Hexcel reports 2020 Q4 and full year losses

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Hexcel Corporation has reported losses in its Q4 and full year 2020 financial results.

Sales in the fourth quarter of 2020 were US$295.8 million compared to US$564.3 million in the fourth quarter of 2019, while full year 2020 sales were US$1,502.4 million, a decrease of 36.3% in constant currency compared to 2019.

Q4 sales for commercial aerospace were, US$126.7 million, a decrease of 66.6% compared to the fourth quarter of 2019, while sales to other commercial aerospace, which include regional and business aircraft, fell by 59.2%, the company said.

According to the company, demand was negatively impacted by the global pandemic, particularly business jets, and all major programs were down substantially with the largest sales value impact related to the A350. ‘Boeing 737 MAX sales continue to be at a very low level,’ a press release said. ‘Build rate reductions driven by the Covid-19 pandemic combined with significant supply chain inventory destocking led to the reduced sales levels.’

In space and defense, Q4 sales were US$119.7 million, an increase of 3.8% compared to 2019, helped by strength in US military rotorcraft programs, while Q4 industrial sales were US$49.4 million, down 28.6%. Wind energy sales, the largest submarket in industrial declined by 42.1% in constant currency compared to Q4 2019.

Full year commercial aerospace sales were US$822.3 million, a decrease of 48.6% due to ‘significant pandemic-induced production cuts across the major aircraft programs during 2020 and only limited sales for the Boeing 737 MAX program’, Hexcel said. The decline was reportedly compounded by significant destocking across the supply chain. Sales to other commercial aerospace decreased 32.5% in 2020, also due to reduce demand, the company said.

Full year space and defense sales were US$448.5 million increased nominally in constant currency compared to 2019, Hexcel said. ‘While 2020 sales for some defense platforms were negatively impacted by temporary pandemic-induced disruptions, space and defense remains an attractive growth market,’ a press release said.

Total industrial sales of US$231.6 million decreased 26.5% in constant currency compared to full year 2019, while wind energy sales decreased 29.3% during 2020 compared to 2019 resulting from global production disruptions caused by the pandemic and lower customer demand.

‘Fourth quarter revenue of US$296 million was in line with our expectations and consistent with our previous commentary that the third and fourth quarters of 2020, along with the first quarter of 2021, have been and are expected to be our most challenging quarters during this pandemic driven market downturn,’ said chairman, CEO and president Nick Stanage. ‘Our results clearly reflect an unusual and tumultuous year for our customers, our suppliers, and our Hexcel employees who have remained laser-focused on managing through the challenges at hand. The Hexcel team has responded quickly and worked safely and efficiently through significant uncertainty. Employees have been challenged in ways we never imagined, yet their commitment to excellence and to our customers has never wavered with many relationships actually being strengthened through innovative ways of working.

‘We continue to forecast stabilizing demand as we move into the second quarter of 2021, with the inventory de-stocking process expected to be largely winding down and the potential for some narrowbody build rate recovery as we progress into the second half of the year. However, there is no room for complacency during this pandemic. A quick and successful rollout of the vaccines is crucial to a significant increase in airline passenger traffic, which will ultimately be the driver of demand for new, composite-rich aircraft,’ he added.

‘As we enter 2021, we will continue to tightly manage cash and costs, and ensure that we deliver our performance targets. The overall long-term demand for efficient aircraft and our advanced composites technology remains robust, and the potential for a significant upturn in 2022 and beyond continues to look positive.’

This story uses material from Hexcel, with editorial changes made by Materials Today. The views expressed in this article do not necessarily represent those of Elsevier.