Thank you for standing by. Welcome to Axalta Coating Systems' first quarter 2024 earnings call. All participants will be in a listen-only mode. A question-and-answer session will follow the presentation by management. Today's call is being recorded, and a replay will be available through May 8th. Those listening after today's call should please note that the information provided in the recording will not be updated, and therefore may no longer be current. I will now turn the call over to Chris Evans. Please go ahead, sir. Thank you and good morning. This is Chris Evans, VP of Investor Relations. We appreciate your continued interest in Axalta, and welcome you to our first quarter financial results conference call. Joining me today are Chris Villavarayan, CEO and President, and Carl Anderson, CFO. We released our quarterly financial results this morning and posted a slide presentation to the investor relations section of our website at axalta.com, which we will be referencing during this call. Our prepared remarks, slide presentation, and our discussion today may contain forward-looking statements reflecting the company's current view of future events and their potential effect on Axalta's operating and financial performance. These statements involve uncertainties and risks, and actual results may differ materially from those forward-looking statements. Please note that the company is under no obligation to provide updates to these forward-looking statements. Our remarks and the slide presentation also contain various non-GAAP financial measures. In the appendix of the slide presentation, we've included reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures. For additional information regarding forward-looking statements and non-GAAP financial measures, please refer to our filings with the SEC. I will now turn the call over to Chris. Thank you, Chris, and good morning, everyone. I'm proud to report an excellent quarter at Axalta. Overall, net sales were primarily flat, while adjusted EBITDA was a record for any first quarter in Axalta's history. Margins are significantly improved, and we believe we have more room to grow. Our balance sheet has continued to improve, with our net leverage ratio declining for seven consecutive quarters. I'm very confident with our trajectory this year, which has led us to raise fiscal year guidance for adjusted EBITDA, adjusted diluted EPS and Free Cash Flow. Yet, I believe we're just getting started transforming the company and unlocking the tremendous potential of our products, technology, and organizational capabilities. For the first quarter, net sales increased 1% year-over-year to $1.3 billion, with positive price mix. We remain committed to realizing the full value of our products and services, therefore, we continue to evaluate targeted pricing in select areas of the portfolio. Volume was approximately flat year-over-year, with growth in Light Vehicle and Refinish offset by declines in industrial and commercial vehicle, given their softer macro environment. Adjusted EBITDA increased 22% year-over-year to $259 million, representing a record first quarter. This quarter ran ahead of guidance due to outstanding execution from the entire global team. Specifically, our commercial teams did a great job of winning new customers by focusing on accretive areas that will support a more profitable product mix and pricing for value. Our operations teams focused on reducing backlogs and beginning the Axalta Performance System journey, which is gaining traction. Procurement over-delivered again, driving 11% better unit variable costs. Cost optimization has been the central focus since I joined the company and will remain a high priority moving forward. Adjusted EBITDA margins improved by 340 basis points to 20%, reflecting significant progress towards a return to historic margins in the 20%-21% range. Profitability increased substantially across both segments. The largest margin contributions came from Light Vehicle and industrial end markets, with profitability improvement in the latter stemming partly from our strategic shift towards higher-margin products. Let's move to slide four for details on our business segment. Refinish had another strong quarter, with net sales 4% higher year-over-year. This represents the 13th straight quarter of better top-line performance, with a balanced contribution from price mix, volume, and FX. Market growth was roughly flat versus the prior year period across North America and EMEA. However, we are seeing above-market performance given our 600 net body shop wins and the addition of 100 new points of distribution. We're also getting traction with our strategic growth initiatives in adjacencies like U-POL, aerosol, RAPTOR Bedl iners and accessories sold through our company-owned stores in Europe. Our acquisition of André Koch supports these strategic initiatives and has proved to be an excellent transaction for us. I'm very pleased with the pace of integration, which is ahead of our initial plan. I believe that differentiated technology is the foundation of Axalta's competitive advantage and a key reason we continue to outpace market growth. I'm happy to announce that we were recognized with several prestigious R&D awards this quarter, all centered around efficient and sustainable innovation. There is no better example than Irus Mix, a fast, efficient, fully automated, and completely hands-free mixing machine for the refinish industry. In addition to seeing strong customer demand in launching this product, it also won an Edison Award in the Environmental and Industrial Solutions category. Another bright spot in the quarter was light vehicle growth. Net sales improved by 4% year-over-year, mostly due to strong volume, particularly in China. Volume growth in China improved by 20% as compared to 4% auto production growth, again, against the prior year quarter. We have partnered with the fastest-growing OEM, and this is solid business for us at an attractive return. We win new business and build lasting partnerships in this market with our products, service, and technology, which is exemplified with our recent recognition from General Motors as a Supplier of the Year. Commercial vehicle net sales declined by 4% year-over-year, consistent with the expected slowdown in North America Class 8 production. We believe this market will further soften into the year before ramping back up in 2025 and 2026, ahead of the emission standards going into effect in 2027. Industrial net sales declined 6% year-over-year, driven by soft construction activity in North America and EMEA, which has offset improvement in new business wins. We have strategically deselected low-margin categories, which is yielding significantly improved profitability. My main focus since joining Axalta has been to improve efficiency and performance across the company. I'm very proud of our achievements to date. We're starting to see the benefits of our actions we have taken in our financial results, but we believe there is more to come. To further enhance our performance and results, we have announced a transformation initiative in February to enable us to be more proactive, responsive, and agile. This program includes a global workforce reduction of approximately 5% and a shift in manufacturing capacity and capability. We expect this program to yield approximately $75 million in annualized run rate savings in 2026. Before passing the call to Carl for a more detailed review of our first quarter financial performance, I want to thank Robert McLaughlin for his 10 years of service on the Axalta board, including as chair of the audit committee. Robert is elected to retire next month after the annual general meeting. He has been an incredible thought partner for the board, and we wish him the very, very best. Thank you, Chris, and good morning, everyone. Let's turn to slide five. First quarter net sales increased by 1% year-over-year to $1.3 billion. Gross margins improved by 340 basis points to 33% versus the prior year, principally driven by 11% lower variable cost unit rate. All raw material categories were lower year-over-year, with isocyanate, epoxy resin, and monomers most favorable. Overall, we are comfortable in the current raw material environment and continue to project a mid-single-digit full-year benefit, strongly weighted to the first half. Though there are a few pockets of pressure stemming from temporary supply issues, such as propylene availability in North America and butyl acetate in Europe, we view these as transitory and isolated situations, which are fully accounted for in our guidance. SG&A was flat year-over-year, demonstrating effective cost management efforts, which offset labor inflation in the category. Income from operations declined $4 million- $121 million, inclusive of a $55 million pre-tax charge related to employee severance and exit costs stemming from the 2024 Transformation Initiative that Chris noted. We expect that the annualized run rate savings from these actions will be $75 million in 2026, with $10 million expected to come in this year. Adjusted EBITDA in the quarter was $259 million, 22% above first quarter 2023, and adjusted diluted earnings per share increased 37% year-over-year to $0.48, despite a $0.05 headwind from higher interest and tax expense. Moving to slide six. Performance Coatings first quarter net sales were flat year-over-year at $848 million. While net sales were flat overall, we were able to drive 4% growth year-over-year in Refinish, which is consistent with our portfolio strategy to accelerate growth in the business. Refinish net sales benefited from strong price mix and a solid contribution from the André Koch acquisition. Refinish market demand in North America and Europe remained stable in the quarter, in line with our expectations. Industrial net sales declined by 6%, primarily due to lower volumes as soft global building and construction activity weighed on demand. As Chris highlighted, we are also strategically moving away from lower-margin business. We believe this strategy is being well executed by our team and is driving significant margin improvement. Industrial volumes are now approximately 20% below 2022 levels, creating a cyclical upside opportunity when global construction activity re-accelerates. Performance Coatings adjusted EBITDA increased 16% year-over-year to a first quarter record of $196 million, with both end markets contributing favorably. Adjusted EBITDA margin improved by 310 basis points compared to the prior year. On slide seven, first quarter Mobility Coatings net sales increased 2% year-over-year to $446 million. 4% better light vehicle net sales partially offset declines in commercial vehicle. Mobility price, excluding mix effect, was modestly favorable and more than offset contractual raw material pass-through impacts in the period. Light vehicle volumes were again solid in the quarter, exceeding global auto growth rates led primarily by China, and commercial vehicle volumes declined as expected, driven by lower North America Class 8 truck production. Mobility Coatings adjusted EBITDA improved to $63 million, up from $44 million, a 44% increase year-over-year. Adjusted EBITDA margin improved by 410 basis points to 14.2%, with considerable improvement in light vehicles. Turning to slide eight. We ended the first quarter with over $1.1 billion in total liquidity, including a cash balance of approximately $624 million. Free cash flow in the quarter was $15 million, an increase of $103 million year-over-year. The strong seasonal free cash flow was a result of improved working capital performance. During the quarter, we also took action to reduce interest expense. First, we paid down $75 million of gross debt, building from the $200 million of debt prepayment executed in 2023. Next, we successfully repriced our term loan, lowering our effective rate by 50 basis points. Taken together, we are confident that interest expense will, will be lower in 2024 versus last year. Our total net leverage ratio at quarter end was 2.8 x, nearly a full turn below the prior year period. Given current trends, we should end the year at the high end of our target net leverage ratio range of 2x-2.5 x. As our balance sheet continues to strengthen, we are announcing this morning a new $700 million share repurchase program. We expect to continue to drive accelerated financial performance in the coming years and believe now is an optimal time to move forward with this program as we focus on driving value creation for our shareholders. I will now turn the call back to Chris for our financial guidance and closing remarks. Thanks, Carl. Let's turn to slide nine. Net sales in the second quarter are expected to be 3%-5% higher year-over-year, driven by strong growth in Light Vehicle and Refinish, stable industrial sales, and market-driven declines in commercial vehicle. Refinish net sales are projected to increase by high single-digit% year-over-year in Q2, given share gains, growth in adjacencies, plus contributions from the André Koch acquisition. We will also benefit from lapping prior year production issues in North America. Light Vehicles should have another strong quarter with robust volume growth and stable price mix. In industrial, net sales are expected to be flat to lower as margin growth remain our highest priority in the current soft macro environment. And lastly, in commercial vehicle, our view is unchanged. We see North American Class 8 builds slowing through the year before demand ramps back up in 2025 and 2026. Our full-year low single-digit sales growth target remains unchanged. We expect typical seasonal trends to play out this year, leading to a step-up in second quarter net sales versus Q1. Second quarter adjusted EBITDA is projected to be roughly up 21% year-over-year to $275 million. Adjusted diluted earnings per share is estimated to be approximately $0.50, an increase of more than 40% year-over-year. Given the strong start to the year, we have increased our full year adjusted EBITDA, adjusted diluted EPS, and Free Cash Flow guidance. Full year 2024 adjusted EBITDA is projected to be between $1.05 billion and $1.08 billion, a $35 million increase to the midpoint versus our prior guidance. This translates to an adjusted Diluted EPS range between $1.90 and $2 per share, an increase of greater than $0.07 to the midpoint. We have also increased our 2024 Free Cash Flow guidance estimate by $50 million to a new range of $425 million to $475 million. I'm proud of our performance to start the year, and I'm confident in our performance trajectory. We believe we're on pace for another record performance in 2024 and are setting the foundation for long-term value creation. ... I look forward to sharing our Axalta plan with you on Strategy Day on May 15th. For more details, please contact Chris Evans or refer to our investor website. Thank you for joining us today. This concludes our prepared remarks. Operator, please open the line for Q&A. Thank you. We will now begin the question and answer session. To ask a question, you may press Star, then One on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. Again, for a question, Star One. If at any time your question has been addressed and you would like to withdraw your question, please press Star, then Two. At this time, we'll pause momentarily to assemble our roster. Our first question comes from David Begleiter from Deutsche Bank. David, please go ahead. This is, David Huang here for Dave. I guess first on guidance, I guess you raised your EBITDA guidance, and you left the sales guidance unchanged. Does the change reflect basically the restructuring benefit and any additional raw material, I mean, deflation? Yeah, good morning. This is Carl. Thanks for the question. Yeah, as far as the guidance, we are expecting about $10 million of benefit related to the restructuring program that we announced in February. So that is part of it. And as we think about the raw material perspective, we are still planning for the full year that we're about mid-single digits% lower on a year-over-year basis for our raw materials. But a lot of that is, as we referenced in the prepared remarks, weighted to the first half of the year. Okay, and then second, on Refinish, can you just talk about your expectation for volume trends in Refinish? I guess there's some divergence among your peers. Noted some pre-buying activity in the prior year that's creating a difficult comp for this year. I guess, can you just talk about underlying demand trends and probably, you know, your opportunity for further share gains? Sure, David. Good morning, and I'll take this one. So you know, I'm not gonna talk about what's happening with the rest of our peers. I think focused on what we're doing. We're focused on four strategies, and the four elements of that are really around body shop wins, which we had an exceptional quarter last quarter with 600 new body shop wins, and that's building on 2,400 body shops that we won last year. And if you look at the last three-five years, we have gotten over 10,000 body shops. So it's certainly the new wins and body shops, that's one element of it. The second element of it is really our adjacent space, and whether it's through on, the, aerosols that we sell with our U-POL acquisition or our, RAPTOR Bedl iners, all of that going through the shelves that we have with AutoZone and O'Reilly's, with 15,000 new shelves that we've been able to, put our products on. And then on top of that, we also have the, the retail shops. We have 75, shops in Europe and in South America that we are able to really push our products through. And today, only 30% of our products go through these shops, and as we move more from distribution through our retail shops, we see this as an incremental opportunity here as well. And then finally, it was the acquisition of André Koch. With that acquisition, which has... You know, we're proceeding well ahead of plan. As I look at it, all four of the elements are really building to the story, and so that's really why we're winning. Okay, thank you. Our next question comes from Christopher Parkinson from Wolfe Capital Christopher, please go ahead. Great. Thanks for taking my question. This is Harris Fein on for Chris. I think I heard you say before that the procurement team took out 11%, on a unit variable cost level. Just curious if you could go into maybe a little bit more detail about what's happening there, and how that flows into the raw material expectations for the full year. Because if you're down mid-single digits for the full year, you know, wondering if that implies that maybe raw materials could be up in the back half of the year. Thanks. Certainly, I'll take this. So we actually, you know, very proud of the team for what they accomplished here. And we started this program actually early last year, and we really saw the net benefit starting in Q3 of last year. And so what we did was the objective of this was really around two elements, and the first element was really to drive the savings, which you're seeing come through the PNL. And again, you know, whether it's last quarter or Q4 or in Q1 of this year. We also see this benefit continuing into a bit of Q2 before we start lapping our performance that we saw in Q3. So to your point, we do believe our, our purchasing team's performance will start being muted as we think about the back half of this year. The second objective of this team was to really get better contracts or, or more longer-term agreements so that it would help us manage through the cyclicality and a little bit of the, the volatility we saw in the marketplace. So these aren't long contracts, but they are six to six months to a year-long contracts that really enables us to be more responsive and manage with indexing as well as productivity. So both of those two elements have really been driven through about two-thirds of our basket, and that's certainly the benefit that you see through this year and what we expect to get somewhat muted through the back half of the year. But the good thing is we can at least balance our performance in material through the full year. Got it. That's helpful. And then I guess the second one, Light Vehicle pricing looks like it was up, excluding mix. Maybe if you could just go into a little bit more detail about how you were able to drive positive price, because, you know, I believe 30% of that business is on RMIs. Yeah, absolutely. I think, you know, just absolute kudos to that team. And, you know, I think it's really three elements here. The first one is, you know, if I went back, I think about a couple of years ago, we put in a great new leadership team that was really driven around listening to the customer and really focusing on getting the right products and the right capacities in place. So if you look at a perfect example being China, the market's up 4%, we grew by 21%. It kind of talks to the exceptional focus and the drive of that team. That's the first one. The second one is, it's really the quality and the reliability of the product. Again, the development of the products led to ensuring that we had the right products for the market. Now, a lot of folks can say this, but I think what's the difference is you can see it from our customer accolades, whether it's the Daimler Award, as well as the GM Supplier of the Year award. I think that certainly plays well to our performance here. And then finally, you know, it really comes to our ability to match color. I think, you know, in my 14 months at Axalta, what I am realizing is we are really good at matching and developing color, and especially in regions like China, our customers are pushing the barriers of color, and we're certainly there to respond to it. Okay. Our next question is coming from Aleksey Yefremov from KeyBanc Capital. Aleksey, please go ahead. Thanks, good morning, everyone. Do you expect to repay more debt before year-end as you're thinking about your 2.5x leverage? And should we expect most of the Free Cash Flow to go towards buyback for the rest of the year if you're not paying any more debt down? Yeah. Thanks, Aleksey. Yes, as we look forward for really the next nine months, if you just look, you know, we're sitting at about 2.8 leverage today. If you run kind of what our expectations are on free cash flow and the new EBITDA guide we gave you, you can see pretty quickly we're gonna be, you know, right below our 2.5 x net leverage, you know, at year-end. So as we look forward, we don't really need to pay any more debt down in order to achieve that objective. So we are, you know, obviously announcing today the new $700 million share repurchase program. We will be taking a closer look at executing on that as we kind of go forward this year. Thanks a lot, very helpful. And then I wanted to ask about index pricing for the rest of this year. It looks like you have some impacts in Q1. Should we expect more pronounced negative price from the indices? And when would you hit sort of the stable point where your prices are equivalent to sort of the cost indices? Yeah, I think we expect it, especially if you get into the second quarter. We are expecting to have in, you know, favorable price mix as we think about where the second quarter is being shaped up at this point. And then as far as really the rest of the year, I would say we would start kind of getting into that more equilibrium as it relates to the price mix dynamic, coupled with the RMIs in index agreements we have in place. Thanks a lot. Thank you. Our next question comes from Ghansham Panjabi from Baird. Ghansham, please go ahead. Hi, good morning, everyone. This is Matthew Krueger sitting in for Ghansham today. So I just wanted to kick things off and touch on the industrial business. So, can you talk a bit about what inning Axalta is, you know, currently in from a business pruning perspective? And then, you know, more specifically, when should we start to lap kind of normalized base comparisons for the industrial segment that already are lapping this, you know, ongoing pruning activity? Certainly, Matt, good morning. So I, I would call us probably in the third inning in our industrial business. Certainly, you know, what's our focus here is primarily, you know, managing the portfolio and driving for margin enhancement. That's essentially what we have been very, very focused on and getting the business ready for when the markets return. So you know, as, as I think about the three business units, you know, and you can see it on the Refinish side and on the mobility side, you know, we've seen certain significant growth.... What I would call on our industrial side, you know, we would call it we are shrinking to grow, and we're making the right choices to make sure that we're driving margin. In fact, if I look at our Q1 margin improvement by the three business segments, the one that has seen the most significant margin improvement was our Industrial business. So we're driving that certainly in the right direction. And then, so as you know, and what are we doing here? What we're doing here is whether it's making the right choices in customers, whether it's making the right choices in the long tail, and making calls on what we have to prune so that we can make sure that with the rest of the business, we're at the right margin levels to go forward. Even as I look at the rest of the year, we're actually driving far more margin improvement through the balance of the year. This is with sales being somewhat flat, which is what we're forecasting for the rest of the year. I do believe that, you know, 2025 is certainly a year that we do see volumes certainly picking up. Specific to the quarter, if I went through the three business segments within Industrial, general industrial, building products, obviously with construction and residential builds, those two are somewhat weak except in coil. But in our energy solutions business, which also sits in Industrial, which supports Light Vehicle or our mobility business in terms of coatings for batteries and motors, we're actually doing quite well with this, especially in China. So I, again, I do believe it's a question of time, but we're certainly going to make sure we have the margin profile for when we get there to see that business grow. So I would call it, we're in the third inning of where we are with industrials. Great. That's, that's very helpful. And then just taking a step back, can you talk a bit about how, you know, a higher for longer interest rate environment would compare to your initial expectations for the year? And can you include, you know, if or where you're seeing any impact from this sort of sentiment across your portfolio? And I'm talking about higher for longer interest rate, specifically. Yeah. Yeah, Yeah, as we look at the from a planning assumption, when we gave the original guidance back in, I guess it was late January, early February, we were planning for rates to be flat at that period of time. So we were not necessarily planning for a rate reduction in our baseline forecast. So obviously, that's kind of played out as we expected to date. You know, if I look at you know, what our debt is, we have about 55, 45, six float percentage from a debt perspective in how we operate. So if and when if rates ever do begin to reduce, I think we're positioned appropriately as it relates to that. And then I think the last point is we look at just managing overall interest expense. You saw what we did in the first quarter. We did pay down $75 million of our term loan, and we also updated our term loan, where we kind of got better pricing as well. So we feel pretty good with some of the actions that we've been able to execute, and being able to you know operate in this environment where rates are looking to be higher for longer. Thank you. Our next question comes from Mike Harrison, from Seaport Research Partners. Mike, please go ahead. Hi, good morning. Was wondering if you could provide a little bit more color on where the $75 million of restructuring savings in that 2024 transformation are gonna come from. You know, would you classify this as, as mostly SG&A, mostly manufacturing costs? I guess any, any key actions or, or buckets that you can provide for us would be helpful. Sure, Mike. Good morning. So I'll, I'll start, and maybe Carl will pick up right after, just to maybe give you more color on the financials. But, overall, you know, coming in about a year and a half ago, you know, what, what I noticed with Axalta was, you know, Axalta felt like we were a holding company with three individual businesses. One of the things that we've really driven from a culture standpoint is to drive this one Axalta culture. What that really meant was, you know, as we looked through the organization, you know, I think a few years ago, there was a pivot to go from more of a regional organization to more of a corporate and more functionally driven organization that stopped somewhere in COVID. The objective was to redrive it back into this more P&L-driven organization that was, I would call it flatter and also smaller at the top. A perfect example of this was the drive that we did to put the operations teams under the P&L, as one example, so that we could be, for a company of our size, be more nimble, agile, and efficient. We want to get as close to the customer and be as responsive and fast as possible. So I would call it, I would call it two-thirds SG&A, more corporate focused, and then one-third in looking at our capacities as well as our manufacturing in certain aspects of the business, and then making calls on footprint there. So that's the overall perspective of the project that we have going over the next couple of years. So that, I hope it gives you a good description. The one last element of this is in terms of the structure or what we did with the manufacturing side, it was really looking at areas of the business where we were underinvested in and areas that we really need to overinvest in. And so we're looking at also, over the period of time, moving some of those assets or that capacity, so that we could essentially drive growth in other parts of the business. With that, I'll turn it to Carl. No, I think, Chris, you covered it. I think, Mike, as Chris referenced, you know, a lot of that savings we expect going forward will be in SG&A, as you look at how that will come through the P&L. All right. That's very helpful. And then, a headline out this morning is saying that the U.S. government is gonna try to mandate automatic emergency braking on all vehicles in five years. It's maybe been a little while since we kind of covered this, autonomous vehicle or autonomous type of features popping up on more vehicles. Can you talk about how that kind of technology could be impacting your-- you know, how you look at the Refinish business over time and might be reducing collision rates over time? Certainly, Mike. I think, you know, as we've watched this over time, I think there's always been this concern of, you know, how is ADAS going to affect, you know, collisions going forward? Until, you know, we get to, you know, let's call it level 4, level 5 autonomous, which is, I believe, moving further and further out, you know, if you look at Cruise or, Apple, I think you can start seeing those investments, tapering out. I think in the short term, the part about, let's call it, what's being driven with, level 2 or level 3, what this would lead to is, minor collisions, which essentially drive for more work in Refinish, shops for us. So I do believe that takes away, let's call it, full car write-offs and gives us an opportunity to actually see more cars in body shops. And, you know, in the last couple of months, I've had many chances to go out to some body shops in The Carolinas, and just looking at the number of, let's call it, you know, cars that are electric or that have some level of automation, and what you can see is there's a lot of cars in body shops that are looking for work because it's actually minor collisions versus the full write-offs that you would normally see. I think it's great because it does the right thing for ensuring that we protect folks, but at the same time, it does provide us a benefit in our business. All right. Thanks very much. You're welcome. Our next question comes from Patrick Cunningham, from Citi. Patrick, go ahead. Hi, good morning. This is Eric Zhang on for Patrick. On the targeted price increases across select parts of the portfolio that was mentioned at the beginning of the call, can we talk about what products were targeted, and is this activity expected to continue for the remainder of the year? We did. Actually, we're very proud of the team for the pure pricing. We did it across the board. All three businesses essentially drove a pricing. Our pure pricing was actually up 2%, and so we're very proud of the team for accomplishing this in a very deflationary market, as someone pointed out. But I think, you know, very quickly, let me just point at what differentiates all three businesses. If I think about our Refinish business, obviously, you know, there's the point that this business is stable, and we continue to price, but we don't price for the sake of pricing here. It's really the efficiency and the productivity we drive to our customers. You know, if I look at our waterborne product, it is 30% more efficient than that, what was here previously. If I look at currently what we're doing with our base coats, you know, we had a ChromaBase technology that we're moving to Cromax XP. That drives a 10% improvement in efficiency for our Refinish customers. So we're pricing for the efficiency and the productivity that we provide our customers there. So that's, as I look at the Refinish business. On the mobility side, we continue to have pockets of the business, which are still, you know, where we believe that there's more value for the products that we bring to our customers. So in certain pockets, we are pricing, and we also have the impact of labor and certain elements of the basket of raws that we continue to price. And then finally, in our Industrial business, this is something that over time, that we're making the right choices of getting out of certain segments or getting out of, let's call it, certain customers and a portion of the tail, to make sure that we can continue to invest in that business, which drives the right level of profitability. So right now, we're pricing across all three elements of the business, and pure pricing is up 2%. Our next question comes from Steve Byrne, from Bank of America. Steve, you may proceed. Hi, Rock Hoffman on for Steve Byrne. Could you guys, I guess, inform if there's been any additional productivity gains that we should expect to come from initiatives launched last summer prior to the 2024 Transformation Initiative? ... Hey, good morning, Rock. Sure, I'm hoping that I could save this for the discussion on May 15th. So probably won't give you too much more color, otherwise, you might not show up to our strategy day there. But we have two initiatives, obviously, the transformation initiative that we're talking about, and then a couple under the operations umbrella. The first one is productivity that we're going to drive through our facilities as we think about the next couple of years. And then the second element of that will be a network optimization process or program, where we're looking for more opportunities. We've grown about 100 warehouses and distribution centers over from the pre-pandemic time to now, and we do believe with that, as well as some of the work that we can do on the transportation side, there's still more opportunities. So those are certainly the elements that we're gonna work on going forward. Thanks. Just to follow up on the light vehicle business, I was wondering if you could either provide similar metrics on light vehicle growth for results versus light vehicle market growth in kind of other non-China regions, or just give us an idea of the extent of magnitude there? Sure. So, you know, as I look at the market, and I'll just go through the light vehicle market and give you a perspective for all three regions. I would call the overall market being solid. For us, in North America, we see that as stable. We are starting to see inventory at the dealers kind of pick up quarter-over-quarter by about 10 days. But that said, volumes here seem somewhat stable. So our... You know, we've picked up a little bit, but, you know, I wouldn't say anything that's significant here. In Europe, again, markets have gone down about 2%-3%, and we've stayed very stable here as well from a market standpoint. China's up 4%, and in that marketplace, as you know, we're up 21%. So overall, I would call the light vehicle performance solid, with a little bit of growth in North America and significant growth in China. Okay, thank you. You're welcome. We have a question from Mike Sison from Wells Fargo. Mike, please go ahead. Good morning. A nice start to the year. In terms of Refinish for the markets in 2Q, I think you said your growth was flat in the first quarter for North America and EMEA. You guys had nice growth. Do you expect the markets to be flat again in 2Q, and how do you think it sort of unfolds for the rest of the year? Yeah, I would say it's flat to about just slightly growing. I'd say flat to 1%. We obviously are showing that we're going up high single digits in Q2, and it's really, as I said, you know, the four strategic initiatives that we're working on. On top of that, we also had the operational issues that we had in Q2 of last year. So lapping that performance is driving our growth in Q2. So I do believe we'll have a really good quarter here again in Q2 in our Refinish business. And more of a longer-term question, which again, probably addressed at the Analyst Day, but, you know, Axalta has been really focused on cost and productivity for a long time, and it does sound like you're maybe getting to more of a growth phase. Is that the way to sort of think about it? And where do you think the growth is sort of, you know, just maybe on average, where, what do you... How do you see that growth folding over the next couple of years? Absolutely. So I think, you know, we do believe there's probably one or two innings left on the margin side, but certainly a lot more that we can focus on the growth side. And to be honest, that is what we will be covering in significant detail going through our strategy day on the 15th. And so what we'll be doing is providing a view of where we'll be in three years from now across the three business segments by yearly targets that we will be providing. So just to give you a perspective and having a measure of where we think we can take the business. With that? Yeah, and then, Mike, I just would add to that, if you just... While there's been a lot of focus with Chris coming in, as far as how improving operations, focus on costs, if you step back and just look at what the team is planning to accomplish for this year, as we referenced, you know, we expect our EBITDA to be up 12% year-on-year. EPS is gonna be up 24%. The implied margin of the business now is running 20%, as far as on an EBITDA margin perspective. I think as Chris said, you know, we like the trajectory of where we're taking the business, and this pivot to growth is what we will spending a lot of time with in the next couple of weeks when we have our strategy day. Thank you. You're welcome. Our next question comes from John Roberts, from Mizuho. John, please go ahead. Thank you, and nice quarter. Could you give us an update on the geographic mix of your auto OEM sales? I'm guessing that China may be bigger than I was thinking it was. ... So, yeah, let me break it down. So, light vehicle for North America is about $300 million, commercial—sorry, and then if I look at EMEA, we're about $400 million, and then about $100 million in China. Okay. So, China, you called out China in terms of the strength in the quarter's volumes that's there. It didn't seem like it was big enough to actually drive the total. Yeah, I think, John, if you look at it, you know, just a little bit of perspective, you know, for the quarter, the China business for us was a little bit north of $60 million of revenue, which is now, you know, it is the third largest region for us from a pure light vehicle perspective. So if I look at still North America, by far and away, is our largest, with Europe being second. But as Chris is referencing, not only in prepared remarks and some of the questions, we continue just to see very, very strong performance specifically in China. Right. Thank you. You're welcome. Our next question comes from Joshua Spector, from UBS. Joshua, you may proceed. Good morning. This is Lucas Beaumont in for Joshua Spector. So I just wanted to go back to the SG&A costs, if we could. So they were kind of only up modestly in the first quarter, after that compares to kind of the high single digit inflation we're sort of seeing across most of the peers. At the same time, it sounds like you're gonna get kind of $50 million in cost savings there through the year from your productivity program, which is about sort of 6%. So I guess, just net of these factors, are you expecting SG&A growth to kind of be flat or up low single digits this year? How should we kind of think about that? Yeah, it's -- you know, as we look at SG&A, we know we're very proud of the, the, you know, what we were able to accomplish in the first quarter. As you referenced, we really were flat year-over-year in SG&A, especially in the environment that we're in. And as, as we look forward, you know, we, we are hoping to be able to manage that SG&A spend to be up, probably very, very low single digits on a year-on-year basis, is how we're looking at that. You know, just based off, not only the transformation, you know, initiative that we are well underway on, but also just as we look at, you know, how best to operate the business kind of going forward. That is a big focus for us, and, you know, at first quarter, we're off to a very good start. Right. Thanks. And then just going back to kind of the Industrial exits, are you able to kind of quantify for us how much volumes you're kind of deselecting there each quarter? And I guess if you could kind of give some sort of scale on the timing on how that's gonna- We're not, we're not breaking that out. We're not breaking that out. But what I can tell you is, obviously, as you can see, we're down about 6%, but we're not breaking out how much of that we're pulling out just because of the choices we're making right now. But I- No, no, thank you. Just to add to that, just a little bit further, I think you know, as we look forward, especially as we look on a year-over-year kind of comparison perspective, while we're still going to be you know, working on the portfolio, we are beginning to see some early signs where you know, when we kind of compare year-over-year, we believe we're gonna be kind of bottoming out, at least as far as having that type of revenue headwind on a quarterly basis going forward. Right. Thank you. Welcome. Our next question comes from Kevin McCarthy, from Vertical Research Partners. Kevin, please go ahead. Yes, thank you, and good morning, everyone. Chris, within your Refinish business, you've got a lot of adjacent products, aerosols, bed liners, perhaps others. How big is that basket of what I would call kind of nontraditional Refinish products? And how fast do you think you might be able to grow that basket over the medium term, versus, you know, body shop work, for example? Sure, I'd love, love to. So the business is about $700 million in total. And then I would say $600 million-$700 million in total, and I would call it... Now, if you think about the overall market, it's the overall market is about $7 billion. So, so we do see that opportunity as something, you know, where we have a small portion that we play here. So we do see this as an area that we can continue to grow over time. Okay. We'll stay tuned for May 15th. But, I want to ask, Carl about free cash flow. Maybe a two-part question. I guess, you know, on the micro level, what is the cash cost associated with your new, you know, $75 million transformation initiative? And then, more broadly, I think you raised your annual range by $25 million. So, you know, is that, mainly just the earnings, upside flowing through, or are there other, moving parts that you would care to call out there? Yeah, so maybe a couple of things on Free Cash Flow. I think, one, you know, we're off to a very good start for the year, having a positive Free Cash Flow of about $15 million. A really strong performance in working capital to help drive that, especially when you can kind of compare us on a year-over-year basis. Specific to your question on restructuring. In total, we have to expect the cash impact to be somewhere between $95 million-$135 million, and that's over a several year type of time period. And, you know, the bulk of that really does relate to severance costs. And then there's also some additional costs, including there for capital expenditures as well. But obviously, you know, that will kind of be, you know, we'll, we'll have some of that will come in this year, some of that come in 2025 as well. But the guide we gave you on Free Cash Flow is not only incorporating the higher EBITDA and the raise that we have, but also some of these cash costs or all these cash costs that will be coming in related to the restructuring this year as well. That's very helpful. I appreciate it. Our next question comes from John McNulty from BMO. John, please go ahead. Hey, good morning. This is Caleb on for John. So, I saw your CapEx was about, like, $22 million in the quarter, but you maintained your full year guide for about $165 million. How are you guys thinking about how that sequences through the rest of the year? Thank you. Yeah, it's a good question. I think a lot of that is just due to timing. So we still are working very diligently in order to kind of be ramping up, you know, CapEx here for the next nine months of the year. So I would expect that really to begin increasing quite significantly as we kind of get into the second quarter. And that will kind of carry through for the rest of the year as well. Okay, thank you. Then you've talked a lot about the positives going on for you in Refinish right now with, like, the acquisition, U-POL, et c.. But maybe can you just talk a little bit more about how the Irus rollout is going and kind of like what inning we're in on that, and then kind of your expectations for that over the next two to three years? Absolutely. Love it. So, I think, you know, if we look here, we have about 90,000 body shops. There's about, you know, 70,000 manual machines in most of those. We have about 2,000 semi-automatic machines from our past, and right now we have 100 Irus machines installed. We have orders for 300. So, you know, as I look at the next couple of years, the objective is to get that up to, you know, 2,000 plus, is what the team is driving right now. Maybe if I could just add on to that, you know, there was a question that was asked earlier just about the accessory market, specifically in Refinish. That is around about $100 million, I guess, of an overall opportunity and overall market size. In total, as Chris referenced, previously, all of Refinish, as we look at that all in, not only kind of what we do from a coatings perspective, but also some of these accessories, we're pegging the market size of about $7 billion. Okay, thanks, and congrats on the quarter. Thank you Thank you. Our next question comes from Jeff Zekauskas from JP Morgan. Jeff, go ahead. Thanks very much. How will you determine whether share repurchase is a good idea, in that Axalta, over a five-year period, has, you know, underperformed the market? There's volatility in its share price because of its cyclicality. You get 5% in the debt markets. Why is it a good idea to spend your capital now to repurchase shares? And how will you determine whether it's a good idea to have spent it? Well, I think overall, as we look at our journey to this point. And just as you think about our quarter-over-quarter performance, I do believe that the underlying value of Axalta is not realized. And if there's an opportunity for us to create that value, especially for shareholders, we certainly will. So I think that's certainly one of our goals. You know, as you look through the four elements of creating value, to your point, you know, there's an opportunity in how we look at the debt. There's certainly an opportunity in how we look at M&A. There's certainly an opportunity in how we look at CapEx. And then finally, there's certainly an opportunity in how we look at share buybacks. But again, as we've played this journey out, we do believe that there is an underlying value in our share, share value, and that that's something that we should provide back to our shareholders. So it's certainly an element that we'll look at. Great. Thanks so much. You're welcome. This concludes our question and answer session, as well as the conference. Thank you very much for attending today's presentation. You may now disconnect. Have a great day. Thank you.