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24th January 2019, Stamford, CT

Strong 2018 for Hexcel, despite headwinds

Hexcel is a leader in advanced composites technology. © Hexcel

Hexcel is a leader in advanced composites technology. © Hexcel

Hexcel reports full year 2018 sales of $2,189.1 million – an increase of 10.3% in constant currency compared to 2017.

Sales for the company’s Commercial Aerospace business were $1,525.0 million, up 8.1% in constant currency compared to 2017. Growth was driven by narrow-body build rate and shipset value increases, and the Airbus A350 and Boeing 787 programmes.

Sales for Other Commercial Aerospace, which include regional and business aircraft customers, increased approximately 23%, driven by higher business jet sales.

Space and Defense sales for the year were $369.9 million, up 6.8% with strong sales across a broad range of rotorcraft programmes as well as the F-35 Joint Strike Fighter driving the increase and more than offsetting the previously announced Airbus A400M production rate reductions.

Total Industrial sales for the year of $294.2 million increased 29.3% compared to 2017.

The launch of a number of new wind turbine platforms utilising the latest generation Hexcel composites led to an increase in wind energy sales of approximately 67% in constant currency compared to 2017. The company’s key wind energy customer, Vestas, has a record backlog.

Gross margin for the year was 26.5% compared to 28% for 2017. Through the company’s focus on operational excellence, previously communicated headwinds were partially mitigated. Those headwinds, which impacted gross margin throughout the year, included higher acrylonitrile costs, an indirect result of higher oil prices, wind energy resin prices and tariffs. The Company also incurred start-up costs for a new PAN and carbon fibre facility in France, which is now aerospace qualified and providing needed additional capacity.

“As I look to 2019, the fundamentals of our business are extremely positive,” said Hexcel chairman, CEO and president Nick Stanage. “We are forecasting double digit sales growth driven by strong commercial aerospace programmes, continued growth in the F35 Joint Strike Fighter build rate plus another double digit step up in demand for our wind energy products. The majority of the 2018 headwinds are now behind us, leading to solid incremental margins. I am confident that we will deliver our 2019 guidance for turnover of between $2.375 billion and $2.475 billion this year.”

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