Crane Nxt, Co. · NYSE:CXT
Crane Nxt — Investor Day (March 2023)
97 slides from Crane Nxt's investor day presentation, Mar 9, 2023
Slide 1: Investor Day
INVESTOR DAY March 9, 2023
Slide 2: Welcome
WELCOME Jason Feldman Vice President, Investor Relations
Slide 3: 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 4: Forward-Looking Statements – Disclaimer
FORWARD-LOOKING STATEMENTS – DISCLAIMER Readers should carefully review Crane’s financial statements and the notes thereto, as well as the section entitled “Risk Factors” in Item 1A of Crane’s Annual Report on Form 10-K for the year ended December 31, 2022 and the other documents Crane and its subsi
Slide 5: Agenda
AGENDA TIME TOPIC PRESENTER 1:00-1:05 Welcome and Agenda Jason Feldman 1:05-1:35 Introduction and Strategy Overview Aaron Saak 1:35-2:05 Crane Currency Overview Sam Keayes 2:05-2:35 Crane Payment Innovations Overview Kurt Gallo 2:35-2:50 Break 2:50-3:15 Expanding Beyond the Core Aaron Saak 3:15-3:40
Slide 6: Separation Overview
SEPARATION OVERVIEW • In March 2022, Crane Holdings, Co. announced its intention to separate into two independent, publicly traded companies ̶ Crane NXT (NYSE: CXT) ̶ Crane Company (NYSE: CR) • Separation permits Crane NXT to attract a shareholder base aligned with its distinct value proposition • U
Slide 7: Introduction and Strategy Overview
INTRODUCTION AND STRATEGY OVERVIEW Aaron W. Saak President and CEO
Slide 8: Crane NXT – Focused on Compounding Value Creation
CRANE NXT – FOCUSED ON COMPOUNDING VALUE CREATION 5-YEAR GOALS • Leading provider of trusted technology solutions to secure, detect, and authenticate our customers’ most valuable assets ~$3B Sales • Durable, resilient business growing at ~MSD today • Best-in-class margins and free cash flow conversi
Slide 9: Built on Technology Leadership
BUILT ON TECHNOLOGY LEADERSHIP OUR FOUNDATION CRANE NXT TODAY • Advanced detection and sensing systems • Micro-optics materials technology • Self-learning image recognition with adaptive algorithms • Advanced substrate manufacturing Crane Paper Co. founded by Zenas Crane in 1801 in Dalton, MA Won ri
Slide 10: Culture Focused on Continuous Improvement
CULTURE FOCUSED ON CONTINUOUS IMPROVEMENT Crane Business System (CBS) KAIZENS ADJ. OPERATING PROFIT* • Rigorous, data-driven 175 management cadence 135 ~110% • Toolkit focused on ̶ Safety ̶ Quality ̶ Delivery ̶ Cost ̶ Growth • Commitment to continuous improvement 2020 2022 2020 2022 Best-in-class op
Slide 11: Legacy of Doing Business the Right Way
LEGACY OF DOING BUSINESS THE RIGHT WAY I am resolved to conduct my business CHARITABLE FUND IMPACT in the strictest honesty and fairness; • 600+ charitable organizations to avoid all deception and trickery; received contributions to deal fairly with both customers • Donations to financially and comp
Slide 12: Crane NXT Provides Trusted Technology Solutions to Secure, Detect, and Authenticate
CRANE NXT PROVIDES TRUSTED TECHNOLOGY SOLUTIONS TO SECURE, DETECT, AND AUTHENTICATE WHAT MATTERS MOST Secure Detect Industry-leading materials technology to protect currency and high-value products Advanced detection systems and software to authenticate and manage transactions Authenticate $1.3B ~40
Slide 13: Broad Geographic Diversity and Resilient Customer Base
BROAD GEOGRAPHIC DIVERSITY AND RESILIENT CUSTOMER BASE SALES BY SEGMENT SALES BY GEOGRAPHY SALES BY CUSTOMER TENURE* ROW <10 Years 100+ Years Emerging 7% Markets 21% 17% 29% 10-20 Years 11% 14% 62% 65% Western Europe North 39% America 20–50 Years ~70% of customers have been with the business more th
Slide 14: Significant Global Scale
SIGNIFICANT GLOBAL SCALE 60+ Countries with Active Sales 4,000+ Employees 15 Global Manufacturing Sites Active Sales Manufacturing Site 10 R&D Facility Major R&D Facilities Ability to leverage footprint for growth and drive operational efficiencies 14
Slide 15: Long Track Record of Successful M&A
LONG TRACK RECORD OF SUCCESSFUL M&A TO EXPAND THE PORTFOLIO INTO GROWING ADJACENT MARKETS ~$2B TAM ~$7B TAM Programmatic M&A Detection Components and Systems Pre-2010 Acquisitions Currency and Authentication Technology (2010) Aftermarket Services (2018) (2013) (2020) (2013) (2017) Separation provide
Slide 16: Resilient Core Growth, Accelerated by M&A
RESILIENT CORE GROWTH, ACCELERATED BY M&A $ Millions $1,400 VENZ Sanctions $1,200 COVID $1,000 $800 $600 $400 $200 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Proven ability to drive growth through multiple cycles 16
Slide 17: History of Improving Profitability in the Core Business and Acquisitions
HISTORY OF IMPROVING PROFITABILITY IN THE CORE BUSINESS AND ACQUISITIONS $400 28% 30% 26% $376 $350 Adjusted Operating Profit* ($ Millions) 24% 25% Adjusted Operating Margin* (%) 21% 21% $300 $342 20% 16% 19% 20% $250 17% $261 $200 $225 15% 13% 12% $184 $181 $150 10% 8% $159 10% $132 $100 $122 5% $5
Slide 18: Multiple Secular Growth Trends Provide Tailwinds to Core Business Growth
MULTIPLE SECULAR GROWTH TRENDS PROVIDE TAILWINDS TO CORE BUSINESS GROWTH GROWTH OF CASH CONTINUED OPERATORS’ FOCUS ON INCREASING SPEND IN CIRCULATION LABOR SCARCITY MARGIN IMPROVEMENTS ON LOSS PREVENTION ~3% ~40% ~11% ~22% growth in banknotes increase in expected CAGR % Growth through 2026 in circul
Slide 19: $28B Addressable Market Growing at MSD+
$28B ADDRESSABLE MARKET GROWING AT MSD+ CURRENCY TECHNOLOGY, COIN AND CASH DETECTION AND ADJACENT MARKETS DESIGN AND PRINTING AUTOMATION SOLUTIONS & SERVICES ~$3B Addressable Market ~$4B Addressable Market ~$20B Addressable Market ~MSD Growth ~MSD Growth ~MSD to LDD Growth ~25% Authenticate ~15% 25%
Slide 20: 5-Year Roadmap
5-YEAR ROADMAP 2023 CONTINUE TO DRIVE DISCIPLINED 5-YEAR TARGET INVEST AND OPERATIONAL M&A TO ~$1.3B GROW CORE EXCELLENCE DIVERSIFY ~$3B Sales BUSINESS THROUGH CBS PORTFOLIO Sales ~MSD U.S. Government Productivity to drive Focus on MSD+ Core Growth new series margin expansion technologies that Core
Slide 21: Crane NXT – Focused on Compounding Value Creation
CRANE NXT – FOCUSED ON COMPOUNDING VALUE CREATION 5-YEAR GOALS • Leading provider of trusted technology solutions to secure, detect, and authenticate our customers’ most valuable assets ~$3B Sales • Durable, resilient business growing at ~MSD today • Best-in-class margins and free cash flow conversi
Slide 22: Crane Currency
CRANE CURRENCY Sam Keayes President, Crane Currency
Slide 23: Crane Currency - What You Will Hear Today
CRANE CURRENCY - WHAT YOU WILL HEAR TODAY • Market leader in proprietary technology that secures and authenticates banknotes • Long-term, trusted partner to over 50 Central Banks, including in the United States • Resilient growth in global cash issuance to continue • Disciplined execution of Crane B
Slide 24: Crane Currency Overview
CRANE CURRENCY OVERVIEW US CURRENCY INTL CURRENCY PRODUCT AUTHENTICATION ~$460M ~28% 2022 Sales 2022 Adj. Margin* • Sole supplier of US currency paper • Currency design, security technology, • Leverages micro- optic technology ~15% Sales CAGR >150 Years since 1879 paper and banknotes • Established c
Slide 25: Growing ~$3B Addressable Market as Cash in Circulation Increases
GROWING ~$3B ADDRESSABLE MARKET AS CASH IN CIRCULATION CONTINUES TO INCREASE BILLIONS OF BANKNOTES IN CIRCULATION* • Market driven by several factors: ~6% 321 • Global uncertainty and natural 304 CAGR disasters reaffirm need for cash 278 265 254 243 226 • Inflation driving increased demand for 212 1
Slide 26: Market-Leading Technology Providing Anti-Counterfeit Protection
MARKET-LEADING TECHNOLOGY PROVIDING UNPARALLELED ANTI-COUNTERFEIT PROTECTION Microscopic printed “icons” that are magnified by the lens array 140 microns Cross section of human hair (for reference) Differentiated solutions used by over 50 countries to protect currency 26
Slide 27: Proprietary Technology and Capabilities Complementing Micro-Optics
PROPRIETARY TECHNOLOGY AND CAPABILITIES THAT COMPLEMENT MICRO-OPTICS TECHNOLOGY DESIGN SERVICES SECURITY PAPER SECURITY TECHNOLOGY BANKNOTE PRINTING Combination of capabilities provides competitive differentiation 27
Slide 28: Differentiated Design & Technology Capabilities Driving International Growth
DIFFERENTIATED DESIGN & TECHNOLOGY CAPABILITIES DRIVING INTERNATIONAL GROWTH 2017 2022 TENURE WITH 69 DENOMINATIONS 130+ TOTAL DENOMINATIONS WON 33 COUNTRIES, 2 PRODUCTS 50 COUNTRIES, 7 PRODUCTS US GOVT. IS 150+ YEARS AVERAGE TENURE OF TOP 10 INT’L CUSTOMERS IS 9 YEARS NO INT’L CUSTOMER REPRESENTS >
Slide 29: Continuing Investments in New Products to Expand Technology Leadership
CONTINUING INVESTMENTS IN NEW PRODUCTS TO EXPAND TECHNOLOGY LEADERSHIP 2008 2017 2019 2020 2021 2022 2023+ MOTION® MOTION® DETECT® BREEZE™ RAPID® MOTION® New Switch SURFACE HD SURFACE Micro-Optics Polymer Technology Protects Replaces Adds machine For lower Sharper images For polymer Continued US$100
Slide 30: Launch of U.S. New Series Provides Decade-Long Growth Opportunity
LAUNCH OF U.S. NEW SERIES PROVIDES OPPORTUNITY FOR DECADE-LONG GROWTH CYCLE Expect new $10 issuance in 2026 $100 $50 $5 Redesign launched New Series launch New Series launch $50, $20, and 2013 2026 2028 2030 2032 2034 $5 issuances to follow $10 $20 $100 New Series launch New Series launch New Series
Slide 31: Expansion of International Business Built on Technology Leadership
EXPANSION OF INTERNATIONAL BUSINESS BUILT ON TECHNOLOGY LEADERSHIP BANKNOTES WITH CRANE MICRO-OPTICS COUNTRIES SELECTING CRANE MICRO-OPTICS 136 50 ~18% ~14% 10-Year 120 10-Year 43 45 42 CAGR 104 CAGR 98 37 85 33 28 69 22 55 18 43 15 34 13 30 11 22 25 10 4 4 5 9 9 3 2 Opportunity to continue market s
Slide 32: Proven Capabilities to Expand Margins Utilizing Crane Business System
PROVEN CAPABILITIES TO EXPAND MARGINS UTILIZING CRANE BUSINESS SYSTEM AVERAGE ADJUSTED MARGIN* • CBS deployed post-acquisition per M&A playbook Current Range • Drove improvement in: - Operational excellence & quality ~24% - Manufacturing productivity - SG&A cost optimization • Core capability to dep
Slide 33: Product Authentication Is Natural Growth Adjacency
PRODUCT AUTHENTICATION IS NATURAL GROWTH ADJACENCY PRODUCT AUTHENTICATION MARKET • Prevents counterfeiting Cosmetics & perfume • Ensures regulatory compliance Wine & spirits Fuel • Increases consumer engagement 4% 2% 5% Food Industrial & • Enhances customer brand experience 25% electronics 9% • Buil
Slide 34: Track Record of Long-Term Growth
TRACK RECORD OF LONG-TERM GROWTH ~MSD+ Crane Currency sales ($ millions) • U.S. Gov new series • Int’l expansion • Product authentication 700 U.S. Revenue International Revenue 600 500 ~9% CAGR (2002-2022) 400 300 200 100 0 Continued growth expected driven by market tailwinds and new products 34
Slide 35: Crane Currency – What We Discussed
CRANE CURRENCY – WHAT WE DISCUSSED • Market leader with proprietary technology that secures and authenticates banknotes, including the U.S. $100 • Long-standing, trusted partner to over 50 central banks • Tailwinds for long-term growth in the core business: ̶ Increasing cash in circulation, growing
Slide 36: Crane Payment Innovations Overview
CRANE PAYMENT INNOVATIONS OVERVIEW Kurt Gallo Senior Vice President, Crane NXT
Slide 37: CPI – What You Will Hear Today
CPI – WHAT YOU WILL HEAR TODAY • Industry-leading provider of trusted technology solutions that detect and authenticate payment transactions • Market leader in offering full set of solutions, including components, integrated systems, connectivity and services • Long-standing, trusted partner to lead
Slide 38: Crane Payment Innovations Overview
CRANE PAYMENT INNOVATIONS OVERVIEW COMPONENTS SYSTEMS AFTERMARKET CONNECTIVITY SERVICES SOLUTIONS ~$870M ~28% 2022 Sales 2022 Adj. Margin* ~MSD #1 Provider core sales growth in all key markets Currency, coin and Self-service retail Authorized service Software solutions credit card technologies, for
Slide 39: Leading Technology Solutions for Detection and Authentication of Payment Transactions
LEADING TECHNOLOGY SOLUTIONS FOR DETECTION AND AUTHENTICATION OF PAYMENT TRANSACTIONS DETECTION ADVANCED IMAGE INTEGRATION AND DETECTION TECHNOLOGIES RECOGNITION ASSEMBLY COMPONENTS SOFTWARE Infrared Capacitive Ultraviolet Optical Magnetic Multi Freq. + + Multiple detecting and Over 5 million data p
Slide 40: Diverse Set of Leading Global Customers Across Multiple End Markets
DIVERSE SET OF LEADING GLOBAL CUSTOMERS ACROSS MULTIPLE END MARKETS CUSTOMER BY KEY CUSTOMERS AVERAGE TENURE OF SEGMENT TOP 20 CUSTOMERS IS 28 YEARS Other Transportation Financial 6% Vending NO ONE CUSTOMER’S Services 1% 30% REVENUE IS MORE THAN 18% 5% OF TOTAL CPI REVENUE 20% RELATIONSHIPS WITH Ret
Slide 41: $4B Addressable Market Growing ~MSD
$4B ADDRESSABLE MARKET GROWING ~MSD 5-Year CPI Mkt. ~$4.7B CAGR% Position Macro-trends impacting growth of CPI business ~$4B ~5% #1 • Resilient use of cash for Services payment transactions ~4% #2 Systems • Continued labor shortages Components ~4% #1 • Increased focus on operator productivity 2022 2
Slide 42: Use of Cash Remains Stable Across Geographies
USE OF CASH REMAINS STABLE ACROSS GEOGRAPHIES Cash Usage in USA Post-COVID Has Remained Stable Cash Usage Stable Across % cash volume change, seasonally adjusted Many Emerging Markets Indexed to July 2020 = 1 Value of Cash ’16-’22 1.2 Transactions CAGR% 1.1 Indonesia ~$990B 4.2% 1.0 India ~$980B 2.4
Slide 43: High Turnover and Open Positions an Ongoing Issue for Customers
HIGH TURNOVER AND OPEN POSITIONS AN ONGOING ISSUE FOR MOST CUSTOMERS, PARTICULARLY RETAILERS RECORD HIGH LABOR TURNOVER SIGNIFICANT NUMBER OF UNFILLED POSITIONS ANNUALIZED QUIT RATES (2012-2022)1 NUMBER OF UNFILLED POSITIONS BY MARKET Quit rate measures the number of people who (thousands of opening
Slide 44: Retailers Continue to Invest in Technology to Improve Profitability
RETAILERS CONTINUE TO INVEST IN TECHNOLOGY TO IMPROVE PROFITABILITY GIVEN LABOR HEADWINDS Opportunities for CPI 1-2% 5-9% 2-4% 1-2% 2-4% 2-4% 2-3% Current EBIT Labor In-store labor Inventory Back-office Customer Future EBIT margin headwinds automation management automation experience margin potentia
Slide 45: CPI Strategy Focused on Four Key Vertical Markets
CPI STRATEGY FOCUSED ON FOUR KEY VERTICAL MARKETS RETAIL FINANCIAL SERVICES GAMING VENDING TAM ($B) ~$1B ~$0.5B ~$0.3B ~$1B Market Growth ~MSD ~MSD ~MSD ~LSD Rate % Components Integrated Systems CPI Offerings Connectivity Solutions Aftermarket Services Industry’s most complete set of integrated solu
Slide 46: Retail – Growing Portfolio of Self Check Out Solutions
RETAIL – GROWING PORTFOLIO OF SELF CHECK OUT SOLUTIONS SYSTEMS CONNECTIVITY COMPONENTS AFTERMARKET PARTS & SERVICES Helping our customers improve productivity and the consumer experience 46
Slide 47: Financial Services – Expanding Automation and Service Solutions
FINANCIAL SERVICES – EXPANDING AUTOMATION AND SERVICE SOLUTIONS FRONT OFFICE CONNECTIVITY SYSTEMS BACK-OFFICE AFTERMARKET PARTS SYSTEMS & SERVICES #1 position in North America for automation solutions 47
Slide 48: SimpliFi Connectivity Solutions Improves Customer Productivity
SIMPLIFI CONNECTIVITY SOLUTIONS IMPROVES CUSTOMER PRODUCTIVITY AND CONSUMER EXPERIENCE CONFIGURED FOR SEAMLESS ACCESS Remote Diagnostics Equipment Payment Performance Transactions Loyalty Advertising Programs Consumer Analytics On Premise Mobile and Head Office Advanced diagnostics, monitoring, and
Slide 49: Utilizing Crane Business System to Drive Margin Improvements
UTILIZING CRANE BUSINESS SYSTEM TO DRIVE MARGIN IMPROVEMENTS PRODUCTIVITY IMPROVEMENT PROCESS SIMPLIFICATION + INVESTMENT IN ROBOTICS AT QUERETARO FACILITY DRIVING IMPROVED PRODUCTIVITY AND QUALITY (UNITS PER PERSON HOUR) 4.30 ~14% CAGR 3.75 3.42 2.90 2.59 2019 2020 2021 2022 2023P CBS drives contin
Slide 50: Demonstrated Track Record of Margin Expansion Across Multiple Cycles
DEMONSTRATED TRACK RECORD OF MARGIN EXPANSION ACROSS MULTIPLE CYCLES CPI adjusted operating margin* 29% 28% 23% 24% 23% 23% 21% 19% 17% 17% 12% 13% 10% 8.4% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023G COVID Continued opportunities for expansion with application of CBS 50 *
Slide 51: CPI – What We Discussed
CPI – WHAT WE DISCUSSED • Industry-leading provider of trusted technology solutions that detect and authenticate payment transactions • Market leader in offering full set of detection solutions, including components, integrated systems, connectivity and services • Long-standing, trusted partner to l
Slide 52: Expanding Beyond the Core
EXPANDING BEYOND THE CORE Aaron W. Saak President and CEO
Slide 53: Expanding Beyond the Core: What You Will Hear
EXPANDING BEYOND THE CORE: WHAT YOU WILL HEAR • Leveraging existing core capabilities to expand and diversify the business • Targeting opportunities in ~$20B market to extend our leadership in technology solutions that secure, detect, and authenticate what matters most • Proven capability to improve
Slide 54: Crane NXT Provides Trusted Technology Solutions to Secure, Detect, and Authenticate
CRANE NXT PROVIDES TRUSTED TECHNOLOGY SOLUTIONS TO SECURE, DETECT, AND AUTHENTICATE WHAT MATTERS MOST Secure Detect Industry-leading materials technology to protect currency and high-value products Advanced detection systems and software to authenticate and manage transactions Authenticate $1.3B ~40
Slide 55: ~$20B Market in Near Adjacencies
~$20B MARKET IN NEAR ADJACENCIES FOCUSED ON TECHNOLOGIES THAT SECURE, DETECT, AND AUTHENTICATE Core Business Focused Adjacencies Addressable Market ~$7B Secure Detect Authenticate ~$6B ~$10B ~$5B Market ~MSD HSD MSD/HSD HSD Growth Applications Authentication Detection and Access controls Industrial
Slide 56: Secular Trends Driving Demand for Technology Solutions
SECULAR TRENDS DRIVING DEMAND FOR TECHNOLOGY SOLUTIONS TO SECURE, DETECT, AND AUTHENTICATE LABOR SCARCITY IoT & ADVANCED SUPPLY CHAIN SECURITY TRUST ARCHITECTURE CONNECTIVITY & TRACEABILITY Gap in labor pool will Rapid ongoing growth of Verification and security, Increasing sophistication create opp
Slide 57: Unique Set of Capabilities That Are Extendable
UNIQUE SET OF CAPABILITIES THAT ARE EXTENDABLE Secure Detect Authenticate • Micro-optic motion and • Cost effective sensor • Image recognition with substrate integration development and adaptive algorithms manufacturing • Self learning image • Repeatable Technology recognition • Near-IR machine micr
Slide 58: Adjacencies Leverage Similar Technologies & Capabilities
ADJACENCIES LEVERAGE SIMILAR TECHNOLOGIES & CAPABILITIES Secure & Detect Software & hardware for face, fingerprint, palm, and iris recognition Secure & Authenticate Detect & Authenticate Overt and covert authentication & Hardware and software systems security technology for physical used to improve
Slide 59: Example: Product Authentication Is ~$5B Market Growing at HSD
EXAMPLE: PRODUCT AUTHENTICATION IS ~$5B MARKET GROWING AT HSD Upstream Midstream Online Security technology Label End product Product Online Digital product production manufacturing manufacturing authentication authentication tracing Security technology Security technology Authentication label or Se
Slide 60: Proven M&A Framework
PROVEN M&A FRAMEWORK Where we start… Focused on technology solutions that secure, detect, and authenticate what matters most Market • Niche technologies with high barriers to entry • Fragmented market segment with consolidation opportunities • Market growth of >MSD Leading position in their market n
Slide 61: Long Track Record Executing M&A That Creates Value
LONG TRACK RECORD EXECUTING M&A THAT CREATES VALUE Leading manufacturer Market leader in technology North America’s leading of detection components for for securing and systems and service provider of coin and cash transactions authentication the world’s automation solutions for cash currency handli
Slide 62: Disciplined Capital Allocation Strategy
DISCIPLINED CAPITAL ALLOCATION STRATEGY Organic Investment Cash Available to Deploy • Expect core business growth of ~MSD (2023-2027) • ~2% to ~2.5% CapEx as percent of sales • Focused on new product development and added capacity for Cumulative US Gov and micro-optics technology Operating $1.6B Deb
Slide 63: Crane NXT Value Creation Formula
CRANE NXT VALUE CREATION FORMULA Resilient core revenue growth at • Investing in core business to ~MSD capitalize on opportunities to enhance organic growth • Continuously utilizing CBS to improve M&A to Expand to CBS to drive Strong FCF margins and generate high FCF Higher-Growth continuous convers
Slide 64: What We Discussed
WHAT WE DISCUSSED • Leveraging existing core capabilities to expand and diversify the business • Targeting opportunities in ~$20B market to extend our leadership in technology solutions that secure, detect, and authenticate what matters most • Proven capability to improve margins of acquisitions ove
Slide 65: Financial Overview
FINANCIAL OVERVIEW Christina Cristiano Senior Vice President and CFO
Slide 66: Financial Overview - What You Will Hear Today
FINANCIAL OVERVIEW - WHAT YOU WILL HEAR TODAY • Durable, resilient business growing at ~MSD with EBITDA in high 20s% • Best-in-class free cash flow • Solid capital structure with substantial flexibility for M&A • Roadmap in place to significantly grow the company • Reaffirming 2023 guidance • On tra
Slide 67: Resilient Performance and Strong Profitability
RESILIENT PERFORMANCE AND STRONG PROFITABILITY ADJUSTED SALES * ADJUSTED OPERATING PROFIT MARGIN* 28% $1.3B $1.3B 26% $1.3B $1.2B $1.1B 21% 19% 16% COVID COVID 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 ~MSD ~40% ~28% >100% Core Reoccurring & Adjusted FCF Revenue Growth Recurring Revenue OP M
Slide 68: Mid Single-Digit Core Revenue Growth with Strong Rebound Post-COVID
MID SINGLE-DIGIT CORE REVENUE GROWTH WITH STRONG REBOUND POST-COVID 19.1% 8.5% 6.0% 6.0% 6.6% 4.5% ~MSD 1.6% Core Growth COVID -18.9% 2015 2016 2017 2018 2019* 2020 2021 2022 Underlying market expected to grow at ~MSD, with acceleration from growth initiatives 68 * Calculation of 2019 core sales exc
Slide 69: Continued Increase in Free Cash Flow
CONTINUED INCREASE IN FREE CASH FLOW FREE CASH FLOW CONVERSION* FREE CASH FLOW ($M)* 139% $275 116% 116% ~20% CAGR $222 101% 100% 69% $128 $110 $59 Currency Currency Order Timing Order Timing 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Expect sustained FCF conversion of ~100% 69 * Please see N
Slide 70: Stable Reoccurring & Recurring Revenue Base
STABLE REOCCURRING & RECURRING REVENUE BASE REOCCURRING REVENUE SALES BY TYPE RECURRING REVENUE CURRENCY CONTRACTS CONNECTIVITY SOLUTIONS Reoccurring Recurring Revenue Revenue ~25% ~15% 2022 Sales $1.3B AFTERMARKET PARTS AFTERMARKET SERVICES ~60% All Other Revenue ~40% of revenue from sticky custome
Slide 71: Strong Capital Structure with Significant Optionality
STRONG CAPITAL STRUCTURE WITH SIGNIFICANT OPTIONALITY ~$845-$895M • Net Debt of ~$650M Total Debt • Initial net debt to EBITDA of 1.5x-2x ~$300-$350M ~$700-$750M Term Loan Liquidity • Term loan at ~6% variable interest rate provides flexibility for early repayment from strong underlying free cash fl
Slide 72: Roadmap to $3B Revenue by 2027
ROADMAP TO $3B REVENUE BY 2027 ~$1-$1.5B ~$3B ~$0.1B ~$0.1B ~$0.2B Focused on ~$1.3B • U.S. differentiated • Micro-optics government Underlying technology in market growth • Automation • Int’l growth near at ~LSD/MSD systems adjacencies • Product Auth. • Connectivity • Aftermarket Services Organic i
Slide 73: Financial Profile Consistent with Industrial Technology Peer Group
FINANCIAL PROFILE CONSISTENT WITH INDUSTRIAL TECHNOLOGY PEER GROUP SMID-CAP INDUSTRIAL CRANE NXT TECHNOLOGY Free cash flow conversion* ~100% ~98% 2023 Adjusted EBITDA margin** ~28% ~20% Growth Rate ~MSD ~MSD Recurring and reoccurring revenue ~40% Variable Dividend Mid-teens FCF payout ratio Variable
Slide 74: Reaffirming 2023 Guidance
REAFFIRMING 2023 GUIDANCE Business 2023 Revenue Segment Growth Drivers 2023 Guidance Crane Payment +5% Core / • Strong secular trends supporting Corporate investment in automation and ~$50M Innovations (CPI) +3.5% after FX Expense productivity initiatives • Continued strength in retail and Non-Opera
Slide 75: On Track for Separation on April 3
ON TRACK FOR SEPARATION ON APRIL 3 March 23 March 29 April 3 April 4 Record date for When-issued trading Distribution Regular-way distribution begins on NYSE date trading of CXT begins Shareholders of record • Crane Holdings, Co. will receive one share of continues to trade “regular Crane Company wa
Slide 76: What We Discussed
WHAT WE DISCUSSED • Durable, resilient business growing at ~MSD with EBITDA in high 20s% and best in class free cash flow • Solid capital structure with substantial flexibility for M&A • Reaffirming 2023 guidance and on track for separation on April 3 • Roadmap in place to accelerate growth and dive
Slide 77: Closing Comments
CLOSING COMMENTS Aaron W. Saak President and CEO
Slide 78: Crane NXT Provides Trusted Technology Solutions to Secure, Detect, and Authenticate
CRANE NXT PROVIDES TRUSTED TECHNOLOGY SOLUTIONS TO SECURE, DETECT, AND AUTHENTICATE WHAT MATTERS MOST Secure Detect Industry-leading materials technology to protect currency and high-value products Advanced detection systems and software to authenticate and manage transactions Authenticate $1.3B ~40
Slide 79: 5-Year Roadmap
5-YEAR ROADMAP 2023 CONTINUE TO DRIVE DISCIPLINED 5-YEAR TARGET INVEST AND OPERATIONAL M&A TO ~$1.3B GROW CORE EXCELLENCE EXPAND ~$3B Sales BUSINESS THROUGH CBS PORTFOLIO Sales ~MSD U.S. Government Productivity to drive Focus on MSD+ Core Growth new series margin expansion technologies that Core Gro
Slide 80: Crane NXT – A Premier Industrial Technology Company
CRANE NXT – A PREMIER INDUSTRIAL TECHNOLOGY COMPANY • Leading provider of trusted technology solutions to secure, detect, and authenticate our customer’s most valuable assets • Durable, resilient business growing at ~MSD with best-in-class margins and free cash flow conversion • Strong balance sheet
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Slide 82: Appendix
APPENDIX
Slide 83: Crane NXT Initial Operating Guidance
CRANE NXT INITIAL OPERATING GUIDANCE Adjusted 2023G vs. 2022A ($ millions) GAAP Adjusted Ex-Amort. Adj. ex-Amort. Additional Details Sales 2022A 2022A* 2022A* 2023G Change FX Core • Crane Payment Innovations (CPI) growing Crane Payment Innovations (CPI) 874 874 874 905 3.5% (1.5%) 5% mid-single digi
Slide 84: Crane NXT Initial EPS Guidance
CRANE NXT INITIAL EPS GUIDANCE ($ millions, except per-share amounts) Guidance 2023G* Additional Details Adjusted Segment Operating Profit 369 Corporate (50) • First quarter 2023 will be reported on a Crane Holdings, Co. consolidated basis Adjusted Operating Profit 319 • Guidance items for 2023 belo
Slide 85: Non-GAAP Explanation
NON-GAAP EXPLANATION Crane Holdings, Co. reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). This presentation includes certain non- GAAP financial measures, including Adjusted Net Sales, Adjusted Operating Profit, Adjusted Operating Margin, Adjus
Slide 86: Non-GAAP Explanation
NON-GAAP EXPLANATION We believe that each of the following non-GAAP measures provides useful information to investors regarding the Company’s financial conditions, operations, and historical performance: ▪ “Adjusted Net Sales” adds back to net sales pre-acquisition deferred revenue that would otherw
Slide 87: Segment Information
SEGMENT INFORMATION (in $ Millions) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20 2Q20 3Q20 4Q20 2020 1Q21 2Q21 3Q21 4Q21 2021 1Q22 2Q22 3Q22 4Q22 2022 Crane Currency Net Sales 458 353 94 107 116 118 434 152 131 160 96 539 122 123 114 107 466 Operating Profit 31 2 4 11 19 15 49 55 40 41 8 1
Slide 88: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS (in $ millions) 2018 2019 2020 2021 2022 Net Sales $ 1,257.0 $ 1,158.3 $ 1,104.8 $ 1,345.1 $ 1,339.9 Acquisition-related deferred revenue 10.2 Net Sales before special items (adjusted) $ 1,257.0 $ 1,158.3 $ 1,115.0 $ 1,345.1 $ 1,339.9 Operating Profit (GAAP) $ 186.0 $ 177.3
Slide 89: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS (in $ millions) 2018 2019 2020 2021 2022 Net Income as reported $ 157.1 $ 118.1 $ 106.8 $ 226.2 $ 269.9 Adjustments: Intangible asset amortization 40.6 37.7 44.0 38.6 37.1 Interest and other Corporate cost, net of tax (39.9) (39.5) (39.8) (41.1) (39.7) Interest expense, net
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Slide 91: Speaker Bios
SPEAKER BIOS
Slide 92: Aaron W. Saak
AARON W. SAAK President & Chief Executive Officer Crane NXT, Co. Aaron Saak was appointed Crane NXT President and Chief Executive Officer in November 2022. Mr. Saak has more than 20 years of experience leading technology-focused businesses for multinational organizations. Before joining Crane, Mr. S
Slide 93: Christina Cristiano
CHRISTINA CRISTIANO Senior Vice President & CFO Crane NXT, Co. Christina Cristiano joined Crane as Vice President, Controller & Chief Accounting Officer in May 2019. In this role, Christina is responsible for overseeing Crane’s global accounting policies and operations; leading the Company’s enterpr
Slide 94: Kurt Gallo
KURT GALLO Senior Vice President Crane NXT, Co. Kurt Gallo joined Crane in early 2008, as the General Manager of Crane’s payment solution businesses. Between 2008 and 2011, he drove the consolidation and harmonization of the three separate businesses into a unified business known as Crane Payment So
Slide 95: Sam Keayes
SAM KEAYES President, Crane Currency Crane NXT, Co. Sam Keayes joined Crane Currency in January 2019 as Vice President/General Manager of the International business, before being promoted to President of Crane Currency in 2020. He joined Crane Currency from Thales, a multi-national engineering busin
Slide 96: Jason Feldman
JASON FELDMAN Vice President, Investor Relations Crane Holdings, Co. Jason Feldman joined Crane Holdings, Co. as Director, Investor Relations in March 2014, and was promoted to Vice President, Investor Relations in 2019. Prior to joining Crane, Mr. Feldman worked for 10 years as an associate and ana
Slide 97: Slide 97