Ducommun (DCO) Goldman Sachs Industrials and Materials Conference summary

Company Overview and Recent Performance

• Celebrated 175 years in business with record financial results and a strong market cap.

• LTM Q3 2024 net revenues reached $781M with an adjusted EBITDA margin of 14.3% and backlog of $1.044B.

• Market capitalization grew 236% from $286M in 2016 to $962M in LTM Q3 2024; enterprise value increased 163% to $1.18B.

• Revenue and EBITDA margins have improved, with a backlog still weighted toward defense.

• Maintains a diverse customer base as a tier one supplier, with strengths in both electronic and structural systems.

Vision 2027 Strategy and Growth Outlook

• Vision 2027 targets net revenues of $950M–$1B and an 18% EBITDA margin by 2027, with a business mix of 55–60% defense and 40–45% commercial aerospace.

• Aftermarket revenue mix targeted to rise from ~10% in 2022 to 15% by 2027, supporting recurring revenue streams.

• Engineered products expected to surpass 25% of revenue by 2027, up from 9% in 2017.

• Strategy includes scaling commercial aerospace and defense, strategic acquisitions, and facility consolidations.

• Forward-looking statements highlight expectations for platform build rates, M&A activity, and defense prime relationships through 2027.

Operations, Cost Management, and Geographic Footprint

• Facility consolidation and low-cost footprint expansion, especially in Mexico, are projected to yield $11–13M in annual savings.

• 96% of revenue is U.S.-based, with a small but productive operation in Mexico.

• Mexico offers about 30% higher productivity, mainly from labor savings, but only modestly impacts margin targets.

• Facility consolidation in California and Berryville has been a major margin driver.

• Ongoing cost management includes moving work to lower-cost locations and driving productivity improvements.