Author Topic: AXTA - Axalta Coating Systems  (Read 17300 times)

RadMan24

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Re: AXTA - Axalta Coating Systems
« Reply #30 on: December 19, 2018, 08:30:04 AM »
Working Capital has been elevated due to long term customer contracts, which has been the drag on FCF, but they expect 20%+ returns on these contracts. This was the main drag on the FCF guidance being down from prior quarter. They discuss the FCF on the call today for guidance in 2019 which is materially higher and also includes elevated working capital for additional long term contracts. They will also have accruals on restructuring liabilities as that flows through the Belgium plant closing. The benefits of which should begin 2020.

Regarding capex, it's been around $150 million, which includes some major expansions and R&D in China and Germany. You back out some of these growth initiatives, include some recent acquisitions, normalized capex probably around $90-100 million.

Raw materials for lots of resins and polymers remain high due to tariffs and supply disruptions. They plan to be aggressive on transportation pricing to increase EBITDA margins there. Very little volume growth assumed in 2019 guidance numbers. Volume growth would be a catalyst 2020 onwards. In the meantime, pricing and refinish market share gains are expected to drive revenue gains.


vince

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Re: AXTA - Axalta Coating Systems
« Reply #31 on: December 19, 2018, 09:10:55 AM »
Working Capital has been elevated due to long term customer contracts, which has been the drag on FCF, but they expect 20%+ returns on these contracts. This was the main drag on the FCF guidance being down from prior quarter. They discuss the FCF on the call today for guidance in 2019 which is materially higher and also includes elevated working capital for additional long term contracts. They will also have accruals on restructuring liabilities as that flows through the Belgium plant closing. The benefits of which should begin 2020.

Regarding capex, it's been around $150 million, which includes some major expansions and R&D in China and Germany. You back out some of these growth initiatives, include some recent acquisitions, normalized capex probably around $90-100 million.

Raw materials for lots of resins and polymers remain high due to tariffs and supply disruptions. They plan to be aggressive on transportation pricing to increase EBITDA margins there. Very little volume growth assumed in 2019 guidance numbers. Volume growth would be a catalyst 2020 onwards. In the meantime, pricing and refinish market share gains are expected to drive revenue gains.

Good post, would you care to tell us what mgmt is saying about fcf levels this year and next? Just so I dont have to go look.

alpha

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undervalued

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Re: AXTA - Axalta Coating Systems
« Reply #33 on: March 16, 2020, 11:08:54 AM »
Anyone has any idea what's going on with this today? No news that I can find that drove the stock off a cliff today.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

Broeb22

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Re: AXTA - Axalta Coating Systems
« Reply #34 on: March 16, 2020, 12:07:22 PM »
Anyone has any idea what's going on with this today? No news that I can find that drove the stock off a cliff today.

Maybe because fewer cars are being produced because none are selling, Fiat closed their European plants today, people are driving less (according to Buffett) so getting into fewer accidents, so maybe there's a big drop in auto coating demand?

RadMan24

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Re: AXTA - Axalta Coating Systems
« Reply #35 on: March 16, 2020, 03:01:06 PM »
Anyone has any idea what's going on with this today? No news that I can find that drove the stock off a cliff today.

Maybe because fewer cars are being produced because none are selling, Fiat closed their European plants today, people are driving less (according to Buffett) so getting into fewer accidents, so maybe there's a big drop in auto coating demand?

They had $1 billion in cash at fiscal year end. FCF has been $450-500m range. Stock was firm due to sale prospects, those have gone out the window as of late.

They will make it out of this alive, but yes, it's lost 40% in no time.