Good day and welcome to the Third Quarter 2023 Howmet Aerospace Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Paul Luther, Vice President of Investor Relations. Please go ahead.

Thank you, Betsy. Good morning and welcome to the Howmet Aerospace third quarter 2023 results conference call. I'm joined by John Plant, Executive Chairman and Chief Executive Officer; and Ken Giacobbe, 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. With that I'd like to turn the call over to John.

Thanks P.T. and welcome everybody to the Q3 earnings call. The results for the third quarter were solid in all respects and exceeded the guidance given in August, which itself was a further increase on that provided in May and February. Sales of $1.658 billion, increase of 16% year-over-year. EBITDA was $382 million, an increase of 18%. EBITDA margin increased to a headline rate of 23%. Margin rate improvements reflect the continuing good work in all segments. I would like to note fasteners with not a sequential quarterly improvement of 230 basis points and additionally, the structure segment had a 320 basis points recovery from the Q2 rate. Howmet's year-over-year revenue increase flowed through to incremental EBITDA margin at a rate of 28%, which was in line with the guidance. Operating income increased by 22% year-over-year and operating income margin was 19%. Continued topline growth and healthy margins generated an earnings per share increase of 28%. Free cash flow was healthy at $132 million and help drive shareholder-friendly actions including gross debt retirement of $200 million share buyback of $25 million. Lastly, we also announced a 25% increase in the dividend on top of last year's 50% increase. Having provided this top-level summary, I'll pass the call to Ken to provide further details of revenue by end market and the results by business segments.

Thank you, John. Let's move to Slide 5. All markets continue to be healthy with revenue in the third quarter, up 16% year-over-year and 1% sequentially. As expected sequential revenue growth was impacted by normal third quarter seasonality. Commercial aerospace increased 23% year-over-year, driven by all three aerospace segments. Commercial Aerospace has grown for 10 consecutive quarters and stands at 49% of total revenue. Commercial Aerospace growth continues to be robust supported by demand for new more fuel-efficient aircraft as well as increased spares demand. Defense Aerospace was up 13% year-over-year driven by the F-35 and Legacy Fighter programs. Commercial Transportation which impacts both forged wheels in the Fastening Systems segment was up 7% year-over-year driven by higher volumes. Commercial Transportation remains resilient, despite normal seasonality. Finally, the industrial and other markets were up 10% year-over-year driven by oil and gas up 29%, General Industrial up 8% and IGT up 4%, in summary, another very strong quarter across all of our end markets. Now let's move to Slide 6, for more details on the third quarter results. Starting with the P&L and enhanced profitability revenue, EBITDA, EBITDA margin and earnings per share all exceeded the high-end of guidance. Revenue was $1.658 billion up 16% year-over-year. EBITDA was $382 million up 18% year-over-year, while absorbing near-term costs associated with net headcount conditions of approximately 645 employees. The Engine segment drove a majority of the increase by adding approximately 500 employees. Year-to-date net debt count additions are just over 1500 employees. We continue to increase headcount for the expected revenue ramp. EBITDA margin was strong at 23%, despite absorbing the headcount additions. Adjusting for year-over-year inflationary cost pass-through of approximately $15 million EBITDA margin was 23.3% in the flow-through of segment incremental revenue to EBITDA was at approximately 28% year-over-year which is…

Thanks, Ken. So let's move to slide 12 and talk about the outlook for the next quarter and year-end. So first of all regarding commercial aerospace, airline load factors continued to show improvement in resilience. Factory improvement for international travel notably in Asia also continues to increase. Domestic airline activity continues to be above 2019 levels in the Western countries. Given these load factors and the continued restriction of aircraft builds, the fleet of existing aircraft are having to work much harder. This is leading to robustness in the engine spares market which is further increased by the fact that the deployment in recent years of new engine technologies which are currently operating with increased replacement parts due to lower time on wing. You look worried about this and you can be assured that Howmet is playing its path and supporting both the technology upgrades and the high-pressure turbine and through providing additional service parts. This will continue over the next two to three years and probably beyond. Moving on commercial aerospace to the defense market. This market is also showing strength with the start of the gradual buildup of engine spares over the next two to three years to support the F-35 program for which the fleet now stands at 975 aircraft and growing. These increases more than offset the continued lockhead inventory correction in our structures business. Other markets of IGT and oil and gas continue to be very healthy. In commercial truck and trailer builds and order intake continued to be good despite the lower freight rates and increased price of diesel fuel. We continue to be cautious though as we look forward until we see several months of data for new 2024 orders, which the order books have only been opened for a month. The initial…

We will now begin the question-and-answer session [Operator Instructions] The first question today comes from Kristine Liwag with Morgan Stanley. Please go ahead. Q – Kristine Liwag: Hey, good morning, everyone.

Hi, Kristine. Q – Kristine Liwag: John, Ken or PT I guess with the 7% revenue increase for your 2024 initial outlook, what does it imply for aircraft production rates for the Boeing 737, 787 and the Airbus A320 and A350. And also when you talk to your customers, how much visibility are you getting for the ramp?

Okay. I guess that's the big one Kristine. So let me just talk generally about the 7%, first of all. Within that, assumption is a mid-teens assumed increase in commercial aero. And more like single-digit increases in industrial, things like AGT oil and gas and general and other, while an assumed high single-digit decrease in commercial transportation. So basically, in our client solid defense solid general industrial markets healthy increase in commercial aerospace that reduced by a high single-digit assumption on commercial or transportation. That's roughly now applying. I'm going to say, we see assumed build rates in let's say forecasting agencies. For the most part, we can see that they're going to increase both wide-body and body fractional increase in mix next year. At the moment, specifically, for Boeing 737 is what you assumed. You asked a question about our assumption is that it's somewhere between the mid-30s and 40 somewhere in that region. We don't want to pit it specifically at this point, you can assume that's within the range plus or minus I gave. It's really important that we see Boeing achieved the rate 38, which we know is going to be prior to now it hasn't really happened that doesn't seem to be happening just yet, but we know it's going to be very soon. But we're not yet ready to believe and input into our guidance even though we can supply a rate 42 should Boeing be in a position to build at that rate. Q – Kristine Liwag: Great. Thanks for the color.

Thank you.

The next question comes from Robert Spingarn with Melius Research. Please go ahead.

Hi. Scott Mikus on for Rob Spingarn. John or Ken, I wanted to ask you a little bit about pension contributions for next year. And also, just given the work you've done there, are you considering any sort of risk transfer to get rid of the pension liability and improve free cash conversion?

We've been working at pension liabilities for several years now and we've indeed taken over the last five years from where we started several billion out of that net liability of gross liabilities rather and we've always been focused on taking ROS and net debt together. Otherwise, you just leave yourself open to interest rate risk and mortality risk and we've managed it down now to I think about $750 million for pension and healthcare certainly in that region. And so it's now, let's say tiny traction of our market cap and therefore essentially is not relevant. At the same time, while I've noted one of the company maybe a couple have continued in prioritizing this. I'm not yet at that point willing to consider that. It's not that, it's off the table because I think it would be something which would be useful to do. But at the same time, I think at this current time there's other better uses of our cash and also I'm not willing to leverage to enable that to occur. So essentially, we are aware of it. We continue to work at our plans. I can see us potentially picking off one or two and do partial initiation either within a plant or in a total of a plan but you shouldn't expect to see that liability extend. We wish to not to pay the premiums to insurance companies to enable that at this point in time. I think that may come over the next say three to five years at some point but not yet. And the assumption we have for next year is that the cash contributions will be a little bit higher than this year but at this point not material.

Okay. Thanks. I'll stick with one question.

Thank you.

The next question comes from David Strauss with Barclays.

Hey, David.

John, you mentioned your work on upgraded blades. I wanted to see if you could give a little more color there around the timing of when you when you think you'll be producing upgrading -- producing and delivering upgraded blades to both GE and Pratt?

So both for the GTF advantage engine upgrade and for the LEAP 1B upgrades. Those have been something that we've been working on for several years now. And the -- and if anything let's say a little bit later into production than originally envisaged although that is pushed back and timing have not been a result of Howmet not being ready. So we're in good shape. I commented in the past that increased performance in the high-pressure turbine leads to increased complexity and with that is value. And we certainly have been intimate with the engine manufacturers to improve the performance as the engine temperatures have seemed to be higher than originally envisaged and therefore to help improve timeline wing. I feel there's though specific timing for both what was really called -- now that has a different code name for GE. And I think for the advantage for Pratt & Whitney you're best asking them for pipeline disclosure rather than myself because we have an agreed plan but that can and has been varied according to the specific needs of those engine manufacturers at this point in time?

Okay. Fair enough. I'll ask them.

Thank you. It's far better David.

And then Ken I guess a two-parter for you. Just quick comments on working capital through the end of this year. It looks like you're kind of a pretty big reversal benefit in Q4 and thoughts on that into 2024? And then pension expense you brought down a little bit for 2023 but what are you looking at for 2024? Thanks.

I'm going to comment on the working capital first, and then let Ken amplify and then Ken can totally deal with the pension side. And the reason why, I want to talk about the working capital because it's also tied up with the specific operations and status of they have met different business units are. So first of all, in terms of working capital I mean AR or account receivable and accounts payable they just move on the days assumption. So, if revenue goes up David, as it has then clearly, we have more dollars tied up in receivables than we had but that's a good answer, because it's whatever day it is and I don't know, if we've ever disclosed it we can back engineer it. But our days are pretty constant. And so because revenue went up a few more dollars went on, but the days in receivables exactly the same payment payables. The big wildcard on what gap is always inventory. And so far inventory is still elevated more elevated than I would like but just because our flight [ph] hasn't been taken up where it should be at this point in time. So it moves with the, I will say status within each business of where we are operationally and in terms of start from let's say, volume recovery. So if you take our Wheels segment, which was the first division to show volume increase manning and then moving through towards stability and now smoothness of production. Our days of inventory are in really good shape. And indeed, I believe we're at close to low-class level. If I look at our engine business, which is our second division out of the gate in terms of building of revenue, increasing manning and that's continuing to increase. We…

Yeah. Thanks David. So as John articulated their days are really the key on working capital. And then also depending on where we are in the cycle -- business segment. So as we exit this year, I think we've given everybody the walk in the assumptions tab of the deck to kind of walk through it. But that would indicate a working capital burn this year roughly about $190 million plus or minus. And it's really driven by -- we've increased the revenue guide once again so you have more AR that goes with that plus we're keeping inventory in the business to make sure that we're not the bottleneck for our customers, delivering on time in full at the right spec is really important for us. So we've got a little bit more inventory. Next year we've got another growth projection here. So I anticipate there'll be working capital burn again next year in 2024, probably be better than this year as we work down inventory in the business but it's again going to be dependent on where we are in the cycle. So I believe it's in really good order here driven by the growth of the business. On the pension expense side, as John mentioned I'll start at the top of the house. We've taken gross liabilities down by 45% since separation. That's a pretty big decline. Big significant part of that is the actions that we've taken to reduce gross liabilities. So as we get a bit of a help from the increase in discount rates but there's a lot of action around that gross liability. John mentioned cash, it will be up next year. We remeasure it at the end of the year. So that's pretty much of a volatile line. So we'll give you more guidance on the next call in terms of what the cash contributions would be. The expense side -- that's a little bit more visible right now. Again we strike it at the end of the year. If you look at our pension and OPEB expense right now it's $35 million on an annual basis. So next year based on asset returns, the market has been a little tougher. I'd say probably another $15 million plus or minus $5 million on either side of that. It's really not material. But I think that's all in good order as well.

Great. Thanks for all the detail.

The next question comes from Scott Duco with Deutsche Bank. Please go ahead.

Hi. Good morning.

Hi, Scott.

Two very quick questions both for John. First did price realizations accelerate again in the third quarter. I think they had accelerated last quarter. And then on Fasteners, can you say whether you're shipping at five a month on 787 at this point? Or are you still tracking a bit below that? Thank you.

Okay. I don't think we've given the third quarter detail on the commercial side. I think that would be in our 10-Q later when we file it, whilst I'd say that it's in good order and in line with what we previously said both for the quarter for the year. And I stand behind my comments regarding 2024 we made them on the last call. 787 at the moment we're a little bit below rate and fully expecting that to move up to grade seven next year. And as I've commented before we see very strong underlying demand for that aircraft. And I can see the need to go above rate seven as well. It's only a question of when.

Okay. Great. Thank you.

Thank you.

The next question comes from Myles Walton with Wolfe Research. Please go ahead.

Thanks. John I was hoping you could dig a little bit deeper into the fastening margin performance and obviously, sort of, troughed at the beginning of the year and has been showing some signs of resiliency and improvement. I think at the beginning of the year you told me to not expect much for a couple of years. Are we at a point where new management plus the rate increases on the wide-bodies we should start to think about getting back to 2018, 2019 Fastener performance?

Well, I think, it's a bit premature to get back there because I mean the conditions there and the wide-body market in particular is quite different to what they are now. So basically in the first quarter, which is probably a low points in base margins reflected essentially a total metallic build of aircraft and you can call it zero in terms of any real volume on the composite side. So that's one factor. Of course that's begun to change. The business itself has also begun to improve. And I see very much improved signs of operating efficiency improvements, but with a ways to go. I see additional discipline in the business commercially and there's still a ways to go. And going forward into next year what I see is a volume increase for commercial aircraft production also fractional improvement in mix because of the wide-body going to next year in particular in your assumptions on what the final wide-body production will be in composite aircraft essentially on wide-body transitioning from metal to composite aircraft through the course of the year. Hopefully with some delivery of 777X parts as well which has got a composite wing. And so I'll say general improvement in conditions for the business, but still with a big thrust on improving its productivity and throughput efficiency which needs to occur. So, basically, some ways to go yes optimism will continue good trend over the last couple of quarters but too soon to call out any specifics on it. And I don't think we have a guide by segment anyway. But I haven't guided or have that margin for next year just given you like the revenue increases. So that gives you a picture of our business.

Thanks John.

Thank you.

Next question comes from Ronald Epstein with Bank of America. Please go ahead.

Hey John, how are you?

Hey Ron.

Yes. The topic that doesn't tend to come up much is the forged wheels. And it appears that it's been running ahead of expectations. I mean how should we think about that? And what are your expectations around it? And when we think about modeling it what would be a prudent way to do so?

Well essentially the play on forged wheels for aluminum is that you start off with what's the big picture in terms of truck and trailer production essentially in North America and Europe, albeit we do play in some of the Asian markets so it's a significant share position as well. And then you factor in basically some -- so whatever percentage change that is in a new factor in as a positive against what I think will be a worse macro position next year. There'll be some penetration achieved against steel wheels particularly as fuel efficiency requirements that step up, a fractional contribution but nothing in a great node in terms of adoption of different I'll say powertrain hinting out there is move towards electrification or whatever but no big moves next year but that's a positive venture as well. And the manufactural share improvement on top of that. So, basically we see secular growth in the segment offsetting some macro decline in the assumed markets and that's why I guided as commented an idea about high single-digit reduction for the business is our assumption trying to be fairly cautious at this point in time until we've got a better read on what's the general economy going to do although I did see freight rates begin to stabilize and improve recently. So, there's a lot of factors yet to bring to bear in terms of what the final outlook for next year is I want to take a fairly cautious assumption. This year I don't really commented -- a more difficult second half as it is we've still been able to burn off backlog. And let's say even despite today we have -- is it Mac truck which is subject to the UAW strike. Our arrears are such that that's not going to affect us in the fourth quarter. And our assumption is that by Q1 next year by another couple of months at UAW dispute the Mac truck will be resolved and therefore they'll be back. So that's about it really. It's been pretty strong this year. I give you the general is into next year.

And then maybe just one follow-on if I may just a little change subject. When we think about the Pratt & Whitney situation with the GTF and all the tests that need to be reworked, is that good bad neutral for you guys? I mean how should we think about the impact on you? I mean the company vis-a-vis the GTF situation?

Yes. I'll start off with having to separate two issues I think on the GTF, because I think while it gets all and mashed together, I see them as quite separate and then the catalysts intertwining for convenience. So this contamination issue clearly that requires inspection that might take, I don't know, so many days, let's call it, 20, 30, 40 days or an off wing to achieve that inspection. And then, I guess longer if those risks turn out they required to be replaced or not. And I guess it is a small fraction of those that will require to be replaced. That's one item or separate item. Over, let's say, previously incentive field but I'll call it, left field there is the discussion about the time on wing issues that have been publicized by everybody regarding the GTF we're particularly in harsh climate countries or pollution countries the time working is a fraction of the predecessor engine and also what we originally thought for the GTF. So, the question then becomes for the problems around the combustor the filling of holes the higher temperature and then those temperatures and pollutants hitting the two blades in the high-pressure turbine those clearly require replacement. And the question is, what is the replacement interval for them? And so that stands alone as an issue. Pratt & Whitney will determine what frequency they want to replace those blades, again, more of a question for perhaps than for myself. We're able to stand behind them and supply what needs to be supplied within degrees. The question is, what's the requirement? Then, of course, you can intertwine them together. So maybe where those engines are off wing for the powder metal contamination issue maybe the opportunity will be taken to replace some of those…

Got it. Thank you very much.

Thank you.

The next question comes from Noah Poponak with Goldman Sachs. Please go ahead.

Hey, good morning everyone. John I was hoping to get a little more color from you on your perspective on the broader aerospace new-build ramp-up. You've had good perspective. And as you mentioned you've been cautious and that it's been correct. It felt like in the middle of the year and kind of around the air show and into the summer you sounded more optimistic and sounded like the supply chain was kind of finally ready to go. And then we've had these incremental engine and aerostructures issues. Did Boeing especially -- and I guess Boeing and Airbus keep the underlying broader supply chain going towards the planned higher rates? And is everything kind of ready to ramp once after fuselage and the like are fixed. And you mentioned them giving you plans for next year. Are they incrementally more firm on that now with the master schedule than they've been recovery to date are things firmer? Or is that wishful thing?

I mean, I think Boeing in particular I have had firm plans throughout the year, it's been the realization of those plants, which has been more of the issues. And I guess it's from a combination of reasons, there's always going to be somewhere in the supply chain amongst all the parts of difficulties. There's always going to be the degree of experience in Boeing on plants with all of the change of people in and out or out and in regarding post-COVID. And then of course, we read in the press about the difficulties of, I'd say was it strike at Spirit Aerospace and then some other production issues of some failed parts and holes and all the rest of it. And yet there seems to have been some management change there, which may proved to be positive because that's a TBD. And hopefully, I guess, you listen carefully to the commentary from Spirit yesterday. We're optimistic that those fuselage and other component problems to get resolved it's not sitting in our control. But should those begin to improve, I think, that's a major step forward in Boeing realizing its own plans for production rate increases and also getting behind it the retrofit of those sales, which were subject to pass those only or holes billed too big and bigger fasteners. So I think they're hoping Herculean efforts to try to achieve all of that. But as you know circulate events by themselves don't sort of produce the output, and we've still got to see that improve. So, hopefully, during October, November, December, we'll begin to see rate pick up, it's spirit other suppliers and then obviously, boring itself to get to their required or stated rate four to next year. In terms of then on the engine side, you've read commentary or I think anyone, I've seen was the GE commentary instead of let's say 1,700 engine 1,600 engines, isn't really impactful for us at this point in time? Because for us it's just us meeting their rate requirements and then there's a choice as I said rather than the previous question, what goes to OE compared to what goes to search requirements. We're dealing with very robust demand on both sides. We see that demand increasing again next year plus some blended in changes potentially for the technology change yet to come.

Okay. I appreciate it. Thank you.

Thank you.

The next question comes from Sheila Kahyaoglu with Jefferies. Please go ahead.

Hi John and hi Ken. Thank you, guys.

Hi Sheila.

So hey, I have two questions if that's okay. So John don't [indiscernible].

Well, I am completely leaning today announce it is two-parts, three-parts so yeah sure. Go for it.

You are. You are. But I want some good nuggets here. So the OEs that are calling out castings and forgings in terms of supply chain kind of slowing down the supply chain. I know you've been clear that Howmet isn't a bottleneck and you aren't in the large structural casting business anyway. So maybe could you characterize your output today? And what you're capable of in terms of demand? And then, this is more of like a larger opportunity in terms of pricing and volume. How do you think about that trade-off going forward?

Generally forgings and castings have been a bit of a whipping below for a couple of years. With commentary I think maybe even before, it was any basis for it albeit, subsequently I think there has been a basis for a commentary where to replace the skill levels to produce some of these in particular the casting is really at a very high order. So the trade the recruitment and then trading lines to produce effective production workers in some of this certainly strain. I think all of the companies in that regard including Howmet. We did choose to start recruitment a bit earlier. And I know that I've cost the company probably 20 basis points of margin by being slightly ahead of the curve -- recruitment. But at the same time I think has paid dividends for us and the fact that we've been in a vision to produce generally on time, at rate and generally good quality. So I think it's been a good trade-off for us. I want to correct you on the structural casting side we're probably the number two in the market behind precision cast parts, but they are still, the big dog on the block in terms of production of structural castings. We do produce them and we're at a good rate for let's say, 98% of all of our structural castings. I mean early on we had a few moments things like fairings and is like shelling pieces and coming off at good rates and no cost [Ph] or whatsoever. And so should there be increased demand for structural castings obviously where we tool and if not the availabilities that to us for the next few years should engine manufacturers want to is that we're in a position to supply because we still have some available capacity and indeed are willing to invest commensurate with it being a good return of capital. And generally I've been quite positive about investing in our engine business and contrasting that to -- the our structures business is based upon returns. So it's one way of saying we're in a good state, restructure casting we are the significant supply to the industry on turbine blades. And I hope that gives you enough nuggets.

How's do you think about pricing and your contract structures going forward given the constraints in the supply chain and you're hiring ahead of the curve.

Pricing has been positive for us. And I think it reflects the value that we bring. When I look at some of the requirements for the increased temperature performance in the, let's say, narrow-body engines. We are bringing to bear some of the not all, but some of the technologies that we've deployed for the F-35 engine in terms of ability to manage both pressure thermal performance in the high-pressure turbine. And we're able to produce parts. We obviously work with the customers to engine into specification. But if they're specified at 2,500 degrees and operate higher we can take it higher because as you know for the F-35 we're up at 3,500 degrees and indeed the only company that well that can provide the turbine parts with that performance in that environment. We've already commented previously that we are working on the improvements for the currently 2028 upgrade to that engine to improve its thrust and time and air. And so again, we are able to take the temperature performance of those parts and elevate it further. And we've talked a little bit, but only a little bit in our Technology Day about some of the technologies that we'd be able to deploy for that. And so we're in a position to bring a degree of performance and capability at scale, which I think needs to reflect in value because in truth the turbine blade is a pretty small part of the value of the engine and to achieve the requirements for let's say lower carbon footprint continually taking up the pressure inside the engine to improve the optimization that you have fuel and therefore its burn characteristics for lower dilution and the whole say fuel efficiencies and carbon footprint presents great value to the industry.

Great. Thank you.

Thank you.

The last question today comes from Seth Seifman with JPMorgan. Please go ahead.

Hey, thanks very much. Good morning everyone. So John I know you said you wouldn't say this or haven't said this and so I'm not necessarily expecting a number in terms of the margin outlook for next year, but if we think about that sort of baseline incremental of 30% plus or minus 5%. How do we think about the puts and takes for where next year can come in relative to that 30%. Does the addition of headcount and the need for the learning to develop among your employees? Does that keep things sort of below that 30% range as it's been in recent years? Or are there other opportunities to be above it? What's the best way to think about that at this point?

Yes. I mean, we were able to step up the last quarter to 19% operating profit and 23% EBITDA rate. I don't have any commentary regarding margin rates for next year. What I still see at the moment is potentially, I don't know this, but potentially a few more months of choppy production particularly on the free manufacturing side, it's just an assumption. Maybe we get lucky towards the second half of next year or the back end of next year and we see things get smooth out, we have seen some things begin to move in our favor and smooth that as I commented on the inventory side, we also think about our engine business. But in terms of -- at what point do we reach what I previously have referred to the state of Grace where things move out margins become stable and better and cash just use that as the industry and hopefully out of Howmet. I've always said that's a year away and I still think you see year away could be the back end of '24, but more likely getting to '25 and that hopefully combines with if the '25 external debuts of what the aircraft production will be including its wide-body mix then that begins to get I'd say into a good state. So, I have generally medium to long-term optimism and feel we are in a really great place with great backlog and good things to come, albeit still having to face up to shorter-term challenges of all the things we've talked about in terms of broad rate changes and the assumptions change in many parts of the market, in particular the commercial aerospace part of the market. I think it's a better best I can give.

Excellent. Thanks very much. Helpful.

Thank you, very much.

This concludes our question-and-answer session and concludes the conference call. Thank you for attending today's presentation. You may now disconnect.