Crane Company · NYSE:CR
Crane — Q1 2023 Earnings Presentation
24 slides from Crane's earnings presentation, May 11, 2023
Slide 1: Crane Q1 2023 Earnings Release Call
CRANE Q1 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: Q1 2023 Overview
CRANE Q1 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 $2,027 Engineered Materials 7% Adjusted EBITDA* $335 % of Sales 16.5% Aerospace & 53% Process Flow Technologies Electronics 40% Adjusted Operating Profit* $294 % of Sales 14.5%
Slide 5: Very Strong First Quarter Results
VERY STRONG FIRST QUARTER RESULTS $ Millions GAAP Adjusted* except per-share amounts Q1 2023 Q1 2022 Change Q1 2023 Q1 2022 Change Sales $514 $539 (5%) $514 $539 (5%) Operating Profit $86 $70 +23% $95 $75 +27% Operating Margin 16.8% 13.0% +380 bps 18.5% 13.9% +460 bps Earnings per Share $1.08 $0.93
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: 2023 Financial Details
2023 FINANCIAL DETAILS
Slide 9: Aerospace & Electronics
AEROSPACE & ELECTRONICS $ Millions GAAP except per-share amounts Q1 2023 Q1 2022 Change Sales $180 $157 +15% Operating Profit $38 $28 +34% Operating Margin 20.9% 17.9% +300 bps Backlog $645 $508 +27% Additional Details Q1 2023 Q1 2023 OE Sales +12% Core Growth +14.8% Aftermarket Sales +21% FX Transl
Slide 10: Process Flow Technologies
PROCESS FLOW TECHNOLOGIES $ Millions GAAP Adjusted* except per-share amounts Q1 2023 Q1 2022 Change Q1 2023 Q1 2022 Change Sales $271 $311 (13%) $271 $311 (13%) Operating Profit $63 $49 +29% $64 $51 +25% Operating Margin 23.3% 15.7% +760 bps 23.4% 16.3% +710 bps Backlog $363 $372 (3%) $363 $332 +9%
Slide 11: Engineered Materials
ENGINEERED MATERIALS $ Millions GAAP except per-share amounts Q1 2023 Q1 2022 Change Sales $62 $70 (12%) Operating Profit $11 $13 (15%) Operating Margin 18.3% 19.0% (70 bps) Additional Details Q1 2023 Q1 2023 Recreational Vehicle Sales (43%) Core Growth (11.5%) Building Products Sales +18% FX Transl
Slide 12: Crane Company Post-Separation Capital Structure
CRANE COMPANY POST-SEPARATION CAPITAL STRUCTURE Additional Details ~$735 Million ~0.2x Net Liquidity ▪ Net Debt (total debt less total cash) of approximately $65 million Debt-to-EBITDA ▪ 2023 Guidance pro forma EBITDA of ~$335 million implies net Debt-to-EBITDA of ~0.2x $500 Million Undrawn Revolver
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 / ~16.5% 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 (1/23/23) (5/10/23) Revised 2023G vs. 2022A Adj. ex-Supply Additional Details Sales 2022A 2022A* 2022A** 2023G* 2023G* Change FX Core Aerospace & Electronics 667 667 667 735 741 11% -- 11% ▪ 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 $345 $364 ▪ Guidance items for 2023 below are based on annualized, post-separation run- Corporate ($65) ($70) rates Adjusted Operating Profit $28
Slide 18: Non-GAAP Information
NON-GAAP INFORMATION MAY 10, 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
Transaction related expenses 11.5 0.20 Repositioning related charges, net 0.2 — Interest expense 2022 364-Day term loan 5.9 0.10 Related party interest income(a) (2.5) (0.04) NON-GAAP FINANCIAL MEASURES Impact of pension curtailment, settlements and non-service costs Interest Expense 2023 Term Facil
Slide 22: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES CRANE COMPANY (A Business of Crane Holdings, Co. Prior to the April 3, 2023 Separation Transaction) (unaudited, in millions, except per share data) Aerospace & Process Flow Engineered Total Three Months Ended March 31, 2023 Electronics Technologies Materials Corporate Com
Slide 23: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES CRANE COMPANY (A Business of Crane Holdings, Co. Prior to the April 3, 2023 Separation Transaction) (unaudited, in millions, except per share data) Three Months Ended March 31, Cash Flow Items 2023 Cash used for operating activities $ (71.6) Less: Capital expenditures (8.
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