commercial aerostructure titanium demand back to the future?€¦ · these factors include, but are...

Commercial Aerostructure Titanium

Demand Back to the Future?

Dawne S. Hickton Vice Chairman, President & CEO

RTI International Metals, Inc.

October 8, 2012

2007-2012…and the Future

1

Economic Outlook Aerospace Specific Drivers Titanium Specific Drivers Titanium Future

World Economies: What have the Experts Predicted?

2

Economic expert predictions yet to be correct

Source: IMF World Economic Outlook

6

5

4

3

2

1

0 2007 2008 2009 2010 2011 2012e 2013e

% C

hang

e in

GD

P

4.9 4.9

4.2 4.3

3.5

3.9 Est 2007/2010

Est 2012

World GDP

Actual

5.2

3

5.3

3.9


3


3.5

3

2.5

2

1.5

1

0.5

0 2007 2008 2009 2010 2011 2012e 2013e

% C

hang

e in

GD

P

2.2

2.8

3.1

2.6

2

2.3

US GDP

2

0.4

3

1.7

Est 2007/2010

Est 2012

Actual


4

China GDP 16

14

12

10

8

6

4

2

0

Source: IMF World Economic Outlook 2007 2008 2009 2010 2011 2012e 2013e

% C

hang

e in

GD

P

10

9.5 10 9.9

8

8.5 9.6

10.4

9.2 Est 2007/2010

Est 2012

Actual

14.2


5


3.5

3

2.5

2

1.5

1

0.5

0 2007 2008 2009 2010 2011 2012e 2013e

% C

hang

e in

GD

P

2.8 2.7

1

1.8

0

1

European Union GDP 3.1

0.9

2

1.6

Est 2007/2010

Est 2012

Actual

Global Economic Risk Factors

6

Eurozone

Middle East

US Election 2012

Sequestration


7


Future of Passenger Travel: Demography as Destiny…

8

Rising middle class in developing regions

Source: Airbus – Global Market Forecast 2012-2031

• Average increase in passenger traffic of 4.7% per year through 2031

• Passenger traffic has doubled every 15 years

• Asia-Pacific Region to lead world traffic by 2031 – 32% of total RPKs

Risk Factors to Growth

9

Remote meetings

Airport security

Higher airline ticket prices

Availability of qualified pilots

Fleet Age: Driver of Demand % of Fleet 20 Years or older

Source: Airline Monitor

44% 39%

22%

15%

15%

10

Fleet Age: Future Aircraft Retirements New Aircraft Provide Operational Advantages

11

“ Over the next 20 years, the airline

industry will need 34,000 new airplanes, of

which 41 percent will replace older, less

efficient airplanes; 59 percent of the new

deliveries will reflect growth in emerging

markets and evolving business models.”

Retirements Higher efficiency engines

Lighter weight aircraft

New electronics

Lower noise pollution

Boeing Current Market Outlook 2012-2031

Future of New Programs: When Will They Drive Demand?

12

Source: Airline Monitor July 2012

2014

CSeries

350 XWB

320 neo

C 919

MS-21

737 MAX

2014

2015

2016

2017

2017

Aircraft Deliveries: Delivery Forecasts Have Yet to be Correct

13

Projected Vs. Actual Deliveries

Source: Airline Monitor, Boeing and Airbus

Boeing 787

2010

2012

Total to Date

2025

80/0

40/12

17

160/yr.

40/18

30/13

80

40/yr.

Airbus 380

Future of Aircraft Financing: Will the Money Be There?

14

Source: Wells Fargo Securities, Bank of America.

• Access to capital markets • Airline earnings under pressure • Airline capacity discipline


15


Buy-Weight Evolution

16

What is the Future of the Buy-to-Fly Ratio?

230k

180k

250k

150k 2012 2007

Pounds in thousands

Note: Buy-weight for airframe only, no engine or fastener content

Competitive Threats

17

Aluminum Lithium

Near Net Shapes

Composite Materials

Additive Manufacturing

Supply Chain Integration

18

Consolidation in the supply chain likely to accelerate: PCC/Primus, ATI/Ladish, RTI/Remmele

Mill product forging, extrusions, and castings

Tier 4 Machining and detail part manufacturing

Tier 3 Assembly, major detail part manufacturing, and minor systems integration

Tier 2 Major assembly, design, and major systems integration

Tier 1


19


Commercial Aerostructure Titanium Demand

20

Source: RTI estimates, including fastener stock; October 2012.

100

90

80

70

60

50

40

30

20

10

2010

Pou

nds

(in M

Ms)

34 47

64 73

83 88 91

2011 2012e 2013e 2014e 2015e 2016e

2011-16 CAGR, 14.1%

Safe Harbor

21

The information in this presentation, including oral comments, includes “forward-looking statements” within the

meaning of the Private Securities Litigation Reform Act of 1995, and is subject to the safe harbor created by that

Act. Because such forward-looking statements involve risks and uncertainties, there are important factors that

could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

These factors include, but are not limited to, the impact of global events on the commercial aerospace industry,

ultimate titanium content per copy and actual aircraft build rates for new commercial and military aircraft programs,

global economic conditions, the competitive nature of the markets for specialty metals, availability and pricing of

raw materials, the successful completion of our capital expansion projects, and other risks and uncertainties

included in the Company’s filings with the Securities and Exchange Commission. Actual results can differ

materially from those forecasted or expected. Additional information concerning such factors is contained from time

to time in the Company’s Securities and Exchange Commission filings, copies of which can be obtained from the

Company or the SEC.

Commercial Aerostructure Titanium

Demand Back to the Future?

Dawne S. Hickton Vice Chairman, President & CEO

RTI International Metals, Inc.

October 8, 2012

commercial aerostructure titanium demand back to the future?€¦ · these factors include, but are...

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