Hexcel's Strong First Quarter 2025 Performance Sets Stage for Future Growth
In its latest earnings conference call, Hexcel Corporation highlighted a strong first quarter 2025 performance, driven by a broad and unrivaled product range of lightweight, innovative aerospace composites. CEO Patrick Winterlich noted that the company's value proposition is well-positioned to meet the expanding demand for advanced lightweight composites in aerospace and defense as the industry continues its recovery from the COVID-19 pandemic.
Hexcel has sole-source life of program contracts across a large number of commercial aircraft programs, including Airbus and Boeing. The company estimates that this will result in roughly $0.5 billion of incremental annual sales ahead of Hexcel when compared to 2024 sales. This is business that Hexcel already has contracted as production rates ramp in the future for the A350 and other Airbus and Boeing commercial programs.
The A350 program, in particular, is a significant contributor to Hexcel's revenue, with a shipset value between $4.5 million and $5 million per aircraft. Airbus delivered 57 A350 aircraft in 2024 and has reiterated its expectation of achieving 12 aircraft per month by 2028, which would result in approximately 132 deliveries.
Defense and business jets, as well as space and other existing and new markets, are also additive to Hexcel's revenue. The company sees significant opportunities in defense as both the U.S. and European governments look to increase spending. With its U.S. domicile and vertically integrated manufacturing presence in Europe, Hexcel is well-positioned to support its overseas defense customers.
Hexcel's ability to generate cash combined with its conservative financial policy underscores a solid balance sheet as sales grow over time. The company has repurchased $50 million of common stock in the first quarter and has additional authorization to purchase a further $185 million. It also addressed a pending debt maturity by refinancing a $300 million fixed-rate note at attractive interest rate spreads.
As Hexcel continues to grow, it is changing its sales reporting structure to two markets: commercial aerospace and defense, space and others, which now includes its industrial business. This change will result in performance-oriented automotive sales once the divestiture of its wind and recreation-focused facility in Austria is completed later in Q2.
Overall, Hexcel's first quarter 2025 performance demonstrates a strong foundation for future growth and expansion into new markets.
