Axalta Coating Systems — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales reached $1.3 billion, an increase of 2% year over year.
• Net income was $95 million, a decrease of $15 million year over year, resulting in a net income margin of 7.2%.
• Adjusted EBITDA was $282 million, a decrease of 4% year over year, with an Adjusted EBITDA margin of 21.5%.
• Diluted EPS was $0.44, compared to $0.51 in the prior-year period.
• Adjusted Diluted EPS was $0.63, down 6% year over year.
• Cash provided by operating activities was $135 million, in line with the prior-year period.
• Free cash flow was $92 million, up 3% year over year.
• Total net leverage was 2.1x, the lowest in Axalta's history.
• Nine months ended September 30, 2026, net sales were $3.9 billion, up from $3.8 billion in the prior year.
• Nine months ended September 30, 2026, net income was $275 million, down from $319 million in the prior year.
• Nine months ended September 30, 2026, Adjusted EBITDA was $846 million, down from $856 million in the prior year.

Guidance and Future Outlook:

• Fourth Quarter 2026 net sales are projected to be approximately flat year over year.
• Full Year 2026 net sales are projected to grow in the low single-digit percentage range.
• Fourth Quarter 2026 Adjusted EBITDA is guided to be between $254 million and $264 million.
• Full Year 2026 Adjusted EBITDA is guided to be between $1,100 million and $1,110 million.
• Fourth Quarter 2026 Adjusted Diluted EPS is guided to be approximately $0.55.
• Full Year 2026 Adjusted Diluted EPS is guided to be approximately $2.45.
• Full Year 2026 Free Cash Flow is guided to be approximately $450 million, including ~$80 million of merger and acquisition-related cash costs.
• Full Year 2026 Depreciation and Amortization is guided to be $310 million.
• Full Year 2026 Tax Rate, as adjusted, is guided to be approximately 24%.
• Full Year 2026 Diluted Shares Outstanding are guided to be approximately 215 million.
• Full Year 2026 Interest Expense is guided to be approximately $150 million.
• Full Year 2026 Capital Expenditures are guided to be approximately $200 million.

Business Segments and Product Lines:

• Performance Coatings net sales were $818 million, down $10 million year over year, driven by lower Refinish volumes in Europe.
• Refinish net sales declined 2% year over year to $504 million.
• Industrial net sales increased 1% year over year to $314 million, driven by volume growth in Asia Pacific.
• Performance Coatings Adjusted EBITDA was $188 million, down from $211 million in the prior year, with a margin of 23.0% compared to 25.5%.
• Mobility Coatings achieved record quarterly net sales of $493 million, up 7% year over year.
• Light Vehicle net sales were up 2%, driven by favorable foreign currency translation.
• Commercial Vehicle net sales increased 24% year over year to $119 million, driven by volume growth from increased Class 8 production in North America.
• Mobility Coatings Adjusted EBITDA was $94 million, a third quarter record, with a margin of 19.0%, reflecting 100 basis points of margin expansion year over year.
• Demand trends in Performance Coatings remained generally stable outside of Europe, with net sales down low single digits in North America and up high single digits in Latin America and Asia Pacific.

Market and Competitive Landscape:

• Net sales growth was driven by volume growth in three out of four regions, favorable foreign currency translation, contributions from acquisitions, and positive price mix.
• Volume declines were primarily in Europe.
• The company faces variable cost inflation and higher raw material and freight costs.
• Geopolitical factors, including the conflict in the Middle East, are impacting raw material and freight prices.
• The company is subject to risks related to tariffs imposed by the U.S. and retaliatory actions from other countries.

Risks and Challenges:

• Risks include economic, competitive, governmental (tariffs), geopolitical, and technological factors outside of Axalta's control.
• Risks related to the execution of tariff mitigation strategies, capital allocation strategy, and future share repurchases.
• Risks associated with the proposed merger with AkzoNobel, including the ability to consummate the transaction and realize anticipated benefits.
• Risks related to the planned divestiture of the North America Building Products business.
• Risks related to the global transformation initiative and the three-year 2024-2026 strategy.
• Merger and acquisition-related expenses totaled $19 million in the quarter and $76 million for the nine months ended September 30, 2026.

Management Commentary and Tone:

• Chris Villavarayan, Chief Executive Officer and President, stated the company delivered revenue growth, strong cash generation, and robust profitability despite a challenging operating environment.
• Management noted maintaining Adjusted EBITDA margin above 20%, strengthening the balance sheet, and achieving record quarterly net sales in Mobility Coatings.
• Management expressed confidence in significant value creation opportunities associated with the proposed combination with AkzoNobel.
• Management remains focused on disciplined execution.

Other Key Points:

• Axalta is in the process of a proposed merger of equals with AkzoNobel N.V.
• Shareholders of Axalta and AkzoNobel voted in favor of all resolutions related to the Proposed Merger on August 5, 2026.
• Axalta is planning the divestiture of its North America Building Products business.
• The company incurred approximately $21 million of incremental merger and acquisition-related cash costs during the quarter.
• Axalta does not provide a reconciliation for non-GAAP estimates on a forward-looking basis due to the unavailability of information necessary to calculate reconciling items without unreasonable effort.
• Conference call to discuss results was held on October 29, 2026.