Crane Company · NYSE:CR
Crane — Q4 2023 Earnings Presentation
32 slides from Crane's earnings presentation, Jan 30, 2024
Slide 1: Crane Q4 2023 Earnings Release Call
CRANE Q4 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: Q4 2023 Overview
CRANE Q4 2023 OVERVIEW
Slide 4: Two Extremely Well Positioned Growth Platforms
TWO EXTREMELY WELL POSITIONED GROWTH PLATFORMS Crane At-a-Glance ($ millions) 2024G 2024G Adjusted Operating Profit* Sales $2,250 Engineered Materials 7% Adjusted EBITDA* $423 Process Flow % of Sales 18.8% Aerospace & 50% Technologies Electronics 43% Adjusted Operating Profit* $376 % of Sales 16.7%
Slide 5: Acquisition of Vian Enterprises, Inc.
ACQUISITION OF VIAN ENTERPRISES, INC. ▪ Purchase price: $103M on a cash-free and debt-free basis By End Market (2022E) Defense Business ▪ August 2023 trailing-12 month (estimate): Sales ~$34M / Adj. EBITDA ~$8M Jet 19% ▪ Year 5 (2028) forecast: ROIC >10% / ~$0.20 Cash EPS accretion* 3% Other 33% ▪ P
Slide 6: Highlights from Fourth Quarter 2023 Results
HIGHLIGHTS FROM FOURTH QUARTER 2023 RESULTS $ Millions GAAP Adjusted* except per-share amounts Q4 2023 Q4 2022 Change Q4 2023 Q4 2022 Change Sales $533 $486 +10% $533 $486 +10% Operating Profit $67 $49 +38% $75 $65 +14% Operating Margin 12.6% 10.0% +260 bps 14.0% 13.5% +50 bps Earnings per Share $0.
Slide 7: Highlights from Full-Year 2023 Results
HIGHLIGHTS FROM FULL-YEAR 2023 RESULTS $ 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
Slide 8: 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 9: 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 9
Slide 10: Additional Financial Details
ADDITIONAL FINANCIAL DETAILS
Slide 11: Aerospace & Electronics
AEROSPACE & ELECTRONICS $ Millions GAAP Adjusted* Q4 2023 Q4 2022 Change Q4 2023 Q4 2022 Change Sales $213 $181 +17% $213 $181 +17% Operating Profit $43 $36 +20% $43 $37 +15% Operating Margin 20.2% 19.8% +40 bps 20.2% 20.6% (40 bps) Backlog $701 $613 +14% $701 $613 +14% Additional Details Q4 2023 Q4
Slide 12: Aerospace & Electronics
AEROSPACE & ELECTRONICS $ Millions GAAP Adjusted* FY 2023 FY 2022 Change FY 2023 FY 2022 Change Sales $789 $667 +18% $789 $667 +18% Operating Profit $159 $120 +32% $159 $122 +31% Operating Margin 20.1% 18.0% +210 bps 20.1% 18.3% +180 bps Backlog $701 $613 +14% $701 $613 +14% Additional Details FY 20
Slide 13: Process Flow Technologies
PROCESS FLOW TECHNOLOGIES $ Millions GAAP Adjusted* Q4 2023 Q4 2022 Change Q4 2023 Q4 2022 Change Sales $272 $252 +8% $272 $252 +8% Operating Profit $43 $37 +16% $46 $41 +13% Operating Margin 16.0% 14.8% +120 bps 17.0% 16.1% +90 bps Backlog $379 $369 +3% $379 $369 +3% Additional Details Q4 2023 ▪ On
Slide 14: Process Flow Technologies
PROCESS FLOW TECHNOLOGIES $ Millions GAAP Adjusted* FY 2023 FY 2022 Change FY 2023 FY 2022 Change Sales $1,073 $1,109 (3%) $1,073 $1,110 (3%) Operating Profit $209 $168 +24% $214 $179 +19% Operating Margin 19.4% 15.2% +420 bps 19.9% 16.2% +370 bps Backlog $379 $369 +3% $379 $369 +3% Additional Detai
Slide 15: Engineered Materials
ENGINEERED MATERIALS $ Millions GAAP Adjusted* Q4 2023 Q4 2022 Change Q4 2023 Q4 2022 Change Sales $49 $52 (7%) $49 $52 (7%) Operating Profit $5 $6 (22%) $5 $6 (27%) Operating Margin 9.3% 11.0% (170 bps) 9.3% 11.8% (250 bps) Additional Details Q4 2023 Q4 2023 Recreational Vehicle Sales (16%) Core Gr
Slide 16: Engineered Materials
ENGINEERED MATERIALS $ Millions GAAP Adjusted* FY 2023 FY 2022 Change FY 2023 FY 2022 Change Sales $224 $258 (13%) $224 $258 (13%) Operating Profit $33 $33 +2% $33 $37 (10%) Operating Margin 14.9% 12.6% +230 bps 14.8% 14.2% +60 bps Additional Details FY 2023 FY 2023 Recreational Vehicle Sales (35%)
Slide 17: Crane Company Post-Separation Capital Structure
CRANE COMPANY POST-SEPARATION CAPITAL STRUCTURE 12/31/2023 Pro Forma for Vian Revolver Draw Additional Details ~$1.03 Billion Liquidity ▪ Repaid $100 million revolver draw used for Baum acquisition in November, 2023 <0.1x Net ▪ Drew $100 million on revolver to fund Vian acquisition on Debt-to-EBITDA
Slide 18: Capital Deployment Potential
CAPITAL DEPLOYMENT POTENTIAL ~$4 Billion Available from 2023-2028 ~$4 Billion Available for M&A and/or repurchases while retaining strong, target credit metrics Incremental Debt Capacity M&A and/or Post-Separation Acquisitions To Date Repurchases October 2023 Process Flow Technologies Purchase Price
Slide 19: 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 20: Long-Term Vision for Strategic Growth Platforms
LONG-TERM VISION FOR STRATEGIC GROWTH PLATFORMS Today 2028F ~$2B Sales / High-Teens Adjusted EBITDA Margin / ~$4B Sales / 20%+ Adjusted EBITDA Margin / MSD Growth HSD Growth A&E PFT A&E PFT ▪ Focus on high-return acquisitions that create value for shareholders and improve the strength of our strateg
Slide 21: Crane Company Revised Operational Guidance
CRANE COMPANY REVISED OPERATIONAL GUIDANCE ($ millions) GAAP Adjusted 2024G vs. 2023A Adjusted Additional Details Sales 2023A 2023A* 2024G Change FX M&A Core Aerospace & Electronics 789 789 904 14.5% - 4.5% 10% ▪ Aerospace & Electronics Process Flow Technologies 1,073 1,073 1,122 4.6% - 4.5% 0% Engi
Slide 22: Crane Company Revised EPS Guidance
CRANE COMPANY REVISED EPS GUIDANCE ($ millions, except per-share amounts) GAAP Adjusted Additional Details Guidance 2023A 2023A 2024G Segment Operating Profit 401 406 451 Corporate (117) (77) (75) ▪ Adjusted EPS guidance of $4.55-$4.85 Operating Profit 284 329 376 Operating Profit Margin 13.6% 15.8%
Slide 23: Non-GAAP Information and Appendix
NON-GAAP INFORMATION AND APPENDIX JANUARY 29, 2024
Slide 24: 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 25: 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 26: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Non-GAAP Financial Measures (unaudited, in millions, except per share data) Three Months Ended December 31, 2023 2022 % Change $ Per Share $ (on $) Net sales (GAAP) $ 532.9 $ 485.9 10 % Adjusted Operating Profit and Adjusted Operating Profit Margin Operating profit (GAAP)
Slide 27: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Non-GAAP Financial Measures (unaudited, in millions, except per share data) 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 (GA
Slide 28: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Non-GAAP Financial Measures by Segment (unaudited, in millions) Aerospace & Process Flow Engineered Total Three Months Ended December 31, 2023 Electronics Technologies Materials Corporate Company Net sales $ 212.8 $ 271.5 $ 48.6 $ — $ 532.9 Operating profit (GAAP) $ 42.9
Slide 29: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Non-GAAP Financial Measures by Segment (unaudited, in millions) Aerospace & Process Flow Engineered Total Twelve Months Ended December 31, 2023 Electronics Technologies Materials Corporate Company Net sales $ 789.3 $ 1,072.8 $ 224.3 $ — $ 2,086.4 Operating profit (GAAP) $
Slide 30: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Adjusted Free Cash Flow (unaudited, in millions) Three Months Ended Twelve Months Ended December 31, December 31, Cash Flow Items 2023 2022 2023 2022 Cash provided by (used for) operating activities from continuing operations $ 159.7 $ 147.0 $ 193.6 $ (461.5) Less: Capita
Slide 31: Appendix: Restatement of Q1 2023 Earnings
APPENDIX: RESTATEMENT OF Q1 2023 EARNINGS GAAP Adjusted Q1 2023 Q1 2023 Q1 2023 Q1 2023 ▪ On May 10, 2023, Crane Company reported Q1 As-Reported As-Restated As-Reported As-Restated Segment Profit 112.4 112.4 112.7 112.7 2023 results on a “carve-out” basis Corporate (26.1) (34.9) (17.5) (21.9) Operat
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