Crane Company · NYSE:CR
Crane — Investor Day (March 2022)
31 slides from Crane's investor day presentation, Mar 30, 2022
Slide 1: Strategic Overview
STRATEGIC OVERVIEW Max Mitchell President and Chief Executive Officer, Crane Co.
Slide 2: Agenda
AGENDA ▪ Separation Overview ▪ Our Journey ▪ Where We are Today ▪ Where We are Headed 2
Slide 3: Well Positioned for Separation
WELL POSITIONED FOR SEPARATION Payment & Merchandising Aerospace & Electronics Process Flow Technologies Technologies Strong track record of delivering consistent and differentiated execution 3
Slide 4: Two Best-in-Class Industrial Technology Leaders
TWO BEST-IN-CLASS INDUSTRIAL TECHNOLOGY LEADERS ▪ Aerospace & Electronics and Process Flow ▪ Crane Payment Innovations (CPI) and Technologies Crane Currency ▪ ~$1.9 billion sales in a $20+ billion market ▪ ~$1.4 billion sales in a $7+ billion market ▪ ~18.5% pre-corporate Adjusted EBITDA ▪ ~28% pre-
Slide 5: Strategic Rationale for Separation
STRATEGIC RATIONALE FOR SEPARATION ▪ Deeper operational focus, accountability and flexibility to meet customer requirements ▪ Increased operating and financial flexibility to pursue growth opportunities ▪ Tailored capital allocation strategies ▪ Will attract a shareholder base aligned with each busi
Slide 6: Financial Rationale for Separation
FINANCIAL RATIONALE FOR SEPARATION Valuation Discount vs. Peers Above average EV/EBITDA (Next 12-Months) discount vs. 7.0x industrial peers 6.0x 5.0x 4.0x Long-term average discount 3.0x 2.0x 1.0x 0.0x 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Current valuation does not reflect strength of e
Slide 7: Timing Is Right for Separation Today
TIMING IS RIGHT FOR SEPARATION TODAY ▪ Business stronger than ever − Record financial results in 2021 − End markets poised for accelerated growth − Accelerating momentum with growth strategies and initiatives ▪ Scale and balance sheet strength to create separate companies with financial flexibility
Slide 8: Separating into Two Public Companies
SEPARATING INTO TWO PUBLIC COMPANIES Continued focus on long-term, sustainable value creation for all stakeholders 8
Slide 9: Strategic Intentionality Enabled Separation
STRATEGIC INTENTIONALITY ENABLED SEPARATION 2003 Sales 2014 Sales 2018 Sales 2020 Sales ($155M) ($712M) ($1,257M) ($1,105M) P&MT P&MT P&MT P&MT Payment & Merchandising segment now large enough to enable separation 9
Slide 10: Execution on M&A Created Financial Flexibility to Enable Separation
EXECUTION ON M&A CREATED FINANCIAL FLEXIBILITY TO ENABLE SEPARATION Payment & Merchandising Technologies adjusted operating margin* 600 bps of D&A ~28% EBITDA COVID 22.6% 22.0% 20.5% 17.9% 17.4% 16.2% 15.1% 12.8% 12.3% 10.3% 11.2% 10.1% 10.7% 7.8% 7.0% 7.0% 8.0% 5.9% 6.1% 1.8% 2003 2004 2005 2006 20
Slide 11: Post-Separation Business Highlights
POST-SEPARATION BUSINESS HIGHLIGHTS Crane Currency and Crane Aerospace & Electronics Process Flow Technologies Payment Innovations 11
Slide 12: Crane Co. Highlights
CRANE CO. HIGHLIGHTS ▪ Highly-engineered, technology-differentiated 2022G Adjusted Operating Profit* products for large ($20+ billion) and attractive markets ▪ Respected brands and leadership positions ▪ Mission-critical, high cost of failure applications Aerospace & Electronics with ~40% of revenue
Slide 13: Crane Co. Highlights
CRANE CO. HIGHLIGHTS ▪ Highly-engineered, technology-differentiated products for large ($20+ billion) and attractive markets ▪ Respected brands and leadership positions ▪ Mission-critical, high cost of failure applications with ~40% of revenue from aftermarket sales ▪ Favorable secular trends and po
Slide 14: Crane Co. Highlights
CRANE CO. HIGHLIGHTS ▪ Highly-engineered, technology-differentiated products for large ($20+ billion) and attractive markets ▪ Respected brands and leadership positions ▪ Mission-critical, high cost of failure applications with ~40% of revenue from aftermarket sales ▪ Favorable secular trends and po
Slide 15: Crane Co. Highlights
CRANE CO. HIGHLIGHTS ▪ CBS firmly ingrained across both platforms ▪ 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 15
Slide 16: Slide 16
Slide 17: Crane NXT Highlights
CRANE NXT HIGHLIGHTS ▪ Premier industrial technology business with significant 2021 Sales scale, best-in-class margin profile, and strong free cash flow generation ▪ Broad portfolio and technology leadership for large ($7+ billion) and attractive end markets ▪ Aligned with long-term secular market d
Slide 18: Crane NXT Highlights
CRANE NXT HIGHLIGHTS ▪ Premier industrial technology business with significant scale, industry leading margins, and free cash flow generation ▪ Broad portfolio and technology leadership for large ($7+ billion) and attractive end markets ▪ Aligned with long-term secular market drivers including secur
Slide 19: Agenda
AGENDA ▪ Separation Overview ▪ Our Journey ▪ Where We are Today ▪ Where We are Headed 19
Slide 20: It's Been a Journey…
IT’S BEEN A JOURNEY… Adjusted Operating Margin* Since CBS Formalized COVID 16.5% 15.8% 15.2% 14.3% 14.3% 14.4% 14.1% 12.9% 13.3% 13.5% 12.0% 10.7% 10.8% 10.1% 10.3% 10.3% 9.3% 8.7% 8.2% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022G* 20 * Adjusted Ope
Slide 21: …Enabled Through Numerous Acquisitions
…ENABLED THROUGH NUMEROUS ACQUISITIONS Deployed over $2 billion on acquisitions since 2010 21
Slide 22: Accelerating Results from Organic Investments
ACCELERATING RESULTS FROM ORGANIC INVESTMENTS New Product Development Breakthrough Innovation Technology Investment Localization Commercial Excellence Incoming Sales Order Customer POs Created in the ERP System 22
Slide 23: Agenda
AGENDA ▪ Separation Overview ▪ Our Journey ▪ Where We are Today ▪ Where We are Headed 23
Slide 24: Record Financial Results
RECORD FINANCIAL RESULTS 2019 2020 2021 Sales $3,283 $2,772 $3,180 Adjusted Operating Profit* $494 $300 $501 Adjusted Operating Margin* 15.0% 10.8% 15.8% Adjusted EPS* $6.02 $3.53 $6.55 Free Cash Flow** $325 $251 $415 Record Results * Excludes Special Items. 2020 and 2021 presented on a Continuing O
Slide 25: Positioned for the Future
POSITIONED FOR THE FUTURE Payment & Merchandising Aerospace & Electronics Process Flow Technologies Technologies 25
Slide 26: Themes from 2021 Continue to Play Out as Expected
THEMES FROM 2021 CONTINUE TO PLAY OUT AS EXPECTED ✓ Strong market recovery ✓ Accelerating organic growth investment results ✓ Alignment with secular trends ✓ Growing opportunities for M&A 26
Slide 27: Building on a Strong Foundation
BUILDING ON A STRONG FOUNDATION ✓ Ethical culture Philanthropy, Sustainability ✓ and Equality ✓ Crane Business System Each business has the policies, processes and governance tools in place to execute on these foundational pillars 27
Slide 28: 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 29: Agenda
AGENDA ▪ Separation Overview ▪ Our Journey ▪ Where We are Today ▪ Where We are Headed 29
Slide 30: Separating into Two Public Companies
SEPARATING INTO TWO PUBLIC COMPANIES Continued focus on long-term, sustainable value creation for all stakeholders 30
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