Hexcel Corporation adds a prayer to the wing as it eyes flight back to growth
Wall Street-quoted Hexcel Corporation, whose European research hub is in Duxford in the Cambridge Cluster, believes it is on the cusp of a strong bounceback following the global pandemic.
It reports second quarter 2021 results including net sales of $320 million and adjusted diluted EPS of $0.08 per share.
Chairman, CEO and President Nick Stanage said it was “a positive quarter as we begin to return to top line growth. Sales in the second quarter were in line with our expectations and we delivered solid margin performance supported by favourable mix from higher fibre sales, which combined with planned reductions in our overhead cost base, resulted in 8 cents of adjusted EPS for the quarter.
“Looking forward, we expect the majority of commercial aerospace supply chain destocking to be largely behind us with a small amount remaining in the second half of the year.”
Stanage said the company was encouraged that airlines were placing new orders with the commercial aerospace OEMs, leading once again to a growing aircraft backlog as passenger numbers continue to increase steadily around the world.
“Our team is prepared and focused on ramping up production levels to meet growing customer demand, particularly as aircraft operators seek more aerodynamic, lightweight aircraft that improve fuel efficiency and reduce emissions,” he said.
“I am excited about the path ahead with significant Hexcel sales growth expected in 2022, 2023 and beyond as we drive strong incremental profits, generate robust positive cash flow and deliver increasing shareholder returns.”
Sales in the second quarter were well down on the $378.7m this time last year. Commercial Aerospace sales of $153.7m fell 24.6 per cent year-on-year.
Narrowbody demand is recovering with sales in the second quarter of 2021 reaching their highest level since the first quarter of 2020 when the pandemic was just beginning.
Sales to ‘Other Commercial Aerospace,’ which include regional and business aircraft, fell by 26.6 per cent. Business jets is the largest market within that segment and sales continued to recover sequentially in the second quarter.
Space & Defence sales of $106.9m decreased 1.4 per cent.
This nominal decrease reflected temporary pandemic-induced disruptions within select space and defence platforms globally, while overall the space and defence outlook remains robust, Stanage said.
Total Industrial sales of $59.7m were 10.1 per cent lower. Solid sales in other industrial markets – including automotive and recreation – helped offset some of the reduced wind energy sales.
Wind energy sales (the largest submarket in Industrial), experienced a decline of 43.9 per cent in constant currency compared to the second quarter of 2020, reflecting the continued lower demand and cessation of sales in North America.