Richard Evans's questions to HAYN leadership • Q4 2023
Question
Asked about the mix of business within the chemical segment, the reasons for worsening nickel headwinds, the timeline for headwinds to abate, future backlog levels, and the company's exposure to Boeing versus Airbus.
Answer
The company explained its strategy of focusing on higher-value specialty alloys over commodity products. The worsening nickel headwind is due to a lag effect from manufacturing lead times, comparing current scrap values to higher input costs from months ago. They agreed a 6-month timeframe after prices stabilize is a fair estimate for headwinds to cease. The backlog is expected to remain high due to a strong aerospace cycle. Exposure is roughly even on engines, but more tilted to Boeing on airframes.