Full-year 2021 net sales were $4,416.2 million, an 18.2% year-over-year increase. Operating profit was $462.4 million compared to $305.5 million in 2020. Adjusted EBIT of $623.2 million increased 16.1% from 2020 despite a substantial cost inflation. Cash flow from operations was $558.6 million, compared to $509.3 million in 2020.
Fourth-quarter net sales of $1,137.2 million increased 5.8% year-over-year, including a 1.2% headwind in foreign exchange, driven by an increase in price medium and product line of 3.6% and a contribution from mergers and acquisitions of 3.9%.
Performance Coatings reported sales growth of 14.2%, including double-digit growth rates in Refinish and Industrial end markets. The 10.1% decline in Mobility Coatings net sales included a 14.4% decline in light vehicles due to continued production constraints from OEM customers due to semiconductor chips and other shortages in the Supply Chain.
This was partially offset by solid commercial vehicle net sales growth of 7.6%, given sustained customer demand and production rates, despite moderate supply chain issues also affecting this market final.
Substantial price and product mix realization of 3.6% in Performance Coatings and Mobility Coatings stemmed from price adjustments implemented to offset widespread inflationary pressure, while product mix was a moderate headwind for the period.
Net sales were also largely constrained during the fourth quarter by limitations in the availability of key raw materials due to both supply availability and bottlenecks observed during the period.
Net earnings to common shareholders were $53.2 million for the quarter, compared to $69.7 million in 2020, and diluted earnings per share were $0.23, compared to $0.30 in Q4 2020. Operating cash flow was $268.6 million, compared to $278.4 million in Q4 2020.
“Axalta’s fourth quarter results underscored continued strong operational execution in 2021,” said Robert W. Bryant, from Axalta President and CEO. “The business generated strong cash flow and performed well in a challenging environment marked by high cost inflation and supply chain headwinds, as well as recent labor constraints. work related to the pandemic that impacted Axalta and customer production sites.
“We continue to take active steps to offset these headwinds by implementing pricing and cost measures, although at the end of the year a gap remains between cost inflation and realized offsets” , added Bryant. “As such, we are implementing additional price actions as needed to offset cost increases across our business. We currently expect that, overall, the remaining unhedged inflation from 2021 as well as the additional inflation expected this year will be fully offset in the course of 2022.”
Annual consolidated financial results
Net sales of $4,416.2 million for 2021 increased by 18.2%, including a foreign exchange benefit of 1.8% and a contribution from mergers and acquisitions of 1.9% compared to 2020. constant currency organic net sales increased 14.5% in the period compared to 2020, driven by volume up 10.5% as a result of the recovery from the impacts of COVID-19 and the average price and product mix up 4.0%, with a positive contribution from both segments.
Despite reported net sales growth from 2020, light vehicle volumes were significantly impacted in 2021 by customer supply chain constraints, and light vehicle net sales for the year were 16 .2% to 2019 levels.
Operating income increased 51.4% to $462.4 million in 2021 from $305.5 million in 2020. Net income to common shareholders was $263.9 million for the year, compared to $121.6 million in 2020, and diluted earnings per share were $1.14, compared to $0.52 in 2020.
“2021 was a year that started with strong aggregate demand and tailwinds for pandemic recovery, but quickly ran into macro headwinds from cost inflation and supply constraints,” he said. Bryant said. “Despite these factors, Axalta’s execution was strong and the company recorded an increase in operating profit as well as strong overall cash flow. This was evidenced by continued excellent organic growth coming from our industrial end-market business portfolio and the excellent traction seen in price realization offsetting inflationary cost pressures.
“For 2022, we expect a year of continued strong end-market demand and expect potential commodity cost inflation to stabilize after the first quarter of 2022, which is also expected to be a peak quarter for inflation rates despite the expectations of low double-digit inflation to be recorded this year,” Bryant said.
Announcing the 2030 Sustainable Development Goals
On January 25, 2022, Axalta announced its commitment to an absolute 50% reduction in Scope 1 and 2 greenhouse gas (GHG) emissions by 2030, on track to becoming carbon neutral across its operations. by 2040. In addition, the company has made 10 new sustainability commitments for 2030. Chief among these is the commitment to deliver sustainability benefits from 80% of new technology development and innovations from Axalta.
“Alongside our pursuit of growth and value creation, we are very pleased to announce our commitment to building a more sustainable future and to share our 2030 sustainability goals, which are detailed in full on axalta. com/sustainability,” Bryant said. “In line with these new objectives, we have deployed a new strategic ESG construct. Structured in three pillars – Planet Solutions, Business Solutions and People Solutions – this construct will guide us from a strategic, customer partnership and employee engagement perspective.