Axalta Updates Financial Guidance and Highlights Recent Effects on Its Business

PHILADELPHIA–(BUSINESS WIRE)–Axalta Coating Systems Ltd. (NYSE: AXTA) (“Axalta”), a leading global
coatings provider, has updated its third quarter and 2017 full year
financial guidance to incorporate several factors expected to impact
results. These include the expected impact of the recent natural
disasters, distributor working capital adjustments in Axalta’s
Performance Coatings segment, and the projected widening of the gap
between raw material input costs and offsetting near-term customer price
increases. Axalta now expects third quarter and 2017 full year Adjusted
EBITDA to be in a range of $205-$215 million and $870-$900 million,
respectively. Net sales for third quarter 2017 are expected to be
between $1.08-$1.10 billion, while full year net sales are expected to
grow between 6%-7%.

Charles W. Shaver, Axalta’s Chairman and CEO, commented that “We have
seen and expect moderate effects on our business from recent hurricanes
and the earthquake in Mexico, largely in terms of lost near-term volume
opportunity. We believe that much of this impact will be made up during
the course of 2018, and hence see these impacts as largely transitory.”
Mr. Shaver continued, “After recent discussions with certain Performance
Coatings distribution partners, we are incorporating the expected impact
of a focused reduction in distributor working capital levels for the
balance of the year. Following this adjustment, we expect volumes for
the segment to return to more normal levels during the fourth quarter.”
Mr. Shaver further commented that “We also continue to see impacts
across coatings markets from tight supply conditions for raw material
inputs, and given time lags to recovery via pricing adjustments, we have
factored in a wider price-cost gap into our 2017 outlook. We expect to
close the gap caused by raw material price pressure over the coming
year.”

Robert W. Bryant, EVP and CFO, added, “Although we never like to see
business impacts of these sorts, we believe the majority of the effects
we have described are largely one-time in nature, and much of these are
expected to be recovered through the course of 2018. We continue to have
confidence in the underlying business climate, and note that the
economics in each of our end-markets remain stable as we look forward.
We are also revisiting and will increase our plans for cost reduction
and productivity measures that should incrementally benefit Axalta in
2018.”

Cautionary Statement Concerning Forward-Looking Statements

This release may contain certain forward-looking statements regarding
Axalta and its subsidiaries including those relating to the impact of
recent natural disasters, distributor working capital adjustments,
projected price-cost gap and cost reduction and productivity measures,
as well as our third quarter and full year 2017 outlook, including net
sales, net sales growth and Adjusted EBITDA. All of these statements are
based on management’s expectations as well as estimates and assumptions
prepared by management that, although they believe to be reasonable, are
inherently uncertain. These statements involve risks and uncertainties,
including, but not limited to, economic, competitive, governmental and
technological factors outside of Axalta’s control that may cause its
business, industry, strategy, financing activities or actual results to
differ materially. More information on potential factors that could
affect Axalta's financial results is available in the "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" section within Axalta's most recent annual report on Form
10-K, and in other documents that we have filed with, or furnished to,
the U.S. Securities and Exchange Commission. Axalta undertakes no
obligation to update or revise any of the forward-looking statements
contained herein, whether as a result of new information, future events
or otherwise.

Non-GAAP Financial Measures

The 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
Adjusted EBITDA. 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-cash items included
within net income, (ii) items Axalta does not believe are indicative of
ongoing operating performance or (iii) nonrecurring or infrequent items
that Axalta believes are not reasonably likely to recur within the next
two years. 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 term Adjusted EBITDA may differ from that of others in
our industry. Adjusted EBITDA should not be considered as an alternative
to net income (loss) income (loss) before operations or any other
performance measures derived in accordance with GAAP as measures of
operating performance or operating cash flows or as measures of
liquidity. Adjusted EBITDA has important limitations as an analytical
tool and should be considered in conjunction with, and not as a
substitute for, our results as reported under GAAP. Axalta does not
provide a reconciliation for non-GAAP estimates for Adjusted EBITDA 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
losses, gains or losses that are unusual or nonrecurring in nature, as
well as discrete taxable events. We cannot estimate or project these
items and they may have a substantial and unpredictable impact on our US
GAAP results.

About Axalta Coating Systems

Axalta is a global leader in the coatings industry, providing customers
with innovative, colorful, beautiful and sustainable coatings solutions.
From light vehicles, commercial vehicles and refinish applications to
electric motors, building facades and other industrial applications, our
coatings are designed to prevent corrosion, increase productivity and
enhance durability. With more than 150 years of experience in the
coatings industry, the 13,600 people of Axalta continue to find ways to
serve our more than 100,000 customers in 130 countries better every day
with the finest coatings, application systems and technology. For more
information, visit axaltacoatingsystems.com
and follow us @axalta on Twitter.

Contacts

Axalta Coating Systems
Christopher Mecray, +1 215-255-7970
[email protected]