Crane Company · NYSE:CR

Crane — Q3 2023 Earnings Presentation

25 slides from Crane's earnings presentation, Oct 24, 2023

  1. Slide 1: Crane Q3 2023 Earnings Release Call

    CRANE Q3 2023 Earnings Release Call

  2. 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

  3. Slide 3: Q3 2023 Overview

    CRANE Q3 2023 OVERVIEW

  4. 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 $2,072 Engineered Materials 7% Adjusted EBITDA* $366 % of Sales 17.6% Aerospace & 53% Process Flow Technologies Electronics 40% Adjusted Operating Profit* $325 % of Sales 15.7%

  5. Slide 5: 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 By End Market (2024E)  2023 forecast: Sales ~EUR 55M (up 10% YoY) / Adj. EBITDA ~EUR 9M* Industrial & High Purity Pharma  Year 3 (2026) forecast: ROIC >10.5% / ~$0.15 Cash EPS accretion* 8% Hydroge

  6. Slide 6: Highlights from Third Quarter 2023 Results

    HIGHLIGHTS FROM THIRD QUARTER 2023 RESULTS $ Millions GAAP Adjusted* except per-share amounts Q3 2023 Q3 2022 Change Q3 2023 Q3 2022 Change Sales $530 $480 10% $530 $480 10% Operating Profit $76 ($117) FAV $81 $57 +42% Operating Margin 14.4% (24.4%) FAV 15.2% 11.8% +340 bps Earnings (loss) per Share

  7. Slide 7: 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

  8. Slide 8: 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 8

  9. Slide 9: Additional Financial Details

    ADDITIONAL FINANCIAL DETAILS

  10. Slide 10: Aerospace & Electronics

    AEROSPACE & ELECTRONICS $ Millions GAAP Q3 2023 Q3 2022 Change Sales $207 $167 +24% Operating Profit $40 $28 +43% Operating Margin 19.4% 16.9% +250 bps Backlog $678 $592 +15% Additional Details Q3 2023 Q3 2023 OE Sales +16% Core Growth +23.6% Aftermarket Sales +44% FX Translation +0.3% OE/Aftermarke

  11. Slide 11: Process Flow Technologies

    PROCESS FLOW TECHNOLOGIES $ Millions GAAP Adjusted* Q3 2023 Q3 2022 Change Q3 2023 Q3 2022 Change Sales $267 $250 +7% $267 $250 +7% Operating Profit $51 $41 +24% $51 $42 +22% Operating Margin 19.2% 16.5% +270 bps 19.2% 16.8% +240 bps Backlog $353 $354 (0%) $353 $354 (0%) Additional Details Q3 2023 

  12. Slide 12: Engineered Materials

    ENGINEERED MATERIALS $ Millions GAAP Adjusted* Q3 2023 Q3 2022 Change Q3 2023 Q3 2022 Change Sales $56 $63 (11%) $56 $63 (11%) Operating Profit $8 $7 +15% $8 $7 +13% Operating Margin 13.7% 10.7% +300 bps 13.7% 10.8% +290 bps Additional Details Q3 2023 Q3 2023 Recreational Vehicle Sales (21%) Core Gr

  13. Slide 13: Crane Company Post-Separation Capital Structure

    CRANE COMPANY POST-SEPARATION CAPITAL STRUCTURE As of October 5, 2023: (post-Baum acquisition) Additional Details ~$980 Million Liquidity  Increased revolver capacity to $800 million, from $500 million, to provide additional flexibility for M&A ~0.2x Net  Drew $100 million on revolver to fund Baum

  14. Slide 14: Capital Deployment Potential ~$4 Billion

    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

  15. Slide 15: 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

  16. Slide 16: Long-Term Vision for Strategic Growth Platforms

    LONG-TERM VISION FOR STRATEGIC GROWTH PLATFORMS 2023G 2028F ~$2B Sales / ~17.6% 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

  17. Slide 17: Crane Company Revised Operational Guidance

    CRANE COMPANY REVISED OPERATIONAL GUIDANCE ($ millions) GAAP Adjusted Adjusted Prior Revised Ex-Supply (7/25/23) (10/23/23) Revised 2023G vs. 2022A Adj. ex-Supply Additional Details Sales 2022A 2022A* 2022A** 2023G* 2023G* Change FX M&A Core Aerospace & Electronics 667 667 667 761 775 16% -- -- 16%

  18. Slide 18: 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 $379 $397  Guidance items for 2023 below are based on annualized, post-separation run- Corporate ($70) ($72) rates Adjusted Operating Profit $30

  19. Slide 19: Non-GAAP Information

    NON-GAAP INFORMATION OCTOBER 23, 2023

  20. Slide 20: 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

  21. Slide 21: 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

  22. Slide 22: Non-GAAP Financial Measures

    NON-GAAP FINANCIAL MEASURES Non-GAAP Financial Measures (unaudited, in millions, except per share data) Three Months Ended September 30, 2023 2022 % Change $ Per Share $ (on $) Net sales (GAAP) $ 530.1 $ 480.0 10 % Adjusted Operating Profit and Adjusted Operating Profit Margin Operating profit (loss

  23. Slide 23: Non-GAAP Financial Measures by Segment

    NON-GAAP FINANCIAL MEASURES Non-GAAP Financial Measures by Segment (unaudited, in millions) Aerospace & Process Flow Engineered Total Three Months Ended September 30, 2023 Electronics Technologies Materials Corporate Company Net sales $ 207.2 $ 266.7 $ 56.2 $ — $ 530.1 Operating profit (GAAP) $ 40.2

  24. Slide 24: Adjusted Free Cash Flow

    NON-GAAP FINANCIAL MEASURES Adjusted Free Cash Flow (unaudited, in millions) Three Months Ended September 30, Cash Flow Items 2023 Cash provided by operating activities from continuing operations $ 86.9 Less: Capital expenditures (9.2) Free cash flow $ 77.7 Adjustments: Transaction-related expenses

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Crane Company — Q3 2023 Earnings Presentation on 6ix