Howmet Aerospace Inc. (HWM) 2022 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to Howmet Aerospace Second Quarter 2022 Results Conference Call. My name is Ian, and I'll be your operator for today. As a reminder, today's conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Paul Luther, Vice President of Investor Relations. Please go ahead.

各位女士、先生，早安，歡迎參加 Howmet Aerospace 2022 年第二季業績電話會議。我叫 Ian，今天將擔任會議主持人。提醒各位，今天的會議將錄音以供重播之用。現在我想把會議交給今天的主持人——投資人關係副總裁 Paul Luther 先生。請開始。

Thank you, Ian. Good morning, and welcome to the Howmet Aerospace Second Quarter 2022 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.

謝謝你，Ian。各位早安，歡迎參加 Howmet Aerospace 2022 年第二季業績電話會議。我與執行董事長兼執行長 John Plant，以及執行副總裁兼財務長 Ken Giacobbe 一同出席。在 John 與 Ken 發表評論後，我們將進行問答環節。

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.

我想提醒各位，今天的討論將包含與未來事件及預期相關的前瞻性陳述。可能導致公司實際結果與這些預測存在重大差異的因素，已列於今日簡報與盈餘新聞稿，以及我們最近向 SEC 提交的文件中。

In addition, we've included some non-GAAP financial measures 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.

此外，我們在討論中也納入了一些非 GAAP 財務衡量指標。與最直接可比的 GAAP 財務衡量指標之調節表，可在今日新聞稿以及今日簡報的附錄中找到。接下來，我把電話交給 John。

Thanks, PT, and good morning, everyone. Welcome to our Q2 call. Howmet's second quarter was another strong quarter and witnessed the continuing recovery in commercial aerospace, which was up 34% year-on-year and 7% sequentially. Total revenue was $1.393 billion and was up 17% year-on-year and 5% sequentially, which was at the top end of our guidance range. Revenue increased in each business segment, both year-over-year and sequentially.

謝謝，PT，各位早安。歡迎參加我們的第二季電話會議。Howmet 第二季再度表現強勁，並見證商用航太持續復甦，商用航太年增 34%，季增 7%。總營收為 13.93 億美元，年增 17%、季增 5%，位於我們指引區間的上緣。各事業部門營收不論年比或季比皆有所成長。

Similarly, Howmet's Q2 EBITDA grew year-over-year and sequentially to [$317 million] (corrected by company after the call), including net headcount additions of approximately 740 employees. Moreover, we are particularly pleased with the continuing healthy EBITDA margin performance of 22.8%, which is also at the high end of guidance. Inflationary costs were either recovered from customers or offset with efficiency improvements. Finally, earnings per share was strong at $0.35, an increase of 59% year-over-year.

同樣地，Howmet 第二季 EBITDA 年比與季比皆成長至 [3.17 億美元]（公司於會後更正），其中包含淨新增約 740 名員工。此外，我們特別滿意 EBITDA 利潤率持續維持健康表現，達 22.8%，同樣位於指引上緣。通膨成本要麼向客戶回收，要麼透過效率提升予以抵銷。最後，每股盈餘表現強勁，為 0.35 美元，年增 59%。

Moving to the balance sheet and cash flow. Free cash flow was a positive $114 million in the quarter, including an inventory build of approximately $105 million, primarily to accommodate the commercial aerospace recovery. Free cash flow was positive for the first half, and we expect to have positive free cash flow in both Q3 and Q4. The cash balance at the end of Q2 increased to $538 million, including common stock repurchases of $60 million and bond repurchases of $60 million.

接著談資產負債表與現金流。本季自由現金流為正 1.14 億美元，其中包含約 1.05 億美元的存貨增加，主要是為了因應商用航太復甦。上半年自由現金流為正，我們預期第三季與第四季自由現金流也將為正。第二季末現金餘額增加至 5.38 億美元，其中包含 6,000 萬美元的普通股回購與 6,000 萬美元的債券回購。

Share and bond repurchases were with cash on hand and continue to reduce share count and interest expense drag and hence, improved free cash flow yield. Legacy pension and OPEB liabilities are trending favorably with a net liability improvement of $60 million year-to-date. Associated cash contributions are down 65% in the first half compared to last year. Lastly, net leverage improved to 3x and is expected to accelerate by year-end to move towards 2.5x EBITDA.

股票與債券回購使用的是手上現金，並持續降低流通股數與利息費用拖累，因此提升自由現金流殖利率。既有退休金與 OPEB 負債呈現有利趨勢，年初至今淨負債改善 6,000 萬美元。相關現金提撥在上半年較去年下降 65%。最後，淨槓桿改善至 3 倍，並預期至年底將加速改善，朝 2.5 倍 EBITDA 邁進。

Segment details will be covered by Ken. However, I would like to note the small continuing EBITDA margin increase in our Engines business and an improvement in Structures. This was commendable for Structures in the light of both the inventory burn down of F-35 and the continuing low to 0 build of the Boeing 787. Now over to Ken.

各事業部門細節將由 Ken 說明。不過，我想特別指出，我們引擎業務的 EBITDA 利潤率持續小幅提升，結構件業務亦有所改善。考量到 F-35 的存貨去化，以及波音 787 持續處於低至零的產量水準，結構件業務的表現值得肯定。接下來交給 Ken。

Thank you, John. Please move to Slide 5 for an overview of the markets. Second quarter revenue was up 17% year-over-year. The commercial aerospace recovery continued in the second quarter, with commercial aerospace revenue up 34% year-over-year and 7% sequentially, driven by the Engine Products segment and the narrow-body recovery. Commercial aerospace was 45% of total revenue, and although an improvement from 2021, we continue to be far short of the pre-COVID level, which was 60% of total revenue.

謝謝你，John。請翻到第 5 頁，先概覽市場情況。第二季營收年增 17%。商用航太復甦在第二季持續，商用航太營收年增 34%、季增 7%，主要由引擎產品事業部門以及窄體機復甦所帶動。商用航太占總營收 45%，雖較 2021 年有所改善，但仍遠低於 COVID 前水準（當時占總營收 60%）。

Defense aerospace was essentially flat year-over-year as well as sequentially, driven by continued customer inventory corrections for the F-35. Commercial transportation, which impacts both the Forged Wheels and Fastening Systems segments, was up 19% year-over-year and 11% sequentially, driven by higher aluminum prices and higher volumes. Finally, the industrial and other market, which is composed of IGT, oil and gas and general industrial, was down 4% year-over-year. Going deeper into this market, IGT was essentially flat, oil and gas was up 24% and general industrial was down 20% on a year-over-year basis.

國防航太年比與季比基本持平，主要受 F-35 客戶持續進行存貨修正所影響。商用運輸（影響鍛造輪圈與緊固系統兩個事業部門）年增 19%、季增 11%，主要由較高的鋁價與較高的出貨量帶動。最後，工業及其他市場（由 IGT、油氣與一般工業組成）年減 4%。進一步拆解該市場：IGT 基本持平，油氣年增 24%，一般工業年減 20%。

Now let's move to Slide 6. So let's start with the P&L with a focus on enhanced profitability. In the second quarter, revenue and adjusted EBITDA were at the high end of guidance as both metrics were up 17% year-over-year. Adjusted EBITDA was $317 million. Adjusted EBITDA margin was also at the high end of guidance as it increased 10 basis points sequentially to 22.8%. Excluding the $60 million year-over-year revenue impact of higher material pass-through, EBITDA margin was 100 basis points higher at 23.8%.

接著請看第 6 頁。我們先從損益表談起，重點放在獲利能力提升。第二季營收與調整後 EBITDA 均位於指引上緣，兩者皆年增 17%。調整後 EBITDA 為 3.17 億美元。調整後 EBITDA 利潤率同樣位於指引上緣，季增 10 個基點至 22.8%。若排除材料轉嫁（pass-through）增加所帶來的 6,000 萬美元年比營收影響，EBITDA 利潤率將高出 100 個基點，達 23.8%。

Adjusting for material pass-through, the flow of the incremental revenue to EBITDA was in line with expectations at approximately 33%. We've been able to maintain our strong margins despite the impacts of higher material pass-through and inflation as well as headcount additions to support future growth. During the second quarter, we continued the recruitment of headcount by approximately 740 employees, including net additions of approximately 455 in Engines and 245 in Fasteners as preparations are made for continued growth in the second half, adding to the growth already experienced in Q2. Year-to-date, we've increased headcount by more than 1,200 employees, and that's been focused in Engines and in Fasteners.

在調整材料轉嫁後，增量營收流入 EBITDA 的比例約為 33%，符合預期。儘管材料轉嫁增加、通膨以及為支援未來成長而增加人力，我們仍能維持強勁利潤率。第二季我們持續招募人力，約增加 740 名員工，其中引擎業務淨增約 455 人、緊固件業務淨增約 245 人，為下半年持續成長做準備，並在第二季已出現的成長基礎上再加碼。年初至今，我們已增加超過 1,200 名員工，主要集中在引擎與緊固件業務。

Adjusted earnings per share exceeded the high end of the guidance at $0.35 per share, up 59% year-over-year. For the quarter, the impact of foreign currency on earnings was minimal.

調整後每股盈餘為每股 0.35 美元，超出指引上緣，年增 59%。本季外匯對盈餘的影響不大。

Moving to the balance sheet. Free cash flow in the second quarter was a positive $114 million, which excluded $44 million of proceeds generated from the sale and associated leaseback of our corporate headquarters in Pittsburgh. Cash on hand increased to $538 million after buying back $60 million of common stock, repurchasing $60 million of our 2024 bonds and funding the quarterly dividend. The average diluted share count improved to a Q2 exit rate of 421 million shares. Net pension and OPEB liabilities were reduced by approximately $60 million in the first half of 2022, and cash contributions were reduced by approximately 65% to $13 million on a year-over-year basis.

接著談資產負債表。第二季自由現金流為正 1.14 億美元，其中不包含我們位於匹茲堡的公司總部出售並回租所產生的 4,400 萬美元收益。手上現金在回購 6,000 萬美元普通股、回購 6,000 萬美元 2024 年到期債券並支付季度股利後，增加至 5.38 億美元。平均稀釋後流通股數改善，第二季期末（exit rate）為 4.21 億股。2022 年上半年淨退休金與 OPEB 負債約減少 6,000 萬美元，現金提撥年比約下降 65% 至 1,300 萬美元。

Discount rates continue to be favorable, and we will remeasure at the end of the year, which should further reduce the net pension liabilities. Annual cash contributions are estimated to be approximately $60 million versus expense of $20 million. Finally, net debt to EBITDA improved to 3x. As John mentioned earlier, we expect net debt to EBITDA to accelerate by year-end and move towards 2.5x.

折現率仍然有利，我們將在年底重新衡量，這應可進一步降低淨退休金負債。年度現金提撥估計約為 6,000 萬美元，而費用為 2,000 萬美元。最後，淨負債對 EBITDA 比率改善至 3 倍。如 John 先前所述，我們預期淨負債對 EBITDA 將在年底前加速改善，朝 2.5 倍邁進。

Moving to capital allocation. We continue to be balanced in our approach. Capital expenditures continued to be less than depreciation at approximately 67% in the second quarter. Productivity CapEx continues to be a focus on automation in both the Engines and the Fasteners businesses to improve yields, enhance quality, reduce outsourcing and mitigate labor risk.

接著談資本配置。我們持續採取均衡的做法。第二季資本支出仍低於折舊，約為折舊的 67%。生產力資本支出（Productivity CapEx）仍聚焦於引擎與緊固件兩大業務的自動化，以提升良率、強化品質、降低外包並緩解勞動力風險。

We purchased approximately 1.8 million shares of common stock in the quarter for $60 million. In the first half of 2022, we repurchased approximately 6.9 million shares of common stock for $235 million. I would also note that we purchased 0.9 million shares of common stock in July, which increases the July year-to-date repurchases to $265 million for 7.8 million shares with an average acquisition price of $33.76 per share. Board authorization for share repurchases is currently $1,082 million.

本季我們以 6,000 萬美元回購約 180 萬股普通股。2022 年上半年，我們以 2.35 億美元回購約 690 萬股普通股。我也要補充說明，我們在 7 月回購了 90 萬股普通股，使得截至 7 月的年初至今回購金額增加至 2.65 億美元、回購股數達 780 萬股，平均取得價格為每股 33.76 美元。目前董事會核准的股票回購額度為 10.82 億美元。

Moving to debt. We repurchased $60 million of our 2024 bonds in the quarter with cash on hand, and this will reduce our annualized interest cost by approximately $3 million. Lastly, we continue to be confident in free cash flow and paid the quarterly dividend of $0.02 per share of common stock.

接著談負債。我們在本季以手頭現金回購了6,000萬美元的2024年到期債券，這將使我們的年化利息成本約減少300萬美元。最後，我們對自由現金流仍具信心，並支付了每股普通股0.02美元的季度股利。

Now let's move to Slide 7 to cover the segments. Q2 was another solid quarter for the Engine Products segment. Year-over-year revenue was 20% higher in the second quarter, with commercial aerospace up 39%, driven by the narrow body recovery. Both IGT and defense aerospace were essentially flat year-over-year while oil and gas was up 24%. Adjusted EBITDA increased 38% year-over-year and margin improved 360 basis points to a record 27.5%, despite adding approximately 455 employees in the second quarter. Year-to-date, net headcount additions for Engines was approximately 780 employees.

現在請看投影片7，說明各事業部門。第二季對引擎產品（Engine Products）事業部而言是另一個穩健的季度。第二季營收年增20%，其中商用航太年增39%，主要受惠於窄體機復甦。IGT與國防航太的年增率基本持平，而油氣則年增24%。調整後EBITDA年增38%，且儘管第二季新增約455名員工，利潤率仍提升360個基點至創新高的27.5%。年初至今，引擎事業部淨新增人力約780人。

Please move to Slide 8. Fastening Systems year-over-year revenue was 6% higher in the second quarter. Commercial aerospace was 20% higher, driven by the narrow body recovery but somewhat offset by continued production declines for the Boeing 787. Industrial was down 26%, driven by a strong Q2 last year. We expect growth in industrial in the second half. Segment adjusted EBITDA decreased 11% in the quarter and was impacted by inflationary costs and the addition of approximately 245 employees to support future growth. Year-to-date, headcount additions for Fasteners was approximately 380 employees.

請看投影片8。緊固系統（Fastening Systems）第二季營收年增6%。商用航太年增20%，受窄體機復甦帶動，但部分被波音787持續減產所抵銷。工業業務年減26%，主要因去年第二季基期偏高。我們預期工業業務在下半年將恢復成長。本季部門調整後EBITDA年減11%，受到通膨成本影響，且為支援未來成長新增約245名員工。年初至今，緊固件（Fasteners）事業部新增人力約380人。

Now let's move to Slide 9. Engineered Structures' year-over-year revenue was 16% higher in the second quarter. Commercial aerospace was 37% higher as the narrow body recovery more than offset the impact of production declines for the Boeing 787. Segment adjusted EBITDA increased 8% year-over-year despite the inventory burn-down of the F-35 and continued 0 to low builds on the Boeing 787 and inflationary cost pressures. The Structures team delivered a Q2 EBITDA margin of 14.1%. I would note that the Q2 adjusted EBITDA margin was equal to the 2019 annual margin despite revenue being down approximately 40% using this quarter's annualized revenue. This was solid performance by the Structures team.

現在請看投影片9。工程結構（Engineered Structures）第二季營收年增16%。商用航太年增37%，窄體機復甦的正面效應，超過了波音787減產的影響。儘管F-35庫存去化、波音787持續維持零到低量生產，以及通膨成本壓力，部門調整後EBITDA仍年增8%。結構事業團隊第二季EBITDA利潤率為14.1%。我想指出，第二季調整後EBITDA利潤率與2019年全年利潤率相當，儘管以本季年化營收計算，營收仍約低40%。這是結構事業團隊的穩健表現。

Finally, let's move to Slide 10. As expected, Forged Wheels' year-over-year revenue was 22% higher in the second quarter. The $50 million increase in revenue year-over-year was driven by higher aluminum prices of $36 million and volume increases of $14 million or 7%. Commercial transportation demand remains strong but volumes continue to be impacted by customer supply chain issues, limiting commercial truck production. Segment adjusted EBITDA increased 7% despite the impact of unfavorable foreign currency, driven primarily by the Euro. While the pass-through of higher aluminum prices did not impact adjusted EBITDA dollars, it did unfavorably impact EBITDA margins by approximately 400 basis points.

最後請看投影片10。如預期，鍛造輪圈（Forged Wheels）第二季營收年增22%。營收年增5,000萬美元，其中3,600萬美元來自鋁價上漲，1,400萬美元來自出貨量增加（約7%）。商用運輸需求仍然強勁，但由於客戶供應鏈問題，出貨量仍受影響，限制了商用卡車產量。部門調整後EBITDA年增7%，儘管受到不利匯率影響，主要來自歐元。雖然較高鋁價的轉嫁並未影響調整後EBITDA金額，但使EBITDA利潤率不利約400個基點。

Before I turn it back to John to discuss guidance, you will note that we called out unfavorable foreign currency in the Wheels segment as a good portion of that segment's revenue has production costs and revenue in local currency. For Howmet in total, the aerospace segments provide a natural foreign currency hedge. While the aerospace segments also have a production -- a portion of their production costs in local currency, the majority of the revenue is in U.S. dollars. For the quarter, Howmet's overall foreign currency earnings impact was less than $1 million. Now let me turn it back over to John.

在我把話題交回John討論財測之前，你會注意到我們在輪圈事業部特別提到不利匯率，因為該事業部相當一部分營收的生產成本與收入以當地貨幣計價。就Howmet整體而言，航太事業部提供了天然的外匯避險。雖然航太事業部也有一部分生產成本以當地貨幣計價，但大多數收入以美元計價。本季Howmet整體外匯對盈餘的影響不到100萬美元。現在我把話題交回John。

Thanks, Ken, and let's move to the outlook. But first, let me provide some commentary about state of end markets and the customers that we serve. The narrow body aircraft production increases will continue, and we expect Airbus to continue to lead with second half A320 production rates in the mid-50s per month. Boeing should lift the 737 MAX production to approximately 30 a month in the second half. Wide-body aircraft production is viewed as stable in the second half, and we are beginning to see spares demand increase due to improvements in international travel. Our view is that the build of wide-body aircraft improves as we move into 2023, especially with the production of the Boeing 787 restarting and combine that with the increases with Airbus of the A330 and A350.

謝謝，Ken，接著我們來看展望。不過首先，我想就終端市場與我們所服務的客戶現況做一些評論。窄體機的產量提升將持續，我們預期Airbus將持續領先，下半年A320月產量將在50多架的中段水準。Boeing下半年應會將737 MAX月產量提升至約30架。寬體機下半年產量被視為穩定，而隨著國際旅行改善，我們開始看到備件需求增加。我們的看法是，進入2023年後寬體機的產量將改善，特別是波音787恢復生產，再加上Airbus的A330與A350增產。

The forecast for 787 production in 2022 is cut again from 25 aircraft I talked about in the last quarter's earnings call to 15 as our best estimate, although we are now optimistic about the future, given the clearance by the FAA to restart deliveries. During the second half, we expect the F-35 inventory burn-off to continue, albeit defense revenue should show a modest improvement compared to the first half of the year. IGT is expected to improve, and we are seeing improvements which have signaled in the oil and gas market for the second half. Commercial truck production is expected to improve as supply chains improve component availability, albeit at a more muted level than we had previously expected.

2022年787產量預測再次下修，從我在上季法說提到的25架，下修至我們目前最佳估計的15架；不過，鑑於FAA已核准恢復交付，我們對未來轉趨樂觀。下半年我們預期F-35庫存去化將持續，但國防營收相較上半年應會小幅改善。IGT預期將改善，而我們也看到油氣市場在下半年出現改善訊號。隨著供應鏈改善零組件供給，商用卡車產量預期將提升，但幅度將較我們先前預期更為溫和。

Regarding titanium orders, we expect to execute revenue opportunities as a result of the Ukraine situation, and we've added $20 million of revenue to our fourth quarter sales. Further updates for 2023 and beyond should become more clear and secure during the next quarter or so as we not only assess the order intake but also customer inventory burn-down, especially for wide-body aircraft production.

關於鈦材訂單，我們預期將因烏克蘭情勢而執行相關營收機會，並已在第四季銷售中增加2,000萬美元營收。對於2023年及以後的進一步更新，預期在接下來一季左右會更清楚且更具確定性，因為我們不僅會評估接單情況，也會評估客戶庫存去化，特別是針對寬體機的生產。

Moving to guidance. The 2022 annual revenue midpoint is increased to $5.68 billion, which reflects the volume recovery commentary noted above and material inflation, which is now expected to be in excess of $200 million. Other inflationary costs such as energy, electricity, transportation, services and other production parts are additive to this number. For the third quarter, revenue is expected to be $1.44 billion, plus or minus $15 million; EBITDA, $326 million, plus $5 million, minus [$6 million] (corrected by company after the call); EBITDA margin, 22.6%, plus or minus 10 basis points; and earnings per share, $0.36, plus or minus $0.01.

接著談財測。2022年全年營收中位數上調至56.8億美元，反映上述的出貨量復甦評論以及原物料通膨；目前預期原物料通膨將超過2億美元。其他通膨成本（如能源、電力、運輸、服務及其他生產零組件）將在此數字之上增加。第三季方面，預期營收為14.4億美元，上下浮動1,500萬美元；EBITDA為3.26億美元，上調5百萬美元、下調[6百萬美元]（公司於會後更正）；EBITDA利潤率為22.6%，上下浮動10個基點；每股盈餘為0.36美元，上下浮動0.01美元。

For the year, we have also tightened our guidance range and called out revenue at $5.68 billion, plus or minus $35 million, which is an increase of $40 million from the prior midpoint guidance. EBITDA at $1.29 billion, plus $9 million, minus $14 million; EBITDA margin of 22.7%; and earnings per share of $1.41, plus [$0.01 or minus $0.03] (corrected by company after the call), an increase of $0.02 from prior guidance at the midpoint; and free cash flow, $650 million, plus or minus $25 million, an increase of $25 million from prior guidance. Free cash flow conversion of net income is expected to be approximately 110%.

就全年而言，我們也收斂了財測區間，並將營收訂為56.8億美元，上下浮動3,500萬美元，較先前中位數上調4,000萬美元。EBITDA為12.9億美元，上調900萬美元、下調1,400萬美元；EBITDA利潤率為22.7%；每股盈餘為1.41美元，上調[0.01或下調0.03]（公司於會後更正），中位數較先前財測上調0.02美元；自由現金流為6.5億美元，上下浮動2,500萬美元，較先前財測上調2,500萬美元。自由現金流對淨利的轉換率預期約為110%。

In summary, Howmet's Q2 year-over-year and sequential profit improvement continues. And we've demonstrated Howmet's unique and differentiated assets. We've been making strong and consistent progress against a choppy backcloth. Liquidity continues to be strong with Q2 free cash flow at $114 million, including an inventory build in excess of $100 million for the commercial aerospace recovery. In the first half, total inventory build is close to $200 million.

總結而言，Howmet第二季年增與季增的獲利改善仍在延續。我們也展現了Howmet獨特且差異化的資產。在波動的背景下，我們持續取得強勁且一致的進展。流動性仍然強勁，第二季自由現金流為1.14億美元，其中包含為商用航太復甦而增加超過1億美元的庫存。上半年合計庫存增加接近2億美元。

Cash on hand has increased to $538 million and that's after the common stock and bond repurchases. Through the first half and July, approximately $343 million has been deployed for common stock and bond repurchases as well as dividends. Capital allocation has been balanced and we've also been improving net leverage as we spoke about and plan to do so again by the end of the year.

手頭現金增加至5.38億美元，這是在普通股與債券回購之後的水準。上半年及7月期間，約3.43億美元已用於普通股與債券回購以及股利。資本配置保持平衡，我們也如先前所述持續改善淨槓桿，並計畫在年底前再次改善。

Regarding guidance, revenue for the year is raised -- reflecting the inflation recovery but also modest net volume improvements. EBITDA margin continues to be healthy and reflects the benefits of strong cost control, efficiency, material pass-through, inflation recovery and pricing with timely headcount additions to prepare for the future and the future lift into 2023. In the second half, we expect to continue to add headcount in Engines and begin recruitment in our Structures business.

關於財測，全年營收上調——反映通膨回收，同時也反映溫和的淨出貨量改善。EBITDA利潤率仍維持健康，反映強勁成本控管、效率提升、原物料轉嫁、通膨回收與定價的效益，並透過適時增補人力為未來以及2023年的進一步提升做好準備。下半年我們預期將持續在引擎事業部增加人力，並開始在結構事業招募。

Finally, the Howmet annual dividend of $0.08 per share or $0.02 per quarter is planned to be doubled to $0.04 per share per quarter, with the first higher payment made in November of this year. Before moving to your questions, I'd like to encourage you to visit our website at howmet.com to look at the Howmet's Technology Day slides.

最後，Howmet 的年度股利為每股 0.08 美元（或每季每股 0.02 美元），計畫將其加倍至每季每股 0.04 美元，首次提高後的股利將於今年 11 月發放。在進入各位提問之前，我想鼓勵各位造訪我們的網站 howmet.com，查看 Howmet 的 Technology Day 簡報投影片。

As a brief introduction, I'd like to highlight 3 slides beginning with Slide 14. What I want to note is that Howmet is a trusted brand with differentiated technologies and a rich IP portfolio with deep process know-how. We're mission-critical in growing markets with the ability to supply 90% of structural and rotating aero engine parts -- sorry, componentry. Approximately 70% of aerospace revenue is under long-term contracts, which is complemented by strong spares demand.

作為簡短介紹，我想從第 14 頁投影片開始重點說明 3 張投影片。我想指出的是，Howmet 是值得信賴的品牌，擁有差異化技術以及豐富的智慧財產（IP）組合，並具備深厚的製程專業知識。我們在成長型市場中屬於任務關鍵供應商，具備供應 90% 的航太發動機結構件與旋轉件——抱歉，是零組件的能力。約 70% 的航太營收來自長期合約，並由強勁的備品需求加以補強。

On Slide 15, 85% of revenue is generated from markets where we hold either a #1 or #2 position, driven by our customer relationships and differentiated assets. Lastly on Slide 16, Howmet's strategy has 4 pillars: to grow above market rates; the prioritization of differentiated products with discerning allocation of capital and resources; commercial and operational discipline; and finally, a disciplined capital allocation strategy. Additional information is available in the full presentation, which is in our -- on our website in the Investors section. And now we can move to questions.

在第 15 頁投影片中，85% 的營收來自我們在其中擁有第 1 或第 2 市占地位的市場，這是由我們的客戶關係與差異化資產所驅動。最後在第 16 頁投影片中，Howmet 的策略有 4 大支柱：以高於市場的速度成長；優先發展差異化產品，並審慎配置資本與資源；商業與營運紀律；以及最後，嚴謹的資本配置策略。更多資訊可在完整簡報中取得，該簡報位於我們網站的投資人（Investors）專區。現在我們可以進入提問。

(Operator Instructions) Our first question comes from Kristine Liwag of Morgan Stanley.

（接線員指示）我們的第一個問題來自 Morgan Stanley 的 Kristine Liwag。

John, maybe I could start with a question on production rates. I mean, Airbus deferred a step-up of the A320neo production rate to 65 per month to early 2024 versus their previous expectation of second half of '23. We're seeing Boeing face challenges to maintain 31 per month for the MAX as well. So in a period where OEM production lines are changing and your business is in the longer lead time side of the supply chain, how do you balance investing to meet production rate increases and not be an industry bottleneck versus preserving the cost structure and maintaining margins?

John，我想先從生產速率的問題開始。也就是說，Airbus 將 A320neo 的月產能提升至 65 架的計畫，從原先預期的 2023 年下半年延後到 2024 年初。我們也看到 Boeing 在維持 MAX 每月 31 架方面同樣面臨挑戰。因此，在 OEM 生產線變動、而你們的業務又位於供應鏈中交期較長的一端時，你們如何在投資以因應產能提升、避免成為產業瓶頸，與同時維持成本結構與利潤率之間取得平衡？

Well, certainly, it's a tough balance at the moment. And so far, we've tried to invest in adding people and training to get ready for the production increases. And as you've seen from the last quarter, continued to do so in preparing for the second half. But as I noted in my commentary, the backcloth is pretty choppy. We saw in May, the 737 production halted for maybe 10 days or so, then maybe 20 Airbuses cut from the second half, and now next year, maybe a delay in the ramp of the A320 to, as you say, 2024.

嗯，當然，這確實是目前很難拿捏的平衡。到目前為止，我們一直嘗試投資於增聘人員與訓練，以便為產量提升做好準備。正如你從上一季看到的，我們也持續這麼做，為下半年做準備。但如我在評論中提到的，整體背景相當顛簸。我們在 5 月看到 737 的生產可能停了大約 10 天左右，接著下半年可能少了約 20 架 Airbus，現在又看到明年 A320 的爬坡可能如你所說延後到 2024 年。

So we find ourselves constantly having to readdress the, I'll say, the slope of the recovery, albeit you've seen we've been pretty consistent in how we've been able to deliver against that backcloth and hope to do so in the future. I still think it's important to consider the fundamental premise of where we are, which is we are in a period of recovery, particularly for commercial aerospace. And defense is solid and hopefully improving for us. And then we've seen the recent buoyancy in the oil and gas sector plus the anticipated recovery, although I did say it more muted in commercial trucks.

因此，我們發現自己必須不斷重新檢視——我會說——復甦的斜率；儘管你也看到，我們在這樣的背景下仍相當一致地交付成果，並希望未來也能如此。我仍認為重要的是要回到我們所處位置的基本前提：我們正處於復甦期，特別是商用航太。國防業務穩健，且希望對我們而言正在改善。再者，我們也看到油氣產業近期的景氣回升，加上預期的復甦——雖然我也說過商用卡車的復甦會較為溫和。

So what we're continually doing is balancing between how we see the addition of, in particular, headcount. It's not really affecting our fundamental capital expenditure plans at this point, given we have capacity -- latent capacity from previous investments. But we adjust trying not to get too far ahead, but trying to be in line for our requirements to customers.

所以我們持續在做的是，在我們對增聘（特別是人力）需求的判斷之間取得平衡。就目前而言，這並未真正影響我們的基本資本支出計畫，因為我們有產能——來自先前投資所留下的閒置產能。但我們會調整，盡量不要走得太前面，同時也要符合客戶對我們的需求。

When I think about one of the fundamental questions in the sector, which is the availability of castings and forgings, which you didn't mention but implied in your question was that point. Again, if you think back to the investments we made in two new engine plants in the 2019 period, then that has largely solved or if not completely solved the issue, which was very significant in -- and present in '17, '18 and '19, which was the capacity available for airfoil castings.

當我思考這個產業的一個根本問題，也就是鑄件與鍛件的供應可得性——你雖然沒有直接提到，但在你的問題中其實暗示了這點。再一次，如果回想我們在 2019 年期間投資的兩座新發動機工廠，那基本上已經解決了、或即便不是完全解決，也大幅緩解了在 2017、2018 與 2019 年非常顯著的問題，也就是渦輪葉片（airfoil）鑄件的可用產能。

And I think one thing we've heard and increasingly heard is that the focus is more on availability of structural castings rather than turbine airfoil castings. And so we've been able to step up to that. At the same time, as I've tried to say on previous calls, we have tens of thousands of parts. Inevitably, we are tight on a few and that would apply to also a few structural casting parts. But nothing that we are aware of that's fundamentally holding engine production or delivery of engines to an airframe manufacturer.

而且我認為我們聽到、並且越來越常聽到的是，焦點更多轉向結構鑄件的可得性，而不是渦輪葉片鑄件。因此我們也能因應提升。同時，如我在先前的電話會議中嘗試說明的，我們有數以萬計的零件；不可避免地，某些零件會比較吃緊，這也同樣適用於少數結構鑄件零件。但就我們所知，沒有任何情況是從根本上阻礙發動機生產，或阻礙向機身製造商交付發動機。

So we're trying to balance, be ahead of it, again investing in people, equipment, training to be ready. But I recognize that we do keep readdressing that labor intake as we see our customers' plans do change and then the anticipated slope of recovery. But importantly, we've broadened out one stage further is that we are clear that 2023 is going to be another growth year for Howmet and we look forward to that. And I'll give more, I'll say, guide on that towards the end of the year, if not in the early next year. But essentially, what we're playing for is the angle of the increase, not the fundamental principle. I hope that covers it, Kristine.

所以我們努力在其中取得平衡、走在前面，再次透過投資人力、設備與訓練來做好準備。但我也理解，當我們看到客戶計畫改變，以及預期的復甦斜率變動時，我們確實會不斷重新檢視人力招募的節奏。不過更重要的是，我們把視野再往前推一步：我們很清楚 2023 年將會是 Howmet 另一個成長年，我們也期待如此。我會在今年年底、若不是在明年年初，提供更多——我會說——相關指引。但基本上，我們在追求的是成長增幅的角度，而不是基本原則本身。希望這回答了你的問題，Kristine。

The next question comes from Noah Poponak of Goldman Sachs.

下一個問題來自 Goldman Sachs 的 Noah Poponak。

It looks like the updated guidance for the year implies that the EBITDA margins would be relatively flat in the back half versus the first, and I think the business segment margin actually down a little, the way the corporate and D&A shake out. And that would be on higher revenue and I assume you're passing through cost while pricing, you keep. So maybe just if you could walk me through why that would be the case.

看起來今年更新後的指引意味著，下半年 EBITDA 利潤率相較上半年會大致持平；而且依照公司費用與折舊攤銷（D&A）的分配方式，事業部門利潤率似乎還會小幅下降。這是在營收更高的情況下發生的，而我假設你們在成本轉嫁的同時也保留了定價帶來的收益。所以你能否帶我理解一下，為什麼會是這樣？

Yes. I mean, I think the major influence on it has been the fact we've kicked up our assumptions regarding the inflationary costs. And we said, just for the metals element alone. If you remember, we started out at the beginning of the year and calling it somewhere, I think, in the region of $100 million to $150 million. And now we're saying, I just said in -- my remarks is that we see north of $200 million now, and so significant inflation element.

是的。我認為主要影響因素在於，我們上調了對通膨成本的假設。我們提到，僅就金屬成本這一項而言。如果你記得，我們在年初的估計大約是 1 億到 1.5 億美元的區間。而現在我們說——我剛才在我的發言中提到——我們目前看到的是超過 2 億美元，因此通膨因素相當顯著。

And then that's ignoring, of course, the inflationary elements of, I would say, utilities, I mean, natural gas in Europe in particular, where I think all of us are familiar with the energy crisis in Europe and the pricing points that energy has reached. And so there's a lot to play for in terms of recovery of that or offsetting it. And as you know, if we cover dollar for dollar, which is where we believe we are, is that, that has a dampening effect on margin. And the more we kick up those inflation assumptions, then you see that, Noah.

而且這還不包含——當然——我會說像公用事業成本的通膨因素，例如歐洲的天然氣，特別是在歐洲；我想大家都很熟悉歐洲的能源危機以及能源價格所達到的水準。因此，在回收這些成本或加以抵銷方面，還有很多可以努力的空間。而如你所知，如果我們做到逐美元（dollar for dollar）覆蓋——我們相信我們目前就是如此——那麼這會對利潤率造成抑制效果。而當我們進一步上調這些通膨假設時，你就會看到這個影響，Noah。

So fundamentally, I believe that the -- if we were to adjust for that, you'll see growth of margin year-on-year. But again, that's like saying let's change the assumptions, I choose not to. I think the important thing is we're holding our margin rate through quite extraordinary times of inflationary pressures and also the choppiness that I referred to in answering to Kristine's question. And really, I think that delivery of consistent margins is really important. And I will say we -- I'll say, quietly are fairly pleased with it.

所以從根本上說，我相信如果我們把這些因素調整掉，你會看到利潤率年增。但那就像是在說讓我們改變假設，我選擇不這麼做。我認為重要的是，在通膨壓力極為異常、以及我在回答 Kristine 問題時提到的那種顛簸環境下，我們仍能維持利潤率水準。而我認為能夠交付一致的利潤率非常重要。我也會說，我們——我會說——私下對此相當滿意。

Yes. Noah, I'd add to that as well. We did bring down the 787 guide as well. That's a very profitable program for us. Now we did replace with some titanium. That's sort of lower margin so you've got a bit of a mix component there. But also, I just wanted to clarify as well. So we said for Q3 EBITDA, $326 million. It's minus $6 million on the down to $320 million, up $5 million for the high side in Q3. That's all on Slide 11. And then the earnings per share, I just want to clarify, we have it on the slide there. $1.41 is the mid or down $0.03 on the low and up $0.01 on the high, but just want to clarify.

是的，Noah，我也補充一下。我們也下調了 787 的指引；那對我們而言是一個獲利能力很高的專案。現在我們用一些鈦材業務來替代，而那部分的利潤率相對較低，所以在產品組合上會有一些影響。另外我也想澄清一下：我們對第三季 EBITDA 的指引是 3.26 億美元；低端下調 600 萬美元至 3.20 億美元，高端上調 500 萬美元（第三季）。這些都在第 11 頁投影片上。至於每股盈餘，我也想澄清一下，我們在投影片上有列出：1.41 美元是中位數，低端下調 0.03 美元，高端上調 0.01 美元，特此說明。

Ken, how much titanium did you add into the...

Ken，你在那個……裡面加了多少鈦？

We added $20 million revenues to the fourth quarter. I chose not to provide a guide for '23 at this point because we're still in the process of order acquisition. And also even upon acquisition and completion of contracts with customers, then the next part is to balance out the inventory against new titanium supplies as that's what on stream. So again, we're trying to get a more accurate picture of what inventory is held at customers as they bank security stocks from, say, VSMPO. And so we've got to assess that in when we provide you with a 2023 number. And if I gave you one today, I wouldn't feel confident in doing so.

我們在第四季增加了2,000萬美元的營收。我此刻選擇不提供2023年的指引，因為我們仍在取得訂單的過程中。而且即使取得訂單並與客戶完成合約之後，下一步還要在庫存與新增鈦供應之間做平衡，因為那才是正在上線的供應。因此，我們再次嘗試更精準地掌握客戶端持有多少庫存，因為他們會像是從VSMPO那樣建立安全庫存。所以在我們提供你們2023年的數字時，必須把這些納入評估。如果我今天就給你一個數字，我不會有信心。

We really shouldn't extrapolate anything from that $20 million, it sounds like?

所以聽起來，我們真的不應該從那2,000萬美元去外推任何東西，對嗎？

No. I mean, the important thing is the fact that we are gaining orders. We're well in the game. And clearly, it will be more than that in '23 but just want to get all of that sorted before we -- and clearly, it's more of a discussion to -- for the end of the year, early next year.

對。我的意思是，重點在於我們正在拿到訂單。我們確實在局內。而且很明顯，2023年會超過那個數字，但我們只是想在我們——而且很清楚，這更像是一個要——在今年年底、明年年初再討論的議題——之前，把這些都整理清楚。

Our next question comes from Gautam Khanna of Cowen.

下一個問題來自Cowen的Gautam Khanna。

Yes. I have a multipart question, trying to stick with the one. But your comment...

是的。我有一個多段式問題，會盡量把它當成一個問題。但你剛才的評論……

Those are tricky, those multipart ones, Gautam.

那種多段式問題很棘手，Gautam。

Yes, I know. It's kind of unfair. But the question is on share gain broadly and the opportunity. So on the forging side, you guys don't seem to be a pinch point. Are you seeing emergent demand there? And did that benefit the quarter or just bookings, given lead times?

是的，我知道。這有點不公平。但問題是關於整體的市占提升以及機會。所以在鍛造這一端，你們看起來並不是瓶頸。你們有看到新出現的需求嗎？而這對本季是帶來了實際出貨的好處，還是只是帶來了接單，考量到交期？

And secondly, on the titanium share opportunity, the $20 million you referenced, is that just 1 OEM? Is it across several? And have you seen any change in urgency for Airbus and Safran to source, given the EU sanction was taken off of the VSMPO?

第二個，關於鈦的市占機會，你提到的那2,000萬美元，是只有一家OEM嗎？還是涵蓋好幾家？另外，鑑於歐盟對VSMPO的制裁已被解除，你們有看到Airbus和Safran在採購來源上的急迫性有任何改變嗎？

Okay. So let me get the latter part first while it's fresh in my mind. It is several OEMs, both engine manufacturers and also an airframe manufacturer. So even though, let's say, European sanctions are not placed upon VSMPO, then, not surprisingly, Airbus are choosing to secure a long-term source and security and so we've begun to book orders with them. We're still working elsewhere with other manufacturers, and so still a lot to play for. And it's also, I'm going to call it, urgency of completion is also influenced by the inventories in the system. So I think that disposes of the titanium commentary.

好。我先回答後半段，趁我腦中還很清楚。那是好幾家OEM，包含引擎製造商，也包含一家機身製造商。所以即便例如歐洲並未對VSMPO施加制裁，Airbus也不意外地選擇要確保長期來源與供應安全，因此我們已開始向他們確認並入帳訂單。我們也仍在其他地方與其他製造商合作，所以還有很多空間可爭取。另外，我會說，完成的急迫性也會受到系統內庫存水位的影響。我想這就回應了關於鈦的評論。

In terms of spot, I did say the spot would be a feature -- more of a feature in the second half. It's always difficult to call it because by the fact it is spot or not on LTA. We are seeing some spot business that's available and coming to us and we have and secured some of it. And some of it is already going in because of long lead times, particularly of metal availability into 2023 as metal lead times go out. And I see those going out 9 months, 12 months. And therefore, for some input orders, it's getting towards 12 months already.

至於現貨（spot），我確實說過現貨會成為——在下半年會更——成為一個更明顯的特徵。這總是很難判斷，因為它本質上就是現貨，或是不在長期協議（LTA）之下。我們確實看到一些可取得的現貨業務流向我們，我們也拿下了一部分。其中有些已經在進行中，因為交期很長，特別是金屬供應的可得性延伸到2023年，金屬交期被拉長。我看到那些交期拉到9個月、12個月。因此，對某些投入端的訂單來說，現在已經接近12個月了。

In terms of, say, the pinch point in the industry, there's very little that can be done in the short term because, for example, on structural castings, it's all about the tooling and the assets that go with it. And so really, there's limited ability to cross over on those sort of areas. And we've got our hands full just dealing with the orders that we have currently for ourselves. At the same time, I do believe that over the next 2 or 3 years, that there will be opportunities to further balance that supply. I think that apparently covers all the points you raised, I think, Gautam.

就產業的瓶頸而言，短期內能做的非常有限，因為例如在結構鑄件方面，關鍵在於模具以及配套的資產。因此，在這類領域能夠相互轉移產能的能力其實很有限。而我們光是處理目前自己手上的訂單就已經忙不過來。同時，我確實相信在未來2到3年，會有機會進一步平衡供給。我想這大概涵蓋了你提出的所有點，我想是的，Gautam。

Yes, I appreciate it.

是的，謝謝，我很感激。

Our next question comes from Robert Stallard of Vertical Research Partners.

下一個問題來自Vertical Research Partners的Robert Stallard。

John, on the metal pass-through, we started to see some of these industrial metal prices come down. How does that flow through to you in terms of timing? And is the mathematical calculation basically the other way around, so you should have a margin expansion as the metal pass-through reduces?

John，關於金屬轉嫁（pass-through），我們開始看到一些工業金屬價格下滑。這在時間上會如何傳導到你們？而數學上的計算基本上是否就是反過來，所以當金屬轉嫁降低時，你們的利潤率應該會擴張？

We would certainly like that to occur. I mean, you have seen some small improvements in metals and the most notable of which has been aluminum. So as that price has come down, let's say, peaked at about $4,500 a tonne, including midwest premiums in the U.S. and has probably fallen closer to, let's say, $3,100, $3,150 at the moment. So a significant move down, albeit still significantly above where it started at less than $2,000 a tonne 18 months ago.

我們當然希望會發生。我是說，你確實看到金屬有一些小幅改善，其中最顯著的是鋁。所以當鋁價下來時，假設它曾在每噸約4,500美元見頂（包含美國中西部溢價），目前可能已降到接近每噸3,100到3,150美元。所以是相當明顯的下跌，儘管仍顯著高於18個月前不到每噸2,000美元的起點。

Assuming it stays there, and of course, none of us know exactly what's going to happen, but if it stays there, then certainly, when our price resets occur on the first of January, then if it stays where it is, then you will see, for example, our Wheels business gain margin expansion as those prices are reset. And if it comes down across the board elsewhere, where again, it's fairly small at this point, then there would be some other tailwinds to margin as well. But we haven't really called those out on the way up. And so I doubt I'll call them on the way down. The most significant has been the aluminum move which is impacted, as Ken talked about, in our Wheels business by over 400 basis points from where we started.

假設它維持在那個水準，當然我們都不知道接下來會發生什麼，但如果維持在那裡，那麼當我們在1月1日進行價格重設時，如果它維持現狀，你就會看到例如我們的車輪（Wheels）業務在價格重設後出現利潤率擴張。如果其他金屬也全面下滑——目前幅度仍相對小——那麼利潤率也會有一些其他順風。但我們在價格上漲時並沒有特別強調這些，所以我也不太可能在下跌時特別強調。最顯著的是鋁的變動，正如Ken提到的，從我們起點到現在，鋁對我們車輪業務的影響超過400個基點。

And clearly, to go down the other side of that would be very welcome. And so that would impact Howmet overall and you would begin to see margin benefit if metals stay where they are or continue to further improve, which we -- obviously we're hoping for but we don't know as it's a future event.

而且很明顯，若能往另一邊回落將非常受歡迎。因此這會影響Howmet整體；如果金屬維持在目前水準或持續進一步改善，你就會開始看到利潤率受益——我們當然希望如此，但我們不知道，因為那是未來事件。

The next question comes from David Strauss of Barclays.

下一個問題來自Barclays的David Strauss。

So just want to get an update on the Wheels business, how the inventory situation looks there in terms of the semiconductors and the inventory or the backlog starting to deliver out. And how do you feel about the Class 8 truck business overall if we're headed into a macro slowdown recession, whatever you want to call it? Obviously, what we've seen in the past is that despite big backlogs on the Class 8 truck side, that business can shrink pretty dramatically.

我想請你更新一下車輪（Wheels）業務：在半導體方面的庫存狀況如何，以及庫存或積壓訂單（backlog）開始出貨消化的情況如何。還有，如果我們正走向宏觀放緩、衰退——不管你想怎麼稱呼——你對整體8級（Class 8）卡車業務的看法是什麼？很明顯，我們過去看到的是，即使8級卡車端有很大的積壓訂單，那個業務仍可能大幅萎縮。

Yes. I don't think we've been in normal times for Class 8 truck in either the U.S. or Europe now for -- certainly the last 18 months. And therefore, I'm going to say and I think I'd like to believe that this time, it is different. So we don't see the same cyclicality and, of course, that might ring hollow because we don't know. But my view is that the availability of trucks has been so restricted for so long and there's fundamental demand for fleets.

是的。我不認為美國或歐洲的8級卡車在——至少過去18個月——一直處於正常狀態。因此，我會說，而且我也願意相信，這一次不一樣。所以我們沒有看到同樣的週期性；當然，這樣說可能聽起來很空泛，因為我們也不知道。但我的看法是，卡車的供給長期以來一直非常受限，而車隊端存在基本面的需求。

And despite low order intake because people have just given up putting orders into the system. But when those order books open for 2023 in September, that we're going to see a significant spike in orders particularly from the larger fleets, where demand is clearly there because of the aging of the fleet, and also to improve fuel efficiency with, say, regulations, which are particularly onerous in Europe.

而且儘管接單量偏低，因為大家已經放棄再把訂單送進系統。但當2023年的訂單簿在9月開放時，我們將看到訂單顯著跳升，特別是來自較大型的車隊；那裡的需求顯然存在，原因包括車隊老化，以及為了符合例如法規要求而提升燃油效率——在歐洲這些法規尤其嚴苛。

So my thought is that the supply chain problems, while they're easing, so a lot of the trucks that have been built called red tags with not a complete part set, have been cleared to some degree. There are still significant shortages across a range of commodities, which are restricting build in the second half of this year.

所以我的想法是，供應鏈問題雖然正在緩解，因此許多已生產但因零件不齊而被貼上紅標（red tags）的卡車，已在某種程度上被清理消化。但在一系列原物料上仍存在顯著短缺，這正在限制今年下半年的產量。

And we've trimmed -- inside our guidance, we've trimmed our assumption, of course, by 5,000 or 10,000 trucks in North America as an example for this year because of a more conservative assumption regarding parts availability. It does mean, I think, that we'll see the same sort of percentage increase I talked about before between '22 and '23. And given the fact that I don't -- even if we're going to build more next year or even just going to build more next year and will supply more wheels, there won't be the opportunity, again because of parts availability, to draw forward truck build out of '24 when people try to have -- historically tried to build and buy ahead of the emissions changes that are coming.

而且我們已經在——在我們的指引中——下修了我們的假設，當然，以北美為例，今年我們把假設下修了5,000到10,000輛卡車，因為對零件可得性採取了更保守的假設。我認為這也意味著，我們將看到我先前談到的那種在2022年與2023年之間的相同百分比增長。而且考量到我不——即使我們明年要造更多，或就算只是明年會造更多並供應更多車輪，也不會有機會——同樣因為零件可得性——把原本屬於2024年的卡車產量提前，因為過去人們在排放法規變更到來之前，歷來會嘗試提前生產與提前採購。

So my thought is that those emission changes will occur in '24. Trucks will be built in the relevant calendar year and maybe even that people are interested in taking the improved fuel emissions from the trucks anyway. So I'm hoping that what we're going to see is an improvement in overall revenues in our Wheels business in '23 and stability and maybe even improvement into '24 as well. And that's despite the calming macroeconomic backcloth of rising interest rates to fundamentally deplete supply and demand -- the supply situation that we've had, which has been extreme. So it's a long way of saying, I feel inherently optimistic about it, albeit I've calmed down the -- a little bit of the assumptions in '22.

所以我的想法是，那些排放變更將會在 24 年發生。卡車會在相關的曆年內生產，甚至可能人們本來就有興趣採用卡車改良後的燃油排放表現。因此，我希望我們在 23 年的 Wheels 業務整體營收會有所改善，並在 24 年也能維持穩定，甚至進一步改善。這是在宏觀經濟背景趨於降溫、利率上升的情況下——這些因素從根本上會削弱供需——而我們先前所處的供給情勢一直非常極端。所以長話短說，我本質上對此感到樂觀，儘管我已經把 22 年的一些假設稍微調低了一點。

Our next question comes from Matt Akers of Wells Fargo.

我們的下一個問題來自富國銀行（Wells Fargo）的 Matt Akers。

I wanted to ask about F-35 and kind of the defense business more broadly. And I guess, with sort of the lower outlook from Lockheed, just kind of where you are on F-35 stocking, destocking. And I guess any other big moving pieces within the defense business? I think you talked about second half improvement over the first half. Yes, just any thoughts there?

我想問一下 F-35，以及更廣泛的國防業務。我想，隨著洛克希德（Lockheed）給出較低的展望，你們在 F-35 的備貨、去庫存方面目前處於什麼狀態？另外，國防業務裡還有沒有其他重要的變動因素？我記得你們提到下半年會比上半年改善。是的，想聽聽你們的看法。

Yes. So for us, defense is a little bit seasonal, given the relatively large aftermarket component within it. And that's why it gives some confidence to second half solidity. At the same time, talking about the F-35 as a single item, which is about 35%, 40% of our defense sales, then we've been incurring the, I'll say, destocking by our customer in the first half and that will continue in the second half. So the whole of this year, we are clear that we're under-supplying Lockheed's build of aircraft.

是的。對我們而言，國防業務帶有一些季節性，因為其中售後市場（aftermarket）的比重相對較大。這也是為什麼我們對下半年表現穩健更有信心。同時，若把 F-35 當作單一項目來看，它約占我們國防銷售的 35% 到 40%，那麼我們在上半年一直承受客戶去庫存的影響，而這種情況在下半年也會持續。因此，今年整體而言，我們很清楚：我們對洛克希德的飛機生產供應是低於其需求的。

And we do note they've cut that build assumption from 156 down to, I'd say, 147, 149 or something as an assumption for this year and next. And therefore, again, it places a little bit more of a burden upon us for inventory takeout, which again, may fall over into the early part of next year. But the fundamental picture is one where our supply situation in 2023, we expect, will be better and improved compared to 2022.

我們也注意到，他們已把今年與明年的生產假設從 156 架下調到大約 147、149 架之類的水準。因此，這又讓我們在去化庫存方面承擔更大的壓力，而這可能會延續到明年年初。但從根本面來看，我們預期 2023 年的供應情況會比 2022 年更好、也會有所改善。

And again, what we're playing for is the angle of recovery just as I'd commented about commercial aerospace earlier. So again, I just want to keep that big picture in mind the revenue increases, and we're just debating the angle at this point in time.

同樣地，我們所追求的是復甦的斜率（recovery angle），就像我先前談到商用航太時所說的。因此，我只是希望大家把大局放在心上：營收在增加，而我們現在只是討論在這個時間點復甦的斜率而已。

And our next question comes from George Shapiro of Shapiro Research.

我們的下一個問題來自 Shapiro Research 的 George Shapiro。

John, of the $200 million for material pass-through, can you tell us how much of that goes to the Wheels business? And then just for this quarter, of the $40 million increase in revenues, how much of that was from the increase in the material cost?

John，關於材料轉嫁（material pass-through）的 2 億美元，你能告訴我們其中有多少是歸屬於 Wheels 業務嗎？另外，就本季而言，營收增加的 4,000 萬美元中，有多少是來自材料成本上升？

I'm going to say sequentially, this quarter was fairly minimal as a quarter-on-quarter, but I'm going to look to Ken in a second to cover that. I don't think we've broken down the $200 million between segment. But it's sufficient to say that the majority of that $200 million relates to aluminum. And I'm going to look to Ken to see whether he has that level of detail, George, to be able to respond to you. So if you could just hold for a second.

我先說，就序列（sequential）來看，本季相較上一季的影響相當有限，不過我等一下請 Ken 來補充。我不認為我們有把這 2 億美元在各事業部之間做拆分。但可以肯定的是，這 2 億美元中的大部分與鋁有關。我也會請 Ken 看看他是否有那個層級的細節，George，好回覆你的問題。所以請你稍等一下。

Yes. So sequentially, it's really not a material impact, George. We haven't given, that $200 million, to your question, the breakdown of aluminum. But as you can imagine, aluminum is a big chunk of it, right, when you look at what we've talked about. So far in this quarter, we said $60 million of material pass-through. Of that, we had about $36 million, I believe I called out in my prepared comments, was aluminum. So that can kind of give you a guide.

是的。George，就序列來看，這其實不是一個重大的影響。至於你問的那 2 億美元，我們沒有提供鋁的拆分明細。但如你所想像，鋁占了很大一部分，對吧，從我們一直在談的內容來看。本季到目前為止，我們說材料轉嫁是 6,000 萬美元。其中大約 3,600 萬美元——我記得我在事先準備的講稿裡有特別提到——是鋁。所以這可以給你一個參考方向。

Okay. And then just one quick one, Ken. Can you break out the aerospace increase by how much was OE and look at it, how much was aftermarket?

好的。那再快速問一個，Ken。你能把航太的成長拆開來看嗎？其中有多少是 OE（原廠配套），多少是售後市場（aftermarket）？

I'm going to say aftermarket, we generally don't call the numbers out, but aftermarket was a small improvement in the first half. We are expecting a bigger improvement in the second half. But you can assume the first half was within a single-digit percentage of what we were supplying in the second half of last year, George. But expecting bigger things to achieve, what we believe will be a 30%-plus year-on-year improvement in the spares business for us.

我會這麼說：售後市場我們通常不會把數字單獨揭露，但上半年售後市場只有小幅改善。我們預期下半年會有更大的改善。不過你可以假設，上半年我們的供應量大概在去年下半年供應量的個位數百分比範圍內，George。但我們期待更大的成果，以達成我們認為備件（spares）業務可實現年對年 30% 以上的改善。

And our next question comes from Seth Seifman of JPMorgan.

我們的下一個問題來自摩根大通（JPMorgan）的 Seth Seifman。

Just looking at the Fasteners business. We saw the revenues kind of bottom out in the second half of '21 and start to inflect higher here in the first half. But there's been some pressure on the EBITDA, I guess, from the second half of last year to the first half of this year. Is it -- are the -- some of these additional inflationary pressures outside of materials showing up more in the Fasteners? Or does it have to do with bringing on people now that revenue is growing again? And how do we think about the incrementals here going forward?

我想從緊固件（Fasteners）業務來看。我們看到營收在 21 年下半年觸底，並在今年上半年開始向上拐點。但 EBITDA 似乎從去年下半年到今年上半年承受了一些壓力。我想問：是不是除了材料以外的一些額外通膨壓力，在緊固件業務上更明顯？還是說，這與營收重新成長後開始增聘人員有關？以及我們該如何看待未來的增量利潤（incrementals）？

Yes. The inflation and certainly materials inflation is not the biggest part of it. It is present, of course, across, let's say, titanium and some steel and aluminum for sure, but it's not the biggest part of it. When I stand back and say, is our Fasteners segment underperforming? So it's always a good question to ask yourself. I don't believe so.

是的。通膨，尤其是材料通膨，並不是其中最大的一部分。當然它確實存在，例如鈦、一些鋼材，以及鋁等，但它不是最主要的因素。當我退一步看，問自己：我們的緊固件事業部是否表現不如預期？這一直是個值得問的好問題。我不這麼認為。

There are two significant factors which are going on, which go to that margin. One is the reduced build of composite aircraft. And so if you look in the sequential margins of the business, when 787 was basically taken down to, I'll say, 1 to 0, then I think as we've explained before, the effect of a composite aircraft replacing a metallic aircraft is of significant value accretion for us. And therefore, we always look forward to that. And that's why we were looking forward to the 777X and the composite wings there, albeit obviously, that's pushed a little bit now.

目前有兩個重要因素在發生，會影響到毛利率。第一個是複合材料飛機的產量下滑。因此，如果你看這項業務的序列毛利率，當 787 基本上被降到我說的 1 到 0 的水準時，那麼我想我們之前也解釋過：複合材料飛機取代金屬飛機，對我們而言具有顯著的價值增益。因此，我們一直期待這一點。這也是為什麼我們曾期待 777X 以及其複合材料機翼，儘管很明顯現在又被往後推遲了一些。

But essentially, if you think about mix because of 787, which hopefully, certainly as we turn the year because even though, let's say, I think Boeing will begin to deliver from inventory, and I think they may begin to build at a little bit higher rate in the second half, I don't know. But a lot of that build is going to come from inventory. And there are multiple tiers because of the distributed, I'll say, supply base around the world of many of the components and trying to get an accurate picture of all that inventory is difficult. So that's why we've taken the assumption of 787 down to the 15 for the year from the 25. And therefore, that mix effect will continue to weigh on our Fastener business in the second half.

但本質上，如果你思考因 787 所造成的產品組合（mix）影響——希望在跨年之際會有所改善——因為即便如此，我認為波音會開始從庫存交付，而且我認為他們可能在下半年以稍高的速度開始生產，我不確定。但那一大部分的生產將來自庫存。而且由於全球分散的供應體系（我姑且稱之為供應基礎）涵蓋許多零組件，存在多個層級，要精準掌握所有庫存的全貌是困難的。所以我們才把 787 的假設從全年 25 架下調到 15 架。因此，這個組合效應在下半年仍會持續拖累我們的緊固件業務。

And then the second thing is we've taken on a significant amount of people in our Fastener business during the last quarter and preparing for volume improvements as we go forward. And we did see volume pick up in Q2, and we're planning for further volume increases in Q3 and Q4, which basically is embedded in our guidance because we've also, as you've seen, lifted revenue guidance, the rate of climb continues. So when you look at it, you shouldn't look at it compared to whether we beat consensus or beat guide or not, but you need to look at a more consistent track through the last year of consistent quarter-on-quarter, like we put on $100 million in like Q3 of last year, then a slight pause and another $100 million in Q1. And we've just guided you to like another $100 million sort of average improvement.

第二點是，我們在上一季於緊固件業務新增了相當多的人員，為未來的產量改善做準備。我們確實在第二季看到量開始回升，而我們也在規劃第三季與第四季進一步的量增，這基本上已反映在我們的指引中，因為你也看到我們上調了營收指引，上升的速度仍在延續。所以你不應該只拿它來看我們是否超過市場共識或超過指引，而是要看過去一年更一致的軌跡：例如去年第三季我們增加了約 1 億美元，之後稍微停頓，第一季又增加了約 1 億美元。而我們現在給你的指引大概是再平均改善約 1 億美元左右。

So it's coming and we're recruiting. And so when you combine both the recruitment costs that we've incurred in Fasteners in Q2, plus that mix effect, that really goes to the heart of the margin issues or not an issue, but the margin change. And then clearly, as those employees become more productive, and it's also going to be influenced by a rate of continued hiring as we prepare for next year, but I'm hoping that begins to improve because the denominator will get bigger of the employee base. And then as 787 begins to start getting built in the first part of next year, then I do see things beginning to improve for that segment.

所以成長正在到來，我們也在招募。因此，當你把我們在第二季緊固件業務所發生的招募成本，加上那個組合效應一起看，這就切中毛利率問題的核心——或者說不是問題，而是毛利率的變動。接著，隨著這些員工生產力提升，另外也會受到我們為明年做準備而持續招募速度的影響，但我希望情況會開始改善，因為員工基數這個分母會變大。然後當 787 在明年年初開始恢復生產時，我確實看到該事業部的情況會開始改善。

(Operator Instructions) Our next question comes from Phil Gibbs of KeyBanc Capital Markets.

（接線員指示）我們的下一個問題來自 KeyBanc Capital Markets 的 Phil Gibbs。

Within the guidance, are there any more buybacks implied in that, meaning from what you've already announced through July?

在指引之內，是否隱含還會有更多回購，也就是說，除了你們已經宣布截至 7 月的部分之外？

What I'd do is to guide you to what we've said by way of approaching 2.5x net leverage by the end of the year. So you can reverse-engineer it from the cash flow that we've given you and an assumption around any balanced capital allocation between, and I'll do them maybe in reverse order, the dividend increase, which I wanted to note, and that shows confidence in our cash flows and I think it's an important thing to do for our shareholders.

我會引導你回到我們所說的：在年底前將淨槓桿降至接近 2.5 倍。因此，你可以根據我們提供的現金流，以及對資本配置在各項之間採取平衡的假設來反推；我可能倒過來說，首先是股利提高——我想特別指出這一點——這顯示我們對現金流的信心，我認為這對股東而言是很重要的事。

At the same time, we will also be addressing, hopefully, some improvement in our debt structure and also hopefully, some continued, say, buyback of stock. But you mustn't assume it's all of one or anything. It's a balanced approach in that second half and you can get it is the -- whatever assumption you make in terms of whatever approaching 2.5x is, so clearly better than 3x. And I'm hopeful that, that will also reflect into the credit ratings of the company and also an approach which the, I'll say, our shareholders are also pleased with that as well.

同時，我們也會著手（希望）改善我們的債務結構，並且也希望能持續進行一些股票回購。但你不能假設資金全部用在某一項或任何單一項上。下半年會採取平衡的做法；而你可以從你對「接近 2.5 倍」的假設來推導——顯然會優於 3 倍。我也希望這能反映在公司的信用評等上，並且這樣的做法，我會說，我們的股東也會對此感到滿意。

You guys have gotten to be a public company now for several quarters. We're clearly on the other side of the demand cycle here for your key markets. The balance sheet looks like it's in good shape. Is there any thoughts to doing M&A? Are there opportunities out there available and the things that you would like to do strategically?

你們成為上市公司已經好幾個季度了。我們顯然已經走過你們主要市場的需求循環低谷。資產負債表看起來狀況良好。你們是否有進行併購（M&A）的想法？外面是否有可把握的機會，以及你們在策略上想做的事情？

Just picking up on your theme is that post separation, we went immediately into the, I'll say, COVID pandemic, but within 2 quarters, we'd restored our margins. We've been consistent in performance and cash flow all the way since then. And as you've seen, putting the balance sheet in really great shape, approaching eventually probably more of our target leverage around that 2x or better.

延續你提到的主題：分拆之後，我們立刻就進入了我會說的新冠疫情期間，但在 2 個季度內我們就恢復了利潤率。從那之後，我們在績效與現金流方面一直表現穩健且一致。而如你所見，我們也把資產負債表調整到非常好的狀態，最終可能會更接近我們約 2 倍或更低的目標槓桿。

So everything is progressing very satisfactorily. We are open to considering any M&A moves. But I always say it's more in that bolt-on scale, which we can deal within a quarter or so of cash flow. And so no immediate thoughts to doing that. It's got a high hurdle to overcome, which is, does it provide a good return on capital for any such investment? Can we gain not only cost synergy but revenue synergy? And therefore, does it go with the strategic intent of the company?

所以一切進展都非常令人滿意。我們願意考慮任何併購動作。但我一向說，會更偏向那種補強型（bolt-on）的規模，我們可以用大約一個季度左右的現金流來消化。因此目前沒有立即要做的想法。門檻很高，需要克服：這類投資是否能帶來良好的資本報酬？我們是否不僅能取得成本綜效，也能取得營收綜效？因此，它是否符合公司的策略意圖？

We've aimed it more, if we said if we're going to do it, it's probably more likely in our Engine or our Fastener business rather than elsewhere. But at the same time, again, trying to try and be disciplined about it all, but nothing that immediately would pass any hurdles compared to the relative risk-free, I'll say, action of buying our own stock back, which we obviously know well, feel confident in and have been consistent in buying back really almost every quarter over the last couple of years but only probably paused for a quarter or so in 2020 just after the, I'll say, the onslaught of the pandemic.

我們的方向是，如果要做，可能更有機會是在我們的引擎（Engine）或緊固件（Fastener）業務，而不是其他地方。但同時，我們也會努力保持紀律；目前沒有任何案子能在門檻上勝過相對低風險的作法——也就是回購我們自己的股票。這是我們非常熟悉、也有信心的事情，而且過去幾年幾乎每個季度都持續回購；大概只在 2020 年、疫情衝擊剛開始後暫停了一個季度左右。

And our next question comes from Michael Ciarmoli of Truist Securities.

我們的下一個問題來自 Truist Securities 的 Michael Ciarmoli。

Just I guess, John or Ken, how should we think about inventory into the second half of '22 and maybe overall working capital as we really think about '23? I mean, it seems like there's a number of moving parts with the F-35 burn going on. It sounds like and it seems like 787 is going to be ramping. Not sure if you need much or need to plan much for some of the titanium. And then I guess the truck's a little bit slower than you initially planned. Can you just give us any color on where inventories might go?

我想請教 John 或 Ken，我們應該如何看待 2022 年下半年的庫存，以及在思考 2023 年時整體營運資金的走向？我的意思是，F-35 的消耗（burn）正在進行，似乎也聽起來 787 會開始爬坡增產。不確定你們是否需要、或是否需要為一些鈦材做太多規劃。另外我想卡車業務比你們最初規劃的稍慢一些。你們能否提供一些顏色，談談庫存可能會往哪裡走？

Yes. I mean, I'll deal with our own inventory first before I comment on anything to do with our customer inventories. And we built a couple of hundred million of inventory in the first half. And we've tried to aim the majority of that towards finished goods. So -- but not exclusively but a lot of it towards finished goods or certainly very advanced stage of work in progress, so that we can and have tried to keep pace and be able to satisfy our customers and have that ability to deliver out of stock to meet their needs. And we're only tight in one or two places.

好的。我先談我們自己的庫存，再評論任何與客戶庫存相關的部分。我們在上半年增加了數億美元的庫存。我們努力把其中大部分配置到成品——所以——雖非完全如此，但很大一部分是成品，或至少是非常後期階段的在製品，這樣我們就能、也一直努力跟上進度，滿足客戶需求，並具備從庫存出貨以滿足其需求的能力。我們只有一兩個地方比較吃緊。

Now having put that what I call the stock for hopefully improved supply security in the face of the lift in demand is that I doubt we'll try to replicate that again in the second half. There may be some but nothing at the scale of the first half, and trying to plan a steady level of production throughput improvements from the hiring we've done as we exit this year into 2023.

在我所稱的、為了在需求回升下提升供應安全而建立的庫存之後，我懷疑我們下半年會再以同樣方式複製一次。可能還會有一些，但規模不會像上半年那樣；並且我們會規劃在今年結束、進入 2023 年時，透過我們已完成的招募來帶動產出吞吐量的穩定改善。

And obviously, we'll make those judgments exactly how much inventory we'll carry into next year according to what the final shape of the increase in revenues for next year is. So I think all good on that front. So more of -- it's less of a build and more of a pause but maybe some selective improvements in inventory in the second half.

而且很明顯地，我們會依據明年營收增長最終的樣貌，來判斷究竟要帶多少庫存進入明年。所以我認為這方面都很好。也就是說——與其說是繼續增加，不如說是暫停增加，但下半年可能會在某些選定項目上做一些庫存改善。

In terms of our customer inventories, it's difficult to really comment. I said 787, despite -- we could assume that there will be build of aircraft in the second half. And I have a feeling that maybe you may see a higher increase in build than we thought because it may prove to be a good way of supplying those 787s into the -- clearly, the airline demand, which is there, compared to the inventory which they have.

至於客戶的庫存，就很難真正評論。我提到 787，儘管——我們可以假設下半年會有飛機的累積生產。我有種感覺，你可能會看到比我們原先想的更高的增產幅度，因為相較於他們現有的庫存，這可能會是向——很明顯存在的航空公司需求——供應這些 787 的一個好方法。

But we don't know that. And we've just said there's clearly inventory in the pipeline. There's inventory around, whether it's sub-suppliers in Europe or in Japan or elsewhere in the world or in the U.S. And so let's be relatively safe. And therefore, we chose to take down our view of 787 for the second half, given the fact that the -- it's been delayed from last year to Q1 to Q2. But all seems to be set well now.

但我們並不確定。我們只是說，管線中顯然有庫存，周邊也有庫存，不論是在歐洲或日本的次級供應商，或世界其他地方，或在美國。因此我們採取相對保守的看法。也因此，鑑於該計畫從去年延到第一季、再延到第二季，我們選擇下調對下半年 787 的看法。但現在看起來一切都已經就緒。

And as I've said in previous calls, the aircraft is a great aircraft. There's clearly demand and need for it there. International travel is coming back. And so I think that plus I've read that Airbus are considering even looking at possibly improving their wide-body rates as we go into next year beyond more than they've already signaled in the skyline.

而且如我在先前的電話會議中所說，這是一款很棒的飛機。顯然市場對它有需求、也需要它。國際旅行正在回來。因此我認為這一點，加上我也讀到空中巴士（Airbus）正在考慮，隨著我們進入明年，甚至可能把他們的寬體機產量提升到超過他們在展望（skyline）中已經釋出的訊號。

So I have some optimism but really choose to say the improvement particularly for wide-body will be more of a '23 feature and also for our commercial truck business. So I think that covers it out, Mike?

所以我抱持一些樂觀，但我仍選擇說，特別是寬體機的改善會更像是 2023 年的特徵；我們的商用卡車業務也是如此。所以我想這樣就涵蓋了，Mike？

Yes, got it.

是的，了解了。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝各位參與。您現在可以斷線。