Crane Company · NYSE:CR
Crane — Investor Day (March 2023)
22 slides from Crane's investor day presentation, Mar 9, 2023
Slide 1: Process Flow Technologies
PROCESS FLOW TECHNOLOGIES Alex Alcala Executive Vice President
Slide 2: What You Will Hear Today
WHAT YOU WILL HEAR TODAY 1. We are accelerating core growth ▪ Portfolio exposure shifting to higher growth markets ▪ Building capabilities to drive above market growth 2. We will continue to drive substantial margin expansion ▪ Operating leverage on higher volumes ▪ New products and growth markets a
Slide 3: A Provider of Highly Engineered Process Flow Equipment for Mission Critical Applications
A PROVIDER OF HIGHLY ENGINEERED PROCESS FLOW EQUIPMENT FOR MISSION CRITICAL APPLICATIONS Process Flow By Product* By Market* By Region* Technologies ~ $1B Sales, ~17% OP Services Energy APAC Emerging (2023G) Specialty Water & Chemical Markets 8% Pipes & 9% & Pharma 8% Wastewater Fittings 7% 12% 11%
Slide 4: On a Path of Growth and Margin Expansion
ON A PATH OF GROWTH AND MARGIN EXPANSION Sales (FX Neutral, $M) and Adjusted Operating Margin (%)* Structural change to the portfolio has improved the underlying 20% growth rates 1,300 Sales Margins 1,200 Expanding Margins at a Rate 17.2% of 100 BPS/ Year 1,100 16.2% 1,000 900 800 11.1% 700 3% - 5%
Slide 5: Building a Portfolio with Structurally Higher Growth Rates
BUILDING A PORTFOLIO WITH STRUCTURALLY HIGHER GROWTH RATES… 11.1% Adjusted Margin* 16.2% Adjusted Margin* Chemical Solutions, 19% 36% of CAGR Chemical Solutions, 35% Sales Water & Wastewater, 8% +7% Pharma, 3% 60% of Industrial Automation, 7% Sales Water & Wastewater, 11% Non Residential Constructio
Slide 6: Building a Portfolio with Structurally Higher Growth Rates
BUILDING A PORTFOLIO WITH STRUCTURALLY HIGHER GROWTH RATES… 11.1% Adjusted Margin* 16.2% Adjusted Margin* Chemical Solutions, 19% 36% of Chemical Solutions, 35% Sales 60% of Adjusted Margin Water & Wastewater, 8% Sales Pharma, 3% Industrial Automation, 7% CAGR ~22% OP +7% Water & Wastewater, 11% Pha
Slide 7: A Transformation Driven by New Product Growth
A TRANSFORMATION DRIVEN BY NEW PRODUCT GROWTH… New Product Sales – Vitality* Chemical Solutions 25% 20% 20% Wastewater Share gain results in 15% Pharma/Aseptic 2x Market 10% Growth 5% Industrial Automation <2% 0% Driving Market Outgrowth with New Products that are Accretive to Margins 7 * Process Va
Slide 8: Driving the Crane Business System – An Engine of Growth and Margin Expansion
… AND BY DRIVING THE CRANE BUSINESS SYSTEM – AN ENGINE OF GROWTH AND MARGIN EXPANSION Commercial New Product Operational Excellence Speed to Market Excellence Culture R.T. Crane Resolution 40% 4X Innovation Spirit Big • Bold • Fast Continuous Improvement 1,300+ Tool Champions Philanthropy 15,700 Vol
Slide 9: Today, PFT Is Repositioned for Growth and Further Margin Expansion
TODAY, PFT IS REPOSITIONED FOR GROWTH AND FURTHER MARGIN EXPANSION Crane Supply 16.2% 4 Divestiture OP Facility Consolation 3 for Energy Businesses 29 Accelerated Innovation with Accretive New Products 2 Sites 11.1% OP Operational 1 Strategic End Market Focus Shift & Commercial Excellence 2002 2017
Slide 10: Positioned to Drive Growth Through the Next Cycle
POSITIONED TO DRIVE GROWTH THROUGH THE NEXT CYCLE Long Term Long Term End Market % 2022 Sales ‘23 Outlook Outlook Trend ▪ Sustainability & Electronics Chemical & Pharma 38% ▪ Life Expectancy and Chronic illness ▪ Circular Economy Water & Wastewater 11% ▪ Tightening Regulations General Industrial ▪ I
Slide 11: Record Backlog …Strong Position to Execute
RECORD BACKLOG …STRONG POSITION TO EXECUTE Process Flow Technologies Ending Backlog ($ millions, FX-neutral) 380 340 49% 300 260 220 180 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Backlog up 49% from 2019; supply chain showing some signs of improvement but still constrained 11
Slide 12: Portfolio Aligned with Two Megatrends
PORTFOLIO ALIGNED WITH TWO MEGATRENDS Sustainability Quality of Life The New Hydrogen Economy Wastewater: Circular Economy Focus on de-carbonizing hard to abate sectors Reusing wastewater to support Circular economy Wastewater: Tightening Regulations Pharma: Increasing Life Expectancy Stricter regul
Slide 13: Five Solutions to Drive Growth
FIVE SOLUTIONS TO DRIVE GROWTH Crane Market Projected Solution TAM Growth Rate Growth Rate 1. Hydrogen – Liquid Entering and High Pressure $900M ~15% Space 2. Chemical Solutions $1,800M ~3% 2x Growth 3. Water & Wastewater 2.5x Growth Markets $1,400M ~4% 75% Markets 60% 4. Pharma/Aseptic $500M ~4% 1.
Slide 14: Hydrogen Is PFT's New Focus Growth Market
HYDROGEN IS PFT’S NEW FOCUS GROWTH MARKET -253ºC 15,000 PSI Liquid Gas High Hydrogen Pressure Cryo Temp Storage Solutions for High Pressure and Cryogenic Applications New Product Line – First Launch 2023 14
Slide 15: Leading Chemical Solutions in a Changing Industry
LEADING CHEMICAL SOLUTIONS IN A CHANGING INDUSTRY Chemical Industry Advancing Sustainability (Circular and Low Carbon Solutions) Other Line Extensions 2024 2023 2022 2021 2019 2016 Corrosive chemicals We WIN by Solving Valve Reliability and Life Challenges Abrasive media 15
Slide 16: Winning with the Most Effective Solid Handling Pumps in Wastewater
WINNING WITH THE MOST EFFECTIVE SOLID HANDLING PUMPS IN WASTEWATER Municipal Residential Industrial 2017 2018 2020 2021-2022 2023 2024 Increasing solids in the waste 2018-22 CAGR ~50% stream are causing more clogging problems 16
Slide 17: Solidifying Our Strength in Pharma by Expanding into Steam Sterilization
SOLIDIFYING OUR STRENGTH IN PHARMA BY EXPANDING INTO THE STEAM STERILIZATION MARKET Biotech Process Map Biologics API Manufacturing New 2023 Pharma We WIN by solving leakage and reliability problems in process media and steam Process Media Steam Utilities sterilized applications 17
Slide 18: Driving Efficiency Through Industrial Automation
DRIVING EFFICIENCY THROUGH INDUSTRIAL AUTOMATION Industry Problems Energy Efficiency Best-in-class low air Challenges Product Reliability (energy) consumption Transmitters Positioners Service Life Issues Increasing Maintenance Costs Reduced Product Reliability Longer Service Life Maintenance Costs F
Slide 19: Strategy Will Continue to Drive Growth and Expanding Margin
STRATEGY WILL CONTINUE TO DRIVE GROWTH AND EXPANDING MARGIN Sales (FX Neutral, $M) and Adjusted Operating Margin (%)* 20% 1,300 Sales Margins 1,200 1,100 17.2% 16.2% 3% - 5% 20% 1,000 Core Growth OP in the 900 CAGR Mid Term 800 11.1% 700 600 2017 2018 2019 2020 2021 2022 2023G ~ 2024F Mid 2025F Term
Slide 20: Inorganic Growth Will Further Strengthen Our Portfolio and Growth Projections
INORGANIC GROWTH WILL FURTHER STRENGTHEN OUR PORTFOLIO AND GROWTH PROJECTIONS First Level Space Assessment Chemical Higher Pharma / Valves in corrosive, toxic media Aseptic Wastewater Cryogenics Space Attractiveness Pharma / Aseptic & LH2 Industrial Components in hygienic applications, Single Use Au
Slide 21: Summary: Four Key Takeaways
SUMMARY Four Key Takeaways 1. Portfolio has structurally improved ▪ Stronger underlining growth rates ▪ Profitability has shifted into the mid/high teens 2. Proven market outgrowth performance led by new products and TAM expansion 3. Expect ~100 BPS average annual margin improvement – sights on 20%
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