Specialist
Former Senior Executive at Axalta Coating Systems Ltd
Agenda
- Axalta's (NYSE: AXTA) operating environment – key market trends
- Capabilities and hurdles – M&A propositions
- Axalta's scalability and potential adjustment to market shifts
- Axalta's outlook and evolving growth strategy
Questions
1.
Can we start with your updated perspective on the coatings industry? What key themes and trends should investors be monitoring?
2.
Where would you place us in the longer-term coatings cycle, given the macro indicators you have outlined? Do you feel that demand has peaked?
3.
What are your thoughts on Axalta’s market positioning? What would you highlight as its strengths and weaknesses?
4.
Axalta is under strategic review. What are your thoughts some of the potential suitors in the market?
5.
PPG has recently been the top name suggested as a potential Axalta buyer. What are your thoughts on the likelihood of that occurring, and the potential synergies of combining these two large players?
6.
You alluded to ongoing coatings industry consolidation over recent years. Where are most of the synergies realised, in your experience? What synergy expectations would underpin a combination of PPG and Axalta?
7.
What exactly is meant by vertical integration in the coatings industry? Do widely varying degrees of vertical integration exist here?
8.
You mentioned some Asian players that could potentially be interested in Axalta. Which specific partnerships do you think would make the most sense?
9.
Can we break down the end markets within industrial coatings? Starting with refinish, which you outlined as a flagship area for Axalta. How is higher total loss frequency by insurers impacting volumes here?
10.
What is your outlook for Axalta’s refinish business? What would you say is the opportunity there?
11.
You mentioned the refinish market within China as a potential growth avenue. Can you explain how Axalta goes about stealing share in a newer market? How do those relationships begin?
12.
How are relationships within the refinish market typically dictated? Is it through contracts?
13.
Axalta has the top market share in North America for refinish. How does its market share in Asia compare? Where do you envisage the biggest opportunity between OEM shops and MSOs [multiple-shop operators]?
14.
Is there a strong correlation between OEM shops using a certain coatings provider for refinish, and using that same provider for the factory coatings?
15.
Are there any costs associated with switching a refinish supplier?
16.
You outlined data suggesting that auto collisions had dropped at one point, but have now risen back up due to distracted drivers. How do you expect collision numbers to trend from here, ultimately dictating volumes within the refinish market? As mentioned, there is a longer-term trend at play through autonomy.
17.
You said there is no true correlation for business in the refinish side transferring over to the OEM side. Why do you think Axalta has not been able to leverage its leading market share to that end in North America?
18.
Which side of Axalta’s business do you think has the strongest runway for growth or the most upside?
19.
You mentioned that technology has been a major advantage for Axalta in some respects. How would you stack-rank Axalta vs other players, in terms of developing new tech, new products and product innovation?
20.
Can you outline the pricing dynamics around bringing out a new product? As Axalta brings forth new technology, new products, do you find it is often able to dictate better margins?
21.
Do weaker new auto sales in the macro environment directly impact Axalta’s ability to maintain pricing?
22.
Can you outline any discernible recent pricing trends relating to raw materials?
23.
Are there any other aspects to highlight today that are key to assessing the outlook for Axalta or the broader industry?
24.
If PPG and Axalta were to consider a merger or an acquisition, do you foresee that going through the DoJ [Department of Justice]? Would it potentially need to divest large segments of the business?
25.
Can you outline a bear and a bull case for Axalta based on wider market trends?
