Axalta Coating Systems Ltd. (NYSE:AXTA) Q4 2022 Earnings Call Transcript

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Sean Lannon: Yes, on the mobility side that market is actually being operating really well. So, we are still pretty optimistic even in our first quarter guide on how our business continues to run outside of obviously the Chinese New Year impacts. Industrial and refinish, both of those were roughly $120 million businesses. So, there is certainly incremental improvement. But relative to total Axalta, those businesses are still pretty small. So, certainly some upside there as we think about full recovery, and just as far as China economy coming back and the impacts on sort of inflation-deflation, I guess we are somewhat neutral. We see a potential argument on both sides. But for our business, the regional arbitrage from the supply chain perspective, we expect about to be a net benefit as we think about the raw material environment.

PJ Juvekar: Thank you. And then, my second question is you are getting some significant volume growth in light vehicles. But you are also talking about the need to get pricing. I am just putting those two comments together, was Axalta trying to loading price or acting tough on price to gain share? And is that what we are seeing? And now, you are saying that we need to get pricing back up? Is that the right way to interpret those two points?

Sean Lannon: No, absolutely not. So, the variable margins that are coming through for the new business wins are coming through at historical levels. Where we are really focused on getting price is on the legacy contracts and continuing the push from a margin perspective.

PJ Juvekar: Thank you.

Operator: Thank you. Our final question today is coming from Josh Spector from UBS. Your line is now live.

Josh Spector: Yes, hi. Thanks for squeezing me in. Just two quick follow-ups, I guess one on the new win side of it, the refinish the NFOs, the new stocking centers in Europe and the mobility side if markets broadly were flat, what do you think Axalta does at a volume level? And then just on the mobility side from an earnings perspective, you historically talked about it the recovery being 50:50, price cost, market recovery. Has that calculus changed given some of the pricing you got in fourth quarter and some of the dynamics you talked about? Thanks.

Sean Lannon: Yes. So, I mean I would expect us assuming a flat market across the board that we are going to up low single digits really across all of our end markets. As far as the mobility volume, I think we said in the third quarter that it’s probably has shifted more to 60:40 as far as the pricing. And it’s probably now back to the 50:50 between volume and price given what we are able to do in the fourth quarter from a pricing perspective.

Josh Spector: Okay, thank you.

Sean Lannon: You are welcome.

Operator: Thank you. We have reached end of our question-and-answer session. And ladies and gentlemen, that does conclude today’s teleconference webcast. You may disconnect your line at this time. And have a wonderful day. We thank you for your participation today.

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