Financial Data and Key Metrics Changes - Hexcel achieved full-year sales of $1.894 billion, adjusted EPS of $1.76, and free cash flow of $157 million for 2025 [11] - In Q4 2025, sales were $492 million, up 3.7% from 2024, indicating a positive trend in commercial orders [12] - Gross margin for Q4 2025 was 24.6%, down from 25% in Q4 2024, primarily due to sales mix [23] Business Line Data and Key Metrics Changes - Commercial aerospace sales in Q4 were $299.5 million, a 7.6% increase compared to 2024, driven by growth in A320, 787, and 737 volumes [13] - Defense, space, and other segments saw sales of $191.8 million in Q4, down 1.9% from the same period in 2024, impacted by the divestment of the Austrian industrial business [14] Market Data and Key Metrics Changes - The backlog for commercial aircraft has exceeded 17,000, with a delivery shortfall of at least 5,300 aircraft, highlighting the supply-demand imbalance [4] - Aircraft production in 2025 was 1,503, about 87% of pre-pandemic levels, with expectations to fully recover to pre-pandemic levels in 2026 [8] Company Strategy and Development Direction - Hexcel is focused on developing advanced material solutions for next-generation aircraft, positioning itself to benefit from increased commercial aircraft production and defense funding [5][10] - The company initiated a $350 million Accelerated Share Repurchase program, reflecting confidence in long-term growth [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a sustained ramp-up in commercial aircraft production rates, with positive catalysts across major programs [6][20] - For 2026, Hexcel expects sales in the range of $2.0 billion to $2.1 billion, with adjusted EPS between $2.10 and $2.30, driven by increased operating leverage and disciplined cost control [21] Other Important Information - The board declared a quarterly dividend of $0.18 per share, a 6% increase, reflecting a positive outlook on long-term growth [18] - The company closed a facility in Belgium and divested non-core businesses to streamline operations [14][16] Q&A Session Summary Question: Can you provide more detail on the growth assumptions for commercial aerospace in 2026? - Management indicated that commercial aerospace growth is expected to be low to mid double digits, with specific assumptions for A350 deliveries at about 80 units in 2026, up from 57 in 2025 [38][39] Question: What is the outlook for incremental margins? - Management expects mid-30s incremental margins, driven by operating leverage as production rates increase [68][69] Question: Will there be further cash going into buybacks in 2026? - The priority is to reduce leverage back to the target range, but after achieving that, continued share repurchase will be considered [71]

Hexcel (NYSE:HXL) Q4 2025 Earnings call January 29, 2026 09:00 AM ET Speaker9Hello everyone, and welcome to Hexcel fourth quarter and full year 2025 earnings call. Please note that this call is being recorded. After the speaker's prepared remarks, there will be a question and answer session. If you'd like to ask a question during that time, please press Star, followed by one on your telephone keypad. Thank you. I'd now like to hand the call over to Kurt Goddard, Vice President of Investor Relations. Please ...