US-based advanced composites manufacturer Hexcel Corporation has reported a 13.4 per cent increase in sales in fiscal 2023 (FY23), amounting to $1,789.0 million compared to $1,577.7 million in the previous year.

Commercial aerospace sector represented 60 per cent of total sales. Sales in this sector soared to $1,068.2 million, marking a 17.2 per cent increase (17 per cent in constant currency) from FY22. The other commercial aerospace segment also witnessed a 14.1 per cent rise over the same period.

The space and defence sector, contributing 30 per cent to the total sales, displayed a robust performance with sales climbing to $544.8 million. This reflects a 17.1 per cent increase (16.6 per cent in constant currency) compared to the previous year, the company said in a press release.

In contrast, the industrial sector, which comprises 10 per cent of Hexcel's sales, experienced a downturn. Sales in this segment decreased by 12.3 per cent (13.6 per cent in constant currency) to $176 million. The decline was attributed to softening in several industrial sub-markets.

The company's gross margin for FY23 improved to 24.2 per cent, up from 22.6 per cent in the prior year, benefiting from higher sales volume leverage. The proportion of selling, general, and administrative, along with research and technology expenses, slightly decreased to 12.1 per cent of sales from 12.3 per cent in FY22.

Hexcel's adjusted operating income for FY23 reached $216.7 million, which is 12.1 per cent of sales, showing a significant improvement from $163.3 million or 10.4 per cent of sales in FY22.

For the fourth quarter of FY23 (Q4 FY23), Hexcel reported sales of $457.5 million, a rise from $429.4 million in the fourth quarter of FY22. The commercial aerospace sector saw a 4.4 per cent increase (5.3 per cent in constant currency) in sales, amounting to $267.5 million. The space and defence sector's sales escalated by 20.4 per cent (19.7 per cent in constant currency), reaching $152.3 million. However, the industrial sector faced a decrease of 19.3 per cent (22.3 per cent in constant currency) in sales, which totalled $37.7 million.

The gross margin for the quarter was reported at 22.5 per cent, slightly lower than 23.1 per cent in the same quarter of the previous year. Selling, general and administrative, along with research and technology expenses, accounted for 11.8 per cent of sales, down from 12.3 per cent. The adjusted operating income for Q4 FY23 was $49.1 million, or 10.7 per cent of sales, compared to $46.3 million, or 10.8 per cent of sales in FY22.

“We continue to focus on ensuring operational readiness for the expected growth ahead—this involves training new labour across our manufacturing sites, driving operational excellence programmes for yield and efficiency gains, and bringing assets on-line for the expected increase in demand. Although there is some near-term margin pressure as a result, all of these efforts will position Hexcel to maximise our margin opportunity in the coming years as build rates ramp upwards,” said chairman, CEO and president Nick Stanage.