Slide 1: Second Quarter 2024 Earnings Call
Second Quarter 2024 Earnings Call John Plant: Executive Chairman and Chief Executive Officer Ken Giacobbe: EVP and Chief Financial Officer July 30, 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: Q2 2024 Highlights
Q2 2024 Highlights Revenue and Profitability Excluding Special Items1,2 Q2 2023 Q1 2024 Q2 2024 Q2 YoY Revenue $1.648B $1.824B $1.880B +14% Adj EBITDA1 $368M $437M $483M +31% Adj EBITDA Margin1 22.3% 24.0% 25.7% +340 bps Adj Operating Income1 $301M $370M $414M +38% Adj Operating Income Margin1 18.3%
Slide 5: Q2 2024 Revenue Up 14% YoY, Commercial Aerospace Up 27% YoY
Q2 2024 Revenue Up 14% YoY, Commercial Aerospace Up 27% YoY Revenue by Market Revenue by Market YoY Sequential (% of total) (% change) Commercial Aerospace 52% ~60% in 2019 Commercial Aerospace 27% 5% Defense Aerospace 11% 4% $1.880B Total Commercial Transportation (4%) (2%) Industrial & 14% Revenue
Slide 6: Q2 2024: Revenue Up 14% YoY, Adj EBITDA Margin 25.7%, Adj EPS Up 52% YoY
Q2 2024: Revenue Up 14% YoY, Adj EBITDA Margin1 25.7%, Adj EPS2 Up 52% YoY ▪ Exceeded high-end of guidance on Revenue, Adj EBITDA1, Adj EBITDA Margin1 and Adj Earnings Per Share2 Enhanced ▪ Revenue up 14% YoY, driven by Commercial Aerospace up 27% Profitability ▪ Adj EBITDA1 of $483M, up 31% YoY. Ad
Slide 7: Engine Products: Revenue Up 14% Q2 YoY; Record Adj EBITDA Margin 31.3%
Engine Products: Revenue Up 14% Q2 YoY; Record Adj EBITDA Margin 31.3% Q2 Revenue by Market +14% (% of total) $885M $933M $821M $798M $852M Industrial & Other 22% 3rd Party Revenue 57% Commercial Aerospace Defense Aerospace 21% Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q2 2024 YoY +31% Segment $292M +
Slide 8: Fastening Systems: Revenue Up 20% Q2 YoY; Adj EBITDA Margin 25.6%
Fastening Systems: Revenue Up 20% Q2 YoY; Adj EBITDA Margin 25.6% Q2 Revenue by Market +20% (% of total) $389M $394M $348M $360M Industrial & Other $329M 10% 3rd Party Revenue Commercial Transportation 17% 64% Commercial Aerospace 9% Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Defense Aerospace Q2 2024
Slide 9: Engineered Structures: Revenue Up 38% Q2 YoY; Adj EBITDA Margin 14.5%
Engineered Structures: Revenue Up 38% Q2 YoY; Adj EBITDA Margin 14.5% Q2 Revenue by Market +38% (% of total) $262M $275M $227M $244M Industrial & Other $200M 5% 3rd Party Revenue Defense Aerospace 22% 73% Commercial Aerospace Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q2 2024 YoY +100% Segment $40M + C
Slide 10: Forged Wheels: Volume Down 4% Q2 YoY; Adj EBITDA Margin 27.0%
Forged Wheels: Volume Down 4% Q2 YoY; Adj EBITDA Margin 27.0% Q2 Revenue by Region -7% (% of total) $298M $285M $288M $278M $275M Other 15% 3rd Party Revenue 56% North America Europe 29% Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q2 2024 YoY -7% - Volume down 4% Segment $81M $77M $82M $75M $72M Adjuste
Slide 11: 2024 Guidance
2024 Guidance Q3 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 $1.845B $1.855B $1.865B $7.400B $7.440B $7.480B Baseline Change +$140M ▪ FY 2024 Adj EBITDA1 up ~24% vs. FY 2023 Adj EBITDA1 $460M $465M $470M $1.8
Slide 12: Summary
Summary ▪ Revenue of ~$1.88B, up 14% YoY, driven by Commercial Aerospace up 27% Revenue / ▪ Adj EBITDA1 of $483M, up 31% YoY Profit Q2 2024 ▪ Adj EBITDA Margin1 of 25.7%, up ~340 bps YoY ▪ Adj Earnings Per Share2 of $0.67, up 52% YoY Cash ▪ Record Q2 Free Cash Flow3 of $342M Generation / ▪ Repurchas
Slide 13: rr) HOWMET
rr) HOWMET Lw.JJ AEROSPACE
Slide 14: Appendix
Appendix FP HOWMET UILJ AEROSPACE
Slide 15: 2024 Assumptions
2024 Assumptions Full Year 2024 2024 Comments Corporate Overhead1 ~$95M ▪ Included in Adj EBITDA1 Previous: ~$83M Depreciation and Amortization ~$270M Interest Expense ~$190M ▪ Excludes future potential debt issuance, breakage, and tender fees Previous: ~$200M Operational Tax Rate 21.0% – 22.0% ▪ Ca
Slide 16: Robust Liquidity; Each Debt Tower Below 2024 Free Cash Flow Expectations
Robust Liquidity; Each Debt Tower Below 2024 Free Cash Flow Expectations Debt ($M) ▪ In July 2024, Redeemed $205M of 2024 Notes with Cash on Hand FCF ($M)1 ▪ In Q2 2024, Debt Reduction of $23M ▪ Combined Actions Drive Annualized Interest Expense savings of ~$12M 2024 FCF ▪ All Debt at Fixed Rates an
Slide 17: Reconciliation of Net Income and Diluted EPS Excluding Special Items
Reconciliation of Net Income and Diluted EPS Excluding Special Items ($ in millions, except per-share amounts) Q2 2023 Q1 2024 Q2 2024 YTD 2024 Net income $193 $243 $266 $509 Diluted EPS $0.46 $0.59 $0.65 $1.23 Special items: Restructuring and other charges(1) $3 $— $22 $22 Plant fire reimbursements
Slide 18: Reconciliation of Operational Tax Rate
Reconciliation of Operational Tax Rate Operational tax rate is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews the operating results of the Company excluding the impacts of Special items. There can be no assurances that additi
Slide 19: Calculation of Segment Markets Revenue
Calculation of Segment Markets Revenue Engine Fastening Engineered Forged ($ in millions) Products Systems Structures Wheels Total Segment Second quarter ended June 30, 2023 Aerospace - Commercial $446 $184 $141 $— $771 Aerospace - Defense $174 $46 $42 $— $262 Commercial Transportation $— $62 $— $29
Slide 20: Calculation of Segment Information
Calculation of Segment Information ($ in millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Engine Products Third-party sales $ 795 $ 821 $ 798 $ 852 $ 3,266 $ 885 $ 933 Inter-segment sales $ 2 $ 5 $ 5 $ 1 $ 13 $ 2 $ 1 Provision for depreciation and amortization $ 32 $ 32 $ 33 $ 33 $
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 Engineered Structures Third-party sales $ 207 $ 200 $ 227 $ 244 $ 878 $ 262 $ 275 Inter-segment sales $ — $ 1 $ — $ 2 $ 3 $ 1 $ 3 Provision for depreciation and amortization $ 12 $
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 Third-party sales – Engine Products $795 $821 $798 $852 $3,266 $885 $933 Third-party sales – Fastening Systems $312 $329 $348 $360 $1,349 $389 $394 Third-party sale
Slide 23: Reconciliation of Total Segment Adj. EBITDA to Income Before Income Taxes
Reconciliation of Total Segment Adj. EBITDA to Income Before Income Taxes ($ in millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Income before income taxes $220 $243 $242 $270 $975 $303 $334 Loss on debt redemption 1 — — 1 2 — — Interest expense 57 55 54 52 218 49 49 Other expense (
Slide 24: Reconciliation of Adj. Corporate Exp. Excluding Depreciation and Special Items
Reconciliation of Adj. Corporate Exp. Excluding Depreciation and Special Items ($ in millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Corporate expense $29 $34 $24 $12 $99 $26 $21 Provision for depreciation and amortization 5 1 1 3 10 2 2 Adjusted Corporate expense excluding depreci
Slide 25: Reconciliation of Adj. EBITDA and Adj. EBITDA Margin Excluding Special Items and Incremental Margin
Reconciliation of Adj. EBITDA and Adj. EBITDA Margin Excluding Special Items and Incremental Margin ($ in millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Third-party sales $1,603 $1,648 $1,658 $1,731 $6,640 $1,824 $1,880 Operating income $285 $285 $307 $326 $1,203 $369 $398 Operati
Slide 26: Reconciliation of Adj. Operating Income and Margin Both Excluding Special Items
Reconciliation of Adj. Operating Income and Margin Both Excluding Special Items ($ in millions) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Third-party sales $1,603 $1,648 $1,658 $1,731 $6,640 $1,824 $1,880 Operating income $285 $285 $307 $326 $1,203 $369 $398 Operating income margin 17.
Slide 27: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow ($ in millions) Q1 2024 Q2 2024 YTD 2024 Cash provided from operations $177 $397 $574 Capital expenditures (82) (55) (137) Free cash flow $95 $342 $437 The Accounts Receivable Securitization program remains unchanged at $250 outstanding. Free cash flow is a non-GAAP
Slide 28: Reconciliation of Net Debt and Net Debt to Adjusted EBITDA Excluding Special Items
Reconciliation of Net Debt and Net Debt to Adjusted EBITDA Excluding Special Items ($ in millions) Trailing-12 months ended March 31, 2024 June 30, 2024 Net income $860 $933 Add: Provision for income taxes $198 216 Other expense, net 18 46 Loss on debt redemption 1 1 Interest expense, net 210 204 Re
Slide 29: rr) HOWMET
rr) HOWMET Lw.JJ AEROSPACE