Axalta plans to reduce leverage in 2019, lowers target ratio to 2.5x

By Devika Patel

Knoxville, Tenn., Dec. 19 – Axalta Coating Systems Ltd. said it has cut its target net leverage ratio to 2.5x from a range of 2.5x to 3x.

The company plans to decrease its leverage in 2019 using cash flow.

“We will maintain a conservative balance sheet, including lowering our target net leverage ratio from 2.5x to 3x range to now 2.5x,” interim chief executive officer Robert Bryant said on the company’s 2019 financial outlook conference call on Wednesday.

Excess cash flow will be used to lower the leverage ratio.

“For free cash flow, we expect to generate $430 million to $470 million in 2019,” interim chief financial officer Sean Lannon said on the call.

“Remaining excess cash flow can contribute to lowering the net debt ratio towards our equilibrium target of 2.5x,” Lannon said.

Axalta is a Philadelphia-based manufacturer, marketer and distributor of high-performance coatings systems.

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