Key Highlights

● Adjusted EBITDA reached a quarterly record of $305 million, up 30 basis points in margin.

● Adjusted diluted earnings per share set a record at $0.72, up from $0.64.

● Shareholders of both companies approved the proposed AkzoNobel merger on 5 August.

● Total net leverage fell to 2.2 times, the lowest level in the company's history.

Axalta Coating Systems Ltd. (NYSE:AXTA), the Philadelphia-based coatings group, reported second-quarter 2026 results on 28 July with several records. Net sales were $1,346 million, up 3 per cent from $1,305 million, with refinish sales rising 6 per cent. Adjusted EBITDA of $305 million was a quarterly record, and its margin of 22.7 per cent was 30 basis points higher than a year earlier. Adjusted diluted earnings per share reached a record $0.72, up from $0.64, although GAAP net income fell to $89 million from $110 million, and diluted EPS fell to $0.41 from $0.50. For the half, net sales were $2,600 million against $2,567 million, and adjusted EPS was $1.27 compared with $1.23. Performance Coatings, which houses refinish and industrial, lifted adjusted EBITDA 10 per cent to $218 million on a margin of 25.1 per cent. Mobility Coatings set a sales record of $474 million, yet its adjusted EBITDA slipped to $87 million as one-off items in the prior year did not recur.

Cash flow, leverage and guidance

Operating cash flow was $152 million and free cash flow $107 million, compared with $101 million a year earlier. Total net leverage was 2.2 times, which the company described as the lowest in its history. By our arithmetic from the balance sheet, net debt was about $2.4 billion, with cash of $633 million. No shares were repurchased in the first half, against $65 million in the same period of 2025, and the release does not mention a dividend. For the third quarter, management guided to adjusted EBITDA of $295 million to $305 million and adjusted EPS of about $0.70. For 2026 it expects low single-digit net sales growth, adjusted EBITDA of $1,140 million to $1,170 million, adjusted EPS of $2.55 to $2.70 and free cash flow above $500 million. Capex is guided at $180 million to $200 million. These are management's expectations and may change, particularly given the pending transaction.

The AkzoNobel transaction

The larger story is the proposed all-stock merger of equals with AkzoNobel N.V. AkzoNobel filed its registration statement in May, the SEC declared it effective on 23 June 2026, and Axalta filed its definitive proxy statement the following day. Shareholders of both companies approved the deal at separate meetings on 5 August, with the vote counts not given in the coverage we reviewed. The companies say closing is expected in late 2026 or early 2027, subject to regulatory approvals and customary conditions. A trade-press report dated 21 September said the parties had sought European Union clearance, with a first-phase decision due by 22 October; that deadline could slip if remedies are offered. A related headline suggested clearance might hinge on a divestment of AkzoNobel's vehicle refinish business, but the article body did not confirm this, so we do not rely on it. We have not verified the ownership split, the listing arrangements or the dividend policy of the combined company.

A Strong Quarter Overshadowed by Deal Timing

Axalta's operating performance, with record adjusted EBITDA, record adjusted earnings per share and leverage at its lowest level on record, gives the company a solid base heading into its merger with AkzoNobel. The bigger swing factor for shareholders is the deal itself: a first-phase European Union decision was due by 22 October, closing is targeted for late 2026 or early 2027, and the ownership split, listing arrangements and dividend policy of the combined company have not yet been disclosed.