# DEAR
SHAREHOLDER

_Source: `DeepSeekOCR_Ardian_pruned_1k/basic-materials-specialty-chemicals/NYSE_AXTA_2022/NYSE_AXTA_2022.mmd` · pages 1-7_

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DEAR
SHAREHOLDER:

Thank you for your continued confidence in and ownership of Axalta. As the new CEO and president, I can tell you that my short time here has only strengthened my belief that Axalta is a true industry leader with incredible people. We are excited by the full breadth of opportunities ahead of us.

OUR PEOPLE, PRODUCTS AND SERVICES GIVE US A REAL COMPETITIVE ADVANTAGE THAT CAN FURTHER UNLOCK VALUE FOR OUR SHAREHOLDERS.

As for our 2022 performance, we ended the year with momentum and a strong growth trajectory despite some challenges. Axalta showed improvement in key metrics, including earnings growth for two consecutive quarters and margin improvement in Q4. Our team members around the world should be proud of all that we accomplished during a challenging year.

Still, there is more we can do to improve our performance and profitability. We must control the controllables and execute quarter by quarter. We will continue to focus on price-cost recovery, productivity and operational and supply chain excellence, all of which should increase our profitability and free cash flow (FCF). Controlling these and executing flawlessly will help enable our own destiny. Longer-term, we will continue to strengthen our core, drive growth and enhance our portfolio.

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## UNIFIED WITH A PURPOSE

Fostering a high-performance culture requires intention and strong employee engagement. In 2022, Axalta unified its employees around the world with a shared Purpose and a consistent set of Values and Behaviors.

OUR NEW PURPOSE IS WE
INNOVATE SMARTER SURFACE
SOLUTIONS FOR BETTER LIVING
AND A SUSTAINABLE FUTURE.

Our new Purpose honors our strong legacy and lineage, optimizes our strengths and creates a compelling, inspirational and ambitious direction. It is about being smarter in who we are and what we create.

## INNOVATIVE PRODUCTS AS A DIFFERENTIATOR

Axalta is constantly innovating products that differentiate us from our competition. We're responding and helping our customers meet the challenges they face with products that make a difference.

We have more than 150 years of experience and knowledge sharing across our Technology function. Our global team of approximately 1,300 scientists, engineers, and technicians is focused on improving processes and developing smarter products and solutions, and we continue to be recognized for our efforts.

In 2022, we earned two prestigious Edison Awards \( ^{™} \) , one of the highest accolades a product can receive in the name of innovation. In Refinish, we were recognized for our Spies Hecker waterborne coating solution, which reduces emissions by more than 60% and provides best-in-class appearance and performance. In addition, our new Values and Behaviors highlight our shared beliefs around what matters most and how we will achieve our strategy, priorities and purpose.

Our three Values are Do What's Right, Act Boldly (by taking action based on data and owning it), and Win Together. When combined, our Purpose and Values unite all of us globally as One Axalta.

![](images/2_0.jpg)

In Mobility Coatings, we won for our digital paint technology coatings, which allows for two-toning, striping and other customization, while delivering a durable and sustainable finish.

In addition, our Abcite \( ^{®} \)  2060 Flame Spray Powder Coating was named a 2022 R&D 100 Award winner for providing best-in-class protection against corrosion and driving productivity. While our Imron \( ^{®} \)  Industrial High Performance Urethane Primer was named a finalist.

We're proud to be recognized for our innovation and we continue to push our teams to create smarter products. We're excited for what our innovation will do in the future.

## FOCUS ON SUSTAINABILITY

Sustainability is central to our business and in 2022, we continued work to meet our 2030 ESG goals structured under business solutions, planet solutions and people solutions. This includes developing new products and expanding solutions that provide sustainability benefits, both in terms of our and our customers' operations.

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Axalta is committed to creating a more sustainable future for the planet. At the core of our commitment to environmental sustainability is a goal to achieve carbon neutrality in our operations by 2040.

Making a meaningful difference also extends to our communities. In 2022, we continued to make a positive impact with donations through the Axalta Bright Futures program and other corporate social responsibility efforts. Axalta has strong governance practices and we operate with integrity and behave ethically in everything we do.

You can learn much more on our sustainability program, including an update on our 2030 ESG goals, in our full 2020-2022 Sustainability Report that we expect to publish later this year.

## LOOKING AHEAD

We will strengthen our core and drive growth while increasing our emphasis on near-term execution and margin recovery.

To achieve these goals we are focused on driving efficient execution at our plant sites, improved productivity across all corporate functions, and commercial courage in our business partnerships. It is our intent to control the controllables and yield maximum profitability in any environment. I am pleased with our progress to-date and am encouraged by recent trends. We are building momentum as historic headwinds during 2021/2022 turn into tailwinds in 2023 and beyond.

We are at an important moment for Axalta and I am committed to delivering a great 2023.

![](images/3_0.jpg)

Chris Villavarayan
CEO & President

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