october 2019 · 2019-10-22 · certain statements contained in this presentation constitute...

1 ©2019 Hexcel. All rights reserved.

October 2019


Certain statements contained in this presentation constitute “forward-looking

statements” within the meaning of the Private Securities Litigation Reform Act of

1995. Such statements that are not of historical fact constitute “forward-looking

statements” and accordingly, involve estimates, assumptions, judgments and

uncertainties. There are a number of factors that could cause actual results or

outcomes to differ materially from those addressed in the forward-looking

statements. Such factors are detailed in the Forward Looking Statements and Risk

Factors sections of the Company’s Annual Report on Form 10-K for the fiscal year

ended December 31, 2018 and its third quarter 2019 quarterly report on Form 10-Q

filed with the Securities and Exchange Commission. We do not undertake an

obligation to update our forward-looking statements to reflect future events.

Risks,

Uncertainties

and Other

Factors with

Respect to

Forward-Looking

Statements

Disclaimer


ADVANCED COMPOSITES LEADERSHIP

Leading, sole source positions in key

markets with high barriers to entry

Excellent customer relationships

Increasing share of long-term growth markets

Long history of creating shareholder value

Sustainable competitive advantage

SALES | $2.4 billion*

• INNOVATIVE SOLUTIONS

• PROVEN EXECUTION

• STRONG SALES & EARNINGS GROWTH

• EXPANDING CASH GENERATION

* Last 12 months 30-Sep-2019


HXL – AT A GLANCEMarkets

* Lat 12-month sales thru 30-Sep-2019

Leader in expanding markets undergoing secular growth

Broadest aerospace composite solution portfolio globally− Intellectual property and manufacturing processes are

differentiators and barriers to entry

#1 in aerospace composites – by sales & capacity− Leveraging scale | Manufacturing in nine countries

Culture of continuous improvement and excellence

COMMERCIAL AEROSPACE

68%*

Wings, Fuselage

Secondary & Interior structures

Engines & Nacelles

SPACE & DEFENSE

18%*

Rotorcraft

Fixed Wing

Launchers & Satellites

INDUSTRIAL

14%*

Wind Energy

Automotive

Recreation, Marine & Other

Lightweighting for high

performance applications• Stronger and lighter than metals

• Superior life cycle costs to metals


We propel the future of flight, energy generation,

transportation and recreation through excellence in advanced material solutions

that create a better world for us all.

OUR HEXCEL

PURPOSE


UNRIVALED PRODUCT RANGEEverything from carbon fibers, reinforcement fabrics, and resins to prepregs, honeycomb core, tooling materials and more . . .

from raw materials to fly-away parts . . . vertical integration is a strength and a differentiator

Strong | stiff | lightweight | fatigue resistant | corrosion resistant

PANPolyacrylonitrile

precursor

REINFORCEMENTS

Aerospace primary and

secondary structures

GLASS

PREPREGS

Wind turbine blades

Aerospace secondary

structures

ENGINEERED

PRODUCTS

Structural assemblies

Machine/shaped core

Tooling system

CARBON PREPREGS

A350 fuselage and wings

GE90 fan blade

ADDITIVE

MANUFACTURING

Thermoplastic, carbon fiber

reinforced 3D printed parts

for Aerospace

HONEYCOMB

Rotorcraft blades

Aircraft flooring

Nacelle structures

Acousti-Cap®

Ca

rbo

n F

ibe

r &

Pre

pre

gs

CARBON FIBER

Continuous and Chopped

A320neo sharklets | F-35 wings | LEAP fan blades/case

Gla

ss P

rep

reg

s

Ho

ne

yc

om

b

En

gin

ee

red

Pro

du

cts


WE DELIVER WHAT OURCUSTOMERS WANTAdvanced composite solutions that are stronger, lighter

and tougher – optimizing total life cycle costs

Carbon fiber is 5x stronger than

aluminum

Carbon fiber is 30% lighter than

aluminum

Our products are tougher, stiffer

and more durable

Our products offer lower lifecycle

cost (operating & maintenance costs)


HEXCEL INNOVATION DRIVING GROWTHNew ideas, processes, and solutions leading the development of world-class products

ORGANIC GROWTH

Driven by Innovation

ACQUISITIONS

Strategic Business & Technology

INVESTMENTS

Joint Ventures & Collaborations

GROWING

INVESTMENT

IN R&T

BROAD AND

EXPANDING

PATENT

PORTFOLIO

UNIVERSITY COLLABORATIONS &

TECHNICAL CONSORTIUMS

PhD

PROGRAMS

1 2 3

Duxford, U.K.

Les Avenières,

France

Dublin, CA Salt Lake City, UT

Decatur, AL

January 2016October 2017

January 2019 December 2017

May 2016: InvestmentCarbon fiber recycling

July 2018: Joint VentureAerospace kitting services

March 2018: Strategic AllianceCarbon fiber reinforced thermoplastic tape

Microwave/radio frequency

absorbing materials

Aerospace additive

manufacturing

Next-generation aerospace

composite solutions

Non-crimp & multi-axial

composite fabrics


GROWING COMPOSITES

PENETRATION

Continued secular

penetration with

each succeeding

platform:

• Primary structure

• Secondary structure

• Engines and nacelles

Shipset values are

estimates and may

vary based on

production rates and

aircraft configurations.

10-15%

1980 2000 2010 2020 20301990

A330

$900K

777

$1M

A380

$3M+

A320

neo

$450K

737

MAX

$400K

A330

neo

$1.05M

787

$1.4MA350

$4.8M

777X

$1.5M

50%+

20%+

4-6%

767A310737

$300K

Replacement of

legacy aircraft:A320

$300K

60%+ ?

Today – Primary

structure composite

aircraft (i.e. A350 & 787)

are <5% of total global

commercial fleet

FSA

$TBD

?

NMA

$TBD

?

Next Generation

IM, thermoplastic, etc.

High Strength (HS)

Carbon Fiber Prepregs

Intermediate Modulus (IM)

Carbon Fiber PrepregsGlass Prepregs


COMMERCIAL AEROSPACECommercial Aviation | Engines/Nacelles | Other Commercial Aerospace

Growing composites secular penetration

Strong global demand – eight-year backlog (Airbus &

Boeing)

Growing build rates for narrow body programs;

increased shipset content for A320neo and B737 MAX

over legacy programs

$1,603

$1,215 $1,286

$1,429 $1,410

$ millions

Airbus and Boeing Other Commercial Aerospace

68%

2014 2015 2016 2017 2018

$1,525

LTM

Sept.

2019


0

2000

4000

6000

8000

10000

12000

14000

A220/320 single aisle 6,203

A330 twin aisle 278

A350 twin aisle 601

A380 twin-aisle 17

737 single aisle 4,592

747 twin-aisle 19

767 twin aisle 105

777, 777X twin aisle 433

787 twin aisle 556

Growing passenger traffic globally

supports strong aircraft demand

OEM BACKLOG | DEMAND FORECASTAirbus & Boeing backlog is worth more than $9 billion to Hexcel

Widebody

Single Aisle


SPACE & DEFENSERotorcraft | Fighters | Launch Vehicles | Transport

Well-positioned, diverse applications

Hexcel carbon fiber is the defense industry standard

Rotorcraft are ~40% of S&D sales

Hexcel content is significant on key programs such as

JSF F-35, A400M, V-22, CH-53K, Black Hawk & Wide

Chord Blades

ARC Technologies, acquired January 2019, is a

leader in microwave absorbing composites

$427$376

$337$322

$344

18%

$ millions

2014 2015 2016 2017 2018

$370

LTM

Sept.

2019


INDUSTRIALWind Energy | Automotive | Recreation | Infrastructure | Marine

Broad range of performance applications

Wind energy comprises ~60% of the total

• Strong growth in 2019

• Multi-year contract with Vestas

Automotive accelerating composite adoption

$322

$264

$238$253

$220

$ millions

14%

2014 2015 2016 2017 2018

$294

LTM

Sept.

2019


PROVEN

PERFORMANCE

Record results and

well positioned for

growth

$ millions, except EPS

ADJUSTED

OPERATING INCOME

SALES

$2,1

89

ADJUSTED

DILUTED EPS

TOTAL DEBT /

ADJUSTED EBITDAFREE CASH FLOW RETURN ON CAPITAL


2014 2015 2016 2017 2018 2019E2014 2015 2016 2017 2018 2019E

THE JOURNEY FROM CASH INVESTMENT TO CASH GENERATIONInvest in leading-edge technology → built assets to deliver future revenue growth → generate strong ROIC and growing free cash flow

On track to deliver $1 billion of free cash flow from 2016-2020

CAPEX FREE CASH FLOW

$5

8

$7

4

$1

51

$2

37

> $

25

0 e

stim

ate

d

($4

)

$1

70

-$

19

0

$1

79

$2

84$3

20

$305

$2

71


FINANCIAL GUIDANCE

Growing sales, expanding margins and significant free cash flow generation

Sales

$2.340 - $2.400 billion

Comm. Aerospace: High-single digit growth

Space & Defense: Double-digit growth

Industrial: Double-digit growth

Adjusted diluted

EPS

$3.43 – $3.53

Cap-Ex

$170 - $190 million

Free cash flow

>$250 million

Shareholder return

>50% of net income

2019 GUIDANCE

Sales (3-year: 2018-2021)

6% - 9% CAGR

Comm. Aerospace: 4% - 7% CAGR

Space & Defense: 11% - 13% CAGR

Industrial: 10%+ CAGR

Adjusted diluted

EPS (3-year: 2018-2021)

Double-digit CAGR EPS growth

Cap-Ex (3-year: 2019-2021)

$500 - $550 million

Free cash flow (5-year: 2019-2023)

$1.8 billion

Shareholder return>50% of net income

MID-TERM GUIDANCE

Sales growth• Secular penetration in growing markets

• Technology leadership supports adoption

EPS growth• Strong EPS growth > Sales growth

― Sustainable competitive advantage

― Operational Excellence

Free cash flow growth• Maximizing cash generation

• Growing strong ROIC


REASONS TO INVEST IN HEXCELInvesting in Innovation | Achieving Operational Excellence | Growing Shareholder Return

Unrivaled product portfolio

Investments in markets

with long-term growth

potential

Technology and

innovation for

sustained growth

Leadership

in Attractive

Markets

Culture of

Innovation

Operational

Excellence

Increasing

Shareholder

Value

Driving productivity

through optimized

performance

ROIC well above cost of capital

70% increase in quarterly

dividends since 2015

>50% of net income returned

to shareholders

Proven execution, strong earnings growth, exceptional cash generation

october 2019 · 2019-10-22 · certain statements contained in this presentation constitute...

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