OK, good morning. It's great to see everyone here in New York. Welcome to our 2024 Investor Day. Also, I would like to welcome those that are participating live on our webcast. We've got some exciting updates to provide to you today. It's exciting times in aerospace, and it's even more exciting in lightweight advanced composite technology. And being one of the leaders in the world, we're thrilled to share with you our story, give you some background, give you maybe a little more detail than you've heard in the past. And then we'll close it up with some Q&A. So I think you're all familiar with our forward-looking statements. If you're interested, we posted our 10-K earlier this month on 2023. I'd encourage you to pull that and review it if you're interested.
I'm going to provide a strategic overview, a little more depth on our product technology, our breadth, our markets. Patrick is going to provide more details on the numbers. Then I'm going to provide an outlook, more detail on 2024, as well as our midterm guidance. And again, remember, our midterm guidance is, in essence, 2024, 2025, 2026. So when we talk about the period, that's what we're talking about. We'll then take a break for about 15 minutes. We'll come back, and Patrick and I will do about 30 minutes of Q&A. So that's what the morning is going to look like. Again, thrilled to be here. Thank you all for taking the time to join us, to share our story, and to hear about what's going on. So in the composite world, in the lightweighting world, there's multiple factors taking place today.
That's why it's so exciting in the aerospace and the industrial markets. We've got the cyclical growth driving demand, basically the recovery from the pandemic, the amount of people willing and wanting to travel, both for leisure, for business. We've got the secular growth. Our customers are getting more sophisticated. Our technology is evolving. Our product portfolio is expanding. And the secular growth on lightweighting has never been stronger than I've seen it today. Utilization of our assets, margin expansion, operational excellence, the internal factors that drive us to support our customers has never been stronger, and we're going to share an overview of that as well today. So I did want to start by giving you a nugget of our financials, and that is our strong cash generation over the period. We expect to generate more than $1.5 billion of adjusted EBITDA. I want to start with our team.
We've got a high-performing, global, incredibly talented and diverse leadership team. Excuse me. Gail Lehman, our general counsel, is here with us today. Patrick, which you'll hear from in a minute, our CFO. Gina Fitzsimons is our CHRO, is with us here today. I wanted to share a little bit on our business presidents. So on the right-hand side, you've got Philippe Chevrier. Philippe runs our Americas Aerospace business. He does that out of Salt Lake City. He also runs our global fiber business, which is global, located strongly in Europe, in the US, providing products throughout the world. Thierry Merlot, next to him on the left-hand side, leads Europe, aerospace, Middle East, Africa, Asia, Pacific, so basically everything outside the US. And he also runs our industrial business. He does that out of France. Two particular points I want to add.
John Albritton, you'll see him on the third, fourth row. John came in in the third quarter of 2023. He leads integrated supply chain for us. That's basically, front to back, how we serve our markets through operations, supply chain, procurement, safety, quality, delivery, et cetera. Great addition to the team, really on board to help us take operational excellence to the next level. The other point I want to make, we've got Paul McKenzie, who's our Chief Technology Officer, located in the UK. Paul has been with us for several years, leading our technology and development, and he decided that it was time for him to retire. He let us know a year in advance. We are fortunate enough that we had a director on our board, Marilyn Minus. She's the Chair at Northeastern for engineering. She's a composite, polymer, carbon fiber expert.
And she is going to officially join Hexcel full-time in April. Now, we've been working the onboarding with Marilyn and Paul for the last several months, and that'll continue. Paul will stay with us up through October facilitating some of the technology transition. Then we have our IT leader out of Salt Lake City, and Kaye Vizi, our communication leader, is joining here with us today. That rounds out our leadership team, very capable, very senior, very experienced in the composite industry. So our purpose, you've seen this. It's on our website. It's in our annual report. It hasn't changed.
It's really focused on excellence in advanced material solutions and how we can position our portfolio, our materials, our technology to better serve our customers, to help them solve their problems, to help them drive efficiency, drive performance, drive safety, all the metrics that they're looking for to support air travel, space exploration, or multiple industrial applications. Our strategy has not changed. First and foremost, we focus on innovation, continually reinventing who we are, continually advancing our technologies, whether it's fiber or weaving or resin systems or finished parts that we're providing to our customers. We're focused on growth markets, markets that require lightweighting, markets that basically perform better with lightweighting for efficiency, for emissions, for sustainability, for all the factors that our customers are looking for to drive value to the end customer. And then we focus on flawless execution.
That starts with safety for our team, safety for our peers, quality, delivery to our customer, on time to our customer request and to our customer request, productivity, and value generation for our shareholders. It's really the overview of our strategy. If you look at the composite value proposition, stronger, lighter, more durable, doesn't stress, corrode, inspection intervals are longer, life cycle costs are lower than the comparable materials and metals and aluminums. It's a great value proposition for what the environment drives today. Lower life cycle costs, longer life, higher performance, lower emissions. It's great to be in the composite business today. Aerodynamic designs. You can make things out of composites and shapes that, in some cases, cannot be made in other materials or are prohibitive economically. And I think you've seen the market has spoken with respect to the composite adoption, the secular penetration.
More and more components are converting to lightweight materials to drive efficiency, to drive performance. If you look at our business, if you look at the barriers to entry, first you have the technology. You've got decades of development, decades of putting assets in the ground, decades of demonstrating proven, high-volume performance to our customers. Our intellectual property, much of it is trade secret. We do not want to patent it. We do not want it in writing for the world to see. We protect it. It's sacred to us. It has been for 75 years, and it will be for the next 75. Our reputation on aligning with our customers, providing them with what they want and need with respect to quality, on time delivery, and value is never-ending.
Our drive for continuous improvement, to reinvent ourselves over and over, whether you're talking about technology, manufacturing processes, talent development, it's across the board. We have the broadest portfolio in the industry, which I'm going to show you more as we go through the presentation. When we talk about product portfolio, you hear that we've got the broadest portfolio. You hear about the advantages that provides on driving growth for the industry, growth for our business. We've got carbon fiber. We're vertically integrated on the precursor and the fiber. We take our fiber, as well as others, and we weave it into reinforced fabrics. We develop resin systems for the need in commercial, in space and defense, in industrial applications. We have Honeycomb Core, which we sell to our customers on a raw basis. We add value to it. We sell it for engines and nacelles.
We sell it with value-added technology such as soundproofing, sound attenuation. We have tooling materials. We have winter sports, RTM materials, everything from raw materials that our customers use for their applications to flyaway parts like rotorcraft blades. Vertical integration is a differentiator. Vertical integration is a strength for Hexcel. Vertical integration is a growth driver for Hexcel. So let me walk you through the key components. Let's start with carbon fiber. Carbon fiber, the precursor, we manufacture in Europe. We manufacture in the U.S. We'll see the maps on the upper right-hand corner. It shows basically that we have redundancy in virtually all of our product technologies. Our customers like that for protection. We like it for flexibility, for supply chain efficiency. And it provides us an opportunity to optimize our supply chain. So we produce the PAN or precursor.
We consume 100% of that internally, where we convert it to carbon fiber. We convert it to aerospace-grade carbon fiber. We basically define that by three grades: high modulus, intermediate modulus, and high strength. The other thing that's important to note is that our assets are fungible. What does that mean? That means that they're flexible. We can make any of our fiber combinations off any of our lines as we work with our customers for qualification. Again, that provides us with the flexibility. It provides us with a built-in protection to mix changes. We do that very efficiently on changeovers. We manufacture our carbon fiber at multiple sites in Europe and soon to be multiple sites in the U.S. with our expansion in Decatur. Applications are across the board: primary structure, secondary structure, engines and nacelles, fan blades, F-35, 787, 350.
It's uniform across our highly demanding, highly technical, strongest type products. Weaving. So weaving, in essence, is taking our fiber or taking a competitor's fiber or taking glass and putting it into a fabric, manufacturing a fabric. We are the world's largest aerospace weaver in the world. We've got presence in Europe, in France, and in the U.S. We manufacture multiple grades of crimp fabrics, which is standard like clothing. We manufacture proprietary fabrics like PrimeTex that has a very close and tight weave and drives enhanced performance. And we have non-crimp technology, which takes advantage of unidirectional fiber to provide the strongest solutions that we stitch and use NCF technology to basically provide the strongest requirements within the weaving industry. Again, we provide all markets, mainly secondary structures in aerospace, lots of components around engines and nacelles, lots of components in the industrial markets. Resin systems and prepregs.
We kind of couple these together, but let me start with the resins. We develop our own resin systems internally, working with our customers. We have over 200 formulations. They have evolved over the past 75 years. Some very old resin systems are staples in the industry and get used today on new applications. And we're developing new applications to help facilitate our customers, whether it's their laydown rate, their cure rate, or their mechanical performance that they require for the application. We do that internally. We do that ourselves. We have multiple labs developing that. Prepreg. Prepreg is when you bring together our resin systems with our fiber. And that can be fiber in a unidirectional form, or it can be fiber in a fabric or a reinforcement form. We bring that together to serve our customers, again, across the board in our industries. Honeycomb. Honeycomb Core.
It's really where Hexcel started 75+ years ago. A couple of college students out of Berkeley invented this. They approached the U.S. military. They made a sale. Hexcel was born. It's a lightweight, think of a honeycomb in its very strong and compressive direction. We sell that to our customers in the raw form, in the block form, in slice form. Then we add value to it. We either shape it. We add our proprietary acoustic cap, sound attenuation, which, as you know, is becoming more and more important with our customers and their applications. We provide the value-added components all the way up through finished, completed parts, including rotorcraft blades, engines and nacelles, and a vast array of fairings, flaps on commercial and military aircraft. That brings us to Engineered Products.
Engineered Products, we basically take our technology, our know-how, we bring it together into either subassemblies like helicopter blade spars or finished parts like helicopter blades or engine nacelles or engine nacelle components. We do this in multiple sites: America, U.S., Europe, and even Africa in our Morocco site. It's a great technology. It's a great platform where we get to see the end product requirements from our customer. And that helps us optimize the subcomponents that go into it and drive the technology for growth. Industrial weaving and prepregging. It's really the similar type of technology. We do this mainly out of Europe and Austria to serve the industrial markets. And in essence, we procure. We buy glass fiber. We buy industrial fiber. We do not manufacture industrial fiber. We made a strategic decision not to pursue that. We work the high-performance, high-grade carbon fiber technologies only.
But we can add value through our resin systems, through our solutions to serve multiple markets within the industrial space and even in the aerospace. Glass is still used in aerospace for secondary structures. And we're a leader in providing that to our customers. So let me just bring it together on our product offering and capability. You can see our offering. Basically, it's everything on the list except the industrial fiber, which we procure. We have multiple sources. And you can look at five of our largest competitors. No one comes close to offering the technology, the portfolio, the breadth of offering to our customers. And what does this do? It provides us a differentiator. It provides us an avenue to talk to our customers at a deeper level than just mechanical performance around fiber.
We have the inroads to talk to them on their raw materials, on their intermediate materials, and their final products. It's a huge strength, a huge differentiator. I am very proud of this chart and what our team did. Roll back the clock. Our last Investor Day was 2019. We did it in May in Salt Lake City. I think a few of you were there. Rich, I can't remember if you made it or not. Great event almost five years ago. Nobody had heard of a Woodward merger. No one had heard of a pandemic. Pandemic hit. 2020 reshaped the business. Businesses had to restructure. Our team responded. We did not look at it as something we couldn't control. We looked at it as an opportunity. It had been a decade since we had open capacity to try to optimize our efficiency in our lines.
It had been over a decade since we had capacity to streamline processes and work productivity initiatives in a meaningful way. We took the pandemic as that opportunity. We also knew we would come back. We knew the market would come back. We took that opportunity to invest in the business. We doubled the size of our Morocco engineered products business simply because demand is so strong and performance is so good. We invested in a new R&T innovation center in Salt Lake City. We did this during the pandemic. Both of those sites opened in 2023. We reinitiated our carbon fiber expansion in Decatur, Alabama. We're doing this because we see the demand. We're going to need that capacity. We had it about three-quarters invested when we stopped it for the pandemic. We invest in the business for the long term, not for the quarter.
I've touched on innovation. Complacency is a word we don't use. We innovate. As soon as we introduce a new material, a new solution for our customers, we're advancing the technology for the next generation, whether it's mechanical performance, whether it's for laydown rates and how our customers will lay it down, or how they cure it. It can be a prepreg format. It can be a tape format. It can be a Resin Transfer Molding format. The other thing we did during the pandemic is we were very disciplined on our R&T. We restructured the business. We took a pretty severe cut in our workforce globally. But we were very disciplined on R&T. And we held back on those same level of cuts in that area of the technology. Let me touch on why vertical integration is so powerful. If you look at the spider diagram, imagine this.
This is basically how our customers come to us. They'll have an application. They'll have a need. Today, there's a lot of work going on. The next new narrowbody. OK? Who knows when it'll be launched? But I can assure you our customers are working the technology today. They'll provide a spider diagram. And this is just an abbreviated version. Usually, it'll have 30 characteristics. But if you look at their spider diagram and their requirements with our resin systems, with our multiple fibers, and how we treat our fibers, we can zero in on exactly what they need. We do that through collaboration with our customers. We do that through our technology, our innovation. Some of these are existing technologies that we combine with different fibers. Some of them are new technologies. But the point. They need for the application at the right value proposition.
Incredible, incredible strength for Hexcel. We've talked about the advantages, the durability, the weight. It's all about lightweighting. It's all about efficiency. It's all about technology to provide that next level of performance. OK, I'm going to switch gears away from our product technology and focus on our markets a little bit and give you our view of what we see happening and projected to happen. Commercial aerospace, our largest segment, about 60% of our total business. You can see the list of customers. Virtually anybody that's in the business is on that list. Space and defense, about 30% of our business, growing nicely. And industrial, about 10% of our business, growing nicely with a reset in the wind industry. If you look at the list of our customers here, we've got relationships that go back decades. We've got proven performance that goes back decades. We've demonstrated performance continuously.
We've demonstrated continuous improvements. We've demonstrated innovation. Let's look at market trends. Upper left hand shows that people want to travel. Domestic travel virtually is back to pre-pandemic levels and in many areas ahead. Global travel is approaching pre-pandemic levels. International is catching up quickly. No doubt we're going to get back on the normal 4%-6% annual growth once the pent-up demand is taken care of and the demand can be fulfilled through the OEs. Huge backlogs. If you look at the lower left, think about this. The composite-intensive aircraft, really, there's two of them: the Airbus A350 and the Boeing 787. Those are the latest aircraft that were designed utilizing composite technology for primary structures, wings, fuselage, empennage, central wing box. The rest of the market, the narrowbodies, they're basically metal planes. They've got composite penetration on secondary structures, on engines, on nacelles. They're growing.
We're growing in that segment. But only about 6% of the installed fleet in the commercial aerospace is composite-intensive aircraft, which means there's a mountain of aircraft that will be replaced over time with composite-intensive aircraft. If you look at defense spending, the lower right hand chart basically shows the global defense spending. It is steadily increasing. If you look at the threats around the world, we're forecasting that it's going to continue to increase. We're going to continue to gain more than our fair share of that market in that space. We've talked about the cyclical growth, serving the demand of consumers. People want to travel. Wide-body momentum has really picked up. Narrowbody is really a function of the health of the supply chain on how quickly it can continue to ramp up, which it will.
Aircraft engines and nacelles, a great strength of Hexcel. And remember, engines and nacelles tend to get refreshed over the life of an aircraft. So you don't necessarily need to have a new aircraft, a new engine and nacelle like the MAX or the NEO. Or ultimately, there'll be other engines, perhaps on the wide bodies, where there will be more composite content. Global space and defense, basically, it's on everything that flies, rotorcraft, fixed-wing space, satellites, drones, you name it. It all requires lightweight, advanced solutions. The secular market growth, again, it's driven by the need for sustainability. It's driven by the need of increased performance, increased efficiency. It's across the board: on the primary structures, on the secondary structures, the engines and nacelles. There's not an application that's not pulling for stronger, lighter, more durable materials. And we have the broadest, strongest portfolio to serve that.
Just as a visual, you can look at the primary structures in the commercial market. Again, fuselage, central wing box, wings, tail planes, the vertical and horizontal. Secondary structures: the fairings, the flaps, the secondary winglets, all composite, high-performing composite to drive weight reduction and performance. And then interiors. More and more opportunities presenting themselves on interiors. Again, the OEs are pushing hard. The latest generation had over 50% of composite content. Future aircraft will go above that and perhaps above 60%. I mentioned engines and nacelles. We've got great positions because of our broad portfolio, because of our intellectual property and our proprietary technology. If you look at functionally and structurally fan blades, fan containment cases, thrust reversers, sound attenuation around the engine nacelle, fantastic business for Hexcel, a big percentage of our commercial business on commercial as well as business and other applications.
We provided our ship set content. But we thought we'd give you a bubble chart. And basically, this basically shows you the primary platforms in the commercial aerospace world. The size of it is, in essence, our ship set content multiplied by the annual production volume at our customers' maximum stated rate. So as an example, I'll pick the A320neo. Airbus has stated 75 per month by 2026 time frame. That's what's depicted there if you look at our ship set content times the annual build rate. That's the bubble size, A350 being the largest ship set we have in the commercial aerospace business. Obviously, the wide bodies are much larger structures. They consume much more materials. And they tend to be in the five to 10, maybe a little higher, in monthly production rates. If you look at the narrowbodies, they're in the 50, 60, 70+.
When you look at the smaller aircraft with those types of monthly volumes, you get a very meaningful impact to our commercial business. We thought this chart would just help give you perspective on the drivers within our industry and within our business. If you look at the commercial aerospace outlook, the majority of the platforms are growing or trying to grow. Really, the only one that I would even say is stable is the A330neo. It might go up another half plane a month. It's stable. It's got a nice backlog. Decarbonization drivers, refleeting, replacement of metals in areas which are lower risk, i.e., secondary structures. There's more and more penetration, even on legacy platforms, and the opportunities we're looking to pursue. It's a great time to be in commercial business.
Backlogs, record backlogs, over $1.48 billion or $9 billion, over $9 billion for Hexcel's revenue with that demand. That's the backlog today, the 20-year forecast, a composite of Airbus and Boeing's 20-year forecast. It's over 41,000 aircraft. And again, you can see the split required for growth, i.e., people that want to travel or need to travel, and the split for fleet replacement, i.e., aircraft wearing out or aircraft not efficient enough to be sustainable, efficient from a cost to operate or efficient from emissions, which is getting more and more expensive, especially in the European Union. Business jets. It's great business for us. Started in early days with minimal content on secondary structures, continued to grow, continued adoption with Gulfstream, Dassault, Embraer, Bombardier, you name it.
We're partners with all of them, evolving rapidly to much more secular penetration with the Falcon 10X having a full composite wing, all Hexcel materials. Great content on the 6X, which was just launched. Fantastic CAGR since 2019, secular penetration, great backlogs, and technology to support our customers where noise, lightweighting, and efficiency is getting more and more important, especially for the large cabin. But that will slow down. Again, if you look at the applications on business jet market, whether it's on the business jet, the turboprops, the regional, it's virtually evolving to like commercial aerospace. You've got the verticals, the horizontals. You've got secondary structures and radomes. Tip to tail, customers need lightweighting. And we're serving that market well. And there's significant growth ahead. I've talked about emissions. I've talked about sustainability. I will propose that lightweighting is the enabler for sustainability.
It's the primary enabler for sustainability for the next several decades. We're working with our customers on alternative fuel applications, on hydrogen, on electric vehicles, all of which are fantastic technologies. They will take time to develop, to evolve, to get infrastructure to support. Lightweighting is the number one enabler today and will be for the future. If you look at composite adoptions in space and defense, it goes back to Apollo landing on the Moon in 1969. The pads, that was Hexcel honeycomb core that touched the Moon. It has evolved rapidly through time. We know space and defense drive performance, drive requirements. Rotorcraft have evolved to pretty much total composite penetration, as you see on the CH-53K. Then you've got the next generation platforms, next generation air dominance, FLRAA, drones, eVTOLs. The list goes on and on.
You cannot find a single application that's not driving for advanced lightweight materials. This chart depicts the CH-53K, great platform for us where we have between $2.5 million-$3.5 million per ship set, very large program that's just starting to ramp. You can see the content. It's on the tail blades, the main blades, the fuselage, the cockpit. Tip to tail, again, everywhere our customer can find an opportunity to lightweight, to convert models to lighter, stronger materials. They've done it and are doing it. Unmanned. You see more and more press on unmanned vehicles or drones. Clearly, they need to be lightweight. Some of them are normal propulsion. Some of them are looking at alternate propulsion. But the one factor that remains, you have to have range. You have to have capacity.
That means you want it as light as possible so that you can fulfill the mission. We're working with multiple OEs that some are developing new, some have been around, are evolving. Rest assured, we're working with them on our technologies to help them meet their needs. If you look at space and defense, on the left-hand side, you see the growth platforms. I've mentioned the CH-53K, the Rafale growing nicely, military, rotorcraft, V-280 FLRAA. It's going to grow in the future. Drones, again, future upgrades. And then the platforms that are classified that we don't even hear about, we're selling into those markets. F-35 is pretty stable, great program, great content. But it's not huge growth going forward, moderate. If you look at stable platforms and great positions, A400M, the Black Hawk, the Apache, the Chinook, fantastic positions with nice ship set content.
And those aircraft are stable and going to be around for a long time, especially for replacement blades. And then the V-22 is sunsetting. Now, I wouldn't be surprised if that date continues to push to the right. There's been great foreign military sales. And we'll see. Being on 100 plus different platforms protects us, makes us very diverse. And we're not driven by a single program in the space and defense space. Industrial market opportunities. We are very disciplined and very selective in the industrial space. We love the industrial space. We define it as about 30 submarkets, everything from automotive to marine to power transmission to tidal power to winter sports, rack, tooling. The list goes on and on. We participate in all those markets.
Large markets, the growing markets, automotive for performance, wheels, areas where the customer cannot find a solution to meet a need, that's what we look to pursue in the industrial space. Very few, if any, can do what they need. Marine. Marine is a growth platform. It's going to take time. It's in the future. But the marine is a huge polluter. And wind-assisted sailing vessels, lightweight hulls in transport vehicles, we're working those today. We're agnostic. It runs off of our existing assets. And it provides a great return on invested capital. It's a much lower investment base in our industrial business than in our aerospace. And it provides us diversity. So we continue to pursue. But we continue to be very disciplined. OK. I'm going to switch gears here. I'm going to talk about Operational Excellence. And first and foremost, it starts with safety.
And again, I'm very proud of this chart. If you look at the data going back to 2013, we don't give the numbers here. But I'll tell you, I'll calibrate you. In 2013, we were well below the industry standard, the industry average on safety. We were much better than the industry average. And 2023 was our safest year ever. I'm very proud of that, and especially given the fact that about 1/3 of our direct employees in our plants have less than two years experience. So we not only continue this trend, we continue this trend through self-awareness, through training. Everyone in Hexcel owns safety. It's not the plants. It's not the line operator. It's Patrick, myself. It's a leadership team. We all drive awareness. We're all safety conscious. And it translates into great performance that we're experiencing here. Manufacturing process science.
We've talked about the technology, the fiber, the resin systems, the molecular makeup of our raw material products. But equally important are the processing of our materials, not only processing within Hexcel's walls with what we control, but within our customers on what they do with the materials, if they're buying a tape format or a prepreg format or a resin transfer infusion format, how are they curing it? How are they handling it? How are they laying it down? We're collaborating with our customers to drive step changes in technology, to drive efficiency, which will even drive faster and more secular penetration. Our footprint is global. We take advantage of the large capital-intensive assets. And we consolidate them for efficiency, things like precursor and carbon fiber. They ship well. We can support our global markets very well. And we optimize efficiency by consolidating.
Whereas our prepreg, which is very close to what the customer ultimately needs, when you bring the fiber together with the resin system, the reaction starts. And you need to freeze it. We try to position that close to our customers. You'll see our prepreg plants located very close to our customers so we can drive supply chain efficiency, inventory efficiency, and ultimate support to our customers. And we do that through multiple technologies, especially around the prepreg. All of our sites virtually have space to expand. Not that we need to expand. We're running approximately at 75% efficiency. And that's just the ratio. If you look at where we were in 2019 and the assets had in place and you ratio our sales where we finished 2023, we're bringing on new capacity in carbon fiber and PAN.
That's for 2025, 2026, 2027, and the out years where we're seeing growth beyond what's defined in our midterm guidance. Supporting high-volume production for our customers is essential. Our customers are very risk-averse, as they should be. We've demonstrated operational excellence. We've demonstrated delivery performance. We've demonstrated quality performance. We've demonstrated our portfolio. As an example, going to market with three different prepreg formulations, all three processes driven from our carbon fiber, thermosets, which require an autoclave, which an A350, a 787 technology utilize, resin transfer molding much faster, but unable to do large parts today. That technology continues to evolve. And we're a leader in that space. And then thermoplastics, where we have technology that is being adopted in small parts and will continue to grow because of the advantages on the ability to combine parts and eliminate fasteners. We're agnostic.
We want to provide the best solution for the application to best serve our customers. We have all the technology required. We've talked a lot in our earnings release about training. We restructured the business due to the pandemic. We generated significant cash during the pandemic. We protected the business during the pandemic. We invested in the business to be more efficient, to grow, and to provide broader solutions to our customer during the pandemic. Training is essential. This isn't only shop-floor training. This is training on continuous improvement. This is training on leadership. This is training on efficiency. We do that across the board, not only for performance and efficiency, but for retention. Career development is a key tenet of our management development process and how we develop our talent internally. Significant training going on today around the world and continuous improvement.
If there was two words that would really define Hexcel, it's innovation. And it's the continuous drive for improvement. That defines everything we do: reinvent, reinvent, reinvent, and improve. And that has positioned us as a leader with our customers. And we'll continue to do so in the years ahead. Future factory. I'm very excited. What's future factory mean? It means taking our technology and manufacturing it in a way that's a step change from what we do today. It could be 30% more efficient or 50% more efficient, utilizing vision systems, utilizing automated inspection systems, utilizing robotics, utilizing big data and artificial intelligence to help us utilize the data to optimize efficiency and performance. Some of this is brand new technology that we're working. Some of this is incremental improvements we've developed during the pandemic that is being implemented as we speak.
Future factory is what will continue to make Hexcel the leader in manufacturing performance, in product innovation, process innovation, and growth. Sustainability. We've established targets for emissions. These are based on 2019 baseline metrics as our benchmark: waste reduction to landfill, freshwater usage, reduction of accidents and injuries, compliance to our code of conduct, our ethics, our governance, 100% diversity sourcing, and our engagement and contributions to the areas where we operate and to the social environment. I can tell you on every one of our objectives, we're on or ahead of schedule to meet our stated objectives, on or ahead of schedule. Very proud of what our team has done. So that wraps up product overview, strategic overview, a little bit on our markets. I'm going to turn it over to Patrick to provide more details on the financials.
OK. Thanks, Nick. Good morning, everyone. Nice to see so many of you here on this bright, sunny Tuesday morning. Thank you for coming. As Nick said, I'm going to go through a number of charts, just giving some financial perspective and talking about capital deployment before handing back to Nick, who's going to give sort of a wrap-up on the forward overview. So as you will know, if you've been following our company, we've been trending very nicely coming out of the pandemic. We're growing sales back to just $1.8 billion. So as Nick kind of referenced, about 75% of where we were in 2019. We have some way to go. We're on a clear trajectory. The OEM build rates continue to grow and increase. That's going to be the major driving force.
But also all the other platforms, as Nick alluded to, the business jets, the space and defense opportunities, and automotive and other industrial applications. So good top-line growth ahead. Operating income is going to follow that as well as adjusted EPS. Now, on margins, and I'm going to talk to margins a little bit more. So margins have been slower than we wanted, slower than you wanted. We didn't anticipate the inflationary impacts back in 2020, 2021, when we started to look forward. And we put some growth targets out. And one of those clear targets was sort of mid-teens operating income percentage. That has proved tougher. And it's proved a bit slower. And we recognize that.
But we also now have great confidence that we're going to get back to those mid-teens and mid-teens and higher operating income margin levels, as Nick was talking about through efficiency, productivity, yield, the type of future factory things that Nick was starting to talk about that are coming in the next few years and then going to roll out over the next decade. All of that is going to help us. But those mid-teen margins, I hear, in the near term, in the next two to three years, we'll be driving back to those mid-teen margins. The headwinds, there is some lingering inflation. Some of our minor raw materials are still sluggish and going down. But on the large part, bulk chemicals, supply chains around the world, as you will be aware, have greatly improved. Energy is really a European issue, quite honestly, for us.
In the U.S., the energy headwind has been minimal. However, in Europe, because of, perhaps most importantly, the Ukraine conflict and gas supplies, that has been a headache. It has softened from where it or the peak of the impact. But it's not quite back to where we were in 2019. However, we're working through it. And we see that continuing to improve. Nick talked about training and experience. And that is crucial. We have complex industrial manufacturing. It takes a skilled workforce. We train people. We invest in training. But that takes time. And you simply, as you'll have heard us say, you can't give three years' experience in six months.
So as that 1/3 of our workforce with less than two years, as Nick talked about, improves and gets efficiency and gets experience, when the lines go down, that's when it really matters, when you have a slight technical hit. How quickly can they fix it? How quickly can they bring it back up? That is what we're seeing improvement all the time. Every quarter is another quarter of experience. And again, that gives us confidence. Another driving force is ROIC. We know relatively we're heavily capital-intensive. That's who we are, much more than labor-intensive. Driving a return on that capital base and again, I'll talk to it in a minute, but pushing that back towards 15% and higher is our medium-longer-term goal. Cash. Nick mentioned it. We did a fantastic job in the middle of the pandemic. We didn't panic.
We managed our working capital. We've driven down debt well over $300 million from 2019 to where we are today. All these numbers you'll recognize, the EBITDA growth through last year, free cash flow up to $149 million. That was even after buying the Amesbury property, which we hadn't really anticipated. Capital expenditures, that $122 million, again, includes that Amesbury one-off, roughly $40 million. It would have been well under $100 million without it. The cash from operations also continues to grow. Our discipline on working capital continues. We did a fantastic job at the end of the year, as you will have seen. Receivables, we always do a great job. We manage payables appropriately. We're trying to stretch our payables days. We do see that as an opportunity. Inventory, we grew inventory. We've talked about this. We did it deliberately to support our customers.
As the video said at the beginning, we put our customers first. We work with them very, very closely. I just wanted to touch on CapEx intensity and why we're confident in the roughly $100 million, just under $100 million, sort of for the near term. You can see the profile there. It's a little bit crude. It's trying to show the relative intensity of the assets we invest in. Sort of at the left hand, at the lower end, the lowest end, you've really got weaving, looms, which can be just a few hundred thousand dollars.
And then on the right, you've got PAN and fiber assets, which I think we said in late 2017, a PAN line and a fiber line, the assets that Nick talked about that we're now finishing off, those were $200 million together, one PAN, one fiber line together, $200 million. And so we have this extreme spectrum of intensity. But where we are today, in the period we see ahead, growing back into that 2019 footprint, we're very confident around this level of CapEx. Now, we will do the right thing. If we see an amazing opportunity with a fantastic payback, we'll come to the market. We'll talk to you guys about it. We'll explain what we're doing. But we will invest. And that investment back in the teens, and you can see on this chart, sort of 2016, 2018 was the peak investment wave. That supported the A350.
That was a fantastic investment cycle. And that has positioned Hexcel where it is today. That A350 business, that carbon fiber, those resin assets, those prepregging assets, absolutely fantastic. And it has helped position Hexcel as a world-class company that it is. So our strong balance sheet, we talk about this. And lots of people talk about, what does a strong balance sheet mean? But it is important to our customers. It's important to our peers, the supply chain we're in. Are we robust? There's lots of talk about companies and their ability to support the ramp. Certainly, the Airbus is trying to drive. And undoubtedly, Boeing will be trying to drive. Hexcel is very, very strong. Our customers often look to us as their single source of supply. It is vital. It is crucial that we are robust. We de-levered, as I mentioned.
We took out $300 million more of debt during the pandemic. Our revolver, in the middle of a banking sort of mini banking crisis last year, February, March 2023, we restructured and we renewed our revolver contract for $750 million. You may have noticed, we were not pulling a single penny of that as we closed 2023. We actually had $227 million of cash. Our net debt was under $500 million, again, a fantastic demonstration of the robustness of Hexcel's balance sheet. What does that mean? That means we're very, very well positioned to deploy capital, including M&A. I'm going to talk about that in a moment. So where do we position ourselves? Same old story, 1.5-2. It hasn't changed. You'll have heard me say it hundreds of times. Nick said it hundreds of times. We're comfortable in this space.
We're going to use our balance sheet. We're going to leverage it. We're going to give ourselves some debt. And we're going to deploy that as strategically as we can. And 1.5-2 is the range we want to live in. We have deployed 76% of net income between the years 2014 and 2023. I think at one point, we gave ourselves a target to distribute more than 50%. We haven't sort of renewed that. But we are way over it. And well, that's the reality. The facts speak for themselves. That 76% is worth $1.6 billion, so $1.3 billion through share repurchases and $0.3 billion through dividends. So that is a substantial amount of capital deployment in, again, that same period, 2013 to date. And then the rating agencies, we're investment grade at two at Moody's and Fitch. And we're one notch below with S&P.
Now, we're working on that. We want to drive ourselves back to investment grade. Scale is part of that story, we believe, and continued and consistent performance. So ROIC, return on invested capital, as I mentioned. Obviously, when your profit goes to almost zero, as it did in 2020 and 2021, it's very difficult to have a ROIC percentage of any meaning. But we're pushing it back. We've pushed it back to double digits. We're continuing to grow that. We should push it into the low teens in the next couple of years. But just want to make it clear, that 15%, 15%+ target is still very much in our minds. And that's ultimately what we're driving to. As a capital-intensive company, that's where we think we should be getting. So capital deployment, again, we're very boring. We're very consistent.
But this, we believe, is a powerful and strong message. We're going to invest in R&T. We're going to invest in the organic CapEx needs as we see them, once we win opportunities. Undoubtedly, we will win opportunities. It's not just the next-gen narrowbodies. It's space and defense. It's industrial. It's business jets. It's all the things that Nick was talking about. We will have all the cash that we need to invest in those programs. We will invest gladly because that is the foundation of the next generation of organic growth in Hexcel. Now, M&A, and I have one more chart on M&A. But M&A is going to be important. We do see inorganic growth as part of our future. Again, we talked about this in 2019. We saw that cash generation wave coming. Obviously, the pandemic sort of put us on our heels.
But we're back here today. We're going to have the cash. We're going to generate the cash. We're going to drive organic growth. But we also see the inorganic, the M&A, as being an important step. Now, we're going to be very disciplined. And I'll come to that in more detail in a moment. And then we're going to return cash to shareholders, to stockholders. So we pay a dividend. We notionally target about a 1% yield. We're not quite there. We're probably 0.8% today. But notionally, we've sort of got about, sorry, 1% in our minds. And then we're going to do stock buyback. We're not just going to sit on the cash. We're going to leverage ourselves in that 1.5-2 range. And if there isn't an M&A opportunity, we're not using the cash for organic growth. We will do share buyback. Okay.
This is my final slide. Just want to sort of talk about how we think and this is very detailed. You can go through it. Lots of little bubbles. We are an innovative materials science, advanced technology company. We know who we are. We're not interested in build to print. We're not interested in commodities. We're not interested in chasing markets where there's 101 players. We want to be the sustainable, competitive, technology-driven, value-adding player wherever we operate. So as we look at the M&A spectrum, there aren't going to be 101 opportunities for Hexcel to pursue. But there will be targets. We will have the cash. We will have the ability. We will look at ROIC. That continues to be important. Can we drive the ROIC? We will obviously want it to be accretive and not dilutive. Again, it's the value-add business.
It's not the build to print low margin. We don't see that as our future. We ask ourselves as that last sort of bullet, which I think is a great question, why is Hexcel going to be a good owner of this asset that's sitting in front of us? Why should Hexcel buy this? We're a great company. Are we buying something great? That's what we want to do. We will pay a fair price for great businesses. Okay. That's our M&A framework. As I say, we see that as part of our outlook. Now, I'm going to hand back to Nick, who's going to give you a perspective on the future.
Okay. Thank you, Patrick. Okay. Let's start with 2024. We've given you part of this guidance with our fourth quarter full-year earnings a few weeks ago. Cyclical, secular, continuous improvements driving growth.
Focus on innovation. Focus on performance to our customers. Focus on operational excellence. Margins are coming back. 2024 guidance, top-line revenue $1.925 billion-$2.025 billion. And that's with commercial aero up mid-teens. Space and defense up mid-single digits. And industrial up low to mid-single digits. Adjusted diluted EPS of $2.10-$2.30 per share. Free cash flow greater than $200 million. Capital expenditures less than $100 million with an effective tax rate of 22%. So clearly, growth is driving utilization improvements, is driving margin, is driving improved financial performance. Let me provide our midterm guidance, again, 2024-2026. We're forecasting total sales CAGR for Hexcel to be between 10%-12%. And that's driven with commercial aerospace up 12%-16%. Space and defense up 5%-10%. And industrial up 3%-6%. Our forecasted adjusted EPS growth through the period is estimated to be above 25%.
Strong cash generation. There's $1.5 billion of EBITDA, greater than $1.5 billion for the three years. Greater than $800 million of free cash flow. We don't have the number written here. Capital expenditures expected to be below $300 million for the cumulative period. We're expecting greater than 100% free cash flow conversion to net income. Returning cash to stockholders. Patrick referenced the $1.3 + $0.3 or $1.6 return to shareholders since 2013. We've repurchased approximately $65 million worth of Hexcel common stock year to date. Our board has approved an incremental $300 million of share repurchase authorization. Our available authorization today is approximately $422 million. Clearly, we're growing the business and growing the value for our stockholders and investors. In summary, we focus on technology. We focus on innovation. We focus on expanding our portfolio. We invest in it organically.
We're very disciplined to look at how we can enhance it externally. We've demonstrated proven execution through good times, through challenging times. We do that by one tenet of our value. And that's one Hexcel. We react to the environment. We have a robust process. We review with the board regularly. But who can predict accurately the next new event? Will it be a terrorist attack? Will it be a pandemic? We're prepared to deal with that through maintaining One Hexcel alignment, flexibility, and continued performance. Clearly, you see the cyclical growth, the pent-up demand on people wanting to travel, the secular penetration driven by our customers' needs to lightweight, and our technology advancements that are allowing more and more conversion to lightweight materials. And strong cash generation to support the business for the future, not only for internal investment but for sharing with our investors and our shareholders.
That concludes our webcast. That concludes our formal remarks.