Crane Company · NYSE:CR
Crane — Q2 2023 Earnings Presentation
24 slides from Crane's earnings presentation, Jul 26, 2023
Slide 1: Crane Q2 2023 Earnings Release Call
CRANE Q2 2023 Earnings Release Call
Slide 2: Forward-Looking Statements – Disclaimer
FORWARD-LOOKING STATEMENTS – DISCLAIMER This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief, or expectations, inclu
Slide 3: Q2 2023 Overview
CRANE Q2 2023 OVERVIEW
Slide 4: Two Extremely Well Positioned Growth Platforms
TWO EXTREMELY WELL POSITIONED GROWTH PLATFORMS Crane At-a-Glance ($ millions) 2023G 2023G Adjusted Operating Profit* Sales $2,047 Engineered Materials 7% Adjusted EBITDA* $350 % of Sales 17.1% Aerospace & 52% Process Flow Technologies Electronics 41% Adjusted Operating Profit* $309 % of Sales 15.1%
Slide 5: Highlights from Second Quarter 2023 Results
HIGHLIGHTS FROM SECOND QUARTER 2023 RESULTS $ Millions GAAP Adjusted* except per-share amounts Q2 2023 Q2 2022 Change Q2 2023 Q2 2022 Change Sales $510 $530 (4%) $510 $530 (4%) Operating Profit $63 $44 +44% $84 $65 +30% Operating Margin 12.4% 8.2% +420 bps 16.5% 12.2% +430 bps Earnings per Share $0.
Slide 6: Strong Core Sales Growth Outlook
STRONG CORE SALES GROWTH OUTLOOK Aerospace & Electronics Process Flow Technologies ▪ Cyclical recovery of commercial A&E markets ▪ Accelerating NPD with new product vitality at record levels ▪ Content already won on large defense programs ramping over next few years ▪ Secular trends supporting conti
Slide 7: Substantial Growth Opportunities
SUBSTANTIAL GROWTH OPPORTUNITIES ▪ Fragmented end markets with robust M&A pipeline ▪ Strong balance sheet to support organic and inorganic strategic growth objectives, while providing a dividend in-line with peers ▪ ~$1 Billion of M&A Capacity available today, growing to ~$4 Billion through 2028 7
Slide 8: Additional Financial Details
ADDITIONAL FINANCIAL DETAILS
Slide 9: Aerospace & Electronics
AEROSPACE & ELECTRONICS $ Millions GAAP Q2 2023 Q2 2022 Change Sales $189 $162 +17% Operating Profit $38 $28 +36% Operating Margin 20.2% 17.5% +270 bps Backlog $675 $534 +26% Additional Details Q2 2023 Q2 2023 OE Sales +13% Core Growth +17.1% Aftermarket Sales +29% FX Translation +0.1% OE/Aftermarke
Slide 10: Process Flow Technologies
PROCESS FLOW TECHNOLOGIES $ Millions GAAP Adjusted* Q2 2023 Q2 2022 Change Q2 2023 Q2 2022 Change Sales $263 $296 (11%) $263 $296 (11%) Operating Profit $51 $41 +25% $53 $46 +14% Operating Margin 19.2% 13.7% +550 bps 20.0% 15.6% +440 bps Backlog $353 $349 +1% $353 $349 +1% Additional Details Q2 2023
Slide 11: Engineered Materials
ENGINEERED MATERIALS $ Millions GAAP Adjusted* Q2 2023 Q2 2022 Change Q2 2023 Q2 2022 Change Sales $57 $73 (21%) $57 $73 (21%) Operating Profit $10 $7 +34% $10 $11 (12%) Operating Margin 17.1% 10.0% +710 bps 16.6% 14.8% +180 bps Additional Details Q2 2023 Q2 2023 Recreational Vehicle Sales (47%) Cor
Slide 12: Crane Company Post-Separation Capital Structure
CRANE COMPANY POST-SEPARATION CAPITAL STRUCTURE Additional Details ~$719 Million ~0.1x Net Liquidity ▪ Net Debt (total debt less total cash) of approximately $43 million Debt-to-EBITDA ▪ 2023 Guidance pro forma EBITDA of ~$350 million implies net Debt-to-EBITDA of ~0.1x $500 Million Undrawn ▪ Intere
Slide 13: Capital Deployment Potential
CAPITAL DEPLOYMENT POTENTIAL ~$4 Billion Available from 2023-2028 Incremental ~$4 Billion Debt Capacity Available for M&A and/or M&A and/or Repurchases repurchases while retaining strong, target credit metrics Operating Cash Flow Dividends Capital Expenditures Sources Uses Substantial additional val
Slide 14: Disciplined Capital Allocation Strategy
DISCIPLINED CAPITAL ALLOCATION STRATEGY Maintain Strong Credit Metrics and Flexible Balance Sheet While Funding: Internal Investments Acquisitions Competitive to Drive Organic Growth to Enhance Growth Returns to Shareholders ▪ Capital expenditures ▪ Pursuing bolt-on transactions ▪ Target dividend pa
Slide 15: Long-Term Vision for Strategic Growth Platforms
LONG-TERM VISION FOR STRATEGIC GROWTH PLATFORMS 2023G 2028F ~$2B Sales / ~17.1% Adjusted EBITDA / MSD Growth ~$4B Sales / 20%+ Adjusted EBITDA / HSD Growth A&E PFT A&E PFT ▪ Focus on high-return acquisitions that create value for shareholders and improve the strength of our strategic growth platform
Slide 16: Crane Company Revised Operational Guidance
CRANE COMPANY REVISED OPERATIONAL GUIDANCE ($ millions) GAAP Adjusted Adjusted Prior Revised Ex-Supply (5/10/23) (5/10/23) Revised 2023G vs. 2022A Adj. ex-Supply Additional Details Sales 2022A 2022A* 2022A** 2023G* 2023G* Change FX Core Aerospace & Electronics 667 667 667 741 761 14% -- 14% ▪ Guidan
Slide 17: Crane Company Revised EPS Guidance
CRANE COMPANY REVISED EPS GUIDANCE ($ millions, except per-share amounts) Additional Details Guidance Prior Revised 2023G* 2023G* Segment Operating Profit $364 $379 ▪ Guidance items for 2023 below are based on annualized, post-separation run- Corporate ($70) ($70) rates Adjusted Operating Profit $29
Slide 18: Non-GAAP Information
NON-GAAP INFORMATION JULY 25, 2023
Slide 19: Non-GAAP Explanation (1/2)
NON-GAAP EXPLANATION (1/2) Crane Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). This press release includes certain non-GAAP financial measures, including adjusted operating profit, adjusted operating margin, adjusted EPS, Free Cash F
Slide 20: Non-GAAP Explanation (2/2)
NON-GAAP EXPLANATION (2/2) We believe that each of the following non-GAAP measures provides useful information to investors regarding the Company’s financial conditions and operations: ▪ "Adjusted Operating Profit" and "Adjusted Operating Margin" add back to Operating Profit items which are outside
Slide 21: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Non-GAAP Financial Measures (unaudited, in millions, except per share data) Three Months Ended June 30, 2023 2022 % Change $ Per Share $ (on $) Net sales (GAAP) $ 509.6 $ 530.3 (4) % Adjusted Operating Profit and Adjusted Operating Profit Margin Operating profit (GAAP) $
Slide 22: Non-GAAP Financial Measures by Segment
NON-GAAP FINANCIAL MEASURES Non-GAAP Financial Measures by Segment (unaudited, in millions, except per share data) Aerospace & Process Flow Engineered Total Three Months Ended June 30, 2023 Electronics Technologies Materials Corporate Company Net sales $ 189.2 $ 263.2 $ 57.2 $ — $ 509.6 Operating pr
Slide 23: Adjusted Free Cash Flow
NON-GAAP FINANCIAL MEASURES Adjusted Free Cash Flow (unaudited, in millions, except per share data) Three Months Ended June 30, Cash Flow Items 2023 Cash provided by operating activities from continuing operations $ 52.4 Less: Capital expenditures (12.1) Free cash flow $ 40.3 Adjustments: Transactio
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