 million in adjusted EBITDA, a significant increase from $68 million a year earlier. Adjusted EBITDA margin rose from 14.8% last year to 19.8%, reflecting benefits from positive price mix and strict cost management. This strong margin growth highlights Axalta's ability to drive profit growth.
By region, in the first half of 2025, North America revenue was $919 million (down from $1.009 billion a year earlier); EMEA revenue was $915 million (down from $921 million); Asia Pacific revenue was $434 million (up from $409 million); and Latin America revenue was $299 million (down slightly from $306 million). Data shows declines in North America and EMEA revenues, while Asia Pacific and Latin America saw growth, especially strong growth in Asia Pacific.
The financial report shows Axalta's sales revenue for Q2 in 2024 and 2025 were $1.351 billion and $1.305 billion respectively; sales revenue for the first half of 2024 and 2025 were $2.645 billion and $2.567 billion respectively. Among them, Axalta's sales in the China market accounted for about 11% and 12% of the net sales for the three and six months ended June 30, 2025 and 11% and 10% for the same periods in 2024.
Based on this data, Axalta's sales revenue in China was $264.5 million (approximately RMB 1.882 billion) in the first half of 2024 and $282.4 million (approximately RMB 2.052 billion) in the first half of 2025, a year-on-year increase of 6.76% in US dollars and 9.03% in RMB. Axalta entered China in 1984, with businesses covering automotive OEM coatings, automotive refinish coatings, powder coatings, insulation coatings, and other industrial coatings. It has four wholly owned factories in mainland China, one Asia Pacific technology R&D center, one global color development center, and four customer training centers. In 2024, sales in China reached $580.4 million (approximately RMB 4.09 billion), up 11.96% year-on-year.
Axalta provided guidance for Q3 and full-year 2025: Q3 net sales expected to grow low single digits year-on-year, adjusted EBITDA between $290 million and $300 million. Full-year net sales forecast between $5.20 billion and $5.275 billion, adjusted EBITDA between $1.14 billion and $1.165 billion, and free cash flow between $475 million and $500 million.
