Howmet Aerospace Inc. (NYSE:HWM) Q4 2022 Earnings Call Transcript

Matt Akers : I wanted to ask on CapEx. It looks like you guys are expecting a step up this year. I know it’s still below D&A and below kind of what it was a few years ago, but just what’s driving the uptick and how we should think about that kind of as we ramp up aero production here?

John Plant: Yes. So, first of all, we’ve taken, I will say, pressed out on the CapEx for the last two or three years and to be sub $200 million, I think, was a good outcome for the year. I do think that because of not only rate increases are coming, we feel not something you can turn on. You have to prepare for them and provide CapEx, not for some aspects of the volume, but also some of the technological changes that we’ve talked about. We’re also spending again on automation, and that’s proving to be, again, beneficial to us over the last couple of years. But I think it’s part of — as we move into looking at 2024, 2025, if it turns out to be the more optimistic scenarios that we’ve talked about of both narrow-body rate and wide-body rate, then I think for us to be in that ZIP code of just below inflation will serve us well, and it will be a source of cash and just let it through the next couple of years at that sort of level.

And if we achieve that, I think in terms of CapEx usage for the business and coming up to our target — utilization rates will be in a good shape to achieve all of that.

Matt Akers : Okay. Great. Thanks.

John Plant: Thank you.

Operator: This concludes our question-and-answer session and also concludes today’s call. Thank you very much for attending today’s presentation. You may now disconnect your lines.