Crane Company · NYSE:CR
Crane — Investor Day (May 2024)
124 slides from Crane's investor day presentation, May 14, 2024
Slide 1: Annual Investor Day
ANNUAL INVESTOR DAY May 14, 2024
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: Agenda
AGENDA TIME TOPIC PRESENTER 8:30-8:35 WELCOME AND INTRODUCTIONS Jason Feldman 8:35-9:05 STRATEGIC OVERVIEW Max Mitchell 9:05-9:20 FINANCIAL OVERVIEW Rich Maue 9:20-9:35 POST-SEPARATION UPDATE Jason Feldman 9:35-9:50 Break { 9:50-10:20 PROCESS FLOW TECHNOLOGIES Alex Alcala 10:20-10:35 Q&A: PROCESS FL
Slide 4: Strategic Overview
STRATEGIC OVERVIEW Max Mitchell Chairman, President and Chief Executive Officer Crane Company
Slide 5: Today's Key Messages and Themes
Today’s Key Messages and Themes Off to a great start post-separation − Executing on all commitments − Outperforming relative to guidance and expectations We are driving accelerating growth across the portfolio − Confident in 4%-6% long-term average core sales growth Execution and operating lev
Slide 6: Exciting Value Creation Opportunity
Exciting Value Creation Opportunity ~$2.3B ~40% 4-6% in sales aftermarket sales from strategic long-term core growth platforms sales growth 35%-40% ~22.5% Substantial operating leverage* pre-corporate Adjusted EBITDA margin** (2024G) M&A opportunity Expect Double-Digit Core EPS Growth With Upside Fr
Slide 7: Agenda: Our Journey
Agenda OUR JOURNEY A REMINDER “New” Crane – How We Operate Substantial Value Who We Are Creation Potential 7
Slide 8: Our Journey: Pre-Separation
Our Journey: Pre-Separation 1.6 1.5 EM Divestiture Crane 1.4 Announced & +24% A&E Investor Day DECEMBER 31, 2020 = 1.0 1.3 S&P Midcap Capital Goods Index +18% 1.2 S&P 500 +12% 1.1 1.0 0.9 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 8 Source: FactSet as of April 30, 2024.
Slide 9: Our Journey: Pre-Separation
Our Journey: Pre-Separation 1.6 Separation Announced 1.5 EM Divestiture Crane 1.4 Announced & +42% A&E Investor Day DECEMBER 31, 2020 = 1.0 1.3 S&P Midcap Capital Goods Index +17% 1.2 S&P 500 +23% 1.1 1.0 0.9 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 9 Source: FactSet as of April 30, 2024.
Slide 10: Our Journey: Pre-Separation
Our Journey: Pre-Separation 1.6 Crane Supply Separation Divestiture Announced Announced 1.5 EM Divestiture Crane 1.4 Announced & +35% A&E Investor Day DECEMBER 31, 2020 = 1.0 1.3 S&P Midcap Capital Goods Index +9% 1.2 S&P 500 +14% 1.1 1.0 0.9 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 10 Source: FactSet as
Slide 11: Our Journey: Pre-Separation
Our Journey: Pre-Separation 1.6 Crane Supply Separation Divestiture Announced Announced 1.5 EM Divestiture Crane 1.4 Announced & +22% A&E Investor Day DECEMBER 31, 2020 = 1.0 1.3 S&P Midcap Capital Goods Index +6% 1.2 S&P 500 +8% 1.1 EM Divestiture 1.0 Terminated by DOJ 0.9 Dec-20 Jun-21 Dec-21 Jun-
Slide 12: Our Journey: Pre-Separation
Our Journey: Pre-Separation 1.6 Crane Supply Asbestos Separation Divestiture Defeasement Announced Announced Announced 1.5 EM Divestiture Crane 1.4 Announced & +36% A&E Investor Day DECEMBER 31, 2020 = 1.0 1.3 S&P Midcap Capital Goods Index +17% 1.2 S&P 500 +14% 1.1 EM Divestiture 1.0 Terminated by
Slide 13: Our Journey: Pre-Separation
Our Journey: Pre-Separation Separation Complete 1.6 Crane Supply Asbestos Separation Divestiture Defeasement Announced Announced Announced 1.5 EM Divestiture Crane 1.4 Announced & +47% A&E Investor Day DECEMBER 31, 2020 = 1.0 1.3 S&P Midcap Capital Goods Index +22% 1.2 S&P 500 +10% 1.1 EM Divestitur
Slide 14: What We Told You Last March
What We Told You Last March: Deeper operational focus, accountability and flexibility to meet customer requirements Increased operating and financial flexibility to pursue growth opportunities Separation will create two pure-play companies, Tailored capital allocation strategies each better po
Slide 15: CR + CXT from 12/31/2020 through 4/30/2024
CR + CXT from 12/31/2020 through 4/30/2024 2.7 Crane + Crane NXT +159% 2.5 2.3 2.1 DECEMBER 31, 2020 = 1.0 1.9 S&P Midcap Capital Goods Index 1.7 +64% 1.5 S&P 500 34% 1.3 1.1 0.9 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 Dec-23 15 Source: FactSet as of April 30, 2024.
Slide 16: Results Post-separation
Results Post-separation 2023 KEY METRICS: Core growth +7% 3 Deals Post-Separation Adj. Operating Profit +28% (~4x core sales growth) Adj. Operating Margin +320 bps 2024 GUIDANCE: Core growth +4%-6% Adjusted Operating Profit +19% (>3x core sales growth) Executing on All Commitments Made A
Slide 17: Post-Separation Crane Company
Post-Separation Crane Company 2.0 1.8 Crane +2% 1.6 1Q23 Results S&P Midcap Capital April 3, 2023 = 1.0 Goods Index 1.4 Separation +1% Complete S&P 500 1.2 +0% 1.0 0.8 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 17 Source: FactSet as of April 30, 2024.
Slide 18: Post-Separation Crane Company
Post-Separation Crane Company 2.0 1.8 2Q23 Results Crane +22% 1.6 1Q23 Results S&P Midcap Capital April 3, 2023 = 1.0 Goods Index 1.4 Separation +16% Complete S&P 500 1.2 +11% 1.0 0.8 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 18 Source: FactSet as of
Slide 19: Post-Separation Crane Company
Post-Separation Crane Company 2.0 1.8 2Q23 3Q23 Results & Results Baum Acquisition Crane +11% 1.6 1Q23 Results S&P Midcap Capital April 3, 2023 = 1.0 Goods Index 1.4 Separation +1% Complete S&P 500 1.2 +2% 1.0 0.8 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Ap
Slide 20: Post-Separation Crane Company
Post-Separation Crane Company 2.0 Vian Acquisition Announced 1.8 2Q23 3Q23 Results & Results Baum Acquisition Crane +52% 1.6 1Q23 Results S&P Midcap Capital April 3, 2023 = 1.0 Goods Index 1.4 Separation +20% Complete S&P 500 1.2 +14% 1.0 0.8 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 D
Slide 21: Post-Separation Crane Company
Post-Separation Crane Company 2.0 Vian 4Q23 Acquisition Results Announced 1.8 2Q23 3Q23 Results & Results Baum Acquisition Crane +52% 1.6 1Q23 Results S&P Midcap Capital April 3, 2023 = 1.0 Goods Index 1.4 Separation +24% Complete S&P 500 1.2 +19% 1.0 0.8 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oc
Slide 22: Post-Separation Crane Company
Post-Separation Crane Company 2.0 Vian 4Q23 Acquisition Results Announced 1.8 2Q23 3Q23 Results & Results Baum Acquisition Crane +75% 1.6 1Q23 1Q24 Results Results & CryoWorks S&P Midcap Capital April 3, 2023 = 1.0 Acquisition Goods Index 1.4 Separation +33% Complete S&P 500 1.2 +21% 1.0 0.8 Apr-23
Slide 23: Post-Separation Crane Company through 4/30/2024
Post-Separation Crane Company through 4/30/2024 2.0 Vian 4Q23 Acquisition Results Announced 1.8 2Q23 3Q23 Results & Results Baum Acquisition Crane +87% 1.6 1Q23 1Q24 Results Results & CryoWorks S&P Midcap Capital April 3, 2023 = 1.0 Acquisition Goods Index 1.4 Separation +34% Complete S&P 500 1.2 +2
Slide 24: Agenda: A Reminder / Who We Are
Agenda OUR JOURNEY A REMINDER “New” Crane – How We Operate Substantial Value Who We Are Creation Potential 24
Slide 25: Crane Company Highlights
Crane Company Highlights 2024G Adjusted Operating Profit* Highly-engineered, technology-differentiated products and solutions for large (~$25 billion) and attractive markets 7% Respected brands and leadership positions Mission-critical, high cost of failure applications with ~40% of revenue fr
Slide 26: Strong Long-Term Core Sales Growth Outlook
Strong Long-Term Core Sales Growth Outlook AEROSPACE & ELECTRONICS PROCESS FLOW TECHNOLOGIES 7%-9% Long-Term Core Sales Growth 3%-5% Long-Term Core Sales Growth Cyclical recovery of commercial A&E markets Accelerating NPD with new product vitality at record levels Content already won on large
Slide 27: Accelerating New Product Development
Accelerating New Product Development 27
Slide 28: Breakthrough Innovation
Breakthrough Innovation 28
Slide 29: Organically Building New Businesses
Organically Building New Businesses -253ºC LIQUID HYDROGEN CRYO TEMP 15,000 PSI GAS HIGH PRESSURE STORAGE 29
Slide 30: Accelerating Commercial Excellence
Accelerating Commercial Excellence Strategic Pricing Channel Partner Management Key Account Management Product Management Front-End Automation Contract Management 30
Slide 31: Capital Deployment Potential
Capital Deployment Potential ~$4 Billion Available from 2024-2028 Incremental ~$4 Billion Debt Capacity Available for M&A and/or M&A and/or repurchases while retaining Repurchases strong, target credit metrics Operating Substantial additional value Cash Flow creation potential from flexible Dividend
Slide 32: Agenda: How We Operate
Agenda OUR JOURNEY A REMINDER “New” Crane – How We Operate Substantial Value Who We Are Creation Potential 32
Slide 33: Building on a Strong Foundation
Building on a Strong Foundation Crane Business System Ethical Culture Philanthropy, Sustainability and Equality 33
Slide 34: Ethics at the Core of Our Culture
Ethics at the Core of Our Culture I am resolved to conduct my business in the strictest honesty and fairness; to avoid all deception and trickery; to deal fairly with both customers and competitors; to be liberal and just toward employees; and to put my whole mind upon the business. Resolution Made
Slide 35: Management Cadence and Disciplined Execution
Management Cadence and Disciplined Execution Rigorous, data-driven management cadence Continuous improvement focused Highest integrity and commitment to quality Empowered, customer-focused BU General Managers Extreme accountability in all aspects of our business 35
Slide 36: Agenda: Substantial Value Creation Potential
Agenda OUR JOURNEY A REMINDER “New” Crane – How We Operate Substantial Value Who We Are Creation Potential 36
Slide 37: Substantial Growth Opportunities
Substantial Growth Opportunities Strong balance sheet to support ~$1 Billion of M&A Capacity Fragmented end markets organic and inorganic strategic available today, growing to with robust M&A pipeline growth objectives, while providing ~$4 Billion through 2028 a dividend in-line with peers 37
Slide 38: History of Successful Acquisitions
History of Successful Acquisitions PRE-SEPARATION POST-SEPARATION Management Has a Long Track Record of Successful M&A 38
Slide 39: Long-term Vision for Strategic Growth Platforms
Long-term Vision for Strategic Growth Platforms Focus on high-return acquisitions that create value for shareholders and improve the strength of our strategic growth platforms 2024G 2028F ~$2.3B Sales ~$4B Sales ~$4 Billion of capital available through 2028 ~22.5% Segment EBITDA ~Mid-20s Segment
Slide 40: Exciting Value Creation Opportunity
Exciting Value Creation Opportunity ~$2.3B ~40% 4-6% in sales aftermarket sales from strategic long-term core growth platforms sales growth 35%-40% ~22.5% Substantial operating leverage* pre-corporate Adjusted EBITDA margin** (2024G) M&A opportunity Expect Double-Digit Core EPS Growth With Upside Fr
Slide 41: Financial Overview
FINANCIAL OVERVIEW Rich Maue Executive Vice President and Chief Financial Officer Crane Company
Slide 42: Agenda
Agenda 2023 Performance 2024 Outlook Capital Allocation Highlights Strategy 42
Slide 43: 2023 Another Outstanding Year
2023 Another Outstanding Year $ Millions GAAP Adjusted* except per-share amounts FY 2023 FY 2022 Change FY 2023 FY 2022 Change Sales $2,086 $2,035 +3% $2,086 $2,035 +3% Operating Profit $284 $38 FAV $330 $257 +28% Operating Margin 13.6% 1.9% FAV 15.8% 12.6% +320 bps Earnings per Share $3.54 $3.00 +1
Slide 44: CBS Drives Consistent, Differentiated Execution
CBS Drives Consistent, Differentiated Execution ACHIEVED RECORD RESULTS DESPITE: Persistent supply chain disruptions Ongoing inflation Continued labor market challenges Management Cadence And Disciplined Execution Drives Differentiated Execution 44
Slide 45: History of Strong Operational Execution
History of Strong Operational Execution Adjusted Segment Operating Margin for Strategic Growth Platforms* (Aerospace & Electronics and Process Flow Technologies) On-Track for Record Margins in 2024 with Substantial Upside 21.1% 20.0% 17.8% 18.0% 17.1% 17.0% 16.4% 16.0% 15.8% 15.3% 15.6% 15.2% 14.8%
Slide 46: Agenda
Agenda 2023 Performance 2024 Outlook Capital Allocation Highlights Strategy 46
Slide 47: And a Great Start to 2024
And a Great Start to 2024 Adjusted* Variance to 2023 $ Millions 1/29/24 4/22/24 1/29/24 4/22/24 FY 2023 except per-share amounts Guidance Guidance Guidance Guidance Sales $2,086 $2,250 $2,292 +8% +10% Operating Profit $330 $376 $395 +14% +20% Operating Margin 15.8% 16.7% 17.2% +90 bps +140 bps Earni
Slide 48: Two Extremely Well Positioned Growth Platforms
Two Extremely Well Positioned Growth Platforms CRANE AT-A-GLANCE 2024G ADJUSTED OPERATING PROFIT* ($ millions) 2024G Engineered 7% Materials Sales $2,292 Process Flow Adjusted EBITDA* $445 50% Technologies 43% % of Sales 19.4% Aerospace & Electronics Adjusted Operating Profit* $395 % of Sales 17.2%
Slide 49: Agenda
Agenda 2023 Performance 2024 Outlook Capital Allocation Highlights Strategy 49
Slide 50: 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 51: Crane Company Capital Structure Today
Crane Company Capital Structure Today AS OF April 30, 2024 ADDITIONAL DETAILS Subsequent to quarter-end, drew ~$50 million on ~0.4x Net ~$861 Million Liquidity revolving credit facility to fund CryoWorks acquisition Debt-to-EBITDA 2024 Guidance adjusted EBITDA of ~$445 million implies net Debt-t
Slide 52: Capital Deployment Potential
Capital Deployment Potential ~$4+ Billion Available from 2024-2028 POST-SEPARATION ACQUISITIONS TO DATE Incremental Debt Capacity ~$4+ Billion M&A and/or Repurchases Available for M&A and/or repurchases while retaining strong, target credit metrics Operating Cash Flow Substantial additional Dividend
Slide 53: Well Positioned for M&A
Well Positioned for M&A Target Areas for M&A AEROSPACE & ELECTRONICS PROCESS FLOW TECHNOLOGIES Power Conversion Chemical Solutions Condition and Position Sensing Pharmaceuticals and Aseptic Pressure and Flow Measurement Wastewater treatment Flow Management Industrial Automation Liq
Slide 54: Data-Driven and Analytical Approach to M&A
Data-Driven and Analytical Approach to M&A Identification by Segment Higher Space Attractiveness $5B estimated EV Lower Lower Extendibility for Crane Higher 54 Note: Illustrative only.
Slide 55: M&A Criteria
M&A Criteria All Acquisitions Must Meet Both Strategic and Financial Criteria STRATEGIC CRITERIA Attractiveness Extendibility Strict Strategic and Alignment with capabilities / “right to win” Financial Discipline FINANCIAL CRITERIA 10% ROIC by year 5 55
Slide 56: Acquisition of Baum Lined Piping GmbH
Acquisition of Baum Lined Piping GmbH Purchase price: EUR 86.5M on a cash-free and debt-free basis 2023 forecast: Sales ~EUR 55M (up 10% YoY) / Adj. EBITDA ~EUR 9M* Year 3 (2026) forecast: ROIC >10.5% / ~$0.15 Cash EPS accretion* BY END MARKET (2024E) Principle Locations: Germany, United Sta
Slide 57: Acquisition of Vian Enterprises, Inc.
Acquisition of Vian Enterprises, Inc. Purchase price: $103M on a cash-free and debt-free basis August 2023 trailing-12 month (estimate): Sales ~$34M / Adj. EBITDA ~$8M* Year 5 (2028) forecast: ROIC >10% / ~$0.20 Cash EPS accretion* BY END MARKET (2022E) BY APPLICATION (2022E) Principle Locat
Slide 58: Acquisition of Cryoworks
Acquisition of Cryoworks Purchase price: $61M before tax step-up benefit Full-Year 2023 (estimate): Sales ~$28M / Adjusted EBITDA ~$5M* Year 5 (2028) forecast: ROIC >10% / ~$0.10 Cash EPS accretion* Principle Location: Jurupa Valley, CA BY END MARKET (2023) BY APPLICATION (2023) Strong str
Slide 59: Momentum Continues
Momentum Continues Solid organic growth Continued margin profile, led by technology 35%-40% expansion, led by superior 4-6% Core innovation and new Growth Operating products, strong pricing, product development Leverage and operational excellence Growth 0.4x net Disciplined approach to through
Slide 60: Post-Separation Update
POST-SEPARATION UPDATE Jason Feldman Senior Vice President, Investor Relations, Treasury & Tax Crane Company
Slide 61: What We Told You Last Year
What We Told You Last Year: WHAT IS DIFFERENT TODAY WHAT WILL STAY THE SAME Simplification post-separation Rigorous cadence and discipline of CBS Asbestos liability fully resolved Strong and unique high-performance culture Strongest balance sheet in 20+ years Continued commitment to ethi
Slide 62: A Year Later, Most Went According To Plan
A Year Later, Most Went According To Plan PROGRESS AS EXPECTED Early success with M&A Accelerating core growth Continued structural shift to higher growth markets Ongoing innovation and investment Further margin expansion 62
Slide 63: A Year Later, Most Went According To Plan
A Year Later, Most Went According To Plan PROGRESS AS EXPECTED WHAT STAYED THE SAME Early success with M&A Rigorous cadence and discipline of CBS Accelerating core growth Strong and unique high-performance culture Continued structural shift to higher growth Continued commitment to ethics
Slide 64: With a Few Positive Surprises…
With a Few Positive Surprises… POSITIVE SURPRISES VS. EXPECTATIONS Degree of acceleration in A&E core growth Magnitude of PFT margin improvement in 2023 Speed of success with commercial excellence and strategic pricing Investor reception and interest 64
Slide 65: With a Few Positive Surprises…And Opportunities Ahead
With a Few Positive Surprises…And Opportunities Ahead POSITIVE SURPRISES VS. EXPECTATIONS WHERE WE STILL HAVE THE BIGGEST OPPORTUNITIES Degree of acceleration in A&E core growth Commercial excellence and strategic pricing Magnitude of PFT margin improvement in 2023 Continued investment and i
Slide 66: Exciting Value Creation Opportunity
Exciting Value Creation Opportunity ~$2.3B ~40% 4-6% in sales aftermarket sales from strategic long-term core growth platforms sales growth 35%-40% ~22.5% Substantial operating leverage* pre-corporate Adjusted EBITDA margin** (2024G) M&A opportunity Expect Double-Digit Core EPS Growth With Upside Fr
Slide 67: Process Flow Technologies
PROCESS FLOW TECHNOLOGIES Alex Alcala Executive Vice President
Slide 68: What You Will Hear Today
What You Will Hear Today 1. We are accelerating core growth by shifting our underlying market exposure resulting in structurally higher organic growth rates 2. Record Performance today and we will continue to drive substantial margin expansion − Operating leverage on higher volumes − New products an
Slide 69: A Provider of Highly Engineered Process Flow Equipment
A Provider of Highly Engineered Process Flow Equipment for Mission Critical Applications Process Flow Technologies BY MARKET* BY MARKET* BY REGION* ~$1.15B Sales ~20.4% OP** Services Energy Chemical APAC (2024G) Specialty Pipes & Industrial & Pharma Emerging 7% Automation 8% Markets 9% Fittings Valv
Slide 70: Successful Strategy Driving Growth and Margin Expansion
Successful Strategy Driving Growth and Margin Expansion Sales (FX Neutral, $M) and Adjusted Operating Margin (%)* 1. Structural change to the portfolio 1,300 has improved the underlying Mid Growth Rates 20%’s 1,200 Sales Margins 20.4% 2. Margins are structurally higher 1,100 19.9% as portfolio has s
Slide 71: A Transformed Portfolio with Structurally Higher Growth Rates
A Transformed Portfolio with Structurally Higher Growth Rates 11.1% Adjusted Margin* 19.9% Adjusted Margin* Chemical Solutions, 19% 36% of CAGR Chemical Solutions, 35% Sales +10% Water & Wastewater, 8% Pharma, 3% 61% of Industrial Automation, 7% Sales Water & Wastewater, 13% Non Residential Construc
Slide 72: Our Changing Portfolio Mix contributes to Margin Expansion
Our changing Portfolio Mix contributes to Margin Expansion 11.1% Adjusted Margin* 19.9% Adjusted Margin* Adjusted Margin* Chemical Solutions, 19% 36% of 61% of Chemical Solutions, 35% Sales Sales Water & Wastewater, 8% Above Average Pharma, 3% CAGR Industrial Automation, 7% +10% Water & Wastewater,
Slide 73: A Transformation Driven by New Product Innovation
A Transformation Driven by New Product Innovation… Chemical Solutions 45 New products launched since 2019 Wastewater 60+ Innovation Share gain ideations New results in 2x NPD Product Funnel Pharma/Aseptic EXCELLENCE ~10% 20% Vitality Vitality* by 2027 Market in 2024 Growth Industrial Automation from
Slide 74: Driving Commercial and Operational Excellence through CBS
…And by Driving Commercial and Operational Excellence through the Crane Business System COMMERCIAL EXCELLENCE OPERATIONAL EXCELLENCE Go-to-Market Market Sizing Strategies Segmentation Value Pricing & Targeting New Product Performance Development & Cadence Driving Growth and Margin Expansion The Cust
Slide 75: A Journey of Growth and Margin Expansion
A Journey of Growth and Margin Expansion Accelerating Inorganic Growth 20.4% 5 OP* Crane Supply 4 Divestiture Facility Consolation 3 for Energy Businesses Accelerated Innovation 2 with Accretive New Products 11.1% OP* Operational & Commercial 1 Strategic End Market Focus Shift Excellence 2002 2017 2
Slide 76: Portfolio Aligned with Strong Megatrends
Portfolio Aligned with Strong Megatrends The New Hydrogen Economy Focus on de-carbonizing hard to abate sectors Chemical: Sustainability & Electronics, Fertilizer and Food Demand MEGATRENDS Products supporting sustainable future of clean energy and healthy foods Wastewater: Tightening Regulations an
Slide 77: Focused on 5 Solutions to Drive Growth
Focused on 5 Solutions to Drive Growth Market Crane Growth Projected Growth Solution TAM Rate Growth Rate Markets 75% Hydrogen & Cryogenics Entering Growth 1 Leading Cryogenic Valve & Pipe Portfolio $900M ~15% Space Markets 61% Chemical Solutions 2 Leading Valve Portfolio $1,800M ~3% 2x Water & Wast
Slide 78: Positioned for Growth in the New Hydrogen Economy
Positioned for Growth in the New Hydrogen Economy SOLUTIONS FOR HIGH PRESSURE AND CRYOGENIC APPLICATIONS -253ºC 15,000 PSI Liquid Gas High Hydrogen Pressure Cryo Temp Storage NEW PRODUCT LINE 78
Slide 79: Demand for Hydrogen is Starting to Increase
Demand for Hydrogen is Starting to Increase as New Applications Emerge 90% OF DEMAND TODAY IS IN TRADITIONAL MOBILITY SECTOR WILL ADD 13 MTPA BY 2030… CARBON SECTORS… AND IS EXPECTED TO CONTINUE TO GROW Global Hydrogen Consumption by Application 450 Refining 400 28 350 Industrial 72 300 10% 86 250 2
Slide 80: Leading Chemical Solutions in a Changing Industry
Leading Chemical Solutions in a Changing Industry WE WIN BY SOLVING VALVE RELIABILITY AND LIFE CHALLENGES Pharma Sustainability 50% Longer Life XOMOX 50% Lower Torque 50% Lower Costs Mobility Science FKX9000 RESISTOFLEX® 50% Reduced 2X Extended Life Maintenance 80
Slide 81: Winning with the Most Effective Solid Handling Pumps in Wastewater
Winning with the Most Effective Solid Handling Pumps in Wastewater CUSTOMER ISSUE: PRODUCT INNOVATION: NEW MARKET: Clogging Pumps Eliminates Clogging Wastewater Treatment Plant LEGACY MARKET: Wastewater Collection System 81
Slide 82: Solidifying Our Strength in Pharma by Expanding into New Markets
Solidifying Our Strength in Pharma by Expanding into New Markets CUSTOMER NEED: RELIABLE ASEPTIC WE WIN BY SOLVING LEAKAGE AND RELIABILITY SOLUTIONS FOR WIDER TEMPERATURES PROBLEMS IN PROCESS MEDIA AND STEAM STERILIZED APPLICATIONS Legacy Market $110M PV & EX ER DIAPHRAGM DIAPHRAGMS New Market $70M
Slide 83: Strategy will Continue to Drive Growth and Expand Margin
Strategy will Continue to Drive Growth and Expand Margin Sales (FX Neutral, $M) and Adjusted Operating Margin (%)* 1,300 Mid 20%’s 1,200 Sales Margins 20.4% 1,100 19.9% 35% 1,000 3%-5% Operating Core Growth Leverage 900 CAGR on Core Sales 800 11.1% 700 600 2017 2018 2019 2020 2021 2022 2023 2024G Mi
Slide 84: Inorganic Growth will Further Strengthen Our Portfolio
Inorganic Growth will Further Strengthen Our Portfolio and Growth Projections FIRST LEVEL SPACE ASSESSMENT Higher Chemical Pharma /Aseptic Valves in corrosive, toxic media Wastewater Cryogenics Space Attractiveness & LH2 Pharma / Aseptic Industrial Automation Components in hygienic applications, Sin
Slide 85: Strengthening the Portfolio through Acquisitions
Strengthening the Portfolio through Acquisitions Acquired: May 2024, purchase price $61M before tax Acquired: Oct 2023, purchase price EUR 86.5M on a step-up benefit cash-free and debt-free basis Full-Year 2023E: Sales ~$28M / Adjusted EBITDA ~$5M* Full-Year 2023E: Sales ~EUR 55M / Adj. EBIT
Slide 86: Summary
Summary Four Key Takeaways 1. Portfolio has structurally changed − Stronger underlining growth rates − Profitability has shifted +20% 2. Continue to deliver market outgrowth performance led by new products and commercial and operational excellence 3. Expect to continue to drive 3-5% Growth at 35% op
Slide 87: Aerospace & Electronics
AEROSPACE & ELECTRONICS John J. Higgs President Crane Aerospace & Electronics
Slide 88: What You Will Hear Today
What You Will Hear Today 1. Positioned for long-term, sustainable, above-market growth 2. Technology leader with differentiated, proprietary products with excellent – and improving – competitive differentiation 3. 7%-9% sales CAGR over the next decade − Low double-digit over the next few years given
Slide 89: A Provider of Highly Engineered Solutions for Aerospace, Defense & Space
A Provider of Highly Engineered Solutions for Mission Critical Aerospace, Defense & Space Applications Aerospace & Electronics BY MARKET* BY APPLICATION* BY SOLUTION* ~$920M Sales ~22% OP** Aftermarket Microwave (2024G) Military Sensing 8% Fluid Total Served Market 39% 30% 20% 31% ~$7.3B Proprietary
Slide 90: Serving Attractive, Growing End Markets
Serving Attractive, Growing End Markets... 10-YR. MARKET MARKET MARKET SIZE GROWTH RATE Commercial $2T Aerospace $980B 3%-5% Market Defense $720B 2%-3% ~4% Annual Growth Space $400B 4%-8% Rate Aerospace, Defense and Space is a $2T Market With ~4% Annual Growth Rate 90
Slide 91: With Unique and Proprietary Capabilities
With Unique and Proprietary Capabilities ELECTRICAL POWER SENSING & FLUID BRAKE SIGNAL MANAGEMENT CONTROL MANAGEMENT CONTROL PROCESSING Ruggedized, High accuracy Pumps and fluid Fast response brake Complex, high highly efficient wired and management control for high density, PCBs power conversion wi
Slide 92: Aligned to Customer Needs and Standard System Architectures
Aligned to Customer Needs and Leveraged Through Standard System Architectures Approach 1. 2. 3 VOICE OF THE CUSTOMER DRIVING TECHNOLOGY LEADING TO INNOVATIVE, (VoC) DEVELOPMENT FLEXIBLE, AND SCALABLE SOLUTIONS Tech Requirements 2010 - 2015 2016 - 2020 Standard SWaP 2021+ Systems Additional Architect
Slide 93: Core Businesses Continue Delivering Exceptional Results
Core Businesses Continue Delivering Exceptional Results Solution Product(s) Sales and Adjusted Operating Margin* ($ in Millions) 24.1% Sensing & Power 22.0% 20.1% Landing 18.3% 17.2% Long-Term 16.5% Core Sales +7-9% Core Leverage Fluid 35%-40% $920 $799 $789 $651 $638 $667 Power 2019 2020 2021 2022
Slide 94: Well-Positioned on Key Commercial Platforms
Well-Positioned on Key Commercial Platforms Boeing Boeing 737MAX 787 Airbus Comac A320NEO C919 Strong Positions on High Volume Production Platforms 94
Slide 95: As Well as in Defense and Space
As Well as in Defense and Space Lockheed MIDS Martin F-35 Space Development PAC3, SMII, Agency Patriot Transport Layer Strong Positions on Strategic Defense and Space Programs 95
Slide 96: A Large Installed Base Generating High Aftermarket Revenues
A Large Installed Base Generating High Aftermarket Revenues Installed Base Provides Robust Aftermarket Revenues 96
Slide 97: With Several Franchise Programs Reaching Production
With Several “Franchise” Programs Reaching Production... AESA RADAR SYSTEMS F-16 MODERNIZATION & UPGRADE 1,200+ units • $800M+ 500 aircraft • $120M+ 97
Slide 98: Power Conversion for AESA Radar
…Such as Power Conversion for AESA Radar... LTAMDS • Low Voltage • High Power • Modular, scalable designs • System level content TPY-4 Sentinel AESA Radar Programs ($M) Annual Run Rate $50 Increasing to ~$50M Long-Term Expect sustained at >$50M with additional Potential growth Opportunities $10 2023
Slide 99: Modernization / Upgrade for the F-16 Brake Control
...And Modernization / Upgrade for the F-16 Brake Control • Antiskid valves • Brake control unit • Modular, scalable designs • Wheel speed sensing Sales ($M) Avg. Annual Sales >$30M Program continues at reduced rate for several years after 2028 Pursuing additional M&U Opportunities 2024G 2025F 2026F
Slide 100: Moving Forward We Have Two Primary Strategies
Moving Forward We Have Two Primary Strategies POSITION TO WIN MAXIMIZE CONTENT NEXT GENERATION PLATFORMS IN EMERGING MARKETS Protect and incrementally grow our core business Maximize content in emerging market segments by securing content on next generation technology and adjacencies that are attrac
Slide 101: Strategies Aligned to Key Market Trends
Strategies Aligned to Key Market Trends NEXT GENERATION ADVANCING MILITARY COMMERCIALIZATION ADVANCED AIR COMMERCIAL AIRCRAFT CAPABILITIES OF SPACE MOBILITY CABIN FLUID LANDING MICROWAVE POWER SENSING 101
Slide 102: With Mature Technology Meeting Customer Needs
With Mature Technology Meeting Customer Needs PUMPS & FFTS BRAKE CONTROL • Highly Reliable POWER • Proven Systems CONVERSION • Off-the-shelf SENSING & CONTROL INTEGRATED MICROWAVE ASSEMBLIES • Mature Technology CABIN FLUID LANDING MICROWAVE POWER SENSING 102
Slide 103: Solutions for NGAD and U.S. Army Vehicle Electrification
Solutions for NGAD and U.S. Army Vehicle Electrification Next Generation Air Dominance (NGAD) • Brake Control Systems • Power Conversion • Oil & Fuel Pumps LOP $300M+ • Fuel Flow Transmitters • Liquid Cooling • Advanced Sensing More Electric U.S. Military Ground Vehicles • High Power DC-DC Conversio
Slide 104: Next Generation Propulsion and Power Generation
Next Generation Propulsion and Power Generation • Oil & Fuel Pumps • Fuel Flow Transmitters LOP $500M+ • SOS Pressure Transducers • Advanced Sensing 104
Slide 105: Power Conversion and Integrated Microwave Assemblies
Power Conversion and Integrated Microwave Assemblies for Defense and Space LEO Satellites • Modular Power DC-DC Space • Filters LOP $500M+ • COTS thru Radiation Hardened PAC-3 • Integrated Microwave Assemblies Missiles • Complex PWBs (Multi-Mix) LOP $250M+ 105
Slide 106: Integrated Solutions for Carbon Neutral Aviation
And Integrated Solutions for Carbon Neutral Aviation Heart Aerospace ES-30 • Brake Control Systems Fixed Wing • Power Conversion LOP $500M+ • Oil & Fuel Pumps Jaunt Air Mobility eVTOL • Fuel Flow Transmitters • Liquid Cooling eVTOL • Advanced Sensing LOP $400M+ 106
Slide 107: Working on Technology Readiness for the Next Decade
We Are Presently Working on Technology Readiness for the Next Decade 1. Develop power conversion, distribution and control to support next generation platform electrification 2. Develop advanced sensing and long-range wireless systems for connected aircraft systems 3. Create scalable power conversio
Slide 108: High-confidence in Long Term Sustainable Growth
High-confidence in Long Term Sustainable Growth 10 year sales growth by driver Expanding Markets Expanding Core Existing / Base Business 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Growth From Base Business, Expanding Our Core and Entering New Markets 108
Slide 109: M&A Will Further Strengthen Our Portfolio
M&A Will Further Strengthen Our Portfolio Higher Power Conversion, Distribution, and Control Thermal Sensing Space Attractiveness Sensing Condition, Position, Pressure and Flow Electro- Mechanical Power Thermal Management Liquid, Vapor, Components and Systems Electro-Mechanical Single and Multi-Func
Slide 110: Disciplined Cadence and Execution
Disciplined Cadence and Execution Crane Business System Rigorous, data-driven management cadence Continuous improvement focused Highest integrity/commitment to quality Empowered, customer-focused BU GMs Extreme Accountability in All Aspects of Our Business 110
Slide 111: Investment in Continuous Improvement
Investment in Continuous Improvement Leveraging Crane Business System to Drive Efficiencies Over 100 $330K Sales Kaizen Events in 2023 per Associate 16% ANNUAL INCREASE 36 New Kaizen Tool Champions 20% ANNUAL INCREASE 111
Slide 112: Summary
Summary Outstanding and differentiated technology in attractive, growing markets Program wins and new pursuits support confidence in 7% to 9% long-term sales growth CAGR and 10% to 12% over the next 3 years Well positioned for new technology insertion opportunities and other growth opportuniti
Slide 113: Conclusion and Q&A
Conclusion and Q&A Max Mitchell Chairman, President and Chief Executive Officer Crane Company
Slide 114: Exciting Value Creation Opportunity
Exciting Value Creation Opportunity ~$2.3B ~40% 4-6% in sales aftermarket sales from strategic long-term core growth platforms sales growth 35%-40% ~22.5% Substantial operating leverage* pre-corporate Adjusted EBITDA margin** (2024G) M&A opportunity Expect Double-Digit Core EPS Growth With Upside Fr
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Slide 116: Non-GAAP and Supplemental Information
Non-GAAP and Supplemental Information May 14, 2024
Slide 117: Crane Company Operational Guidance
Crane Company Operational Guidance Original Revised ADDITIONAL DETAILS ($ millions) GAAP Adjusted (1/29/24) (4/22/24) 2024G vs. 2023A Adjusted Sales 2023A 2023A* 2024G 2024G Change FX M&A Core Aerospace & Electronics Aerospace & Electronics 789 789 904 920 16.6% – 4.5% 12% Process Flow Technologies
Slide 118: Crane Company EPS Guidance
Crane Company EPS Guidance Original Revised ADDITIONAL DETAILS ($ millions, except per-share amounts) GAAP Adjusted* (1/29/24) (4/22/24) Guidance 2023A 2023A 2024G 2024G Adjusted EPS guidance of $4.75-$5.05 Segment Operating Profit 401 406 451 470 Corporate (117) (76) (75) (75) – 14% EPS growth foll
Slide 119: 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 presentation includes certain non-GAAP financial measures, including Adjusted Operating Profit, Adjusted Operating Margin, Adjusted Net Income, Adjus
Slide 120: 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 121: Non-GAAP Financial Measures
Non-GAAP Financial Measures Historical Segment Margin Information (in $ Millions) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024G Process Flow Technologies Net Sales 924 1,031 1,093 1,235 1,259 1,110 1,093 1,230 1,289 1,289 1,264 1,091 999 1,
Slide 122: Non-GAAP Financial Measures
Non-GAAP Financial Measures Twelve Months Ended December 31, 2023 2022 % Change $ Per Share $ (on $) Net sales (GAAP) $ 2,086.4 $ 2,035.0 3% Adjusted Operating Profit and Adjusted Operating Profit Margin Operating profit (GAAP) $ 283.8 37.9 NM Operating profit margin (GAAP) 14% 2% Special items impa
Slide 123: Non-GAAP Financial Measures
Non-GAAP Financial Measures Twelve Months Ended December 31, 2023 $ Adjusted EBITDA and Adjusted EBITDA Margin Net income from continuing operations attributable to common shareholders (GAAP) $ 203.8 Net income margin (GAAP) 9.8% Adjustments to net income: Interest expense, net 17.6 Income tax expen
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