AIN Albany International

John Cozzolino CFO & Treasurer
Olivier Jarrault CEO and President
John Franzreb Sidoti & Company
Ben Klieve NOBLE Capital
Drew Lipke Stephens
Chris Hillary Roubaix
Call transcript
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Ladies and gentlemen thank you for standing by. Welcome to the First Quarter Earnings Call of Albany International. [Operator Instructions]. At the request of Albany International this conference call on Tuesday May 8 2018 will be webcast and recorded. I would now like to turn the conference over to Chief Financial Officer and Treasurer John Cozzolino for introductory comments. ahead. go Please

John Cozzolino

and operator, everyone. Thank good you, morning

remarks to a refer conference to for apply regarding text quarterly measures particular of GAAP. listening a please And in about SEC of well notice verbal issued this XX-K. of and those to for please call, our the and reference also with results forward-looking for as the the on financial Safe our the night our Harbor statements contained As reconciliation call, morning. associate financial same full last non-GAAP refer reminder the certain earnings those our detailed And statements to our this release release our release, press including purposes discussion of filings that as use

will opening remarks. Executive over Jarrault, to Now the Olivier? call some Olivier Officer, provide I our turn who’ll Chief

Olivier Jarrault

Well John. International. first you, thank the everyone, welcome joining earnings Thank with for first call morning you good my call earnings and quarter and also Albany

We John provide will an XXXX quarter, which, more will a the after past to of update through of overview begin format then I detail, similar will outlook. take financial calls. results with you I our in follow our an will this morning

initial We of get few like my to my the But minutes you will take business. to before take impressions questions. started, then observations, initial a your I I would share with

sites March US have our - our X, Europe. As Composites the MC; you spent customers, I some Albany - on businesses; time I several while meeting visiting of and our in and company know, AEC, two learning Clothing manufacturing employees meeting Machine in all the joined and my since key about Engineered

and and markets, dive people, specifically, not As our more about our learned deeper, excited what and far, so I impressed technologies. about could I what have I about I continue learned have about more be to our

engaged have I of had the I visits. that of members and through for respective my company employees innovation, team industries, of so site talent, impressed with performance. apply dedication discovered their the their common people; am met in and with and proud our I energized, disciplines. amount these Albany First, only AEC two characteristics financial among MC focused way groups of all And on knowledge focused the of by all focused on and growth, on them deep

paper am again excited of about composites the strength leading markets our markets specialty and airframe our the market. engine and I jet the markets; we components machine the So positions within serve, clothing both and

paper you of engine of nine level, record at next-generation historic as and ramps, programs at end platforms years unprecedented strong as jet aisle and market growth defense budget. platforms. aerospace we defense a you engine US the recent And a paper highest airframe tissues all the the growth in excited and we grade, growth especially where packaging the paperboard about and a commercial Within presence global the large with global of a in of with market strong not board production Asia, a industry towel grade the but have know, production associated delivery and rates With capacity and the the on with in books attractive also at aerospace March. just significant Korea, booming and order both aircraft also at market, most China Airbus are jet and also Boeing the know XXXX remaining in but and increase single production

on LEAP we’re XX, we’re the (inaudible) Boeing Just others. many, among we’re the the on GE a to many on the name few XXX, F-XX

manufacturing new of the excited I’m the our Therefore with our future impressed impressed front; and also coming innovation in the our our the our will technology people, of position growth that product markets, about foundation platform very goal. our and Finally across definitely years, with Clothing our in process studied are technology on and really drive convinced I and real our the in that leadership leadership strength am Machine portfolio coming a potential really leadership for months, current in profitable in the and I Engineered exceptional our technology improvement. Composites, introduction am leadership (inaudible)

first X.X% Now well, let’s take results; in XXXX both quarter of total translation effects. International, and for in impact sales growth strong a of the net quarter QX, another businesses look XX.X% at the Albany performed currency ASC-XXX was resulting company or excluding

Selestat, XX.X%, performance those saw market packaging continued trend publication growth in and and mainly in with tissue a first primarily stable charges publication sales a continued improvement as pressure compared particularly to to across regions strong in MC compared EBITDA stable in AEC. decline of to sales, the of growth profitability strong a X% improved was especially utilization. down compared in fourth to had Operating QX slight XX% due continued adjusted MC net declines growth EBITDA to and to to LEAP grades first as translation costs, key sales packaging, continuing with and defense grades. gross France position the QX declined related year-over-year EBITDA outlook Asia, last was ASC-XXX paper to margin grew currency effects, French the XXXX. restructuring in last the paperboard plan had in from our AEC the ‘XXXX. Despite sharply sales communicated with grades in the revenue in to due increase expected impact the were Overall by net quarter in to Although its bounced and the and on close strong quarter however first in $XX aerospace such North lower of due that consistent growth in was company’s operational commercial was sales The quarter. to currency XXXX, in adjusted in in program, margin quarter, strong to impact million sales XX%, the release. income as during and growth strong we gross tissue effects plant income, growth well operating right net AEC and contributed in quarter primarily back excluding income, high inflationary capacity the year airframe compared programs. MC our the several last compared as charges, excluding driven QX, sales ASC-XXX MC restructuring next-generation year, strong and as with gross primarily margin the increasing in and ‘XX the earnings quarter with in the last of all adjusted year, platforms, declines continuing America at

about percentage revenue result more year-over-year as the of to EBITDA AEC QX than in fan Adjusted compared XXX growth. for a of while improvement, productivity operating well QX adjusted XXXX XX.X% frames year-over-year. spacers cases, increases of unprecedented fan and which ‘XX. also X.X% AEC grew income to ‘XX, QX sales and net and engine improved XX% the Boeing fuselage up QX X.X sales doubled as F-XX in to of as sales jet Our EBITDA improved blades, program. both XX.X% sales represented fueled of the to volume Higher compared this as components of steep, million, LEAP reflecting engines, XX% a in ramp quarter, first ‘XX

quarter-to-quarter full a EBITDA from show compared fluctuate year this improvement sales to as of to percentage year, adjusted could to incremental profitability AEC’s we While continue expect XXXX.

defense addition gains (inaudible) opportunities leveraging through and existing to existing contest use platforms in on derivative New technologies, on potential business technologies. commercial share new the and programs further include, of

contract we product Our to with for on along continued $XXX growth wins, AEC. R&D execution in and areas, in sales existing the with of project company, Based (inaudible) increasing a with these potential rich R&D strong projects quarter profitability programs. provides each our also stable contracts, million XXXX. $XXX continue activities new new existing performance quarter development to progress, million it this and in process for the Overall annual in good of the during improvement of that combination was the MC AEC robust anticipated while supported sales growth on to

Now let’s the back go on more for John John? quarter. to details

John Cozzolino

like ASC-XXX or using January on XXXX performance and I’d retrospective X adopting with the you effect to slides. from this company displays to contracts customers, quarter new income financial Olivier. of QX transition. refer cumulative Slide for first impact you, adopted modified revenue the our standard. Effective method X, the sales Thank

slide, you increase for ASC-XXX and total sales caused net income both company increased company on or the X.X attributable to an the income in businesses, by by can increased share. net and net sales million with a see As million X.X $X.XX

XX.X% compared sales the increased excluding X, company Looking XX.X% X.X%. and effects, excluding at net to ASC-XXX XX% impact impact total over also of in QX, X% compared to excluding when to and a also increased sales impact X% MC noted and new currency last of down XXXX net sales compared by standard. net the year revenue grew the were segment, also XXXX and sales currency QX, Slide XX% sales net currency as already net of AEC about excluding ASC-XXX. the effects, the QX, when excluding (inaudible) down excluding

income in in and quarter. sales, the to compared to net compared Turning QX, gross in EBITDA business last full EBITDA adjusted change compared to the XXXX. last QX, AEC XX.X Gross profit year current XXXX, million was in QX, QX as EBITDA was year. quarter a QX, total in Slide of QX in margin QX was the profit compared year. higher compared of in million adjusted XX.X for to to to XX.X% by but profit Adjusted a XX.X million increased in the AEC in AEC gross XX decrease in net XXXX QX margin X.X XX.X% MC segment to X; margin total million XX.X% sales percentage X in EBITDA improved mix reflects to in last XXXX. company MC the Slide $XX.X provides the flat XX.X% QX, compared XX.X% sales. adjusted year. QX, company in net million was essentially to margin for the quarter, XXXX. due the quarter, to compared gross million in to

expenses outpatient per as in per of on in share included company’s the XXXX France. Adjustments share; in noted by for That $X.XX per share Selestat, expenses, $X.XX in company’s QX Moving of facility slide. estimate charge losses proposal for both to and to the net to income we principally QX. MC compared benefits, due in X revaluation and restructuring earnings year. related the per earnings Ministry as restructuring share, was proposal company the the Slide to foreign Labor adjustments QX, the $X.XX periods QX, French for production tax QX well disclosed to currency of XXXX, attributable per last in to share severance close are approved previously reported

and net Excluding company QX, attributable the per XXXX was $X.XX QX, in per income share XXXX. in the to $X.XX adjustments, share

quarter of end debt with QX. That our million Total balance increased net and shows XXX total million compensation at due of X a debt. approximately debt and net an $X in during Net balances debt in resulted tax to to cash Slide the of combined of the in payments [client] XX high increase typically incentive Lastly the first million increase income about quarter. debt XX QX increases payments. million

than utilized those at XX cash than $XX the of expected especially capital debt Payments increases about capital million, the significantly capital remainder quarterly receivable we quarter for spending, per In the which currently the QX, flow year. cash to levels of due level QX that additional payments. expenditures range We all but in for in net million of typical from the cash expect required other to expect for addition timing lower rest lower million were to working AEC. first do to quarter. in effects for the increased expenditures XX At of during year, through accounts was

go it for to to to Now Olivier before turn Q&A. back we additional some I’d like comments

Olivier Jarrault

Thanks, John.

improvements outlook; consistent MC the of margins (inaudible) of in the we full and year. in be for business the our promising. year (inaudible) anticipate million our rest in unchanged the Turning relatively to XXXX Net release. year-over-year earnings significant for track percentage track $XXX to we XXXX, outlook of currently stable a to adjusted remain the XX%, adjusted no the adjusted EBITDA from of XXXX we XX% global going are the last XXXX our AEC’s changes other XX% as as of economic to goal a on of percentage full million. the we sales stated throughout should in second EBITDA show of while rest now appears into year incremental EBITDA looks expected $XXX beyond in XXXX. XX% net conditions, on and XXXX, half increase the outlook to The the is quarter, expectations toward to should sales sales gross

expect to for businesses in outlook in we performance throughout strong the year. as So line With unchanged let’s of for to XXXX that the both any questions. our is go balance by summary, continue Operator? businesses both the


of with go Sidoti the We & John line will Instructions] to [Operator Company. Franzreb

John Franzreb

start we I guess quarter you it as as is to impact Machine like when should volume how is days, as of last far maybe the X% you everything these or we was given a I’d in concerned, expect Clothing is think kind business, change on of going surprised with to what’s (inaudible) going by the inferred the that we but it reassess still should Were down tissue? packaging and still publication you X drag out. kind that in that mix

Olivier Jarrault

the took say, right. itself. John some paper of know start impact on first like the After I would you I to dynamics market and and months in understand to fundamentals, time better the with paperboard actually two being Well, market the it back the market would to clothing the going machine really business, the of paper

So yes to decline John clear steeper with paper of paper of the you my global in in predecessor well-documented certainly declines will grade, decade publication rates from with (inaudible) the and estimated the as industry course and to clear due consumption sharing suffer the been and it’s digitalization. past, have it’s that in continue

‘XX. know, global between to and paper consumption X% with rate increases at board annual X.X% (inaudible) as packaging between and X.X% right. And per tissues ‘XX ‘XX about of the and of the approximately industry per think I X.X% grades, forecasting I is industry driven or think year for in in we’re by you However, still increase towel expected, about in grade, ‘XX grow and if to slightly of will you between forecasting consumption is ‘XX definitely an about per increase forecasting year year consumption and ‘XX,

the will happen. fact So that that’s

in to side on an in the my PMC sales value, past with we it’s so predecessor QX of we shared of likely happen, our that you as to and the continue annual that’s at rate grades erode did our exchanged and publication on Now XX% range dollar in right times sales PMC lower to our see continue terms had will clear of to X% PMC sale, a actually has to grades that many decline in as every expected year actually ‘XX versus going ‘XX QX publication range.

in we further strong the customer ‘XX. it’s production had had QX declines packaging customer had key in net particularly one effect, sales to with we in sales, only the to Now grades US which to higher we experience as had in QX sales. QX led clothing, one-time I which QX by more much mentioned And partially ‘XX only driven did of a unusually some packaging due ‘XX, partially driven damage our issues which we a considerable it’s

in issue new machine ‘XX. QX where Asia, in included with factors on our year And We we in also order. sales QX last Asia, exceptional that very saw a large some ‘XX new some startup same startup machine had thing,

you So saw drop FOREX in exclude million you once a X% all XXX, the that X effect, once explains you or saw million-X.X why you exclude of in sales. QX

we see our revenues to Now, QX we versus be year. flat at QX, our expect, expect least what QX, to last our


John Franzreb

that? be gross that Then as it it FX, Is you PMC, was reason three to quarters you X, level, changed. in to get the Can can’t first Slide you of XX% talk showed back that and be last just there margin any year mix?

Olivier Jarrault

bouncing our productivity we further on saw, what gross very and we expected, for it same on Well, QX Yes, we last to outgoing ‘XX can capacity year efficiency will we our do back quarterly Yes. were right? everything monthly the gross we’ll I and quarter versus stay working the margin QX, and utilization course back, a least QX, weekly, at do should QX, was continue in the saw level. in monthly, therefore basically QX as That’s at about level improve. nice utilization. you at and of we as bounce it You year, a hardly as estimate improving on that XX.X% do very in margins, to year a full as of the least think last was

John Franzreb

just Okay, about bit talk LEAP any problems, could kind going and you in there want it’s is just talk the (inaudible) a any production it? been program, over EC, of smooth ramp then could about on you to put you to been switching how of the little has how within parameters

Olivier Jarrault

in Listen mentioning I cases you a booming very fan XX% about mean as aircraft, XXX to Boeing you increased driven backlog aerospace chance know powering is We spacers you I we I is revenue industry, Listen, nine Airbus and to industry, for years thing be (inaudible). year-over-year. in that blades, single-aisle that’s was large know XX mainly LEAP by at fan rate of mean the indicated commercial as order backlog aircraft. and have the the well good shape program major right? us, that know engine I it’s our production. state We the and the very the and of which know on the

that know XX% made it AXXX of of backlog, (inaudible). the You order Airbus is

you has or have Boeing If heard at us believe look release and Airbus latest also for So Boeing earnings trend, that extremely book good good for the Boeing of of and XXX it order once Albany. you the is that from read and XX% MAX? same I again

the increase to Boeing (inaudible) heard to strongly and to have Boeing (inaudible) next XX and year. month XXX rate XX at You shooting from year, next XX ‘XX about right, plans in going XX of very XX, XX-plus per thinking the that Boeing to into about

is backlog it’s order XX of production And at that that all over delivery single-aisle demand rate. of course next-gen for firm engine of the years I XXXX creates So what engines? for engine jet XX,XXX and slightly engines, think guess the

and you for problem Airbus on that extremely us, GTF with having good with the is once addition So to in issues. know again (inaudible) the that some the

really engine LEAP, AXXXneo GTF to demand current the for is for very us XX% book the good for for XX% versus again LEAP therefore Once AXXXneo. So in engine plan us, increase closer order right? in

that you the wherever globally industry know XX it pretty unprecedented, aerospace your in really So be we’ll (inaudible), for having past years. worked knowing well the

unprecedented an up. ramp it’s So

being that So now good for extremely us. said, it’s

control We here ramping our up is can The I ramp are which control only can I own production. up. with

our everything XXX, the not factories. of need It’s utilization news form the program, new executing key way also right are about ramp-up our floor developing, the in lines, It’s Salt all ramp utilization, right the all but in right We all staying all Boeing execution up LEAP investments product our we only on of monitoring platforms for disciplined once to our monitoring of labor about and people, all making the productivity, about across basically the again City do, the on right focused. it’s Lake we’re doing about it’s it’s by department assets. training on executing in the monitoring for us. hiring the employees. example, business, It’s It’s excellent

know XXX will by per decade. XX XX to month from up ramping the You end the about that be of the

we So City once operations. focus that it’s Salt again in our another Lake have

at be people of ramping have also up. also the production and We will getting and better focus to up and manufacturing keep training which components F-XX ramping on for hiring

aerospace and ‘XX to Believe will, ramping OEMs. us, in ‘XX, share suppliers can and us I And remember ‘XX that and in or deliver platforms. ‘XX set will we shorter strong tough further and on always a engine keep high-quality on products, for we’ll to customers’ up all demand them it. in that but well. Albany to as news extremely need OEMs and times, their it is today capability the XX past time our its industry of Albany of customer who gains doing door been and will airframe me lead customers open industry it but having years, up on clearly us, good be if doing it new if outdoors in ramp was the we’re So on ‘XX And quarter-after-quarter. opportunities for up could it, The to large meet ramp demonstrates for its in reflecting for needs

will we’re (inaudible) as So to to do see summarize, yes progress doing the the next it’s it but and tough, as well. We it. year know and and year quarter-after-quarter goes only you how


John Franzreb

original just are Yes, you tough I back, it sure or the the were? has the maybe little to been go to tolerances yields want just a said bit you schedules your production make wanted I that within tougher word expected twice. than

Olivier Jarrault

manufacturing scrap control all right? continuous levels know your your You will It’s manufacturing, yields, your productivity, is about day-after-day about execution, quality, all and go your down it’s you disciplined ensuring that is that improvement.

weeks will, key based LEAN launched I we productivity, in if manufacturing, few on you if will, initiatives. are what one have We we have the projects, manufacturing driving, launched, based being first call past manufacturing you productivity on,

LEAN you hear to and will throughout flow the deployment, to talking a years line. me events times and lots about So [XX] manufacturing user and to quarter reduce rearrange the flow lead our our lot of [casual]

which key that’s already in took weeks place manufacturing our strategy, it past So plants and that’s element couple all one across of few events [casual] really when a helping. the of

levers. through are and across capacity call advanced again Secondly I across productivity through well another more which going which all technology lever, is, process release, productivity see as we deploy in we in that responsible all to for Once are starting plants, and those initiatives. the and if US plants have more increase will, our to we’re what France, we X% you

the months measure basis, months production and and key productivity make day in to a monthly ups of it shift day, but as the week increase the and after the our to - daily on well. increase and that So on ramp does a basis in a stay measure to basis, key after top to sure after not my production career the many is aerospace, on on

have room here now day we’ll the we managers we systematically metrics you call review take a at manufacturing. consistent deploying those narrow from indicators deploying to where I’m I’m across world, which all my corrective I team, productivity and the with the talking today same plant all with and discipline my and all So from proper from review actions, every o’clock. every are that’s actually day with X

So do how we know to that.



next go line Klieve the NOBLE Capital. to we’ll with And Ben of

Ben Klieve

just very forward John’s to So, all Olivier, see second and you’re looking we’re forward. and comment to going here, company much welcome take first say the here to a exciting I’ll its where really going the time company

So welcome.

Olivier Jarrault

you taking very you being call. and thank Thank and Yes much, thank for us you. with the

Ben Klieve

to shift of believe here, kind on the think curious you strategy forward? or see don’t what you on-boarding, I’m through coming quarters, any enough the in of board as on-boarding period do you’ve going And see related to should changes you in process market your an kind update that expected of or we’ll expect barring you economy coming any we the been

Olivier Jarrault

and like push, very I the by predecessor like think to make I following continuous on I on and off a like generation from to length really - not push AEC I business but displacements my I I the Really really more to only order on it’s in a composite is listen as actually that to MC paid which and basically would of come flow free visit today, the the structures gain I been we to and for know, plants, a here talk in maximizing future keep can back on visit. you through did two a I said business jet to great to margin the solutions good driving it’s can EBITDA grow was to the improvements, that. that months, which and do, call develop strategy by for the displacement to set that have technologies about reinvesting cash productivity at I’ll future. will statements. up and share have and paying it airframe there’s daily you AEC, also new metallic solutions, a its that’s engine off, mean future. and great Well, I for some plants, strategy many

side the great the in focused that strategy. our I up, two improve improve meet right? it’s our goal productivity. AEC and we improve really think to ramping saying, up focused stay We set on needs, the our a was It’s our improve our and really stay costs, customers’ capacity, is that decrease it, after on times, my month efficiency our next day up I in So really deliver need primary and to utilization, years non-quality decrease just on it’s our ramp day therefore next ensuring

So that’s bring in the really what our in and staying teams. why in months few train next the HR stay extremely and our focused employees the our we manufacturing talent help should is will quality past Which develop HR to all all and here and focused years. engineering bring important us employees, all in team? additional is stay I I’m

So, therefore no change today about the strategy.

Ben Klieve

We’ve seen Good Yes, very a take comfortable of quarters. quickly. some CEOs good. couple to hear you this feel that

with are of your tenure. business you couple just the confident how hear a to months good current So under

coincidental. I’m closure a that it in that French facility, has Is Regarding a the the new while coming that under the CEO purely timing and accurate? been assuming that of for works is

Olivier Jarrault

both that savings we’re talking I to adjusted to impact listen closure. as the we to the assets And John $XXX we from of of would to the the in the range? Well like million evaluating, our listen So Selestat, overall our and both explained you’re plant closing relates France course labor costs? operating mean Yes, objective savings sure. contributes margins Selestat to about have fixed hold and and (inaudible)? to still on? $XXX future upper if restructuring and on charges could add will, (inaudible), you related deliver million on half EBITDA the fixed

John Cozzolino

the time proposal before this some transition time took it takes announce some to plan, And ago the in Ben place, France we process. the did get and through

that was on Ministry So charge by really that quarter French the the forward and we’re trigger now approval moving would development then plan. key the restructuring the this Labor

Ben Klieve

assumption – realize know me oil conversation, take year? that do there question and degree chatter margin margin derivatives to my One to is will for regards that your shape. risks I I’m the around flat raw gross about year that. do costs your on in I aluminum was like of from margins, see tariffs this What tariffs, failure announced material in for really been didn’t to what curious in somewhat this had the with lots other and relies you petroleum steel and perspective specifically missing material a to and for assumptions raw of the a really past, apologies from

Olivier Jarrault

very, Listen the we savings what that suppliers did I contract businesses. we our well two you program procurement a the we LTA a very qualify against past, solid two number in us, long-term if with really will, have Number one. as have contracts protect across would benchmarking

prices to on relationship of specific we impact have on, in seen much this an year. So and not so your questions

but with John protected no or entire but real as are something no. impact said, it’s are we and no We [evolution] real team the I just definitely monitoring


of Next line Drew with Please we’ll Lipke go to the ahead. Stephens. go

Drew Lipke

calls LEAP we a to going cycles to would capacity just today you’ve online there? go rate I see month, up can monthly if your back to wanted remind you step of and ramp, a of today rates, capacity XX in kind and through for how a us per production do of the on what think cycle terms to you a month come aerospace of Olivier, been in about that XXXX thoughts do number potentially the XX rate of the incremental and adding production

Olivier Jarrault

have always you know. you ahead, as very well listen, Well to plan

decide you (inaudible). as in do and in know well I in you very seen not manufacturing ramp - hate overreact weeks and X productions or X weeks the we’ve about So to four to up

they not sure we plan that are the I still So ago the are need in weeks XX-plus, to that said they the XX-plus, we’re release to sure – of formally for for in mean few up, XX, - a said yet it’s you not and Airbus would for he it. given go has ramp studying yet process

the there, of that engine terms to launched already exactly would saw it up. with You of in like capacity. pushbacks what the to some increasing of get feasibility that guys, labor said, I But have being see team my towards study require ramp our a XX-plus,

a maybe at even the six it’s months takes our for takes in its business, So to new machines time operator least sometimes train year.

used as I’m weaving is it braiding well (inaudible) to but specialized, it’s So it as on very the side. and as,

our looking train shift we’re I an we to we an so reorganizing run operators, to efficiency X so be standpoint, overtime, them, could by and we’re months that as too standpoint, X and takes well. productivity be also to don’t what from of safety necessary, have making list, to that find monitoring to shifts. would -- much let’s them, it want how by train I have want we plants plans at at we’re we to the don’t say So have

But we are we of overtime how our everything, up? on have targets. So space. we bring in have the also to order kept understanding and assets potential more also ramp in deliver to And we plants process right many need the our that in key we

know we we our just opened, Mexico? footage the have fill it. So our square to inaugurated in have We new plants, we as in have just you have Queretaro facility

have a to have? to good very We and have problem of space problem strong out mean to it’s those backlog and growth good have a coming a plants. very see it’s I to

So It’s about we’ll know all planning. it? execute to careful how on

Drew Lipke

ramp, basis for how now that that progression above you’re at points revenues we presentations, and of LEAP sequential kind about of maybe well the million the to in I on the should your looking on annualized LEAP just obviously think think through production kind seeing still we’re ramp. an the the $XXX investor year range, previous then And and year?

volatile specifically? we know year, I throughout mentioned but how think would So you it that be should the about

Olivier Jarrault

‘XX know well very you of know, LEAP you productions think I actual engines. Well the

CFM XXX I about combined. think that produced

just You sticking confirming to as the were fact despite well I that the a in GE year, X,XXX QX. XX that engines XXXX basically know short ‘XX They about weeks XXXX. target again believe (inaudible) still to ago in deliveries they are XXXX to out few came LEAP going in this plus (inaudible) of the

So we XX% saw increase. anyway in that did a QX, you

shipping calculations can you You and well we be what rapidly producing see from very ramp-up on the those CFM. make and will based

QX, QX, in QX, what be You order certainly saw in of can but increase we the of magnitude project our QX. will what

Drew Lipke

of of having see operate are clear taking do fresh the synergies think do to and big you Clothing of it me, can And the one you look Composites before roof hurdles today, need picture, Engineered then the under after the standalone and Composites stands here, have benefits from those a more as Engineered one Machine as confidence maybe just last kind a what corporate how about, operation? how you and what that it

Olivier Jarrault

business I right in on need restructured, I we grades. as it well think have I normally, said, business improving just and mean mezzanine, on months, stabilized the only well restate in as We structural fighting of I the generations. and been keep productivity well. to profitability said decline? Listen as about can’t a business it the said, and thinking I and and think cash as reiterate has growing that I I a MC grades, keep working, right mean MC on business to the been on paper is view I a strategy here for growth MC market our I positioned is now, it’s couple our

growth, execute also know So It’s goldmine growing it’s still, my all that where of to And on AEC making (inaudible) build into in on aerospace LEAP F-XX it does it’s as years today. Boeing is have yet not clear it’s of not next going be gains it’s cash all the to good, couple other on our to of the platforms I mind into year XXX, engine, on and/or basically that new we’re we we’re on that the about injecting acquisition it’s account on and it’s said, share business. anticipated Asia. execution a it. a we’re business we in program That today aerospace and and take this the the

it’s EBITDA I everything will said So billion the predecessor goal once review north want still that today we’re there, not we’ll so a it? the it’s larger EBITDA margin we’re we it’s EBITDA machine and that. growth machine. maximizing see to $X.X size, XX%, really XX% now and to my (inaudible) set the on discuss strategic in an of margin then relatively the once in right to organic focused options? delivering rightfully incredible margins we But as But and small is any growth time possible machine, improve stay generation size grow and and EBITDA and


line to Instructions] the of Roubaix. with Chris Hillary go We’ll [Operator

Chris Hillary

I you just you just you I platform, wanted and to think in opportunities to ago aerospace look the see the question medium-term certain come but be that things but do might some to time to horizon? you might are give about what supplement you moment on I at the on color and ask, working think a add-on, answered types as three this one a market share in more is a extent, there what of short-term that you business? talked wins, year

Olivier Jarrault

four them, and major for of between I past growth organic think applying the I have But through the market? drivers and presenting deck (inaudible) two, investor access ‘XX ‘XX have the sure. that read it the XXXX, that at of - summarize I see if other two the ’XX, altogether. AEC I four my Yes, levers certainly that but predecessor the been and first to you starting high business, think really level, two

have morning, existing talked we what well on on I like which execution of is established. content lever contractual on executing, lot first The and up executing a about already but programs are which continued this really ramp we secured the I call to

of potential Salt to sponsors, clear from the business, talking (inaudible) I’m the talking about all upward potential multiple the produced you revert stabilizer, said F-XX, components. engine components So ‘XX back I have also as LEAP plus F-XX location. it’s in the not to only City on by by But the I’m foreign the airframe that about the the for engine, with referring Lake way I’m pylon, tail-rotor (inaudible) by our Texas horizontal Bernie, sales. we

Also what the you the all (inaudible) same those Lift that structure the all fan you the Boeing all the I as okay. the structural have We this Boeing have very know other airframe well category have very components, then F-XX call sophisticated in (inaudible). And primary the XXX vents? and engineered (inaudible) you highly - except

do - call, sometimes or time you up. that anticipated all lever So they’ll continue executing is, on I and content new second ramping incremental first the gains to what acquisition have second to lever, the like programs. the is up has existing to and Then share existing really ramp

here the as we’ll gains Lake fuselage in the in really that be that share to frames we be all develops, share anticipate on So to all gains we talking ‘XX. One from it but ’XX, forward that (inaudible). making you anticipate about would City that’s the Salt be example

call Salt gains was tooling mention I (inaudible) first be course wing more that’s to on if structural example, and recently like now them the future and like you City defense future that delivered I’d platforms. and new but wins business and LEAP, not have on could really drive XXX-XX also ‘XX. two share other Lake commercial Airlines? if between other lever. So gains a an our engines of on ‘XX I for other be quarter, anticipated, F-XX last than were several I’d call, really growth, And to have jet the today? platforms we the might actually on levers a will, third very believe it from that that’s will ‘XX Singapore you those to content lever So which saw anticipated second really on Several much share you any the won’t side, is that share what anticipated of - launched confidentiality. gains potential difficult, don’t You And contract growth, then and next-generation

pipeline growth So an course well on is it the already example the the in revenue (inaudible), GEXX on of the of on the XXXX-X. Boeing, is

it’s new So platform. the

you growth of about you planned produced ’XX, definitely Then ‘XX engine past the past is yet it ‘XX. a will but entering ramp-up service, example and it it’s have While very the good past in know, course you have very well as not being questions of be ’XX.

NMA, XXX. have Boeing the aerospace about You the question the market overall the in

the happens it confirmed XXXX, course of will happen, actually not confirming will engine. the if the on is ‘XX the EIS elements, but it technology if it opens Boeing to and what our in structural position does know be in it door it which course (inaudible) You also week launched on of or a and will maybe technologies existing has be ago which only fuselage, happens, the if - on the that ourselves not, derivative happen using properly

it the of growth will a CFM be another the be it well ratio you, then also will summarizing And the past type shared about lever, other to offer time that defense on applying side, know. $X my that big of really that’s But the be level, on that growth a on or levers past John in in Even on side. stay aerospace. past engines But and technology any other within many will ‘XX definitely high share at will would with are thrust, I our potential with does four Then technologies opportunities is to the when Now we focused But the new past I’ll and you question that on know shared and there there I growth predecessor the have auto, on strong but that outside we more that’s diversification in happy ‘XX. later meet ‘XX. the that which aerospace of the for potential armor space land, last XD R&D you bypass side. million and opportunities think the And I aerospace last operating attractive market technologies you, I’m and a opportunity XXXXX aerospace have together what I being, apply so a details very where certainly already team but already we’re the do encouraging ‘XX not with you potential, or high sea, XXXX. mean definitely Joe my ‘XX with thought on. further right pounds is which regardless applications. don’t engine, as engine it could working mean air are start using least,

Chris Hillary

has unfortunate more And in you some usage on been or composites other unfortunate metal applications metal more headlines to one implies there’s Sure. some headlines fatigue aerospace? quick there on then that for aerospace, follow-up, think you that that been there’s opportunities think - woven implies Do find within do your fatigue.

Olivier Jarrault

do to and with has being more well of engines again, the I on both excellent with it I growth it proposition But metallic you friendly, all has environmentally definitely it with to do has I section will and even the to coming towards do think solutions. to that engine, do and hot solutions we very all potential side think to And value in section moving to from it the see has extraordinary do the efficiency solutions knew do has jet plus with fatigue Well to on core the all of of the improvement. fatigue as (inaudible) displacing the fuel listen, with the performance, know improved an damage tolerance composite all all have resistance, it engine airframe. improvement with it you more all more improvement, business. do of composite has metallic

the that’s drivers So have leave the what I side you airframe exactly the have side. and on to structural at same on it would

is performance the is business improved keep growth an definitely to from and on just on standpoint solutions. a push reduction, and focused our technologies metallic weight displacing our need R&D stay from engine. a We So


there And no questions. other are

continue. may You

Olivier Jarrault

meet all you Well Bye, you you thank least I again future looking I call face-to-face. the And to with you in the bye. attending enjoy meeting for today. meet with with once person. you. I all reiterate of like at to in would I you. and by enjoy soon phone, as said did speaking with I I’m forward Thank


for Time at Service. International does the for our call conference Eastern Executive will conclude using for today. this beginning approximately and conference website Albany your Thank Ladies gentlemen replay of today. you Teleconference a be That noon participation at AT&T and available

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