Howmet Aerospace Inc.

Hello and welcome to the HALMAT Aerospace fourth quarter 2023 and full year earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. And to withdraw from the question queue, please press star, then two. I would now like to hand the call over to Paul Luther, Vice President of Investor Relations. Please go ahead.

Thank you, MJ. Good morning and welcome to the Hamad Aerospace fourth quarter and full year 2023 results conference call. I'm joined by John Plant, Executive Chairman and Chief Executive Officer, and Ken Giacobi, Executive Vice President and Chief Financial Officer. After comments by John and Ken, we will have a question and answer session. I would like to remind you that today's discussion will contain forward-looking statements relating to future events and expectations. You can find factors that could cause the company's actual results to differ materially from these projections listed in today's presentation and earnings press release and in our most recent SEC filings. In today's presentation, references to EBITDA, operating income, and EPS mean adjusted EBITDA excluding special items. adjusted operating income excluding special items, and adjusted EPS excluding special items. These measures are among the non-GAAP financial measures that we've included in our discussion. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release and in the appendix in today's presentation. And with that, I'd like to turn the call over to John.

Thanks, PT, and welcome, everyone, to the 2023 year-end results call. If you move to slide four, please. And I'll start off by saying Hamlet's fourth quarter results were indeed very strong. Revenue, EBITDA, EBITDA margin, and earnings per share all met or exceeded the high end of guidance. More importantly, we continue to outgrow each of our respective markets. Specifically, revenue was $1.73 billion, an increase of 14% year over year. and with commercial aerospace up 22%. EBITDA was 398 million, which is an increase of 18% year-on-year, while EBITDA margin was in line with Q3 at a solid 23%. The second half EBITDA margin was 30 basis points greater than the full-year average, and Q4 earnings per share increased by a significant 39%. For the full year, Revenue was up 17%, driven by commercial aerospace, up 24%, and EBITDA was up 18%. Earnings per share continued to improve annually and was a record $1.84 per share, which is an increase of 31% year over year. Moving to the balance sheet and free cash flow, free cash flow was a record and above the high end of guidance at $682 million. And in the fourth quarter, Hammett continued with its balanced capital allocation strategy by buying back another $100 million of common stock and repaying another $100 million of debt as part of its reduction of the 2024 bonds. Moreover, we refinanced the $400 million of the 2024 bonds at a reduced interest rate. The combination of these actions further reduces annualized interest expense by $10 million going into 2024. This goes towards continued improvement in free cash flow yield and improved earnings per share. Lastly, net leverage improved to a record 2.1 times, which was in line with expectations. Each segment contributed with engine products and forged wheels delivering record profits. We were pleased with the pickup in faster margins to adjust in excess of 22% EBITDA margin. Ken's going to detail all of this in his commentary. Having completed a strong 2023, the majority of my comments today will focus on the outlook for 2024 and will be covered in the guidance section after covering the historical results. We look forward to a healthy 2024. And now over to Ken.