Q&A with Axalta's Nigel Budden

Yes, is it only a year? Wow. In fact, you're right. Just last weekend, first of February, it was a year since we stood up on our own right from DuPont Performance Coatings as Axalta Coating Systems. And it's been quite a year, as you can imagine. Lots of executing against new plans, putting identity programs in place, all that sort of thing. But essentially, it's been an excellent year for us. And I judge that by, of course, the first thing being how did we go sales-wise, and we had a very good year sales-wise. We exceeded our own expectations. And we were able to achieve quite a few things in the year as well. Not only did we have to stand up the company, get all the brand library for the company and our brands out into the marketplace, but we were able to launch new products. We put a new corporate affairs organization in place. And we did things that seem normal to existing companies, like started a focus giving program in the community in which we participate, things like that that all had to be set up for the first time. So if I just comment briefly on the products, we had to move away from some of the old product categories to new, and we established the Chromax brand of North American-based products. And that went extremely well. And then on the back of that, we launched a brand new product called Chromax Mosaic. And we brought tools out in support of our branding programs, things like our Digital Spectra Spectrum Master, which enables body shops to look at 3D vehicle renderings utilizing digital color technology and looking at exactly what the color will look like in 3D perspective on different shapes and different cars, tapping into our huge library of colors. So those sorts of things are very exciting and motivating for all the people that participate in Axalta. And then, as I said, setting up departments that maybe may have been lacking because of the move away from DuPont. And the one that springs to mind, a very good example, is corporate affairs, where we are ramping up our own internal network of communication pathways and extend external messaging to all the stakeholders, customers, suppliers, and people like that. So it's a really fast-moving train at the moment, and it's been a lot of fun. And simple things, like focused giving to the community in which we play. We've set up a couple of programs relative to STEM, science, technology, engineering, and mathematics, and have a couple of live examples. Sustainability, building our sustainability footprint, and partnering with well-known efforts that are out there today. And then community relations, getting our leadership team and the people within Axalta participating in various community activities. So I think you get a flavor for standing a new company up and lots of neat things going on.

Yeah, well, the whole social network media is something that we wanted to jump into very quickly, because not only are there our normal stakeholders, customers, suppliers, etc., but we have some great North America assets that we use, like Axalta Racing, where we sponsor the 24 car of Hendrick Motorsports with Jeff Gordon. So as you're probably aware, that has just a huge fan base attached to it. So we really wanted to sharpen the pencil on how we get our brand, our messaging, and the things that we're doing relative to that investment out into the market. And felt that YouTube, Instagram, Facebook, Twitter, all those things are an ideal way to quickly move the needle and get out there and talk to those people. And we have a charming young lady running the social network program now, who's always sitting there tweeting away. And no matter when I look at what's going on, there's always news about something in Axalta or specifically something in the broader area of Axalta Racing. For an old guy like me, it's a lot of fun to get programs like that, Christopher.

Yes, at the end of last year, we signed up for another three years with Hendrick Motorsport. And that was a real milestone in itself, because I think it's 22 years now since we started this sponsorship with Hendrick Motorsport. And that's certainly the longest running sponsorship of Hendrick, and I wouldn't mind betting that it's the longest running sponsorship in NASCAR. So another three years with Jeff. We've got some exciting strategically placed races that we're participating in through the year. We start March 9th in Las Vegas, which is a key area for us. And we'll be joining with a lot of our partners and participating in a weekend-long event of entertainment and racing on the back of the NASCAR race with Jeff. And also engaging what we were just talking about, all our social media activities and really ramping them up, bringing them to the forefront, and being able to talk to people that are interested in us, our brands, and people that we may be interested in also. So yeah, it's a big event for us. It's a key expense for us, and one that we're very focused on and really wanting to ramp it up to the next level and get a good return out of it.

Yeah, Service King is a great organization. Met some really cool people there. They have a good organization. But it is that MSO sector that we're seeing a lot of consolidation going on in our industry. And we were delighted that they chose us as their paint supplier and business partner going forward. And yes, we're looking long and hard at the whole category, the MSO category. And I think that it's consolidating at such a pace that we want to make sure we can do the right things by our existing customers within that process, and maybe with some new customers also. I think it's so big, there's a lot of business in that category, and it's one that we're looking at very carefully.

Yeah, it's a lot more than paint, right? There's a lot of technology behind paint. So waterborne, low VOC are things that are relatively new and adding value in the marketplace today. But once you move beyond the paint, it gets into how you train people. So putting the right training centers in the right places so it's easy for customers to partake in learning how to utilize our products. Same with customer service, putting customer service centers in place so no matter where you are in the country, you can talk to someone live on the phone about orders placement, inquiries, that sort of thing. Inside sales support, we've had a big effort on putting inside sales in so that someone can always talk to someone from Axalta, no matter how big or small they are, they can always get to us. And then the thing that we really pride ourselves on is color. We're here to sell color. And no matter what it is, with wheels, as we all know, there's a lot of technology relative to the creation of color and how it's used. So we have our new Acquire Plus EFX, which is a very fancy portable spectrophotometer that's able to take a photograph of a color scheme and then tap into our computer base and then spit out a formula on how to match it, or give the painter some ideas on how to change the hue, the tone, in either direction. So that's off the top of my head, a list of some of the other added value we bring.

Yeah, that was the resin reactor, a laboratory resin reactor that we put in to our technology center in Wilmington, Delaware. And it's a reactor system that enables us to not use the commercial reactors to do product development. So it's a great thing for us as we look at advancing technology and making sure that we can quickly react to customer needs relative to smaller batches, smaller size products, so we can fully explore how it's going to behave, durability, things like that, before we go to commercialization. So yes, a big investment for us, and that's what it was. We'll be using a lot of that in the years ahead.

Yeah, wasn't it eventful? And you see I've got my little A badge on here, the little A for Axalta on my shirt. And I'm sure you and a lot of the people that will hear this have seen the rivalry that we put out there. A lot of time and effort working on getting our corporate brand persona situated in front of our stakeholders in a very clear and meaningful manner. And getting our brands out, be it on a NASCAR or a print media, or however it is that we get it, to get them in front of our customers. And just a look and feel about our new exciting company. And hey, to be honest with you, I'm hoping that we don't do a lot of that in 2014, because we've got it in place, and I'd now like to capitalize on what we've got in place and get some normality and start to roll it out the same way day after day, so people get to understand it and know it and recognize everything to do with it. So the answer really is yes and no. I'll start with the no. No, I don't want to see a lot more of that done, because I do want to start to have people look at something the same so that we get the recognition. But because of the excitement about what it created, I'd like to see more of it. And it comes down to adding on a new corporate website, things like that, and getting the look and feel the same through the website and supporting what we did last year in something concrete like a website. And then back to color, we've got new things coming in color, like our new Spectrum Master design tool, which will enable people to use a fan deck type color matching tool but with Xirallics and metal flake in it, so they get a wide cross-section of what the color will look like in its different versions, be it with metal flake or high saturation or low saturation. So those things will continue to roll out under the auspices of us building our corporate identity. But let's keep it simple this year. We've got an exciting business to run, and we've got lots of customers to service. And it would be really neat if every one of our thousands of customers in North America, which includes USA and Canada, were able to just at a glance see our new logo or our new brand identities, instantly recognize it, and know what it stands for. So we'll be working really hard at doing that sort of thing this year and delivering the value that we just talked about on top of the paint in the manner that we are so good at doing. So an exciting year coming forward for us. I look forward to talking to you again and reporting back on how it all went at some stage.

Thank you.