Mission Critical Metallics Hunter Dalton, EVP ATI High Performance Specialty Materials Group May 20, 2014 2014 ATI. All Rights Reserved.
Forward Looking Statements This presentation contains forward-looking statements. Actual results may differ materially from results anticipated in the forward-looking statements. These and additional risk factors are described from time to time in the Company s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2013. 2
Commercial Aerospace Market Drivers Traffic (RPMs) Capacity (ASMs) Airline Profitability Fuel Costs International Carriers Growth of Low-Cost Carriers Change Specialty Metals Market Impact 3 (Sources: Airline Monitor, IATA press releases) (Sources: Airline Monitor, IATA press releases)
Units 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 Air Transport Production Market 2011-2021*, By OEM 0 2011 2013 2015 2017 2019 2021 *Drop in forecasted production rates from 2014 to 2016 is due to potential change in orders, shifting from legacy aircraft to the next generation single aisle. Other Embraer Bombardier Boeing Airbus Secular Growth Trends Titanium intensive airplanes Fuel efficient hotter burning engines 4
Units 12,000 Aeroengine Production Market 2011-2021, By OEM 10,000 8,000 6,000 4,000 2,000 Other Rolls Royce CFM General Electric Pratt & Whitney 0 2011 2013 2015 2017 2019 2021 *Includes spares Source: IFC SH&E 5
Commercial Engines in Service History and Forecast 75,000 70,000+ 3.3% CAGR 70,000 65,000 60,000 55,000 50,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: Airline Monitor The larger the fleet, the greater the demand for spare parts. 6
Jet Engine Materials Low Pressure Compressor Titanium Combustor Superalloys Low Pressure Turbine Superalloys, Gamma Ti Aluminides Fan Titanium/Composites High Pressure Turbine Superalloys/Powder Alloys High Pressure Compressor Titanium/Superalloys Engine Shaft High Strength Steels, Superalloys 7
Titanium Applications in Jet Engines Fan & compressor cases, disks, blisks, impellers, blades, vanes, and fasteners Fan Frame Compressor rotor Fan Disc Flowformed Shaft Intermediate Case Titanium Forged Compressor Blades Forged Case Fan Disc w/blades 8
250 Titanium & Specialty Alloy Demand Ramping Up with Aeroengine Production Aerospace Raw Material Demand Forecast Buy Weight, M lbs. Titanium 200 150 Specialty alloys 100 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: ICF SH&E Fundamental drivers & backlogs remain strong. Large commercial engines driving titanium demand. 9
Engine Development Trends Demand for Green engines Reduced noise Reduced emissions (SO 2, CO 2, NO 2 ) Improved fuel efficiency Higher operating temperatures Higher temperature capable materials Lighter materials Lower operating costs for airlines Reduced maintenance intervals Reduced part count PWA Geared Turbofan CFMI LeapX New Designs and Materials 10
Changes in Jet Engine Design Limited introduction of composites Larger thrust engines Consume more nickel-based and titanium alloys per engine Higher engine temperatures Nickel-based alloy content in compressor growing High temp powder/cast & wrought alloys New titanium-based materials Gamma TiAl Advanced Manufacturing Additive Manufacturing Evolutionary Change 11
Commercial Aerospace Panel 15:30 16:45 Sala Nettuno New titanium-based materials Gamma TiAl Dr. Wilfried Smarsly, MTU Advanced Manufacturing Mr. Bertrand Flipo, TWI Additive Manufacturing Dr. Robert Sharman, GKN Evolutionary Change 12
Titanium in Jet Engines Demand Drivers Higher build rates Larger engines Larger global fleet for spare parts New engine designs Fuel efficient hotter burning engines 13
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