EBITDA Guidance and Restructuring
Q: Why raise EBITDA guidance but not sales guidance?
A: The company increased its EBITDA guidance due to an expected $10 million benefit from the restructuring program announced in February. They anticipate mid-single-digit percentage reductions in raw material costs year-over-year, primarily in the first half.

Share Repurchase and Debt Reduction
Q: Will you repay more debt or focus on share buybacks?
A: With leverage at 2.8x and expecting to reach below 2.5x by year-end without more debt repayment , they plan to utilize free cash flow for a new $700 million share repurchase program.

Industrial Business Restructuring
Q: What stage is the Industrial business pruning at?
A: Currently in the third inning of restructuring, they focus on portfolio management and margin enhancement. The Industrial segment saw significant margin improvement in Q1, with more expected even with flat sales.

Procurement Savings and Raw Materials
Q: How did procurement achieve 11% cost reduction?
A: By implementing a program early last year, resulting in net benefits starting in Q3, including better contracts and longer-term agreements covering about two-thirds of their raw material basket. Savings are expected to continue into Q2 but may be muted in the second half.

Light Vehicle Growth and Pricing
Q: How did you drive positive Light Vehicle pricing and growth?
A: Through a new leadership team focusing on customer needs, quality products, and color-matching capabilities, they achieved 21% growth in China versus a market up 4%. This success is attributed to exceptional focus and meeting customer demands.

Refinish Volume Trends and Strategies
Q: What are your expectations for Refinish volume and share gains?
A: By focusing on four strategies—winning body shops (600 new in the quarter, over 10,000 in recent years), expanding in adjacent spaces via the U-POL acquisition, growing retail presence with 75 shops, and the André Koch acquisition—they are driving growth in Refinish.

Restructuring Savings Breakdown
Q: Where will the $75 million restructuring savings come from?
A: Approximately two-thirds of the savings will come from SG&A reductions, focusing on creating a more efficient, flatter organization. The remaining savings will come from optimizing manufacturing capacities and footprints.

Impact of ADAS on Refinish
Q: How will autonomous features affect Refinish over time?
A: Advanced driver-assistance systems may reduce severe collisions but lead to more minor accidents, increasing demand for refinish work. Full autonomy is further out, so current technologies may benefit the Refinish business.

Interest Rates Impact
Q: How do higher-for-longer interest rates affect you?
A: Initial guidance assumed flat rates. With 55% fixed and 45% floating debt, they feel well-positioned. Actions like paying down $75 million of term loan and securing better pricing help manage interest expense in a higher-rate environment.

Free Cash Flow and Restructuring Costs
Q: What's the cash impact of restructuring, and FCF outlook?
A: Total cash impact is expected between $95 million to $135 million over several years, mainly for severance. Despite these costs, they raised free cash flow guidance, factoring in higher EBITDA.

SG&A Cost Management
Q: How are you managing SG&A costs amid inflation?
A: SG&A was flat year-over-year in Q1. They aim to keep SG&A growth to very low single digits for the year through transformation initiatives and operational efficiencies.

Light Vehicle Growth Outside China
Q: Can you share Light Vehicle growth in other regions?
A: North America is stable with slight growth; Europe saw a 2–3% market decline but remained stable for them; China grew 21% against a market up 4%.

Refinish Market Outlook
Q: Do you expect Refinish markets to be flat in Q2?
A: They anticipate flat to slight market growth (0–1%). Their own growth is expected to be high single digits in Q2, driven by strategic initiatives and overcoming prior operational issues.

Long-Term Growth vs. Cost Focus
Q: Is Axalta shifting from cost focus to growth?
A: While there's room for margin improvement, they're now focusing more on growth. Detailed plans will be shared at the upcoming Strategy Day.

Geographic Mix of Auto OEM Sales
Q: What's the geographic mix of auto OEM sales?
A: Light Vehicle revenue is approximately $300 million in North America, $400 million in EMEA, and $100 million in China.

Refinish Adjacent Products Growth
Q: How big is the Refinish accessories market and growth potential?
A: The Refinish accessories market is about $7 billion, with Axalta's business around $700 million. They see significant opportunities to grow this segment over time.

CapEx Plans and Timing
Q: Q1 CapEx was low; how will spending progress?
A: Q1 CapEx was $22 million, with full-year guidance of $165 million. Lower Q1 spending was due to timing; they expect CapEx to ramp up significantly in Q2 and beyond.

Index Pricing Dynamics
Q: How will index pricing impact prices this year?
A: They expect a favorable price mix in Q2 and aim to reach equilibrium in price-mix dynamics with RMIs and index agreements as the year progresses.

Additional Productivity Gains
Q: Any further productivity gains beyond transformation initiatives?
A: They're working on operational productivity and network optimization, including reducing warehouses and improving transportation, seeking additional efficiency opportunities.

Use of Free Cash Flow
Q: How will you determine if share repurchase is a good idea?
A: They believe Axalta's underlying value isn't fully realized and aim to create shareholder value through buybacks. Capital allocation considers debt management, M&A, CapEx, and repurchases.