Howmet Aerospace (HWM) Baird 2024 Global Industrials Conference summary

Industry outlook and production trends

• Aircraft production is expected to increase in 2025, though not as much as some forecasts suggest, with further improvements anticipated into 2026 and 2027.

• Supply chains are seen as capable of supporting higher production, and manufacturers are improving labor utilization and training.

• Backlogs remain large, and easing supply chains combined with operational improvements point to a positive industry trajectory.

Spares, aftermarket, and OEM mix

• Both spares demand and OEM production are set to rise, with spares growth driven by aging fleets and engine maintenance needs.

• Shop visits for newer engines are expected to increase over the next one to two decades, supporting long-term spares revenue.

• The spares weighting in revenue mix is likely to improve due to persistent demand.

Industrial gas turbines (IGT) and energy trends

• Data center expansion and AI are driving significant increases in electricity demand, boosting gas turbine blade demand.

• Gas turbines are expected to play a larger role in electricity generation, both in the US and Europe, due to grid constraints and LNG exports.

• The company is a major supplier to all leading turbine manufacturers and is expanding its global network.