Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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- Boeing CFO Brian West: OK on tariffs for now, backlogs and inventories help March 20, 2025
Hexcel Earnings: Returning to Pre-Pandemic Revenues, Ready for Rate Increases, but MAX Remains A Wild Card
By Chris Sloan
January 23, 2025 © Leeham News: Composites supplier Hexcel is ready, willing, and able to return to pre-pandemic production, profitability, and revenue benchmarks but can only move as quickly as its OEM clients up the supplier chain.
“While OEM production (rates) are increasing, recent history has clearly shown that ramping up aircraft build rates continues to be a challenging process. (OEM) Production levels in 2024 were only 68% of 2018 levels. Hexcel is close to about 80% as compared to 2019 levels,” concedes Hexcel’s Chairman, CEO, and President Tom Gentile.
Though the company forecasts its core commercial aviation aerospace sales to advance by high single-digits, the Gentile waves cautionary flags. “Because of the continued [start, stop, start ] production environment, uncertainty remains in relation to the outlook for our 2025 performance. Sales growth may be impacted by potential delays to the recovery in production rates.” The choppy rates have obvious knock-on effects on revenue and operating leverage – ultimately weighing down profit margins that will likely need until 2026 or 2027 to recover to pre-pandemic levels. “Daunting” and “Maximum” are words Gentile uses to describe labor, materials, and utilities inflation over the last 3-4 years. Not one to waste a good crisis, Hexcel is pledging to use this to its advantage. “It gives us time to work on our productivity and future factory initiatives to drive productivity to offset some of the (inflationary environment).”
The good news/bad news combination of bullish demand and constrained supply—a refrain common to all of commercial aviation—echoes through the halls of Hexcel.
Shipset Status: Program by Program Updates Offer Clues To OEM Rates
Hexcel is well positioned as the shift to composites and next generation materials, continues its unabated march forward. A350 and 787 generate the most revenue and production, obviously due to their sheer fuselage size and greater use of composites. But, the narrow-body programs hold their own with volume. The uneven production rate curve is causing consternation in the program production rate updates from Hexcel. With OEM’s guiding production rate increases, stability continues to bedevil every airframe model line and their suppliers, none more so than the MAX.
Hexcel reports increased demand for aerospace composites as industry rebounds
By Bryan Corliss
Jan. 27, 2023, © Leeham News: Composites materials supplier Hexcel Corp. reported that its fourth-quarter sales were up 29% over the same period last year, driven by increased demand from all across the aerospace industry.
“Virtually every platform from narrowbody to widebody to business jets is growing, and the customers continue to ramp as fast as the supply chain allows,” CEO Nick Stanage said.
As international air travel recovers, airlines are seeking more widebody jets, which is good for Hexcel, because newer widebodies have higher percentages of composite materials, Hexcel executives told investment analysts. However, new business jet and military aircraft models also incorporate higher percentages of composites.
Stanage and Hexcel CFO Patrick Winterlich noted that their company is not immune from the inflation and labor issues facing most manufacturers, but said they’re coping.
“You can’t give someone five years, three years, of experience in six months or nine months,” Stanage said. “We are working as hard and are focused as hard as we can on training and accelerating it.”
- Hexcel profits beat Wall Street expectations
- Analysts: Can Hexcel match Boeing ramp-up?
- CEO: Commercial aerospace can withstand recession
Read more
HOTR: Hexcel gives glimpse at 2030 airplane
By the Leeham News Team
July 28, 2022, © Leeham News: Hexcel, a major supplier of composites to Airbus and Boeing, gave a hint of things to come when the next generation narrowbody airplane is developed for late this decade or early next decade.
In its 2Q2022 earnings call, Hexcel forecast that the next-gen airplane may be comprised of more than 60% of composites and thermoplastics. (Figure 1.) This compares with about 50% for the Airbus A350 and Boeing 787. It compares with about 5% of the narrow- and widebody airplanes of the 1970s and 1980s.
Upping composite content in single-aisle airplanes and achieving economic operating gains is more difficult than the gains for widebody aircraft. The weight savings and stage lengths simply don’t match the benefits achieved on widebodies.
Nevertheless, Hexcel’s presentation presents an intriguing look into the future.