Hey, thank you all for coming. It's a real honor today to have John Plant here with us. For those of you who don't know John is the Executive Chairman and CEO of Howmet Aerospace. John, thank you for taking the time out. I know it's a crazy busy time in the industry and the world and everything. Thanks for making time to come over. Thank you. Maybe we start with just timely. Last week, you all hosted an investor event in Whitehall. Are there any, like, high-level highlights that you'd like to mention? I know you guys talked about digital thread and some of the automation you do and some of the various things in the process. We don't make a regular sort of thing of showcasing our manufacturing. We thought given the recent, I'll say, significant investments we've made and seeing, let's say, the generational improvements from what we had done for, let's say, 2015 and that level of, I'll say, build-out and the amount of automation that we showcased of, say, improving this facility and expanding in the investments that we had made in building a new plant out on the same campus in 2020, then that was a worthwhile, you know, event and thing to do. More recently, for the build-out that we did in 2025 and still building out in terms of placement of new equipment, it was worthy of showing how we had produced and introduced the very latest technologies into that site that we had done elsewhere in Howmet, also how we're trying to bring together the thread of machine learning and use of artificial intelligence to improve the quality and yield of our parts, and how we're providing an extraordinary level of traceability and capabilities in that plant. I thought it was something that was worthwhile doing, especially given the change and an improvement in manufacturing process, while at the same time producing, you know, extraordinary increases in the technical performance of the parts, you know, all at the same time. That's what we're really trying to get across and convey last week of, you know, how we're moving the goalposts once again in terms of increasing the moat around the Howmet business. When you think about the business, maybe that's a good transition to pretty much every end market you're exposed to now is on fire. You know, commercial aerospace is very, very strong. Defense is very, very strong. Industrial gas turbine is very, very strong. How do you think about deploying capital to those various markets when they're all very robust? Well, of course, building capacity. It is always, I'll say, first of all, it's a pleasure compared to the opposite of shrinking one's business. I guess that's very positive. At the same time, when you're building out an enterprise, you have a lot of considerations to take into consideration there, which is, you know, how much capital expenditure you should deploy, what's gonna be the ability to get people, what's the counter to that in terms of automation. The principle is exciting, but you have to be cautious and careful because you're building, you know, costs into your business, which you have to have return on per today and also in particular over the coming years. That's an interesting part of the equation. Then also you have to consider the end markets that you're serving, not your direct customer, what's happening to those end markets. You know, there are different, I will say, risk indicators for us when we look at all of those different end markets and the considerations we take into account when we want to capacitize for. We'll have slightly different flavors, for example, between our commercial aerospace customers to our defense aerospace customers and to a, let's say, land-based gas turbine customers. They have different characteristics, different levels of, I'll say, historical cyclicality and say security around them, and also the volume and a variety consideration. You're trying to take all of those factors into account when making those investment decisions. You have different levels of knowledge also. For example, you have backlog numbers that you'll have for your commercial aerospace clients, which you don't have that, quite that same level of clarity that you have in the industrial gas turbine markets. I mean, maybe, I'll change gears a little bit because usually we jump right into commercial. Why don't I start with industrial gas turbine? How are you thinking about that? I mean, it does seem like maybe four or five years ago, at least in the investment community, we weren't really thinking that, wow, we'd see this boom in industrial gas turbine. How are you thinking about that for your business? Well, I guess I've also evolved my own thinking around those markets because previously, you know, it wasn't the biggest end market for us to spend a lot of time thinking about. Maybe historically, I'd been maybe too dismissive of the preparedness to invest. You know, I consider it to be a much more volatile short cycle part of the business, and one plagued by many new product introductions which led to, I'll say, increasingly small batch sizes and continual product development, which was the antithesis of getting good yields for your parts. It didn't seem to be the most profitable, the most secure and therefore relatively uninvestable by comparison. It was more on a maintenance basis of that capacity. Things began to change in 2024, I felt. First of all, some of our customers were more interested in repeatability of their own turbine builds, and therefore far less volatility around NPIs. You had that aspect. You began to appreciate that the move to renewables probably wasn't the best solution for all of the customer set, and having that base level of demand and certainty and the ability to respond to, say, underlying energy requirements meant the gas turbines really were a good place to be. It was probably gonna give us at least a consistent demand level of maybe single-digit growth for, you know, the balance of the decade and beyond. It was one where it was worthwhile to replace and repair capacity and maybe increase slightly. We began to tick up the investment a little bit in 2024. It seemed to change again in 2025. I do remember just after the last presidential election in the U.S. also, it seemed to change again because due to the emphasis on fossil fuels versus renewables, and that caused us to again rethink the amount of capacity that would be required in terms of the natural gas turbine. It could be whether it was from natural gas or indeed hydrogen and dual use. It was more investable. Bit by bit, you began to get convinced that the electricity demand was going to increase with the data center build out. It has been going on for some time. Every aspect of what we were looking at, whether it was the base load, looking at European, you know, I'll say energy requirements, particularly for the next decade, those things which had been uninvestable, for example, in the defense industry in Europe became so. The same for also natural gas in terms of an energy provision and the ability to the U.S. to provide LNG tankers across to Europe has again commenced with energy security. It became far more interesting for us. Then of course, you had not just the underlying data center build out, but then you had the increasing emphasis on data centers and being what's been an extraordinary level of capital investment, which seems to change almost every six months now. Even that which we had looked at in the second half of last year by way of an investment program for the next few years in, you know, through 2026, 2027 and 2028, by February of this year, it had changed again. You saw certain of, I'll say the hyperscalers announcing, I'll say investment increase, like from $135 million to $185 million. I think that was maybe Microsoft. Then you had Amazon come out, so they're gonna spend $200 billion. None of those levels of increases of investment are currently in our capacity numbers. We just have not yet even considered them. You know, those of our immediate customer, being the gas turbine manufacturers, those that we had, let's say, executed agreements with to build additional capacities for them over the next few years, those are already, you know, changing once again. It's quite fascinating, and you also have to consider not just the next three years, but you're looking through to the end of the decade and increasingly now, like what's gonna happen by 2032, 2035, and not just for large utilities, but also for mini and micro grids, which are providing electricity sources for other industrial complexes where maybe the fundamental electricity supply won't be sufficient. There's a lot of things to think about, both in the U.S. but for other, you know, markets in the world and also what the choices of energy source is going to be. I mean, maybe when you look out to 2030, 2035, how do you think that end market compares to commercial aero? I don't think I know enough yet to be able to have absolute clarity over what the requirements will be. I can see the aircraft backlogs. I can see what's been ordered or options on aircraft, and therefore that level of, let's say, security. Obviously, you could always have cancellations, but without that build rate increases in commercial aero. If you were to order a, let's say, a Boeing 787 today, you probably wouldn't get it before 2040, absent rate increases. Mm-hmm. You have that increased visibility. You don't yet have that for the large and small to mid-sized gas turbines. You have a level of demand, and then you have to take into account lots of other energy policy and macroeconomic factors to give you the conviction to be willing to invest to a certain degree. You have to consider, you know, where we fit in with that market, which for us, of course, it's not just building out the OE level of capacity, because those turbines which we supply over the next five years, which will be a lot higher quantity than the last five years, then that's going to give us the replacement market in the 2030s. We're also trying to evaluate if turbine build were to, let's say, stop growing, then does that mean we would stop growing? Well, the answer to that is no. You know, we would continue with the OE build, but then we'd have all the spares for all the turbines that we've produced over the next five years. It gives us a level of repeatability, which is quite different for Howmet compared to just the basic consideration of the OE level of demand. You've got all of those considerations to build into it as well. How does the mini and, I'll say, you know, let's say average smaller land-based gas turbine play into the demand pattern over the decade to 2040? A lot of things to think about, but the conviction that it's a good space to be. It's going to be a significant increase in business for us. It's going to give us significant replacement demand. How do we protect ourselves on those investments with the contracts that we were willing to enter into with our direct customer, and how does that occur as well? Again, lots of things to think about, which is the propensity to invest with what risk profile and security do we want. Gotcha. Maybe transitioning to commercial aero, you mentioned the big backlogs and, you know, for example, on 787, you mentioned, you know, if rates didn't go up, it would take a very long time to get your airplanes. How are you thinking about the OE delivery rates? We see the big backlogs, but how are you thinking about where deliveries could go and how that impacts your business? I would say, let me frame it this way. Historically, you guys have taken a little bit more conservative view on that and been rewarded for it. You've been right. How are you thinking about that going forward? Well, I'm convinced that the airframe manufacturers and the engine manufacturers are gonna make more. That's a good starting point. You know, more is better. We're prepared and capacitized, and will invest to be able to produce more. At the same time, we've always maintained a fairly cautious stance over, you know, where should we guide in terms of the Howmet, let's say, let's call it more of a promise of what we're going to deliver by way of profitability for our shareholders. You know, where we guide to and where we can produce to may be different. Should an aircraft manufacturer be able to produce more, you know, I'm convinced that we will be able to match rate. At the same time, we wanna make sure that we don't get caught out. An example of that might be if you took the aspirations that airframe manufacturers had for 2025. I think every one of them was convinced that, as an example, they would make more wide-body aircraft. You can think of whether it's an Airbus, say, A350 or a 787. The thought was production will be higher. Now, in the final reckoning, it wasn't as high as people had imagined, and therefore, there's always going to be the drawdown of inventories for parts they'd ordered last year. You can see that as an example, you can just take the titanium purchases by Airbus in 2026. They will actually be reduced compared to previous thoughts because of what had already been, you know, previously purchased. The same where other manufacturers promised, let's say a rate 38 or something and struggled, and eventually gets there. You know, so you have to take account of all of those inventory cycles of, you know, over-ordering, you know, reductions of inventories or not increasing because they allow those inventories to be used up when rates do begin to increase. You have a lot of those things rippling through the industry as well. In the last few years, it's been beneficial to be cautious over what will actually get done while thinking positively and wanting to say, if customers achieve those rates, then of course, we'll be able to support them. I know that we have, in one sense, wasted money. We've recruited people and trained them, and sometimes they have not been made, you know, productive at the same rate as expected. At the same time, where I'll say other shortages have come or our peers have not been able to keep up, we've been able to supply in those things. It's been a good equation for us because of the quality and delivery that Howmet has been able to produce has stood us in really good stead in our arrangements with the customer. You know, the company's been able to achieve output. Do you have the capacity in place to meet where OEM demand potentially could go? Again, it's never the simple binary yes or no. It's always that, well, maybe. If you were to say, can we meet if Boeing gets a rate 47 or is it 52 or is it 60-something? Yeah. Well, the answer is yes. Now, if you then ask me the same question, can we support them getting to rate 65, 75 or higher? Well, the answer is yes. Then if you were to stack everybody's on top of each other, and if you add all of the demand for narrow body of, let's say, an A220, an A320, a Boeing 737. Oh, by the way, let's now stack on top of the build out of wide bodies on top and on top and on top, and every one of them, then today I don't think we could support all of that, you know, at the moment. Therefore, you have to make a judgment. Will every one of those, you know, rates come to fruition? Well, at the moment, if, as we gain conviction over the next few years that that becomes the likelihood, then my suspicion is that we would actually have to put more capacity down to achieve that level of production. Okay. Because if you take the previous peak on narrow-body, it was probably around about 100 aircraft a month in 2019. Yeah. We're not there yet. If you stack today's aspirational numbers on top of each other, then you have to be producing 150, 160 aircraft a month. You know, that's a lot of increase over the previous peak. Now, are we in a fundamentally better position, let's say, in terms of the life cycle of new technology on an engine program? Probably, yes. I suspect if you scan the whole supply base and say, "Can you produce 50% more than your previous peak?" I suspect the answer probably would be no. I think we would probably fit into that as well, which would say, no, we would need to build out more. If you looked at what we showcased last week in Whitehall, one of our manufacturing plants, and we've got 60 of them, you know, we provided for additional space such that we could drop machines in should they be required. Providing we're inside our own ability to produce machines, 'cause we produce a lot of our own equipment ourselves because we wanna keep it hidden from view. Even where we buy on the external markets from third-party machine tool manufacturers, as long as we're inside lead time for those, then we're good. Because you posited that every one of our end markets is growing, then I'll say places and capacities at machine tool manufacturers are becoming very tight. You know, we've been trying to make sure that we can reserve capacity in that we dense as we can. Again, we've got to accept and believe the demand signals for our customers, you know, and can you stack all of these things on top of each other? Because today we probably would not have that, you know, capacity in place. I mean, just to maybe unpack that a little bit. How tight is machine tool capacity? If you were to order something today, ballpark, how long would it take? I've heard things like autoclaves could take two years. Yeah. It really depends upon type of equipment. You're getting out to that two years and more than two years now- Yeah - in terms of unless you have reserve capacity, then it's becoming a problem. You know, in our dialogue with some of our, you know, land-based gas turbine customers, you know, the situation is, you know, if you believe that demand, then and you want to contract for it, then every week that goes by, it's not necessarily lose a week here and therefore lose a week at the end of the timing of introduction. Maybe you lose a week now, and you're gonna lose three months when you need it because of the capacity in the industry. It It needs to apply both for plant and equipment, but also tooling. For example, we just built a whole new plant out for tooling 'cause we're gonna need to more than double our own in production of dies, which is extraordinary if you think about it- Yeah - just to double that and more. Not everybody, not every company has even the financial capacity to do that. Whereas at least with Howmet, you know, our customers, I think, believe that the answer is we can. I think that's really important to them, that they know that should we commit to doing it, then we have the management depth to be able to do it. We have the financial depth to be able to do it, and that's really important at this stage of the economic cycle, you know, with the supplier that can. Yeah. One thing you didn't mention was labor. Has labor become a challenge as you start stacking all this on top of each other? It's quite strange in that labor's become a little bit easier than it was in the immediate years after COVID. Gaining, I'll say, labor in this nation, I know the quantity of additional new employees that have been required. But at the same time, we have experienced elevated turnover and gaining the right quality of employee has been a challenge for us. We've put a lot of effort into that and trying to reduce our employee turnover. You know, that's been additional routines through our recruitment processes. We've actually built out additional training centers so that we can train people, you know, for a long period of time before we put them into, you know, this is for real in terms of those production requirements. Obviously because of the interlinking, let's say 40 or 50 processes that some of our parts go through, you know, if you make a failure of a part at the early stage, then it cascades through your whole manufacturing process. Training is really important. We've been emphasizing the recruitment and the training and even the degree to, you know, what's the average span of control of, I'll say maybe manufacturing supervision in our plants, such that there's a more intimate personal relationship with our employees to try to gain that because it's very important to us. At the same time as improving, I'll say that whole employee turnover, we've also been spending a lot of money on automation. I think you heard a quote last week from our wheels business, so not in aerospace, where it was one robot now for every two people, which is, you know, very significant level of automation. If you looked at what we built out in that new engine plant, again, a very high level of, I'll say machine input versus labor input. That's not just done for, I'll say, labor input costs and to do with variability 'cause of labor turnover. It's also vital for the quality. In fact, some of the tolerances of our parts have now reached a level where it's almost impossible for a human being to replicate that on a consistent basis. You know, let's say hour by hour, never mind shift by shift. You know, automation and machine input is there for quality purposes more than it is for labor cost purposes. Gotcha. We didn't talk about aftermarket demand. If you've got all these OE programs, where's the aftermarket fit in all that? 'Cause that's growing too as the fleet grows. Yes. I mean, we're seeing demand for the aftermarket growth for, you know, fleet growth for sure. You know, the build-out of both commercial aircraft, given the very low scrappage rates that we've been experiencing the last few years. You see it also in some of the major military programs where if you take the F-35 as an example, there's always a lag between producing that new aircraft and then what's the spares demand going to with what the duty cycle is of how many hours between the shop visits for that aircraft. As the fleet grows, we have these predictive models of, you know, what aftermarket demand will increase by. The prediction that by 2035 we'd be producing more aftermarket turbine blade parts for the F-35 than OE parts came to be. Yes. If you blow that forward and say the fleet will increase over the next five years by another, you know, 150+ aircraft per year for the five years, so there's another 800 aircraft. If you plan that through into the 2030s and that demand, and then by 2040, and then those aircraft will probably be in service till 2070 or something, then you can see what the aftermarket stream will be, you know, through those decades. That's an important part. Then also with every new generation of aircraft engine, with the increase in, I'll say, emissions requirements or fuel efficiency, then the temperatures re-rating within the turbine has been tending to increase. The pressures increase because you want to atomize the fuel and gain more fuel efficiency. That in itself produces a more exacting environment in the gas path of the turbine, which means that those turbine blades have to be uprated. Uprated tends to be both the barrier coatings that we put on of various types, but also the basic construct of allowing airflow and increasing airflow through those turbine blades where we've reached a level now where we can consciously and deliberately accelerate the airflow, or we can decrease it according to where you want those cooling parts to be on the turbine blade. Sure. The way we exhaust the air from it and the holes in it, which, you know, what type of hole, what shape of hole, and then now how we're trying to control the flow of air so that the air molecules will follow the curvature of the turbine blade. All of that is leading to, again, value for us. You know, the complexity is increasing and therefore the aftermarket opportunity because as each engine has been introduced, then it's so far that the theoretical time to replacement has yet to be achieved and therefore it's given us a higher replacement rate. We're now going through the part where we know that we haven't reached peak yet for the, for example, on the CFM56 for the CFM area, that has not yet peaked. That's still got some years of growth left in it, and yet we stopped producing it essentially for OE demand five years ago. Sure. Now we have, let's say in that particular customer, the LEAP range of engines, which is the shop visits are going to be increasing, you know, every year through the next ten years. We see that, but also beyond that service demand, which will increase every year for the next five years. We're also seeing this temporary, I call it a bit of a bubble we're going through because of the early life failures of some of those parts in some of the countries in the world where air pollution is greater, or you're seeing silica in particular, so it's called the sand from the Middle East or whatever. You know, that's causing, again, thermal problems in the after the combustor, and therefore parts are having to be replaced. Therefore, we've got underlying secular demand. We've got what I call a bit of a bubble demand. Anything you know is that the demand is increasing and the sophistication of the part is increasing, and therefore, you know, tending to be good for that part of our business. Will that require more investment in capacity to support all that aftermarket across both those end markets? Compared to history, probably. We're having to make assessments of what those demand requirements are also stacking it, as I said, according to what we think the OE level will be building out through both narrow body and wide body in the coming years. A fascinating, it's not a problem, but fascinating thing to. Yeah you know, work through. Also it's like everything, you know, there's, you know, risk and reward go together. Sure. Maybe it's reward with risk. With, you know, defense budgets have been growing around the world, in the U.S. pretty robustly, you know, potentially for fiscal 2027, very robustly. I think a lot of us know about the F-35 opportunity. Are there other new potential opportunities for Howmet in defense markets given the growth there? Well, we try to work on most things which are going on. You could look at, first of all, what's the next generation uplift of performance of the engine on an F-35? Or you could say, what is going to be the engine of choice for the F-47 or is the Navy gonna get a plane and what will be that engine of choice? We try to position ourselves well for those. I mean, the next thing which is quite exciting and which is again, the degree of demand is probably not able to be really determined at the moment, is the future use of collaborative combat aircraft, so these unmanned aircraft that will fly alongside a manned fighter. I mean, is it 2? Is it 5? Is it 25? You know, we don't yet understand. Sure What that end demand will be, and maybe it'll be also a function of defense budgets and the blend between manned and unmanned aircraft. Neither do we know who will be the airframe manufacturer of choice. Will it be like, one of the existing defense primes with one of these newer companies that have, you know, been entering the market? Who will gain the contracts and who will be successful? It's like, we don't know yet. We're trying to position ourselves for the engines with an example. It's not just the structural parts or the fastening systems which those CCAs will require, but also, you know, what engine. Of course, each airframe manufacturer, there won't be a different engine for every one of them. There will be a common engine which, you know, so the eventual choice of who's going to produce them, but they will make those engines, like, so engine selection. The last three selections, we've been part of that. We've been positioning for it, believing that it's a good market to deploy our engineering resources, but we don't understand yet its size. Yeah. Thinking overall, you know, let's say a 5,000-lb thrust or an 8,000- or 15,000-lb thrust engine for a collaborative combat aircraft, it might be bigger than the manned aircraft, depending how many, but we don't know how many. It's another chip we'll place down on the roulette table and say, "This is a good thing for us." At the same time, it's not just rocket motors, but some of the larger missile systems are now requiring a turbine as well. We're sort of trying to cover that part of the market. And also with the, you know, we've all seen large orders for missiles in the last, I'll say two or three years, and seems like almost a day doesn't go by without another order placed for them. Yeah. Whether they are defensive missiles like Patriot systems or whatever, we also tend to make sure that we're well-placed for parts on those as well. Albeit it's not the biggest part of the Howmet business, but you know, it'll be an interesting you know, increase in demand for us over the next few years. In just kind of going down that a little bit, in commercial space, there's been a real push towards reusable rockets that require turbines. Is that an end market that you guys play in or? Well, I wasn't quite sure what you're referring to there because most of the things, I mean, maybe for a missile, they never come back. Yeah. That's something different. I mean, they are meant to be destroyed upon impact. I've never seen one come back yet. On the collaborative combat aircraft, we have no clue. I mean, are they meant to be disposable or are they meant to be returned? I guess it'll be a combination according to what the mission requires at the time. Some will come back and some won't, and, you know, we don't know. We're just humble parts manufacturers for- I was referring to reusable rockets, where some of those. Oh, you mean for like space rockets? Exactly. Like for Blue Origin or something? Yeah. Yeah, we do some of that stuff as well. You know, it's been interesting. Our space business has increased a lot as I'll say the amount of parts which have been used in whether it's been SpaceX, Blue Origin or any of the others, I forgot the name, ULA or something, I don't know. It's been increasing. What's been interesting is that a lot of other markets have seemed to have like come up more rapidly and gone beyond them in terms of opportunity. Yeah Right now the area which seems particularly hot, you know, once you've got through the, I'll say, new fighter aircraft or new stealth bombers and that build out, which we're involved with as well, it's been the, you know, the CCAs and the missiles, which has suddenly become a lot more interesting because you've got now beyond just like there's another lot, and it's difficult for us to capacitate just for another lot because once you've done a lot, well, you can do the equipment. There's a reluctance to capacitate for it. When you're seeing now demand for, say, you can see for certain missile systems demand for seven years, it becomes more investable. Yeah. Therefore, you know, the considerations around capital deployment become different. Maybe as a last question, your own supply chains, do you worry about them? I mean, how tough has that been to manage, given you're ramping, they have to ramp too? For the most part, we buy base metal, and so the difficulties obtaining alloy or alloyed metals has been fairly small for us. We do buy, for example, for our rings business, where we do buy alloyed metal for from other suppliers. We also produce it for ourselves, so maybe we are 40% self-sufficient in where we do buy alloyed metal, whereas 60% comes from the outside. It's only like 5%-8% of our business. The rest is base metal, so we're buying from, I'll say, traders or, you know, smelters directly. It's metal input has not been an issue for us at all. You know, I'd. Right now, given the build out, I'd be more worried about machine tool capacity than I am base metal capacity. Now, do I have to think about what the overall picture is? Is there enough alloy or, you know, being prepared for all? Well, under the right circumstances or the right commercial arrangements, yes, we could, but that's not really our normal business. You know, we only supply to a degree to our internal requirements. We will alloy ourselves some base metal for example, our turbine blade business, but for our rings business, we'll access just part of the market, say up to maximum of 8% of material input from- Got you. other alloy manufacturers. Got you. Well, I think we're out of time, John. Thank you very much. That was a lot of fun. Thank you. Yeah. Nice to talk to you, Ron. Thank you.