StandardAero, Inc. Q4 FY2024 earnings call

• Recognized the team's outstanding contributions and noted 2024 was a historic year with adjusted EBITDA growing 23% for the year and 37% in Q4.
• Made progress on the LEAP program, including industrializing over 260 LEAP component repairs, inducting the first LEAP engines, and receiving CAAC authorization. Also, had agreements with nine customers for future revenue over $1 billion.
• Invested in CFM56 and CF34 platforms, expanded the Augusta facility, and reached an agreement with GE to expand the CF34 license.
• Completed IPO and debt refinancing, reducing leverage and interest expense, with annual interest savings over $130 million.

Engine Services: In 2024, revenue increased to $4.6 billion, a 15% growth compared to 2023. Component Repair Services: 2024 revenue was $592 million, a 15% increase compared to 2023 (13% pro forma for the acquisition of Aero Turbine). The commercial aerospace end market for Engine Services saw a 26% increase, while business aviation end market revenue grew 8%. Military and helicopter end market revenue declined 3% due to lower inductions on the Rolls-Royce AE 1107 engine.

• Projected 2025 revenue to be between $5.8 billion and $5.95 billion. Adjusted EBITDA is guided to be between $770 million and $790 million.
• Priorities include finalizing the LEAP program build-out, leveraging CFM56 and CF34 platforms, accelerating component repair development, and pursuing accretive M&A opportunities.

• Supply chain challenges and delayed parts availability.
• Temporary grounding of the V-22 Osprey impacting the military platform.
• Uncertainty regarding tariffs and their potential impact on the business, though historically not materially affected.

Q: Seth Seifman asked about commercial aero growth and cash flow.

A: Russell Ford mentioned strong growth across commercial platforms like CF34, CFM56, and LEAP, and Dan Satterfield discussed working capital build related to future growth.

Q: Sheila Kahyaoglu asked about maintenance trends and aftermarket performance during airline volatility.

A: Russell Ford stated maintenance work is dampened or delayed by flight operation changes, so no immediate disruption.

Q: Ken Herbert asked about LEAP contract progression and CFM56 growth.

A: Russell Ford talked about strong LEAP pipeline with long-term contracts and Dan Satterfield discussed CFM56 turnaround times and improvement.

Q: Greg Dahlberg asked about M&A pipeline in CRS.

A: Alex Trapp mentioned interest in CRS acquisitions, with a tracker of opportunities and M&A as part of value creation.

Q: Krista Friesen asked about M&A integration time and tariffs.

A: Alex Trapp discussed M&A process timelines (6-24 months) and Russell Ford spoke about monitoring tariffs and being in compliance.