Crane Company · NYSE:CR
Crane — Investor Day (March 2022)
20 slides from Crane's investor day presentation, Mar 30, 2022
Slide 1: Financial Overview
FINANCIAL OVERVIEW Rich Maue Senior Vice President and Chief Financial Officer
Slide 2: Record Full Year 2021 Financial Results
RECORD FULL YEAR 2021 FINANCIAL RESULTS $ Millions except per-share amounts FY 2021 FY 2020 Change Sales* $3,180 $2,772 +15% Operating Profit** $501 $300 +67% Operating Margin** 15.8% 10.8% +500 bps Earnings per Share from Continuing Operations** $6.55 $3.53 +87% Free Cash Flow from Continuing Opera
Slide 3: CBS Drives Consistent, Differentiated Execution
CBS DRIVES CONSISTENT, DIFFERENTIATED EXECUTION Achieved record results despite: ▪ COVID ▪ Supply chain disruptions ▪ Severe inflation ▪ Labor market challenges Management cadence and disciplined execution drives differentiated execution 3
Slide 4: Solidly On-Track to Achieve 2022 Guidance
SOLIDLY ON-TRACK TO ACHIEVE 2022 GUIDANCE $ Millions except per share amounts 2022G 2021 Change*** Net Sales $3,300 $3,180 +4% Earnings per Share from Continuing Operations* $7.00-$7.40 $6.55 +10% Free Cash Flow from Continuing Operations** $350-$390 $415 (11%) 2022G Other 2022 Guidance Details Core
Slide 5: Cyclical & Secular Runway for Growth Beyond '22
CYCLICAL & SECULAR RUNWAY FOR GROWTH BEYOND ‘22 5
Slide 6: Aerospace & Electronics Growth Opportunities
AEROSPACE & ELECTRONICS GROWTH OPPORTUNITIES Good visibility to 7%-9% sales CAGR through 2031 6
Slide 7: Process Flow Technologies Growth Opportunities
PROCESS FLOW TECHNOLOGIES GROWTH OPPORTUNITIES Momentum with new products introductions, and alignment with secular trends 7
Slide 8: Crane NXT Growth Opportunities
CRANE NXT GROWTH OPPORTUNITIES Secular drivers of productivity and security, and entering new markets 8
Slide 9: Management Cadence and Disciplined Execution
MANAGEMENT CADENCE AND DISCIPLINED EXECUTION ▪ 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 9
Slide 10: Steadily Improving Earnings Quality
STEADILY IMPROVING EARNINGS QUALITY Free Cash Conversion Free Cash Conversion (Excluding Asbestos) 120% 120% 100% 100% Average 111% (2016-2022G) Average 99% Average 99% 80% (2016-2022G) 80% (2010-2015) Average 78% 60% (2010-2015) 60% 40% 40% 20% 20% 0% 0% 2022G 2022G 2020 2012 2010 2011 2012 2013 20
Slide 11: Steadily Improving Earnings Quality
STEADILY IMPROVING EARNINGS QUALITY Free Cash Flow* $ Millions $450 $350 +10.5% CAGR $250 $415 $370 $305 $325 $150 $267 $269 $251 $205 $210 $220 $189 $113 $115 $50 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022G** * Free Cash Flow is defined as Cash Provided by Operating Activities
Slide 12: Strong Balance Sheet Provides Flexibility
STRONG BALANCE SHEET PROVIDES FLEXIBILITY Gross Debt to Adjusted EBITDA Net Debt to Adjusted EBITDA* (Moody’s Basis)* 1.5x 4.2x 2.4x 2.1x 0.6x <0.1x 2020 2021 2022G 2020 2021 2022G 12 * Please see non-GAAP Financial Measures tables for details.
Slide 13: Management Cadence and Disciplined Execution
MANAGEMENT CADENCE AND DISCIPLINED EXECUTION Maintain Investment Grade Credit Rating While Funding: Internal Investments to Drive Acquisitions to Competitive Returns Organic Growth Enhance Growth to Shareholders ▪ Capital expenditures ▪ Pursuing bolt-on transactions ▪ Competitive returns to and adja
Slide 14: Early Thoughts on Crane Co. Financial Profile
EARLY THOUGHTS ON CRANE CO. FINANCIAL PROFILE ▪ Flexible capital deployment policy − Can support substantial M&A for growth − Dividend in-line with peers ▪ Strong balance sheet to support organic and inorganic strategic growth objectives, while providing a dividend in-line with peers ▪ Corporate cos
Slide 15: Early Thoughts on Crane NXT Financial Profile
EARLY THOUGHTS ON CRANE NXT FINANCIAL PROFILE ▪ Strong balance sheet and free cash flow provides substantial flexibility − Continued investment in organic growth initiatives − Accretive acquisitions could include bolt-ons and adjacencies − Expect a robust and differentiated level of capital return P
Slide 16: Early Thoughts on Crane NXT Financial Profile
EARLY THOUGHTS ON CRANE NXT FINANCIAL PROFILE ▪ Expect to repay $300 million 2023 bonds before separation ▪ $200 million 2036 notes and $350 million 2048 notes to remain with Crane NXT − Debt primarily funded Crane NXT transactions, and long-duration highly attractive stable financing ▪ Corporate co
Slide 17: Additional Separation Details
ADDITIONAL SEPARATION DETAILS ▪ Expect the transaction to be tax-free to Crane Co., and to Crane Co. U.S. shareholders ▪ Completion is subject to certain customary conditions, including registration and listing of Crane Co. shares, and final approval of the spin-off by the Board of Directors ▪ No sh
Slide 18: Next Steps and Timing
NEXT STEPS AND TIMING ▪ Expect the separation process to take approximately 12 months to complete ▪ Will provide additional information in Form 10 Registration Statement ▪ Search process for Crane NXT CEO is underway, including evaluation of internal and external candidates ▪ Board composition and e
Slide 19: Exciting Value Creation Story Ahead
EXCITING VALUE CREATION STORY AHEAD Continued focus on long-term, sustainable value creation for all stakeholders 19
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