Slide 1: Third Quarter 2024 Earnings Call
Third Quarter 2024 Earnings Call John Plant: Executive Chairman and Chief Executive Officer Ken Giacobbe: EVP and Chief Financial Officer November 6, 2024
Slide 2: Important Information
Important Information Forward–Looking Statements This presentation contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those
Slide 3: Important Information (continued)
Important Information (continued) Non-GAAP Financial Measures Some of the information included in this presentation is derived from Howmet Aerospace’s consolidated financial information but is not presented in Howmet Aerospace’s financial statements prepared in accordance with accounting principles
Slide 4: Q3 2024 Highlights
Q3 2024 Highlights Revenue and Profitability Excluding Special Items1,2 Q3 2023 Q2 2024 Q3 2024 Q3 YoY Revenue $1.658B $1.880B $1.835B +11% Adj EBITDA1 $382M $483M $487M +27% Adj EBITDA Margin1 23.0% 25.7% 26.5% +350 bps Adj Operating Income1 $314M $414M $419M +33% Adj Operating Income Margin1 18.9%
Slide 5: Q3 2024 Revenue Up 11% YoY, Commercial Aerospace Up 17% YoY
Q3 2024 Revenue Up 11% YoY, Commercial Aerospace Up 17% YoY Revenue by Market Revenue by Market YoY Sequential (% of total) (% change) Commercial Aerospace 52% Commercial Aerospace 17% (2%) Defense Aerospace 15% Flat $1.835B Total Commercial Transportation (12%) (10%) Industrial & 15% Revenue Other
Slide 6: Q3 2024: Revenue Up 11% YoY, Adj EBITDA Margin 26.5%, Adj EPS Up 54% YoY
Q3 2024: Revenue Up 11% YoY, Adj EBITDA Margin1 26.5%, Adj EPS2 Up 54% YoY ▪ Exceeded High-End of Guidance on Adj EBITDA1, Adj EBITDA Margin1 and Adj Earnings Per Share2 Enhanced ▪ Revenue up 11% YoY, driven by Commercial Aerospace up 17%, Commercial Transportation down 12% Profitability ▪ Adj EBITD
Slide 7: Engine Products: Revenue Up 18% Q3 YoY; Record Adj EBITDA Margin 32.5%
Engine Products: Revenue Up 18% Q3 YoY; Record Adj EBITDA Margin 32.5% Q3 Revenue by Market +18% (% of total) $885M $933M $945M $798M $852M Industrial & Other 23% 3rd Party Revenue 57% Commercial Aerospace Defense Aerospace 20% Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q3 2024 YoY +40% Segment $292M $
Slide 8: Fastening Systems: Revenue Up 13% Q3 YoY; Adj EBITDA Margin 26.0%
Fastening Systems: Revenue Up 13% Q3 YoY; Adj EBITDA Margin 26.0% Q3 Revenue by Market +13% (% of total) $389M $394M $392M $348M $360M Industrial & Other 10% 3rd Party Revenue Commercial Transportation 16% 63% Commercial Aerospace 11% Defense Aerospace Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q3 2024
Slide 9: Engineered Structures: Revenue Up 11% Q3 YoY; Adj EBITDA Margin 15.0%
Engineered Structures: Revenue Up 11% Q3 YoY; Adj EBITDA Margin 15.0% Q3 Revenue by Market +11% (% of total) $262M $275M $244M $253M Industrial & Other $227M 5% 3rd Party Revenue Defense Aerospace 23% 72% Commercial Aerospace Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q3 2024 YoY +27% Segment $40M $38M
Slide 10: Forged Wheels: Revenue Down 14% Q3 YoY; Adj EBITDA Margin 26.1%
Forged Wheels: Revenue Down 14% Q3 YoY; Adj EBITDA Margin 26.1% Q3 Revenue by Region -14% (% of total) $285M $275M $288M $278M $245M Other 15% 3rd Party Revenue 58% North America Europe 27% Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q3 2024 YoY -17% Segment $82M - Volume Down 13% $77M $72M $75M Adjuste
Slide 11: 2024 Guidance
2024 Guidance Q4 2024 Guidance FY 2024 Guidance What we expect in 2024 Low Baseline High Low Baseline High ▪ FY 2024 Revenue up ~12% vs. FY 2023 Revenue $1.850B $1.870B $1.890B $7.390B $7.410B $7.430B Baseline Change ($30M) ▪ FY 2024 Adj EBITDA1 up ~26% vs. FY 2023 Adj EBITDA1 $478M $488M $498M $1.8
Slide 12: Summary
Summary ▪ Revenue of ~$1.84B, up 11% YoY, driven by Comm Aerospace up 17%, Comm Transportation down 12% Revenue / ▪ Adj EBITDA1 of $487M, up 27% YoY Profit Q3 2024 ▪ Adj EBITDA Margin1 of 26.5%, up ~350 bps YoY ▪ Adj Earnings Per Share2 of $0.71, up 54% YoY ▪ Record Q3 Free Cash Flow3 of $162M Cash
Slide 13: rr) HOWMET
rr) HOWMET Lw.J AEROSPACE
Slide 14: Appendix
Appendix fri HOWMET UELJ AEROSPACE
Slide 15: 2024 Assumptions
2024 Assumptions Full Year 2024 2024 Comments Corporate Overhead1 ~$95M ▪ Included in Adj EBITDA1 Depreciation and Amortization ~$270M Interest Expense ~$185M ▪ Excludes future potential debt issuance, breakage, and tender fees Previous: ~$190M Operational Tax Rate 20.5% – 21.5% ▪ Cash Tax Rate ~15%
Slide 16: Robust Liquidity; Each Debt Tower Below 2024 Free Cash Flow Expectations
Robust Liquidity; Each Debt Tower Below 2024 Free Cash Flow Expectations ▪ In August 2024, Redeemed $577M of 2025 Notes with Cash on Hand, Issued $500M new notes due 2031 Debt ($M) ▪ In July 2024, Redeemed $205M of 2024 Notes with Cash on Hand FCF ($M)1 ▪ In May / June 2024, Repurchased $23M of 2025
Slide 17: Reconciliation of Net Income and Diluted EPS Excluding Special Items
Reconciliation of Net Income and Diluted EPS Excluding Special Items ($ in millions, except per-share amounts) Q3 2023 Q2 2024 Q3 2024 Net income $188 $266 $332 Diluted Earnings Per Share ("EPS") $0.45 $0.65 $0.81 Special items: Restructuring and other charges (credits)(1) $4 $22 $(1) Loss on debt r
Slide 18: Reconciliation of Operational Tax Rate
Reconciliation of Operational Tax Rate ($ in millions) Q3 2024 YTD 2024 Effective tax rate, Special items(1)(2) Operational tax Effective tax rate, Special items(1)(2) Operational tax as reported rate, as adjusted as reported rate, as adjusted Income before income taxes $354 $4 $358 $991 $21 $1,012
Slide 19: Calculation of Segment Markets Revenue
Calculation of Segment Markets Revenue Engine Fastening Engineered Forged ($ in millions) Products Systems Structures Wheels Total Segment Q3 2023 Aerospace - Commercial $446 $209 $165 $— $820 Aerospace - Defense $165 $41 $45 $— $251 Commercial Transportation $— $67 $— $285 $352 Industrial and Other
Slide 20: Calculation of Segment Information
Calculation of Segment Information ($ in millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Engine Products Third-party sales $ 795 $ 821 $ 798 $ 852 $ 3,266 $ 885 $ 933 $ 945 Inter-segment sales $ 2 $ 5 $ 5 $ 1 $ 13 $ 2 $ 1 $ 3 Provision for depreciation and amortization $ 32
Slide 21: Calculation of Segment Information (continued)
Calculation of Segment Information (continued) ($ in millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Engineered Structures Third-party sales $ 207 $ 200 $ 227 $ 244 $ 878 $ 262 $ 275 $ 253 Inter-segment sales $ — $ 1 $ — $ 2 $ 3 $ 1 $ 3 $ 3 Provision for depreciation and am
Slide 22: Calculation of Total Segment Adj. EBITDA and Adj. EBITDA Margin
Calculation of Total Segment Adj. EBITDA and Adj. EBITDA Margin ($ in millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Third-party sales – Engine Products $795 $821 $798 $852 $3,266 $885 $933 $945 Third-party sales – Fastening Systems $312 $329 $348 $360 $1,349 $389 $394 $39
Slide 23: Reconciliation of Total Segment Adj. EBITDA to Income Before Income Taxes
Reconciliation of Total Segment Adj. EBITDA to Income Before Income Taxes ($ in millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Income before income taxes $220 $243 $242 $270 $975 $303 $334 $354 Loss on debt redemption 1 — — 1 2 — — 6 Interest expense 57 55 54 52 218 49 49
Slide 24: Reconciliation of Adj. Corporate Exp. Excluding Depreciation and Special Items
Reconciliation of Adj. Corporate Exp. Excluding Depreciation and Special Items ($ in millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Corporate expense $29 $34 $24 $12 $99 $26 $21 $25 Provision for depreciation and amortization 5 1 1 3 10 2 2 2 Adjusted Corporate expense exc
Slide 25: Special Items and Incremental Margin
Reconciliation of Adj. EBITDA and Adj. EBITDA Margin Excluding Special Items and Incremental Margin ($ in millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Third-party sales $1,603 $1,648 $1,658 $1,731 $6,640 $1,824 $1,880 $1,835 Operating income $285 $285 $307 $326 $1,203 $3
Slide 26: Reconciliation of Adj. Operating Income and Margin Both Excluding Special Items
Reconciliation of Adj. Operating Income and Margin Both Excluding Special Items ($ in millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Third-party sales $1,603 $1,648 $1,658 $1,731 $6,640 $1,824 $1,880 $1,835 Operating income $285 $285 $307 $326 $1,203 $369 $398 $421 Operati
Slide 27: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow ($ in millions) Q1 2024 Q2 2024 Q3 2024 YTD 2024 Cash provided from operations $177 $397 $244 $818 Capital expenditures (82) (55) (82) (219) Free cash flow $95 $342 $162 $599 The Accounts Receivable Securitization program remains unchanged at $250 outstanding. Free c
Slide 28: Reconciliation of Net Debt and Net Debt to Adjusted EBITDA
Reconciliation of Net Debt and Net Debt to Adjusted EBITDA Excluding Special Items ($ in millions) Trailing-12 months ended June 30, 2024 September 30, 2024 Net income $933 $1,077 Add: Provision for income taxes 216 184 Other expense, net 46 52 Loss on debt redemption 1 7 Interest expense, net 204 1
Slide 29: rr) HOWMET
rr) HOWMET Lw.J AEROSPACE