Axalta Coating Systems (AXTA) Q2 2026 earnings call transcript

Good morning, everyone, and thank you for joining us today to discuss Axalta's second quarter, 2026 financial results. I'm Colleen Lubick, Vice President of Investor Relations. Joining me today are Chris Villarreal, our Chief Executive Officer, and Carl Anderson, Our Chief Financial Officer. Before we begin, please turn to slide two for our forward-looking statements and non-GAAP disclosures. We posted our second quarter 2026 financial results this morning. You can find today's presentation and supporting materials on the Investor Relations section of our website at exalta. com. Our remarks today in the slide presentation may include forward-looking statements reflecting our current views of future events and their potential impact on Exalta's performance and with respect to the proposed mergers of equals between Exalta and AXO Nobel.

These statements involve risks and uncertainties, and actual results and outcomes may differ materially. We are under no obligation to update these statements. Our remarks on this slide presentation also contain various non-GAAP financial measures. We included reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures. Refer to our filings with the SEC for more information. I will now turn the call over to Chris.

Thank you, Colleen, and good morning, everyone. Let's turn to slide three. I want to begin the call by congratulating our team on an exceptional quarter. We set records for adjusted EBITDA, which increased 5% from the prior period to $305 million, adjusted diluted EPS, which improved 13% year-over-year to $0.72, exceeding our expectations, and we had the lowest net leverage in Axalta's history. Also notable is net sales growth of 3% year-over-year and an excellent adjusted EBITDA margin of 22.7%, up 30 basis points from the prior year period and the highest second quarter in many years. We are clearly on track to achieve the key milestones set as part of our A plan that we will close out this year.

Cash was again a great story this quarter. We delivered $152 million in cash from operations and $107 million in free cash flow, an improvement of 6% year-over-year. Based on our first-half performance, we remain well-positioned to deliver another year of excellent cash generation. The Axalta team has driven growth, controlled the controllables, and significantly improved the balance sheet. Let's turn to slide four.

Across the portfolio, the disciplined execution and operational excellence we have worked on perfecting over the last several years has paid off. Investments in technology within all businesses, substantial operational enhancements, and cultural changes that include accelerated decision-making and accountability has elevated our product and service offerings. These offerings have translated into meaningful business wins across all end markets. Starting with refinish, net sales increased 6% year-over-year, driven primarily by the abatement of destocking this quarter and favorable price mix.

Europe, our largest refinish region, delivered a record quarter for net sales. Regarding body shop wins, we far exceeded our normal run rate with more than 1,900 new net body shops secured in the first half of this year. In addition, in July, we won approximately 800 new North American locations associated with leading MSOs. This represents excellent wins for Axalta and further reinforce our growth momentum. As I've told you before, 90% of our 95,000 refinished customers are small businesses. Time in a body shop is money, and we optimize this for them by creating productivity and efficiency improvements. In industrial, we're far outperforming our expectations for profitability with 13 quarters of adjusted EBITDA margin expansion, despite the choppy macro environment in North America.

In Asia, we have delivered six consecutive quarters of net sales growth driven by higher demand for energy solutions, and in Europe, we have posted another quarter of volume growth. While North America remains challenged, the business is not standing still. When demand recovers, and we certainly expect that it will, we're positioned to capitalize on volumes as we enter the next upcycle with record levels of profitability driven by a cost structure that is significantly more efficient than in prior cycles. In mobility, we delivered a record quarter in net sales of $474 million, including record quarterly sales in commercial vehicles. Our commercial transportation solutions business continues to perform exceptionally well at record levels, and we're benefiting from the ramp-up in Class 8 production in North America.

We are equally pleased with the consistency and profitability of the mobility segment, which delivered an adjusted EBITDA margin of 18.4%. The combination of flawless execution and disciplined cost and productivity initiatives differentiate Axalta. This represents our eighth consecutive quarter of lower operating expenses on a constant currency basis. In addition, variable input costs declined this quarter by nearly 2%. These actions contribute to record quarterly adjusted EBITDA and the highest second quarter margin in the last decade of 22.7%. Well-defined A-Plan targets that put our customers first, purpose-driven innovation and profitable growth, fueled by outstanding operational performance, and a global team that is second to none, put us in an excellent position for our next chapter with Axon Nobel.

With that, I'll turn the call over to Carl to go through the financials.

Thank you, Chris, and good morning, everyone. Turning to slide 5, net sales were up 3% year-over-year, coming in at just under $1.35 billion, the highest quarterly sales performance over the past two years.

Foreign currency translation tailwinds, contributions from acquisitions, and positive price mix were partially offset by lower volumes in mobility and industrial. Net income was $89 million, a decrease of $21 million versus the prior year period. The decline was primarily attributable to an incremental $31 million of transaction-related costs associated with the pending merger with Axon O'Bell. Adjusted net income, which excludes merger and acquisition-related costs, increased 10% year-over-year to $153 million, compared to $139 million in the prior year period, driven primarily by Performance Coatings earnings and lower interest expense. Adjusted EBITDA increased 5% to a record $305 million, resulting in an adjusted EBITDA margin of 22.7%.

Our performance exceeded expectations due to favorable business mix supported by increased sales and performance coatings and continued cost discipline.

Adjusted diluted earnings per share increased 13% year over year to a quarterly record of $0.72 per share, benefiting from higher earnings and lower interest expense. Finally, our momentum and cash generation remained consistent again in the second quarter. Cash provided by operating activities was $152 million, while free cash flow was $107 million, representing increases of 7% and 6% respectively.

The improvement compared to the prior year period was driven by better working capital performance and lower interest payments. Turning to performance coatings, the segment delivered solid second quarter results, with net sales increasing 4% year-over-year and 9% sequentially. Compared to the second quarter of last year, growth was driven by acquisitions, positive price mix, and favorable foreign currency translation.

Refinished net sales increased 6% to $545 million, supported by volume growth in three out of four regions, and positive price mix as channel inventory normalizes in North America. Industrial net sales increased 2% year-over-year to $327 million. Volume growth in Europe and Asia, along with positive price mix, more than offset lower volumes in North America.

Performance coatings adjusted EBITDA increased 10% to $218 million, while adjusted EBITDA margin expanded 130 basis points to 25.1%. The increase was driven by the combination of positive price mix, continued cost discipline, and flat volumes and refinish, allowing us to effectively convert top-line growth into higher earnings.

Mobility Codings delivered a record second-quarter net sales of $474 million, an increase of 1% from the prior year period. Late vehicle net sales declined slightly as favorable foreign currency and organic growth in Latin America partially offset lower volumes in other regions.

Commercial vehicle net sales increased 7% year over year, supported by volume growth in all four regions and favorable foreign currency translation. We are seeing North America Class A production improving and expect this to continue in the second half. The mobility coatings adjusted EBITDA totaled $87 million in the second quarter, with adjusted EBITDA margin of 18.4%. Margins were up 90 basis points sequentially, driven by solid conversion on incremental revenue.

Compared to a year ago, tailwinds from higher volumes in commercial vehicle were more than offset by favorable one-time items recorded in the second quarter of last year that did not repeat.

Turning to slide 8, in the second quarter, we delivered another period of consistent cash generation, which highlights the durability of our operating model.

Through June, cash provided by operating activities has increased 31% compared to the first half of 2025. We also continue to strengthen our balance sheet, reducing gross debt by $80 million during the quarter and $135 million year-to-date. Through June, interest expense was 16% lower than the prior year period, reflecting the benefits of our deleveraging efforts. As a result, we ended the quarter with a net leverage ratio of 2.2 times, the lowest in the company's history, and remain on track to exit the year below two times. As we turn to our outlook on slide 9, our strong second quarter results and performance across the organization is putting us on an excellent path for 2026. External forecasts and key performance indicators remain broadly consistent with the assumptions underpinning our prior guidance.

That said, the situation in Iran, tariffs, and broader geopolitical tensions in the Middle East continue to create some uncertainty. As a result, we believe it is prudent to maintain our previously issued full-year guidance for net sales, adjusted EBITDA, adjusted diluted earnings per share, and free cash flow. Having said that we continue to operate very effectively and are prepared to convert on higher volumes if they come in stronger than planned Specifically for the third quarter we expect net sales to increase by low single percent compared to the prior year period with adjusted EBITDA in the range of million to million We also anticipate adjusted diluted earnings per share of approximately $0.70, up 4% from a year ago.

Overall, we are encouraged by our first-half results and believe we are well-positioned to deliver another year of record financial performance. Turning to slide 10, we're now just over a week away from a defining milestone, our special general meeting on August 5th, where shareholders will vote on the proposed merger of equals with Axel Nobel. Regulatory clearances also continue in parallel, and we remain on track for closing in late 2026 or early 2027.

From a financial standpoint, the fundamentals of a transaction are exactly where we want them. We continue to expect approximately $600 million annual run rate cost synergies, with roughly 90% captured within the first three years following close. We also see attractive revenue synergy opportunities through cross-selling, technology sharing, and expanded customer access across a broader global platform. The planning work completed to date has only strengthened our confidence in those numbers.

Just as important, the results we've walked through today mean we'll enter this combination from the strongest financial position in our history, Record earnings, robust cash generation, and our lowest ever net leverage. Following the vote, integration preparation will accelerate as we prepare for day one. Now, I will turn the call back to Chris for closing remarks.

Thanks, Carl. I opened today's call by celebrating our outstanding quarter, and I want to close it by thanking the people who made it possible. To our employees around the world, thank you for your commitment to our customers and to our performance. Your focus on execution, productivity, and operational excellence have energized and strengthened Axalta as a leading coding company. Because of your efforts, we're well positioned to capitalize on growth opportunities, maintain industry-leading profitability, and maximize the value of our proposed combination with Axel Nobel for our shareholders. Congratulations on a job well done. Thank you for joining us today. Operator, please open the line for questions.

Yeah, good morning, Matt. Again, certainly proud of our performance in Q2. And really, if you think about it, a lot of that is, as I think about the business, it's really tied to stability and recovery. It's a lot of what we've been seeing when it comes to the market. I would say the collisions are starting to be in line with our expectations.

North America was down about mid-single digits, and as I look at Europe, that was more like low single digits. So collisions are coming in exactly where we wanted, and then it transitions to the strategy. And here, when you think about the strategy, it's always what we've said we're going to do. So it's acquisitions, what we drive in new body shop wins, adjacencies, and then pricing. And across all those three elements, we're well positioned. So three of those elements you can see in Q2. But really, to your point, as we look forward into Q3 and Q4, the new body shop wins. It's in total, we're at about 2,700 body shops through July. So that's, on average, we do about 2,500 per year.

So we're well ahead there. And additionally, to the fact that we won 800 body shops that are in the MSO space, what benefit we get in the back half is really more on the volume side. So we'll certainly pick up on the volume side at the back half. We certainly have, obviously, what we've done on pricing that's coming through. And then on top of that, we continue to work on acquisitions. We did some M&A on distributors outside North America, especially in Europe. In Asia, primarily in Australia, that's certainly coming through in Q2, but we also expect that benefit to flow through the back half. So, again, we're feeling quite good with where performance coatings, or more importantly, refinishes sitting at this point.

Okay. And if I could, free cash flow was similarly a bit better than expected. Primarily, it looks like working capital, which is maybe a bit counterintuitive to me in the backdrop. So how did you manage this? How sustainable is this? Are there givebacks in 2H? How should we think about the cash flow profile for the year?

Thanks, Chris. Yeah, I'm going to answer your question. The team did a really nice job of improving our cash conversion cycle. So we improved about 10%. A lot of that was driven by turning our inventory days a lot quicker. So we actually reduced that about eight days on a year-over-year basis. And it's important because while free cash flow is up 6%, it does include certain deal fees as well. So if I was to exclude that, we would have been up to close to about 20% on free cash flow on a year-over-year comparison. And that's at the same time that we just are continuing to drive overall improvements within the business. So overall, good story on cash flow.

Our leverage is at a record of 2.2 times. And you're seeing that kind of come through on lower cash interest payments as well.

Yeah, actually, you know, again, good morning, David. And I would say, you know, volumes in industrial and Q2 were actually down about 1%. Primarily, but if you look at it, you know, net sales were up 2%. So what happened here is really what we did with pricing and our actions in driving cost and just the pure focus on that team and really looking at margins. And if I look at, you know, from where we started about two, three years ago, margins are actually up twice where they used to be. So that team's just done a phenomenal job of just managing cost with the macro where it's been. But specific to, you know, as you look forward or what we see in terms of volumes, I would say North America still remains choppy and challenged.

But our true story on wind and volume is really coming from Europe. Europe is up, primarily driven by our E-code business, and then Asia. Asia's gone six quarters up from our energy solutions business there. And so everything that we provide, whether it's for battery casings or what we do for motors with impregnating resins, all of that is coming in just, you know, as a strong positive. And even as we look at Q3 and our numbers in July, that performance continues. So at this point, actually, you know, our industrial business, as I look at Q2, is that it's the best margins or the best performance in the history of Axalta, and it's actually holding through to Q3.

A lot of it is we're still very, very focused on the volumes, but the strength is coming out of Europe and Asia, and we're watching the, let's call it the weakness in North America. It feels like we've hit bottom, but we continue to say that quarter after quarter. But the expectation is that if anything picks up there, then the team really has the potential of driving that margin even higher.

I expect volumes to be pretty much flat for Q3 and then up as I think about Q4. Overall, I would say in the back half, we expect volumes to be slightly up. But in reality, it's what we're going to do in terms of if I look at the back half of the year, we're expecting claims to be down as we've always consistently been saying, down mid-single digits. So what the team's doing with the wins is driving us to hold flat to up. The difference with Q3, as you know, with all the new wins that we have, it takes a bit of time for this to actually roll through into the P&L. So that's what's driving, let's call it the ramp-ups, but we do expect Q4 to start picking up in terms of volumes.

Sure. Hey, good morning, Chris. Thanks for the question. Pretty detailed one there. I'll break it out. So, you know, if you think about it, and as we described destalking, destalking as an impact for us was, let's call it, Low to mid-single dip. And if I look at Q2 and Q3, the stocking is mostly completely out. So I would call that, let's call it a net positive from where we were. Essentially, it's, you know, in line with what we've always said. And as I think about stabilization and recovery, where that's coming from is really, you know, the markets are starting to drop. The collision rate drops are more in line with our expectations. So if I think about North America, that's dropping about mid-single digits.

Europe's probably low single digits. But on top of that, you know, in terms of all the other metrics that you asked about, I would say, you know, miles driven is up slightly. Nothing's changed there. In terms of insurance rates, insurance rates continue to fade. And I would say that's coming in slightly better than we've planned, and certainly used car pricing is also trending the right way. So the stockings are positive. Miles driven is a positive. Insurance rates are slightly better. Used car pricing is good. So that's what's driving, I would call it, the recovery or the expectations of a better future here. Obviously the counter to this is with where affordability is Consumers are still in some cases not putting in insurance claims And the last part of this is also total losses are going up because of the cost of repairs So parts costs as well as cost of repairs are all having a bit of an impact on this So that the let call it the look on the market itself but it still comes in from our perspective What we plan for is this mid digits decline through the low to mid digit decline through the back half So that said, the positive for us, when you think about the wins, again, the MSO win that we won in North America is, you know, 600 body shops.

You know, it's one of the top five MSOs in North America. We're very, very good with this. And then on top of that, additionally, what the teams have won, it's just not a North American story for us. In North America, we won actually two large MSOs, but in Europe, the team's done another great job of securing a large one. And if I move on to Asia, we won the BMW business in Japan where we won 80 body shops there. That's something that we've never had for a long time. So, you know, you added all that up, the confidence on the new business wins is what gives us great confidence of where the business can really build out for the future here.

And then on top of that, what we've done in adjacencies, our adjacencies growth is up, you know, 15 million bucks. So it's been a very, very good story for us.

Yeah, thanks, Chris. Good morning. As relates to cost, you know, this is really it starts with the culture of Axalta. You know, across whether it's functions, across BU, across what we're doing in purchasing, it's something that we talk about daily, weekly, monthly. And it just is the overall focus really of the company to be much more efficient as we progress. And so I think the trajectory that we're on continues. You know, we're not done. There's more opportunities as we continue to look at what we can do throughout the rest of this year. But more importantly, I think it provides a really, really strong building block of what we can be doing when we get this merger over the finish line and get that closed with Axel & O'Bell.

So I would just say more of the same, Chris, as we look to execute the rest of this year.

Hey, good morning, Laurent. No, we actually saw very little of that, and I'll probably go through why. A lot of the pricing that we drove was early in Q2. So, you know, as we finished Q1, we essentially came up with a perspective that, you know, we had mid-single-digit inflation, and we essentially had all three businesses move out with pricing early on in the quarter.

And as I look at where backlogs sat at the back half of Q2, and even if I look at our July numbers where they're coming in, I would say there was very little in the form of pull forward that was driving some of our results for Q2.

And as we think about pricing, we're quite comfortable with the pricing that we've put in place. Obviously, a lot of that's flown in through Q2. If I look at peak inflation, though, peak inflation really hits us more in Q3 and a bit in Q4, and a lot of this is driven from the fact that we actually performed incredibly well from a cost perspective, I think, in the first half. And here, if you think about the fact that we had inventory levels that we're providing as a bit of tailwind, as well as the consistent work that our purchasing teams have done in managing costs and driving productivity, all of that provided a really good tailwind. But a lot of that, a bit of that is also being saved into what we have in the back half.

The purchasing teams will continue to obviously act and keep working on the back half. From a pricing perspective, I think we're at a good spot. We might price in certain pockets as we go forward because obviously with the Middle East conflict, it's uncertain which way this might play out. But at this point, from a pricing dynamic, we feel we're in a good spot. And in terms of a pull forward, Laurent, we haven't seen much. And I think you can see it, finally, as I think about the demand picture from all three of the businesses. The strength really came in areas that we had, I would say, a strong performance story. You know, for example, performance coatings was weak, and essentially the pickup was a lot of it was destalking and then just the demand picture that was driving both refinish and industrial.

Yeah, Laurent, I think as you think of the second half, even if you look at the low end of the full-year guidance, that implies that the second half comes in about $12 million higher than the first half from an EBITDA basis. We are, you know, we think about just the cost dynamic is what we're seeing with raw materials. Obviously, we'll have performed better in the first half than when we would in the second half, but it's all part of the overall planning that we have in place that, at least on a gross level, we see the cost impact on RAS being up about mid-single digits for the full year.

That should be that for Q3, maybe ticks up a little bit more to get to the low end of high single digits where you're going to be exiting the year. But as Chris talked to, the productivity that the purchasing team is driving is a pretty significant offset that we would expect to be able to mitigate that, to be able to deliver the guidance construct that we put forward.

Yeah, good morning, Tao. So it's really two things. The first one is obviously the North American Class 8 market is picking up, and so it's been on the normal cyclical lows, and then what we're starting to see is it returning to about 300,000 truck build for a year, which normally comes in about 75,000 trucks per quarter. And that's what we're seeing in the back half of the year. So that's also what's driving a little bit of the improved performance. So that's one story. But the second story, what's really driving our performance here is what we're doing in commercial transportation solutions. So this team, the mobility team, a few years ago started focusing on everything that's outside just Class 8, such as off-highway, military, everything that we do on ambulances, fire trucks, RVs, and the team's really been crushing it.

That business has now grown to about 50% of our overall CV business. So it's a great, great story here. And that's actually up 5% year over year. And so that plus where CV is going is what's driving the improvement in mobility, even though we see, let's call it, light vehicle markets being slightly down. Additionally, the Light Vehicle team has also done an amazing job winning new business in Europe and LATAM. LATAM has been just a great, great, great story for us for almost, I would say, a year, year and a half now. Now, and they've actually had a program there called Fast and Furious, which was to essentially transition some LV customers as well as focus on some CV customers, and that's just come in well beyond our expectations.

So all of that's what's driving the positive performance, not only in mobility, but certainly in CV.

Well, I think it's probably early to call. Well, you know, the MSO consolidation has, I think, just based on where the markets have been, have kind of slowed down a bit. But that said, you know, the large MSOs obviously play a significant part in our business, primarily because a lot of what we do on the premium side is runs through the MSO space. And Axalta, you know, our refinish business is our crown jewel. Our refinish is a business that not only, you know, accounts for almost half of what Axalta is, but certainly from a premium perspective, we are obviously also the leader in this marketplace. And as you think about that, in terms of MSOs, we provide to now, you know, we moved from 12 to about 13 of the top 20 MSOs.

And why this is really, really important is the MSOs usually provide to all the insurance carriers for all the work that's done. So it's very, very important to stay focused in this space. And for us, we're very, very focused, again, on driving this because it essentially grows our refinish or our premium business. But additionally, it gives us the foundation to also expand in our economy business. It gives us the scale. It gives us the products. It gives us the technology. And really, on the economy side, you know, with what we do in adjacencies, that's been something that we were at 9%. We've grown up to 11%, 12% over the last three years. In the premium space, we've been north of 40%.

Now, where I want to take you here is the economy space. This is a great story because the merger with Exxon Nobel gives us the opportunity to grow in the economy space because that's somewhere that they're very, very strong with. So again, as I think about refinish, we're well positioned with the MSOs, and I believe as far as we continue to grow here and with the merger with Axso, we'll become even a stronger player here.

Yeah good morning Gansham I think not really I would say it pretty much consistent with what we saw in the last two quarters or probably consistent to what we been saying I think you know if out I would call it overall the expectations If we look at each of the markets I would call it refinishes Collision claims are going down mid digits is what we forecast here Are we seeing any improvements around the globe So I would say, you know, Europe is a bit better than that number. But that said, I would say, you know, overall, the market is a bit sluggish here. If I look at LightVacul, LightVacul would be down, you know, the markets are down 1% to 2% or 2% to 3%, primarily North America.

We're seeing weakness, obviously, in North America and China. I would say the rest of Asia as well as Europe seems stable. And then finally, when it comes to industrial, I would call it North America continues to be weak, and Europe seems to be stable here as well.

And then with that, I will probably turn it over to Carl to just maybe add some more color. Yeah, Ganshan, the only other point that I think is helpful to add is you think about the second half for our revenue story, the foreign exchange tailwind will begin to abate. And so as you look at the second half, we are planning for revenue to be up low single digits. Part of that will be the volume story that Chris talked to on Refinish. But also, you know, we do expect price mix to also be positive for the year. And we continue to have a little bit of accretion from the acquisitions that we've done previously and refinished as well.

So I think it's an important story is even in this environment, we're able to kind of continue to grow top line here.

Yeah, so a full year, at least it's important to know this is on a gross basis, right? So this would be not including any of the productivity. But we do expect full year to be about a mid-single-digit headwind to overall raw materials. Q2 was about a low-single-digit headwind as well.

Well, certainly I think, you know, when it comes to North America, In North America, it's really tied to consumer confidence and interest rates and house building. And, you know, let's call it most of our business in North America is tied to building products. So let's call it as construction goes, that's how our performance improves. And at this point with interest rates and all the, let's call it the negative sentiment in North America, That's what's driving a little bit of our performance or the lag in performance in North America. Specific to Europe, that market, specific to the products we serve, here we provide eco. Obviously, this is a different element that also goes into bankals, so we have a higher market performance here.

And the market is also a little bit stable for us as we look at Europe, specific to the products we provide.

Yeah, so right now, you know, if I think about the globe, our expectations are about 90 million. Specific to China, I would call that about 32 million for the full year. And, you know, if I look at those numbers from last year to this year, I would call that almost flat. And even if I look at, let's call it front half to back half, I'd call it flat. And here, the dynamics is primarily driven by the fact that I think, you know, the local market especially, it's not a question of consumer confidence. I think it's more a question of there's a ton of new models and new technology that's coming out, and I think folks are just waiting for the new models in terms of the customers we work with for the back half.

That said, the strength for us that we're seeing in China is the export market. The export market is up 70% on a comp basis, and so that's certainly driving some great performance from that team as we think about looking forward here.

Yeah, thanks, Duffy. Yeah, the bulk of what we're seeing would be prices kind of holding where they are now, so it just would be the rolling effect into the P&L. We do see some pretty significant differences depending on, you know, what we are buying. So, solvents, as you would expect, has been up probably 15%, 20% just based off what's happening with oil prices. Monomers has also been up as well, probably high single digits percentage basis, but others have been lower. So it is definitely a mix that we're seeing across the overall raw material basket that we're buying at this point. But at this moment, we're not forecasting really any significant changes, at least in the overall price levels for the rest of the year.

It was about, I think it was about $7 million of a benefit a year ago.

Yeah, good morning. Yeah, I think as it relates to kind of our mobility overall business, we do expect it to begin to inflect in the third quarter, so you'll start seeing that turn positive for the third quarter as we kind of think through that. Keep in mind, some of what you saw was more mix-related than price as we think about what happened in the second quarter. And also, we do have the RMIs that represent about 50% of the mobility segment for us that will begin to kind of kick in as we get into the fourth quarter.

We are showing volumes to be up slightly, and it's really driven by the wins. So, you know, what the teams have done in terms of winning in Europe and Latin America, that should drive some volume growth in the back half. That's purely looking at light vehicle. But additionally, you know, as we think about the overall segment of mobility between what we see in commercial vehicle and the continued wins that the team will have on CES, all of that, when you look at the overall perspective of mobility, We should show some volume growth in the backhand.

Well, maybe I'll start and maybe turn it over to Carl. But from a perspective of how we think about North America, obviously, with a lot of the de-stocking coming out, Q3, price mix, obviously, will start turning positive. So that's one element. The second half of this is additionally, certainly the large 600 body shop win that we just won, and as we play out, maybe a quarter or two should also help drive the benefit and the improvement in the North American business. So as I look at the North American business, my expectations are this will continue to grow positive, especially from a price mix perspective. Nothing different than what we've said previously in terms of the consistency primarily driven by de-stocking.

But the additional benefit we also get is the new business wins coming through.

With that, Carl? Yeah, and maybe just to add a little bit more color as I think about refinished, one, I think it is important just to note is the expectations we had for what occurred in the second quarter has been consistent with really the messaging we've been talking about over the last 12 months as well, when we thought things would begin to turn a little bit for refinished. So it did come in as we expected, maybe even a little bit better in the second quarter. But as Chris said, a lot of the mix impacts, which was really one of the bigger drivers of what's impacted price mix over the last four to five quarters. The bulk of that is behind us.

And as he said, especially as we get into the third quarter, that we should have another positive price mix story for us.

Yeah, it's primarily driven with the customers that we serve and, you know, specific to the customers in China as well as our customers in North America. And what happens is, you know, as those customers go, we go. And we saw, obviously, with those customers, maybe call it dropping a little bit in volume. That's what's driven that little bit of a difference. That said, you know, the new business wins that we're getting in Europe and Latin America. Additionally, in North America, some of those customers were also moving manufacturing between North America, sorry, the U. S. and Mexico. So those volume changes eventually will sort itself out, and that's why we believe the back half will be back to an expectation of volume growth.

Well, thank you. Thanks, everyone, for calling in. And I think, you know, from my perspective, again, you know, thanks for your continued interest and certainly to the employees of Axalta. You know, great quarter. Certainly, we'll be performing at this rate going into Q3 and certainly looking forward to the vote here in a week and becoming yet a stronger player as soon as we close. Thank you very much.