Carlyle is now the frontrunner to buy BASF’s coatings business after KPS Capital exited the bid https://t.co/W2xQoQaQBh ...

Core Insights - Axalta Coating Systems Ltd. is launching two innovative products, Alesta® e-PRO FG Black and Alesta® e-PRO Dielectric Gray, at The Battery Show North America, aimed at enhancing safety and performance in electric vehicle (EV) battery applications [1][8] Product Features - Alesta® e-PRO FG Black is designed for extreme heat protection, capable of withstanding temperatures up to 1200°C, and helps delay fire propagation in EV battery systems [5][6] - Alesta® e-PRO Dielectric Gray provides superior electrical insulation in high-voltage environments, improving reliability in EV battery packs and stationary energy storage systems [5][6] Testing and Compliance - Both products have undergone rigorous testing, with Alesta® e-PRO Dielectric Gray meeting UL 94 V0 and IEC 60243-1 standards, while Alesta® e-PRO FG Black has been tested for direct flame exposure and thermal runaway scenarios [6][8] - Alesta® e-PRO FG Black produces no smoke and does not ignite during thermal events at 1200°C, ensuring safety under extreme conditions [6][7] Market Context - The global EV market is projected to exceed 20 million units in 2025, representing over a quarter of cars sold worldwide, indicating a growing demand for advanced battery safety solutions [8] - Axalta's commitment to innovation is reflected in its partnerships with leading OEMs and Tier 1 suppliers who are conducting additional testing for these new coatings [8] Recognition - Axalta has been recognized in TIME magazine's list of America's Best Midsize Companies of 2025, highlighting its performance in employee satisfaction, revenue growth, and sustainability transparency [9]

Financial Data and Key Metrics Changes - RPM International achieved record sales of nearly $7.4 billion for the fiscal year ended May 31, 2025, with adjusted EBIT up 3.7% from the prior year and adjusted earnings per share up 7.3% from the prior year of $5.30, resulting in a record EBIT margin of 13.2% [14][15][16] - The fiscal year concluded the MAP 2025 Operating Improvement Program, which resulted in a more than 500 basis point improvement in gross margins and a 260 basis point improvement in EBIT margins [15][16] Business Line Data and Key Metrics Changes - The Construction Products Group experienced a 4% unit volume growth, while the Performance Coatings Group saw an 8% unit volume growth [29] - Record results in sales and earnings were reported for the Construction Products and Performance Coatings businesses, with the Consumer Group also achieving record sales [29] Market Data and Key Metrics Changes - 78% of RPM's revenues are generated from core North American markets, with 14% from Europe and approximately $500 million from developing markets [20] - There is over $100 billion of growth potential identified for RPM's product lines, with significant opportunities in the Construction Products Group and Consumer Group [19][20] Company Strategy and Development Direction - RPM is pivoting to growth following the completion of the MAP 2025 initiative, focusing on embedding the learnings into the company culture and pursuing greater efficiency and growth opportunities [16][21] - The organizational structure has been streamlined to a three-group structure by merging the Specialty Products Group into the Performance Coatings Group, aiming for enhanced collaboration and efficiency [22] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of turnkey offerings in roofing and flooring as a competitive advantage in labor-constrained construction markets [28] - The outlook for the second quarter is expected to mirror the first quarter, with continued outsized growth and improved leverage to the bottom line [30] Other Important Information - RPM's board of directors approved a regular quarterly cash dividend of $0.54 per share, marking the 52nd consecutive year of increased cash dividends [31] - Significant investments in growth were made, including $5.3 million in new sales hires and $3.2 million in higher advertising expenses [32] Q&A Session Summary Question: What caused the increase in SG&A expenses in the quarter? - The increase was attributed to extraordinary healthcare costs and deliberate investments in growth, including new sales hires and higher advertising expenses [32] Question: Does RPM have a foundation? - RPM does not currently have a foundation but engages in charitable programs and has contributed over $3.5 million to community causes [33] Question: How is RPM embracing system selling? - RPM has expanded its offerings to include comprehensive solutions for building systems, significantly increasing revenue per square foot in installations [34] Question: Is RPM benefiting from reshoring of manufacturing? - Yes, RPM is benefiting from reshoring, particularly in the Performance Coatings Group, which manufactures high-performance products for various industries [35]

Financial Performance - RPM achieved record Q1 adjusted EBIT of $3378 million, a 29% increase year-over-year[7] - The company reported record Q1 revenue of $211 billion, up 74% from the previous year[7] - Adjusted EPS for Q1 reached a record $188, a 22% increase compared to the prior year[7, 9] - Consolidated sales increased by 74%, including 30% organic growth, 38% from acquisitions, and 06% from foreign exchange[20] Segment Performance - Construction Products Group (CPG) sales increased by 65% to $8814 million, with adjusted EBIT up 31% to $1691 million[27] - Performance Coatings Group (PCG) sales grew by 99% to $5385 million, and adjusted EBIT increased by 110% to $870 million[32] - Consumer Group sales increased by 66% to $6938 million, with adjusted EBIT up 29% to $1199 million[38] Regional Performance - North America accounted for 79% of total sales, with a growth of 59%[22] - Europe represented 15% of total sales, showing a significant growth of 207%[22] - Latin America contributed 3% of total sales, experiencing a decline of 48%[22] Outlook - The company anticipates mid-single-digit (MSD) percentage growth in both sales and adjusted EBIT for Q2 2026[52] - For fiscal year 2026, RPM expects sales growth to be at the higher end of the low-to-mid single-digit range and adjusted EBIT growth to be at the lower end of the high-single-digit to low-double-digit range[55]

Core Insights - RPM International Inc. is a global leader in specialty coatings, sealants, and building materials, operating through various segments including industrial, consumer, and specialty products, with significant competition from companies like Sherwin-Williams and PPG Industries [1] Financial Performance - RPM is set to release its quarterly earnings on October 1, 2025, with analysts estimating earnings per share (EPS) to be $1.87, reflecting a 1.6% increase from the previous year, indicating stability in EPS estimates over the past 30 days [2][6] - The company's revenue is projected to reach approximately $2.05 billion, marking a 3.8% year-over-year increase, which is a positive indicator of operational strength [3][6] Market Valuation - RPM's price-to-sales ratio is 2.04, suggesting that investors are willing to pay $2.04 for every dollar of sales, reflecting confidence in the company's revenue-generating capabilities [3] - The price-to-earnings (P/E) ratio stands at 21.64, indicating that investors are paying $21.64 for each dollar of earnings, while the enterprise value to sales ratio is 2.40 and the enterprise value to operating cash flow ratio is 23.02, highlighting RPM's valuation in relation to its sales and cash flow [4] Financial Health - The company's debt-to-equity ratio of 1.03 indicates a balanced approach to financing, utilizing both debt and equity, and a current ratio of 2.16 suggests a strong ability to cover short-term liabilities with its assets [5]

Core Insights - Axalta Coating Systems has honored Dr. Delson Trindade with the title of Axalta Fellow, the highest recognition for scientists and engineers within the company, due to his significant contributions in scientific accomplishments, technical leadership, and commercial impact throughout his career [1][3]. Company Achievements - Dr. Trindade has nearly 40 years of experience in coating technologies, showcasing exceptional expertise and leadership that have been vital across all of Axalta's business sectors [3]. - He has played a key role in expanding Axalta's technical capabilities and enhancing customer engagement through various initiatives, including co-inventing the multi-layer "3-Wet" coating processes for the automotive industry and advancing silanated clearcoat platforms [4]. Technical Contributions - Dr. Trindade has contributed to the development of a formulation toolbox for the electrification sector and has been involved in over 100 patent filings, highlighting his innovative impact on the industry [4]. - His work emphasizes Axalta's commitment to innovation, sustainability, and market leadership, as he is an integral member of the Fellows Forum, which promotes scientific excellence within the company [5]. Professional Background - Dr. Trindade's career with Axalta began in Brazil, and he has worked in various countries including Germany, Argentina, and the U.S., currently based in Philadelphia at the Global Headquarters and Innovation Center [6]. - He holds a doctorate in Physical Chemistry from the University of São Paulo and an MBA in Technology & Innovation from Harvard University and the University of São Paulo [6]. Company Overview - Axalta is a global leader in the coatings industry, providing innovative and sustainable coating solutions across various applications, including light vehicles, commercial vehicles, and industrial uses [7]. - With over 150 years of experience, Axalta serves more than 100,000 customers in over 140 countries, focusing on preventing corrosion, increasing productivity, and enhancing durability through its products [7].

Core Insights - Axalta Coating Systems Ltd. (NYSE: AXTA) reported quarterly results that were below expectations since the last analysis in February [1] Company Performance - The recent quarterly results of Axalta were not as strong as anticipated, indicating potential challenges in performance [1] Investment Focus - The company is viewed through a value-focused investment lens, emphasizing fundamental research in sectors such as chemicals, homebuilders, building materials, industrials, and metals & mining [1] - The investment strategy prioritizes stocks that are undervalued and have near-term catalysts, with an investment horizon ranging from one quarter to two years [1]

Core Thesis - Axalta Coating Systems Ltd. is experiencing a significant decline in share price, down 28% from recent highs, despite strong earnings growth in the coatings sector [2] - The company's share was trading at $32.38 as of September 8th, with trailing and forward P/E ratios of 15.87 and 11.52 respectively [1] Financial Performance - Axalta's refinish business, which accounts for approximately 60% of EBITDA, is facing volume weakness, raising concerns about a potential secular decline [2] - However, evidence suggests that accident frequency remains stable, with liability claims down only low-single digits, indicating that volume improvements may occur in the second half of 2025 [3] Market Position and Competitive Advantage - Axalta holds a 25% global share in the refinish market and 40% share in the premium segment, supported by industry-leading technology and high switching costs [3] - Despite temporary headwinds, growth drivers such as price/mix improvements and share gains in mainstream and economy segments remain intact [3] Future Outlook - EBITDA growth is projected to be in the high single digits from 2026 as cyclical pressures ease and operational efficiencies improve [4] - A re-rating to historical valuation levels could imply a share price of $41, representing approximately 38% upside based on consensus 2026 numbers [4] - Potential M&A activity, particularly related to BASF's coatings sale process, could further enhance Axalta's valuation and market interest [4] Investment Sentiment - The bullish thesis on Axalta emphasizes valuation upside and M&A catalysts, suggesting that despite recent challenges, the company presents an asymmetric risk/reward profile [5]

Core Viewpoint - PPG has launched a new non-methanol hard coating for ophthalmic lenses, addressing regulatory changes while ensuring durability performance [1] Company Summary - PPG introduced the PPG HI-GARD® Non-Methanol hard coating specifically for 1.5 standard index ophthalmic lenses [1] - The new formulation serves as a drop-in replacement for traditional methanol-based coatings, allowing prescription lens manufacturers to comply with evolving regulations [1] - The PPG Hi-Gard Non-Methanol coating provides the same level of scratch-resistant protection for plastic lens materials as its predecessors [1]

Core Insights - PPG Industries is experiencing challenges due to demand weakness, particularly in Europe, but is benefiting from cost discipline, acquisitions, and pricing actions [1][6][9] Financial Performance - PPG's second-quarter adjusted earnings were $2.22 per share, matching estimates but down from $2.35 a year earlier [1] - The company reported a roughly 1% decline in revenue, with higher sales in the Performance Coatings unit offset by declines in Global Architectural Coatings and Industrial Coatings segments [1] Cost Management and Restructuring - PPG is implementing a cost-cutting and restructuring strategy, realizing an additional $20 million in structural cost savings in Q2 2025, with expectations of around $60 million in total savings for the full year [2][9] - A comprehensive cost reduction program is expected to deliver annualized pre-tax savings of approximately $175 million once fully implemented, focusing on structural costs mainly in Europe [3] Acquisitions and Growth Strategy - The company is pursuing inorganic growth through acquisitions, including Tikkurila, Worwag, Cetelon, and Arsonsisi's powder coatings business, which are expected to contribute positively to its revenue [4][9] Shareholder Returns - PPG has a strong track record of returning cash to shareholders, having returned $1.4 billion in 2024 through dividends and share buybacks, with a quarterly dividend increase of 4% in July 2025 [5] Market Challenges - The company faces challenges from soft global industrial production, particularly affecting the Industrial Coatings segment, with lower automotive OEM build rates and weak consumer confidence in Europe [6][8] - Demand in the Global Architectural Coatings segment fell by 5% due to lower sales volumes and weaker consumer confidence in Europe [8] Future Outlook - PPG maintains its full-year 2025 adjusted earnings per share guidance of $7.75 to $8.05, supported by share gains and internal improvement initiatives despite current economic conditions [9]