ATI (ATI) investor relations material

Business transformation and strategic focus

• Shifted focus since 2019 to aerospace and defense, exiting lower-value segments and investing in differentiated products like hafnium and zirconium.

• Aerospace and defense now comprise 68–70% of total revenue, up from 50% in 2019.

• Proprietary capabilities in jet engine alloys, isothermal forging, premium titanium, and hafnium/zirconium set the company apart.

• One of two global suppliers for isothermal forging and premium titanium, and the only independent Western supplier of hafnium and zirconium.

• Customers seek solutions for complex problems, leveraging deep materials expertise and process know-how.

Capacity expansion and customer partnerships

• Capacity optimization starts with operational improvements and portfolio optimization through the Elevation model.

• New capacity investments, such as superalloy nickel remelt assets, are underway, with 20% of CapEx customer-funded.

• Customer-funded capital accelerates asset qualification and prioritizes engineering resources for rapid deployment.

• All capital projects meet a 30% IRR benchmark before customer investment, enhancing returns.

• Collaboration with customers ensures alignment of capacity with demand and secures long-term commitments.

Financial performance and outlook

• AA&S segment margin rose from 14% to 22% year-over-year; overall business margin at 23%.

• EBITDA up 57% in Q2; incremental margins at 50% expected to continue through year-end.

• Entering 2027 with a $1.35 billion EBITDA run rate, driven by price resets, new assets, and operational improvements.

• Contract renewals are yielding significant price increases due to high demand and unique capabilities.

• Trade restrictions on Chinese hafnium and zirconium support pricing and mix improvements.