Adjusted net income improved by $144 million year over year to $518 million
Axalta has reported an increase of 2 per cent YoY in its net sales to $5.3 billion for year 2024. Net income improved to $391 million versus $269 million in 2023, resulting in a net income margin of 7.4%, an increase of 220 basis points versus the prior year.
The net income increase was driven primarily by lower variable costs, sales growth inclusive of contributions from acquisitions, lower consulting and enterprise resource planning system implementation spending and savings from the 2024 Transformation Initiative partially offset by labor inflation and increased restructuring costs.
Adjusted net income improved by $144 million year over year to $518 million. Adjusted EBITDA improved to $1,116 million, increasing 17% when compared to fiscal year 2023.
Fiscal year 2024 cash provided by operating activities was $576 million versus $575 million in the prior year as earnings growth was mostly offset by higher working capital. Free cash flow totaled $451 million compared to $447 million in 2023, an increase of $4 million.
“Axalta's 2024 financial results were exceptional. We delivered record net sales and Adjusted EBITDA for the fourth quarter and full year in a challenging macro environment,” said Chris Villavarayan, Axalta’s CEO and President.
“Consistent outperformance in Refinish and Light Vehicle and excellent execution across the company, resulted in an Adjusted EBITDA margin of over 21% as we continue down the path to delivering against our commitments outlined in the 2026 A Plan.”
Fourth Quarter 2024 Consolidated Financial Results
Fourth quarter 2024 net sales increased 1% year over year to $1.3 billion, inclusive of a 1% foreign currency headwind.
Net income increased 85% year over year to $137 million, resulting in a net income margin of 10.5%, driven by favorable price-mix contribution, lower income tax expense due to a $27 million deferred tax benefit recognition in the quarter, lower variable costs and benefits from the 2024 Transformation Initiative partially offset by volume declines and labor inflation.
Adjusted net income improved by $30 million year over year to $131 million and does not include the previously mentioned deferred tax benefit. Adjusted EBITDA increased by 10% to $275 million compared to $251 million in the prior year period. Adjusted EBITDA margin expanded by 170 basis points to 21.0%. Diluted earnings per share increased by 91% to $0.63 compared to $0.33 in the prior year period. Adjusted diluted earnings per share improved by 30% to $0.60.
Fourth quarter 2024 cash provided by operating activities was $234 million versus $286 million in the same period last year, with free cash flow totaling $177 million compared to $254 million in the prior year period. The year-over-year decrease in free cash flow was driven primarily by higher working capital and increased capital expenditures.
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