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    Howmet Aerospace Inc (HWM)

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    Business Description

    Howmet Aerospace is a global leader in lightweight metals engineering and manufacturing, specializing in advanced engineered solutions for the aerospace and transportation industries. The company operates in four primary segments, offering products such as investment castings, seamless rolled rings, fastening systems, titanium and aluminum components, and aluminum wheels . These products serve critical roles in the aerospace and transportation sectors, contributing significantly to Howmet's revenue, with the aerospace sector being the largest contributor .

    1. Engine Products - Provides investment castings and seamless rolled rings for aircraft engines and industrial gas turbines, significantly contributing to the aerospace market .
    2. Fastening Systems - Produces aerospace and industrial fastening systems, essential for aircraft and commercial transportation vehicles .
    3. Engineered Structures - Offers titanium and aluminum components for aerospace and defense applications .
    4. Forged Wheels - Manufactures aluminum wheels for commercial transportation, known for their strength and lightweight properties .

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    John C. PlantExecutive Chairman and Chief Executive OfficerOctober 14, 2021John C. Plant is the Executive Chairman and Chief Executive Officer of Howmet Aerospace Inc. He was appointed as CEO effective October 14, 2021. Previously, he served as Co-CEO from April 2020 to October 2021. He has been the Chairman of Howmet's Board since October 2017 and a member since February 2016 .
    Ken GiacobbeExecutive Vice President and Chief Financial OfficerNovember 1, 2016Ken Giacobbe is the Executive Vice President and Chief Financial Officer of Howmet Aerospace Inc. He joined Howmet in 2004 and has held various finance roles, becoming CFO of the Engineered Products and Solutions segment from January 2013 until October 2016 .
    Lola F. LinExecutive Vice President, Chief Legal and Compliance Officer, and SecretaryN/AThe documents do not provide specific details on the start date for Lola F. Lin in her current role. However, she is mentioned in documents from 2023 and 2024, indicating her active role during these periods .
    Neil E. MarchukExecutive Vice President, Chief Human Resources Officer, and Interim President, Engineered StructuresMarch 1, 2019Neil E. Marchuk is the Executive Vice President, Chief Human Resources Officer, and Interim President, Engineered Structures at Howmet Aerospace. He was elected to this position effective March 1, 2019. Prior to joining Howmet, he served as Executive Vice President and Chief Human Resources Officer at Adient .
    Michael N. ChanatryVice President and Chief Commercial OfficerMay 16, 2018Michael N. Chanatry is the Vice President and Chief Commercial Officer at Howmet Aerospace. He was elected to this position effective May 16, 2018. Before joining Howmet, he held various leadership roles at General Electric, including Vice President of Supply Chain for GE's Power Division .
    Barbara L. ShultzVice President and ControllerMay 25, 2021Barbara L. Shultz serves as the Vice President and Controller at Howmet Aerospace Inc. She was elected to this position effective May 25, 2021. She joined Howmet in 2005 and has held various financial accounting roles, including Director of Finance for the Alcoa Wheel and Transportation Products business .

    Questions to Ask Management

    1. Given that aftermarket revenues have increased from 11% in 2019 to 17% in 2024 and are expected to exceed 20% in the next few years, what specific strategies are you implementing to sustain this growth while mitigating risks associated with potential fluctuations in spares demand?

    2. With the introduction of the new high-pressure turbine blade for the LEAP-1A, how do you anticipate this will impact your pricing structure and production efficiency, and what challenges might arise in scaling up production to meet both OEM and aftermarket demand?

    3. Considering the expected reacceleration in incremental margins in the fourth quarter, can you provide more detail on the drivers of this improvement and discuss the sustainability of these margin levels given the uncertainties and costs associated with hiring and training new employees next year?

    4. Despite external forecasts predicting higher aircraft production rates for 2025, you've tempered your expectations due to factors like the gradual restart of Boeing 737 assembly lines and supply chain impacts at Airbus; could you elaborate on these factors and how they might affect your growth targets?

    5. Even with the resumption of F-35 deliveries and expected growth in defense aerospace, your forecast for defense revenue growth remains at mid-single digits; what barriers are preventing higher growth in this segment, and are there opportunities to accelerate this growth?

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateAugust 18, 2021
    End Date/DurationNo stated expiration
    Total additional amount$1,500 million
    Remaining authorization amount$2,297 million (as of October 31, 2024)
    DetailsThe program was increased by an additional $2,000 million on July 30, 2024. The program may be suspended, modified, or terminated at any time without prior notice.

    Debt Maturity Schedule

    YearAmount Due (in millions)Debt TypeInterest Rate (%)% of Total Debt
    2026200 USD Term Loan Facility5.795 5.9% = (200 / 3,394) * 100
    2026208 JPY Term Loan Facility2.044 6.1% = (208 / 3,394) * 100
    2027625 5.900% Notes5.900 18.4% = (625 / 3,394) * 100
    2028300 6.750% Bonds6.750 8.8% = (300 / 3,394) * 100
    2029700 3.000% Notes3.000 20.6% = (700 / 3,394) * 100
    2031500 4.850% Notes (Euro liability)3.720 14.7% = (500 / 3,394) * 100
    2037625 5.950% Notes5.950 18.4% = (625 / 3,394) * 100
    2042250 4.750% Iowa Finance Authority Loan4.750 7.4% = (250 / 3,394) * 100

    Competitors

    Competitors mentioned in the company's latest 10K filing.

    • Berkshire Hathaway Inc.: Through its acquisition of Precision Castparts Corporation, competes in titanium and titanium-based alloys, precision forgings, seamless rolled rings, investment castings, including airfoils, and aerospace fasteners .
    • VSMPO (Russia): Competes in titanium and titanium-based alloys and precision forgings .
    • Allegheny Technologies, Inc.: High-Performance Materials & Components segment competes in titanium and titanium-based alloys and precision forgings .
    • Lisi Aerospace (France): Competes in aerospace fasteners .
    • Aubert & Duval (part of Eramet Group in France): Competes in precision forgings .
    • Doncasters Group Ltd. (U.K.): Competes in investment castings .
    • Consolidated Precision Products Corp.: Owned by Warburg Pincus and Berkshire Partners, competes in investment castings .
    • Weber Metals (part of Otto Fuchs): Competes in precision forgings .
    • Forgital and Frisa (Mexico): Compete in seamless rings .
    • Accuride Corporation: Competes in aluminum wheels in the commercial transportation industry .
    • Speedline (member of the Ronal Group): Competes in aluminum wheels in the commercial transportation industry .
    • Nippon Steel Corporation: Competes in aluminum wheels in the commercial transportation industry .
    • Dicastal: Competes in aluminum wheels in the commercial transportation industry .
    • Alux: Competes in aluminum wheels in the commercial transportation industry .
    • Wheels India Limited: Competes in aluminum wheels in the commercial transportation industry .

    Auditor

    NameStart DateEnd DateReason for Change
    PricewaterhouseCoopers LLP1950 PresentCurrent auditor