And what you can see is there’s a lot of cars in body shops that are looking for work because it’s actually minor collisions versus the full write-offs that you would normally see. So I think it’s great because it does the right thing for ensuring that we protect folks. But at the same time, it does provide us a benefit in our business.
Operator: Our next question comes from Patrick Cunningham from Citi.
Unidentified Analyst: This is Eric Zhang [ph] on for Patrick. On the targeted price increases across like parts of the portfolio that was mentioned at the beginning of the call, can we talk about what products were targeted and is this activity expected to continue for the remainder of the year?
Chris Villavarayan: We did — actually, we’re very proud of the team for the pure pricing. We did it across the board, all 3 businesses essentially drove pricing. Our pure pricing was actually up 2%. And so we’re very proud of the team for accomplishing this in a very deflationary market, as someone pointed out. But I think very, very quickly, let me just point at what differentiates all 3 businesses. If I think about our Refinish business, obviously, there’s the point that this business is stable and we continue to price but we don’t price for the sake of pricing here, it’s really the efficiency and the productivity we drive to our customers. If I look at our waterborne product, it is 30% more efficient than what was here previously.
If I look at currently what we’re doing with our base coats, we had chroma-based technology that we’re moving to Cromax XP. That drives the 10% improvement in efficiency for our Refinish customers. So we’re pricing for the efficiency and the productivity that we provide our customers there. So that’s, as I look at the Refinish business. On the Mobility side, we continue to have pockets of the business which are still where we believe that there’s more value for the products that we bring to our customers. So in certain pockets, we are pricing. And we also have the impact of labor and certain elements of the basket of raws that we continue to price. And then finally, in our Industrial business, this is something that over time that we’re making the right choices of getting out of certain segments or getting out of, let’s call it, certain customers and a portion of the tail to make sure that we can continue to invest in that business which drives the right level of profitability.
So right now, we’re pricing across all 3 elements of the business and pure pricing is up 2%.
Operator: And our next question comes from Steve Byrne from Bank of America.
Rock Hoffman: Rock Hoffman on for Steve Byrne. Could you guys, I guess, inform if there’s been any additional productivity gains that we should expect to come from initiatives launched last summer prior to the 2024 transformation initiative?
Chris Villavarayan: Sure. I’m hoping that I could save this for the discussion on May 15. So probably won’t give you too much more color, Otherwise, you might not show up to our Strategy Day there. But we’re — we have two initiatives. Obviously, the transformation initiative that we’re talking about. And then a couple under the operations umbrella. The first one is productivity that we’re going to drive through our facilities as we think about the next couple of years. And then the second element of that will be a network optimization process or program where we’re looking for more opportunities. We’ve grown about 100 warehouses and distribution centers over — from the pre-pandemic time to now. And we do believe with that as well as some of the work that we can do on the transportation side, there’s still more opportunities. So those are certainly the elements that we’re going to work on going forward.
Rock Hoffman: And just a follow-up on the Light Vehicle business. Just wondering if you could either provide similar metrics on Light Vehicle growth for Axalta versus Light Vehicle market growth in kind of other non-China regions or just give us an idea of the extent of magnitude there?
Chris Villavarayan: Sure. So as I look at the market and I’ll just go through the Light Vehicle market and give you a perspective for all 3 regions. I would call the overall market being solid for us. In North America, we see that as stable. We are starting to see inventory at the dealers kind of pick up quarter-over-quarter by about 10 days. But that said, volumes here seem somewhat stable. So our — we’ve picked up a little bit but I wouldn’t say anything that’s significant here. In Europe, again, markets have gone down about 2% to 3% and we have stayed very stable here as well from a market standpoint. China is up 4%. And in that marketplace, as you know, we’re up 21%. So overall, I would call the Light Vehicle performance solid with a little bit of growth in North America and significant growth in China.
Operator: We have a question from Mike Sison from Wells Fargo.
Michael Sison: Nice start to the year. In terms of Refinish, for the markets in 2Q, I think you said your growth was flat in the first quarter for North America. And EMEA, you guys had nice growth. Do you expect the markets to be flat again in 2Q? And how do you think sort of unfolds for the rest of the year?
Chris Villavarayan: Yes, I would say it’s flat to about just slightly growing, I’d say, flat to 1%. We obviously are showing that we’re going up high single digits in Q2 and it’s really, as I said, the 4 strategic initiatives that we are working on. On top of that, we also had the operational issues that we had in Q2 of last year. So lapping that performance is driving our growth in Q2. So I do believe we’ll have a really good quarter here again in Q2 in our Refinish business.
Michael Sison: And more of a longer-term question which again, probably addressed at the Analyst Day. But Axalta has been really focused on cost and productivity for a long time. And it does sound like you’re maybe getting to more of a growth phase. Is that the way to sort of think about it? And where do you think the growth is sort of just maybe on average. What do you — how do you see that growth holding over the next couple of years?
Chris Villavarayan: Absolutely. So I think we do believe there’s probably 1 or 2 innings left on the margin side but certainly a lot more that we can focus on the growth side. And to be honest, that is what we will be covering in significant detail going through our Strategy Day on the 15th. And so what we’ll be doing is providing a view of where we’ll be in 3 years from now across the 3 business segments by yearly targets that we will be providing. So just to give you a perspective and having a measure of where we think we can take the business with that.
Carl Anderson: Yes. And then Mike, I just would add to that, if you just — while there’s been a lot of focus with Chris coming in as far as how improving operations, focus on costs. If you step back and just look at what the team is planning to accomplish for this year, as we referenced, we expect our EBITDA to be up 12% year-on-year. EPS is going to be up 24%. The implied margin of the business now is running 20% as far as on an EBITDA margin perspective. So I think, as Chris said, we like the trajectory of where we’re taking the business. And this pivot to growth is what we will — spending a lot of time with in the next couple of weeks when we have our Strategy Day.
Operator: Our next question comes from John Roberts with Mizuho.
John Roberts: Nice quarter. Could you give us an update on the geographic mix of your auto OEM sales? I’m guessing that China may be bigger than I was thinking it was.
Chris Villavarayan: So yes, let me break it down. So Light Vehicle for North America is about $300 million — sorry and then if I look at EMEA, we’re about $400 million and then about $100 million in China.
John Roberts: So China — you called out China in terms of the strength in the quarter’s volumes that’s there. It didn’t seem like it was big enough to actually drive the total.
Carl Anderson: Yes. I think, John, if you look at it — just a little bit of perspective, for the quarter, the China business for us was a little bit north of $60 million of revenue. Which is now — it is the third largest region for us from a pure Light Vehicle perspective. So if I look at it, still North America by far in the way is our largest with Europe being second. But as Chris is referencing not only in prepared remarks, in some of the questions, we continue just to see very, very strong performance, specifically in China.
Operator: Our next question comes from Joshua Spector from UBS.
Unidentified Analyst: This is Lukas Spillman [ph] on for Josh. So I just want to go back to the SG&A costs, if we could. So they are kind of only up modestly in the first quarter — that compares to kind of the high single-digit inflation we’re sort of seeing across most of the peers. At the same time, it sounds like you’re going to get kind of $50 million in cost savings there through the year from your productivity program which is about sort of 6%. So I guess just net of these factors, are you expecting SG&A growth to kind of be flat or up low single digits this year? How should we kind of think about that?
Carl Anderson: Yes. As we look at SG&A, we’re very proud of the — what we were able to accomplish in the first quarter, as you referenced, we really were flat year-over-year in SG&A, especially in the environment that we’re in. And — as we look forward, we are hoping to be able to manage that SG&A spend to be up probably very, very low single digits on a year-on-year basis. It’s how we’re looking at that, just based off not only the transformation initiatives that we are well underway on but also just as we look at how best to operate the business kind of going forward. So that is a big focus for us. And first quarter, we’re off to a very good start.
Unidentified Analyst: And then just going back to kind of the Industrial exits, are you able to kind of quantify for us how much volumes are you kind of deselecting there each quarter? And I guess if you could kind of give some sort of scale on the timing on how that’s going to…
Chris Villavarayan: We’re not breaking that out. But what I can tell you is, obviously, as you can see, we’re down about 6% but we’re not breaking out how much of that we’re pulling out just because of the choices we’re making right now.
