Quickstep Holdings update on major customer contracts and forecast demand

Quickstep Holdings Ltd (ASX: $QHL) has provided an update on ongoing major customer contract renewals and forecast demand. The company has ongoing long-term agreements with Northrop Grumman, Lockheed Martin, and Marand, with production transitioning to the next phase of multi-year orders under these agreements. This provides clear demand signals out to FY27 for F-35 components and to FY29 for C-130 components. All demand requirements are expected to be finalized through receipt of purchase orders before the end of July 2024.

Executive Commentary on Demand and Production

As the F-35 approaches the midpoint of its initial volume buildout, Quickstep has been working closely with its customers to establish production schedules which meet their demand profiles, while providing the Company with the opportunity to streamline its operating model. Quickstep will run a 'level-loaded' production schedule for Lots 18 to 20, ensuring consistent production volume through FY25 to FY27. The overall demand for F35 components will be circa 8% lower than average demand over the FY23 / FY24 period, but Quickstep's streamlined operating model aims to ensure program margins remain consistent despite this lower demand. For C-130 components, the next contract period commences in mid-FY25 and goes out to FY29, with the demand profile expecting 20 ship sets of components supplied each year. The streamlined operating model being initiated by Quickstep will support continued improvement in margins. Quickstep continues to be actively engaged with all major customers and partners to identify new opportunities in traditional program component supply and new and emerging sectors. Interest in and demand for advanced composites along with next generation production processes remains strong and provides opportunities for Quickstep globally.

Summary of Quickstep Holdings Update

Quickstep Holdings Ltd (ASX: $QHL) has provided an update on ongoing major customer contract renewals and forecast demand. The company's ongoing long-term agreements with Northrop Grumman, Lockheed Martin, and Marand are transitioning to the next phase of multi-year orders, providing clear demand signals out to FY27 for F-35 components and to FY29 for C-130 components. Quickstep aims to finalize all demand requirements through receipt of purchase orders before the end of July 2024. The company's streamlined operating model for F-35 and C-130 components is expected to support consistent production volume and improvement in margins. Additionally, Quickstep is actively engaged in identifying new opportunities in traditional program component supply and new and emerging sectors, leveraging the strong interest and demand for advanced composites and next-generation production processes globally.