Hexcel rolls with the punches
US industrial heavyweight Hexcel Corporation, which has a major composites operation in Duxford, has taken an anticipated financial battering in Q4 and the full year because of the coronavirus pandemic.
Chairman, CEO and President Nick Stanage said that, as expected, it had been “an unusual and tumultuous year.”
Q4 2020 sales were reduced to $295.8 million compared to $564.3m in Q4 2019. Full-year sales were down 36 per cent to $1,502m year-on-year. Liquidity remains strong at $875m with cash of $103m and an undrawn revolver balance of $772m at December 31.
Stanage said: “Fourth quarter revenue was in line with our expectations and consistent with our previous commentary that the third and fourth quarters of 2020, along with the first quarter of 2021, have been and are expected to be our most challenging quarters during this pandemic driven market downturn.
“Our cash management continued to be strong with Hexcel delivering $214 million of free cash flow for 2020, ensuring that our liquidity position remains robust.
“Our results clearly reflect an unusual and tumultuous year for our customers, our suppliers, and our employees who have remained laser-focused on managing through the challenges at hand.
“The Hexcel team has responded quickly and worked safely and efficiently through significant uncertainty. Employees have been challenged in ways we never imagined, yet their commitment to excellence and to our customers has never wavered with many relationships actually being strengthened through innovative ways of working.
“We continue to forecast stabilising demand as we move into the second quarter of 2021, with the inventory de-stocking process expected to be largely winding down and the potential for some narrowbody build rate recovery as we progress into the second half of the year.
“However, there is no room for complacency during this pandemic. A quick and successful rollout of the vaccines is crucial to a significant increase in airline passenger traffic, which will ultimately be the driver of demand for new, composite-rich aircraft.”
Stanage said the company would continue to tightly manage cash and costs and ensure it delivers performance targets. He felt the long-term prospects for the business remained good.
“The overall long-term demand for efficient aircraft and our advanced composites technology remains robust, and the potential for a significant upturn in 2022 and beyond continues to look positive,” he said.