Howmet Aerospace (HWM) Jefferies Global Industrial Conference 2024 summary

Industry outlook and demand trends

• 2025 is expected to see increased demand for commercial aerospace products, with both Boeing and Airbus aiming to raise production rates.

• Airlines are seeking new aircraft for fuel efficiency and emissions targets, driving OEM and aftermarket demand.

• Running older aircraft longer is boosting spare parts demand, especially for modern engines like LEAP and GTF.

• The company anticipates providing a revenue outlook in November or possibly next year, depending on market clarity.

Supply chain management and internal planning

• Supply chain and labor management have been challenging due to volatile demand and production disruptions.

• Inventory and workforce planning are tightly managed to avoid excess commitments and maintain flexibility.

• A min-max system is used to meet legal obligations while minimizing inventory risk.

• Recruitment is expected to increase in 2025, with an estimated 1,000 new hires, depending on demand into 2026.

Engine business performance and technology

• Engine segment margins reached a record 31% in Q2, up from 22-23% in 2019, due to a more advanced product mix and unique technology.

• Military engine technologies are being adapted for commercial use, enhancing product robustness and value.

• Automation and process improvements have enabled complex part production at scale, supporting margin expansion.

• Long-term agreements with engine OEMs are in place, supporting organic growth and contracted investments.

• New capacity is expected to come online progressively through 2026, with some impact possible in late 2025.