Slide 1: Reshaping for the Future
Investor Day – December 11, 2013 Reshaping for the Future COMMERCIAL / INDUSTRIAL DEFENSE ENERGY
Slide 2: Safe Harbor Statement
Safe Harbor Statement Please note that the information provided in this presentation is accurate as of the date of the original presentation. The presentation will remain posted on this web site from one to twelve months following the initial presentation, but content will not be updated to reflect
Slide 3: Strategic Overview and Future Vision
Investor Day – December 11, 2013 Strategic Overview and Future Vision Dave Adams President and CEO COMMERCIAL / INDUSTRIAL DEFENSE ENERGY
Slide 4: Agenda
Agenda OVERVIEW AND VISION Dave Adams CREATING SHAREHOLDER VALUE Financial Update and 2014 Guidance Glenn Tynan Operating Margin Improvement Tom Quinly BUSINESS OVERVIEW Commercial Aerospace Graham Macdonald Industrial Kevin Rayment Surface Technologies Larry Peach Defense Lynn Bamford Oil & Gas Ron
Slide 5: An Inflection Point...
An Inflection Point...
Slide 6: Moving Forward – Creating Value
Moving Forward – Creating Value FOCUS: Improving Shareholder Value Market Strategies Organic Growth (VP / GMs) Operational Margin Improvement Initiatives (COO) Financial Capital Deployment Discipline (CFO) Efficient Working Capital / CF Execution New Alignment Will Accelerate Value Creation 6
Slide 7: Our Vision is One Curtiss-Wright
Our Vision is One Curtiss-Wright Processes Markets Leaders Functions Comms. Strategies INTEGRATED MARKET-FACING GLOBAL & DIVERSIFIED 5 or fewer major segments with critical mass Top quartile performer A Unified Global Diversified Industrial Company 7
Slide 8: Recent Organization
Recent Organization Three Segments Organized by Technology, Serving Diverse Markets CEO COO Surface Flow Control Controls HQ HQ Technologies HQ Power Generation Commercial Commercial Aerospace Aerospace Oil & Gas Aerospace Aerospace Naval Defense Defense Defense Ground Defense General Industrial Gen
Slide 9: Today’s Organization
Today’s Organization Three Segments Aligned by Market CEO COO Commercial / Defense Energy Industrial Commercial Aerospace Power Generation Aerospace Defense General Industrial Ground Defense Oil & Gas Surface Naval Defense Technologies 9
Slide 10: Experienced Executive Team
Experienced Executive Team COO CEO CFO Tom Quinly Dave Adams Glenn Tynan 20+ Years industry exp. 24+ Years industry exp. 20+ Years industry exp. 9 Years at CW 14 Years at CW 14 Years at CW Former President: Former President: CW Controls CW Controls, Flow Control, Surface Technologies
Slide 11: Three Powerful Segments
Three Powerful Segments COMMERCIAL / INDUSTRIAL Component / Subsystems offering provides strong margins without high overhead requirements Providing unique value through vehicle control systems; leveraging trends in emissions and efficiency DEFENSE High value IP content in Electronics and Nuclear –
Slide 12: One Curtiss-Wright
Our Alignment PRIORITIZES THE CUSTOMER EMPHASIZES MARKET LEADERSHIP LEVERAGES OPERATIONAL EXPERTISE / SYNERGIES STREAMLINES P&Ls and REDUCES DUPLICATION One Curtiss-Wright 12
Slide 13: Choosing Where We Compete
Choosing Where We Compete custom design systems integration very low volume high volatility FOCUS FOCUS little IP content high volume low tier parts supplier 13
Slide 14: Achieving Profitable Growth
Achieving Profitable Growth custom design systems integration very low volume high volatility UNIQUE IP PLATFORM FOCUS INDEPENDENT FOCUS SCALE little IP content high volume low tier parts supplier 14
Slide 15: Clear Financial Objectives
Clear Financial Objectives ~100% >12% Top Quartile Double >12.5% 5-6% Digit Organic Sales EPS Operating ROIC Free Cash Flow Growth Growth Margins Conversion 15
Slide 16: Financial Highlights
Investor Day – December 11, 2013 Financial Highlights Glenn E. Tynan VP & CFO COMMERCIAL / INDUSTRIAL DEFENSE ENERGY
Slide 17: Finance Transformation
Finance Transformation UNIVERSAL AND TRANSPARENT METRICS RIGOROUS WORKING CAPITAL MANAGEMENT COMPREHENSIVE CAPITAL ALLOCATION STRATEGY ONE CURTISS-WRIGHT THREE MARKET-FACING SEGMENTS 17
Slide 18: Return on Invested Capital
Return on Invested Capital ROIC = NOPAT / (Avg. Debt + Equity) Adopting ROIC as standard metric for: Capital Investments Acquisitions Compensation Capital to be allocated to the highest return investments and/or businesses 18
Slide 19: Return on Invested Capital
Return on Invested Capital 14.0% ROIC(1) 12.0% OBJECTIVE 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Curtiss-Wright Peer 50th Peer 75th Percentile Percentile Currently below median versus peer group(2) Target: 12% ROIC Goal: Top Quartile (1) ROIC = NOPAT / (Avg. Debt + Equity) (2) Peer group per CW proxy –
Slide 20: Capital Allocation Strategy
Capital Allocation Strategy Capital Expenditures Acquisitions Dividends Share Repurchase The same metric (ROIC) and criteria are applied to all investment opportunities Leverage Metrics: Debt / Cap 35% – 50% Debt / EBITDA 2x – 4x 20
Slide 21: Cash Flow
Cash Flow 35% Working Capital(1) as a % of Sales 30% 25% 20% OBJECTIVE 15% 10% 5% 0% Curtiss-Wright Peer 50th Peer 75th Percentile Percentile Currently below median Cash flow key element of versus peer group(2) S/T compensation plan Goal: Top Quartile Focus: Reduce Working Capital % at the B
Slide 22: Capital Expenditures
Capital Expenditures 4.0% CapEx as a % of Sales 3.5% 3.0% 2.5% 2.0% OBJECTIVE 1.5% 1.0% 0.5% 0.0% Curtiss-Wright Peer 50th Peer 75th Percentile Percentile Currently below median Invest in high return versus peer group(1) projects and/or businesses Goal: Top Quartile Accountability (1) Peer g
Slide 23: A New Approach to M&A
A New Approach to M&A Corporate-led process drives consistency New ROIC-based valuation analysis Capital Allocation decisions temper current spend Ample quality opportunities More Selective Approach 23
Slide 24: Dividends and Share Repurchase
Dividends and Share Repurchase Dividends Steady, periodic increases Share Buybacks Shift of balance enables share buybacks to become a more strategic element of our capital allocation strategy Consistently Working to Maximize Value 24
Slide 25: Financial Guidance
Financial Guidance COMMERCIAL / INDUSTRIAL DEFENSE ENERGY
Slide 26: 2014 Guidance – Current Segment Structure
2014 Guidance – Current Segment Structure FY2013E FY2014E % Growth (as of Oct. 30) (as of Dec. 11) Total Sales $2,480 - 2,520M $2,650 - 2,700M 6 - 8% Flow Control $1,300 - 1,320M $1,370 - 1,390M 5 - 6% Controls $865 - 875M $950 - 970M 9 - 11% Surface Technologies $315 - 325M $330 - 340M 3 - 6% Total
Slide 27: Operating Margin Expansion 2014
Operating Margin Expansion 2014 11.0% +120 bps 10.5% 10.1 - 10.3% (30 bps) (10 bps) 10.0% 9.5% 9.3 - 9.5% 9.0% 8.5% 8.0% 2013E Operational Acquisitions Acquisitions 2014E improvements in completed completed base business 4Q'12 - 1Q'13 2H'13 Guidance as of December 11, 2013. 27
Slide 28: 2014 Guidance – Transition to New Segment Structure
2014 Guidance – Transition to New Segment Structure Flow: Comm Aero Flow Control Commercial / Power Industrial Gen All CWST Oil & Gas Power Gen Controls: All Comm Aero Comm + Gen. Ind. Defense Aero Gen Indus Controls Defense Flow: Defense + Gen Power Gen Indus (AP1000) + Defense GI Controls: All Def
Slide 29: 2014 Guidance – New Segment Structure
2014 Guidance – New Segment Structure FY2014E % Growth (as of Dec. 11) Total Sales $2,650 - 2,700M 6 - 8% Commercial / Industrial $1,040 - 1,060M Defense $890 - 910M Energy $720 - 730M Total Operating Income $267 - 278M 13 - 18% CW Margin 10.1% - 10.3% Commercial / Industrial $138 - 142M Margin 13.3
Slide 30: 2014 Guidance – Sales Growth by End Market
2014 Guidance – Sales Growth by End Market FY2014E % of Total (as of Dec. 11) Sales Aero Defense 8 - 12% 11% Ground Defense (7 - 11%) 3% Naval Defense (2) - 2% 14% Total Defense 1 - 5% 29% Including Other Defense Commercial Aero 6 - 10% 16% Oil & Gas 11 - 15% 19% Power Generation 2 - 6% 18% General
Slide 31: 2014 Guidance – All Other
2014 Guidance – All Other FY2013E FY2014E (as of Oct. 30) (as of Dec. 11) Post-Retirement Expense $33 - 34M $36 - 37M Interest Expense $39 - 40M $39 - 40M Diluted EPS $2.75 - 2.85 $3.20 - 3.35 Diluted Shares Outstanding 47.6M 48.4M(1) Effective Tax Rate 32.0% 32.0% Free Cash Flow $110 - 120M $140 -
Slide 32: Sound Financial Strategies
Sound Financial Strategies Balanced Capital Allocation Improving Operating Cash Flow Maximization Shareholder Margin Expansion Returns Financial Transparency 32
Slide 33: Operating Margin Improvement
Investor Day – December 11, 2013 Operating Margin Improvement Tom Quinly Chief Operating Officer COMMERCIAL / INDUSTRIAL DEFENSE ENERGY
Slide 34: Current State – Operating Margin Benchmarking
Current State – Operating Margin Benchmarking (1) 16.0% 14% 14.0% OBJECTIVE 12.5% 12.0% 10.0% 9.3% - 9.5% 9.2% 8.0% 6.0% 4.0% 2.0% 0.0% CW 2013 50th 75th Target Peer Group Percentile (1) Based upon peer group per CW proxy - 3 year avg. 2010-2012 34
Slide 35: Margin Improvement “Big 10” Imperatives
Margin Improvement “BIG 10” IMPERATIVES 35
Slide 36: Clarity of Purpose
Clarity of Purpose 1 Operating Margin RONA Inventory OTD New Product ROIC Inventory IWRR Acquisitions Turns Organic Product FCF Growth Strategies Growth Geographic Employee Capital Initiatives Expansion Engagement Deployment 36
Slide 37: Accountability
Accountability 2 Total Alignment Total Commitment No Excuses Compensation Alignment 37
Slide 38: Total 2013 Opportunity
Operational Excellence 3 Continue Lean Journey $2.3B Drive Engineering Excellence R&D $70M Selling Continuous Improvement Culture $155M Admin Total 2013 Opportunity All disciplines $354M Targeted Savings by Site/Team Other COS $825M Direct Material $880M Continuing the Journey 38
Slide 39: Supply Chain Initiatives
Supply Chain Initiatives 4 Leverage Spend Council $1.3B LCE Supplier Development $330M INDIRECT Indirect Spend Target $85M Focused Commodity Teams CAPEX Total Opportunity Clear Accountability $880m DIRECT 39
Slide 40: Portfolio Rationalization
Portfolio Rationalization 5 “Addition by Subtraction” 40
Slide 41: Consolidation Programs
Consolidation Programs 6 Market facing – delayering Numerous Opportunities $1.4M Improving transparency Leverage Centers of Excellence Continuous Process: $750M Strategy Evolution > 40 20 Acquisition Integration Opportunity Sites* Sites* <$40M >$40M 41 *Excludes Surface Technologies sa
Slide 42: Shared Services
Shared Services 7 5.1% Benchmarking complete Finance – well down the path: 3.1% Contributing IT - well down the path: Fy14 contributions HR – early days Phase II launch next year Additional plans being developed Driving top quartile performance 42
Slide 43: Low Cost Economy COE Development
Low Cost Economy COE Development 8 Suzhou, China + Nogales, MX Significant Contributions Pune, India + Querétaro, MX Still Maturing Supply Chain Localization Key Driver Teams/Processes in place Aggressive Fy14 plan 43
Slide 44: Segment Focus Opportunities
Segment Focus Opportunities 9 $30-40M Segment Focus Area Defense – Consolidation Programs Defense – Underperforming Product Areas – Program Investments – Portfolio Expansion Investments Fy13 Opportunity – Greenfield Operations Com/Ind Commercial Industrial – LCE Capability Development – Portfolio Ex
Slide 45: Strategic Growth Initiatives
Strategic Growth Initiatives 10 New Market Dimension Focus Area Technology – Protect the Core – Technology Leadership – Attack Discontinuities – Portfolio Expansion Market – Leverage core capabilities Technology – Attack niche new segments – Select Bolt-On Acquisitions Geographic – Management Traini
Slide 46: Strategic Margin Drivers
Strategic Margin Drivers 14% Volume Strategic Initiatives Segment Focus Portfolio Review Shared 9.3 - 9.5% Services Competitiveness Programs Today 2018 Achieving 14% Over the Planning Period 46
Slide 47: Key Takeaways
Key Takeaways Significant opportunities Plan in place Management alignment and commitment Talented team to execute No excuses 47
Slide 48: Curtiss-Wright
I CURTISS WRIGHT
Slide 49: Commercial Aerospace
Investor Day – December 11, 2013 Commercial Aerospace Graham Macdonald SVP/GM, Sensors & Controls COMMERCIAL / INDUSTRIAL DEFENSE ENERGY
Slide 50: 110 Years of History – Foundation for the Future
110 Years of History – Foundation for the Future Innovation . Precision Reliability 50
Slide 51: Commercial Aerospace – Our Capability
Commercial Aerospace – Our Capability Nose to Tail – Covering the Airplane 51
Slide 52: Commercial Aerospace – Our Market
Commercial Aerospace – Our Market 787-9/10 CS100/300 A350-800/900/1000 A319/320/321 NEO B737-7/8/9 Max MRJ90 MS-21 E175/190/195 C919 777-8/9 2014 2015 2016 2017 2018 2019 2020 2021 8 Years – 10 Platforms – 21 Derivatives 52
Slide 53: Commercial Aerospace – Our Market
Commercial Aerospace – Our Market 787-9/10 CS100/300 A350-800/900/1000 A319/320/321 NEO B737-7/8/9 Max MRJ90 MS-21 E175/190/195 C919 777-8/9 2014 2015 2016 2017 2018 2019 2020 2021 CW Key Platform Wins - >$2.2B in LTV 53
Slide 54: Commercial Aerospace – Our Market
Commercial Aerospace – Our Market 787-9/10 CS100/300 A350-800/900/1000 A319/320/321 NEO B737-7/8/9 Max MRJ90 MS-21 E175/190/195 C919 777-8/9 2014 2015 2016 2017 2018 2019 2020 2021 CW Key Platform Pursuits - >$300M in LTV 54
Slide 55: Commercial Aerospace – Our Strategy
Commercial Aerospace – Our Strategy Evolving Market Channels: Trend Tier 1 Consolidation Customers Seeking Risk Sharing Partners 55
Slide 56: Commercial Aerospace – Our Strategy
Commercial Aerospace – Our Strategy Key Account Strategy 56
Slide 57: Commercial Aerospace – Our Strategy
Commercial Aerospace – Our Strategy Key Account Strategy Technology - Drive for Efficiency: Trend Higher Operating Temperatures More Electric Aircraft Advanced System Architecture – More Sensors to Optimize Operations 57
Slide 58: Commercial Aerospace – Our Strategy
Commercial Aerospace – Our Strategy Key Account Strategy Technology Roadmaps & Expanded Product Offering 58
Slide 59: Commercial Aerospace – Our Strategy
Commercial Aerospace – Our Strategy Key Account Strategy Technology Roadmaps & Expanded Product Offering Creating Competitive Differentiation 59
Slide 60: Summary
Summary Market Experience – Capability and Technologies to Fill Customer Gaps Technical Solutions That Differentiate Market Opportunities – Rate Increase on Legacy & Development Platforms Pipeline of New and Derivative Commercial Platforms and Engine Aero Market Position – Customer R
Slide 61: Industrial
Investor Day – December 11, 2013 Industrial Kevin Rayment SVP/GM, Industrial COMMERCIAL / INDUSTRIAL DEFENSE ENERGY
Slide 62: Markets We Serve
Markets We Serve On Highway Off Highway Electric Vehicles 62
Slide 63: Products
Products Controllers Power Management Electronic Throttle Sensors Joysticks Shifters 63
Slide 64: Applications
Applications 64
Slide 65: Opportunity In This Space
Opportunity In This Space Market Access Double Digit Growth Electronic Adoption Base Growth Industrial + Vehicle P&G PG Drives Build Industrial $3B $900M + Rate Williams Growth $300M Controls CW + Focus Arens Controls 5-6% 65
Slide 66: Positive Trends Impacting Our Growth
Positive Trends Impacting Our Growth Increased demand for electronic control systems and sensors Driven by Operational efficiency Safety Driver Fatigue Repeatability Making “use of the data” / intelligent systems Reduced emissions and greater fuel efficiencies OEMs reducing supplie
Slide 67: Competitive Strengths
Competitive Strengths Technology Leadership Critical Application Growth Rugged Designs Superior Customer Satisfaction Integrated Channel Global Capability 67
Slide 68: Market Leadership
Market Leadership #1 #1 Electronic Shifters Throttle Controls #1 #1 Hybrid Bus Mobility 68
Slide 69: Key Strategy #1 - Covering the Vehicle
Key Strategy #1- Covering the Vehicle CW System Solution 69
Slide 70: Key Strategy #2 – New Product Generation
Key Strategy #2 – New Product Generation Next Generation Step Change - Technology New Technology 70
Slide 71: Margin Expansion Opportunities
Margin Expansion Opportunities China Manufacturing Expansion China Localization “Phase II” Complex Integration Margin Expansion Core To Our Business 71
Slide 72: Summary
Summary Market opportunity Established critical mass Double digit growth Market leadership System strategy Margin expansion Tremendous Opportunity For Growth 72
Slide 73: Surface Technologies
Investor Day – December 11, 2013 Surface Technologies Larry Peach President, Surface Technologies COMMERCIAL / INDUSTRIAL DEFENSE ENERGY
Slide 74: Providing Advanced Surface Technologies
Providing Advanced Surface Technologies For Premium Commercial/Industrial Markets Ensuring design integrity & fatigue/corrosion protection of utmost importance 74
Slide 75: Providing Advanced Surface Technologies
Providing Advanced Surface Technologies For Premium Commercial/Industrial Markets Customers moving to new geographies & demanding more advanced service delivery 75
Slide 76: Providing Advanced Surface Technologies
Providing Advanced Surface Technologies For Premium Commercial/Industrial Markets Technology leadership required to support advanced design criteria 76
Slide 77: Enabling Critical Component Performance
Enabling Critical Component Performance Shot & Engineered Analytical Laser Coatings Services Peening Provide Ensure Extend Life Protection Integrity 77
Slide 78: Market Positioning & Differentiation
Market Positioning & Differentiation #1 Worldwide in Shot & Laser Peening Technical leadership in Engineered Coatings & Analytical Services Specialized engineering capabilities Bundling new technologies throughout 70+ facility network Shop-in-Shop global expansion focus 78
Slide 79: Advancing Technology & Reach
Advancing Technology & Reach Laser Peening Laser Technology Peening Shot Peening 2009 Advanced Technology Shot Peening Legacy Technology Distribution 79
Slide 80: Advancing Technology & Reach
2013 Advancing Technology & Reach Laser Advanced Legacy Peening Analytical Engineered Technology Technology Services Coatings Laser Technology Peening Shot Peening 2009 Analytical Engineered Services Coatings Advanced Technology Shot Peening Legacy Technology Distribution 80 2009 – 2013F CAGR: 16%
Slide 81: Market Directions
Market Directions Market Trends Commercial Aerospace Airbus deliveries steady Boeing deliveries still increasing Biz/Regional jets slight growth General Industrial US GDP growth strengthens EU emerging from recession Industrial Gas Turbines New technologies increasing oil/gas drilling ac
Slide 82: Focused Technology Investment
Focused Technology Investment Scale UP: Grow by expanding use of existing proprietary predictive models for new applications Scale OUT: Grow by rapid insertion of new tools & technologies 82
Slide 83: Margin Improvement
Margin Improvement Productivity enhancements from increased automation & robotics Further exploitation of offline Cumulative Value programming Asset redeployments among facilities and facility consolidations Cost Control Automation Technology Critical Mass 83
Slide 84: Summary
Summary Extending Life Cycle Advancing Up Technology Chain Focused Technology Development Top Quartile Op Margin performance 84
Slide 85: Defense
Investor Day – December 11, 2013 Defense Lynn Bamford SVP/GM, Defense Solutions COMMERCIAL / INDUSTRIAL DEFENSE ENERGY
Slide 86: Our Defense Markets
Our Defense Markets Enabling Network- Providing mission- Centric Warfare critical avionics C4ISR Providing reliable Providing shipboard electro-mechanical and electro-mechanical and vehicle electronics electronic solutions 86
Slide 87: Curtiss-Wright Ranked #1 in the Industry
Curtiss-Wright Ranked #1 in the Industry THE LEADING SUPPLIER OF OPEN ARCHITECTURE RUGGED EMBEDDED COMPUTING TECHNOLOGY The COTS Success Story 87
Slide 88: Defense Market Trends
Defense Market Trends Trends Predictions Fewer Large Programs US Defense cuts will continue Modernization Of Existing Platforms R&D cut at ~ 20% Emphasis On Affordability Defense Industry hit hard in 2014 Emphasis On Technical Maturity Primes focusing on International Sales Worldwide C4ISR growth dr
Slide 89: Strategy: “COTS +”
Strategy: “COTS +” Become a New Class of COTS Supplier We Took A Core COTS Product Strategy CORE COTS PRODUCTS 89
Slide 90: Strategy: “COTS +”
Strategy: “COTS +” Become a New Class of COTS Supplier Added Capabilities to Provide a Stronger COTS Offering C4ISR Application Knowledge Unmatched Acquisition Life Cycle Reform Support Knowledge CORE COTS PRODUCTS Customization Affordable Price Ranges 90
Slide 91: Strategy: “COTS +”
Strategy: “COTS +” Become a New Class of COTS Supplier Plus Capabilities to Increase Value and Content System of C4ISR Systems Application Integration Knowledge Unmatched Acquisition Life Cycle Reform Support Knowledge CORE COTS PRODUCTS Advanced Technology Customization Partnerships System Ready Af
Slide 92: Strategy: “COTS +”
Strategy: “COTS +” Become a New Class of COTS Supplier COTS+ System of C4ISR Systems Application Integration Knowledge Unmatched COTS+ Will: Acquisition Reform Life Cycle Support Provide affordable solutions Knowledge CORE Support platform upgrades COTS PRODUCTS Deliver mature low risk technol
Slide 93: Strategy: Growth in C4ISR
Strategy: Growth in C4ISR Global Hawk/ JSTARS Triton UCAS-D G/ATOR Enabling Network-Centric Warfare Sentinel Kiowa WIN-T JLTV Doubling Available Market 93
Slide 94: Strategy: Targeting Key Market Opportunities
Strategy: Targeting Key Market Opportunities Examples Electronic Warfare Increased demand for wideband and multichannel needs of EW, SIGINT CHAMP-DRFM Extreme high performance & ISR systems wide-band Digital RF Memory Module Foreign Military Sales Need to protect U.S. technology through trus
Slide 95: Strategy: International Growth
Strategy: International Growth Singapore Bionics I South Africa Hoefyster UK Scout UK Warrior Well-Positioned in Europe, Middle East and Asia 95
Slide 96: Summary
Summary Track record of technology leadership Trusted supplier for over 3 decades and thousands of programs Continued growth in a constrained market Marquee brand Top quartile financial performance Ranked Number One In The Industry 96
Slide 97: Oil & Gas
Investor Day – December 11th, 2013 Oil & Gas Ron Stockwell VP/GM, Oil & Gas Systems COMMERCIAL / INDUSTRIAL DEFENSE ENERGY
Slide 98: Products and Services
Products and Services Pressure Top & Bottom Slide Valves Reactors Relief Valves Un-heading Valves Valve Repair Electronic & Butterfly Separators Hydraulic Controls Valves 98
Slide 99: Market Updates
Market Updates Refining Aftermarket Upstream Capital investment Worldwide refinery Worldwide demand is slowed significantly in counts are stable, increasing, driving recent years and capacity is upstream activity increasing US production is North America has level, but there are Shift to more highes
Slide 100: Upstream Market Drivers
Upstream Market Drivers Industry Drivers Fuel Future Growth Rising Demand • Global oil consumption is expected to increase by 25 for Oil and Gas million barrels per day Emergence of • Shale oil will be 35% of oil production by 2035 Unconventional • Shale gas will be 45% of gas production by 2035 Res
Slide 101: Oil & Gas Strategy Overview
Oil & Gas Strategy Overview Upstream Diversification Upstream expansion Operational Technology insertion Aftermarket Excellence Short cycle business focus Growth Cost reduction & lead time Aftermarket growth Selective global growth Product Global Reach Innovation 101
Slide 102: Upstream Diversification
Upstream Diversification Exploration to Transportation Components 102
Slide 103: Upstream Diversification Key Opportunity Areas
Upstream Diversification Key Opportunity Areas Separation and Processing Emissions Control Wireless Connectivity Strategy - Providing high IP products for critical wellhead applications ensuring safe, efficient and environmentally friendly operations 103
Slide 104: Upstream Diversification Key Opportunity Areas
Upstream Diversification Key Opportunity Areas 104 Over 40,000 New Wells in North America Every Year!
Slide 105: Cimarron Core Products
Cimarron Core Products Production, Processing and Emissions Control Equipment Separators Combination Units Burner Management Systems Flowback Equipment Emission Control Devices Oil Treating Equipment Vapor Recovery Towers 105 Well Positioned in a Growing Market
Slide 106: Margin Improvement
Margin Improvement Energy Op Margins Product Mix 14% Upstream product focus New technology introduction Capacity Utilization Insourced $12M from Cimarron 7.2% - 7.4% $40M planned for 2014 Accelerates Cimarron growth Lean Implementation Throughput up 25% Targeting 20% improvement
Slide 107: Summary
Summary Solid growth led by Upstream and Aftermarket Intercompany capacity supports Upstream growth Continued focus on Lean implementation drives margin improvement 107 Capitalizing on Upstream & Operational Excellence
Slide 108: Commercial Power
Investor Day – December 11, 2013 Commercial Power Greg Hempfling SVP/GM, Electro-Mechanical Systems COMMERCIAL / INDUSTRIAL Jim Leachman SVP/GM, Nuclear DEFENSE ENERGY
Slide 109: An Enduring Legacy
An Enduring Legacy 60 years of service to the Nuclear Power Market 109
Slide 110: “New Build” Market is Strong
“New Build” Market is Strong 60 Operating reactors under construction in 13 countries 150 to 300 planned/proposed in 43 countries by 2030 Source: WNA 110
Slide 111: New Build by Location
New Build by Location Reactors Planned and Proposed Worldwide Through 2030 171 108 107 53 38 11 China Europe Asia (No China) Middle East North America South America We expect over half of the new planned and proposed reactor builds to be of AP1000 design in China 111 Source: http://www.world-nuclear
Slide 112: AP1000 Canned Motor Reactor Coolant Pump
AP1000 Canned Motor Reactor Coolant Pump Curtiss-Wright’s AP1000 Reactor Coolant Pump (RCP) Designed for Westinghouse AP1000® Nuclear Power Plant RCP circulates reactor coolant water through the reactor vessel, loop piping and steam generators Eight RCPs in each AP1000 Nuclear Power Plant
Slide 113: AP1000 RCP Strategic Actions
AP1000 RCP Strategic Actions Focus on China Negotiate RCP orders directly with the Chinese plant owners Explore opportunities through Westinghouse Keep pursuing all opportunities Czech Republic High Seismic RCP Innovations/Improvement Make Current Model RCP obsolete 113
Slide 114: World Operating Reactors
World Operating Reactors 432 Operating reactors in 31 countries provide 11% of the world’s power Source: WNA 114
Slide 115: Market Volatility Creates Opportunity
Market Volatility Creates Opportunity Three Mile Island / Chernobyl Nuclear Renaissance Fukushima Poor operating performance 91%+ capacity factors Plant closures Cost overruns PLEX, EPU’s Natural gas prices “N” Stamp/OEM abandonment Positive public opinion Economy- Reduced De
Slide 116: Operating Reactors
Operating Reactors Aftermarket Sales Growth New Build New Build 12% New Build 24% 14% Operating Reactors Operating Operating Reactors 88% Reactors 86% 76% 14% CAGR 10% CAGR 2000 2008 2013 Continued Strong Sales Growth into Operating Reactors 116
Slide 117: Operating Reactors Market Drivers
Operating Reactors Market Drivers Safety and Reliability OBSOLESCENCE INTRO. GROWTH MATURITY DECLINE OEM 117
Slide 118: Operating Reactors
Operating Reactors Regulatory: Fukushima Completed Backlog Addressable Market $0M $14M $70M 118
Slide 119: Operating Reactors
Operating Reactors Safety, Reliability, OEM Abandonment, Obsolescence Plant Process Computers Analog Control Modules Critical plant performance monitoring Solves OEM market abandonment with state of the art technology Generates thousands of new CW Platform for larger non-safety control insta
Slide 120: Operating Reactors
Operating Reactors Safety, Reliability, Obsolescence, Regulatory NETCO-SNAP-IN/Badger Testing Connection Products Electrical Quick Penetration Grayboots Disconnects Assemblies (EPAs) 20+ year Spent Fuel Pool rack life One QDC application saves $325K in extension maintenance and exposure costs
Slide 121: Operating Reactors
Operating Reactors Technology Advancements and Developments Zero Entry Nozzle Dam Position Indication Fuel Rod Inserts Probe (PIP) 50% reduction in 40% Cost Savings Safe storage of PWR man-REM exposure spent fuel Market Opportunity- Refurbishment Kit Fuel Bundle insertion $40M versus who
Slide 122: Operating Reactors
Operating Reactors Sustainable Growth Platform OEM 12% New Build New Build 24% 26% New Build 14% Operating Operating OperatingReactors Reactors Reactors 76% 74% 76% 10% CAGR 2014 2018 Bright Future for Continued Growth in Operating Reactors 122
Slide 123: Summary
Summary The future for worldwide Nuclear energy is positive Well-positioned in China and globally Technology & innovation equal growth Key role in solving critical plant obsolescence challenges 123
Slide 124: Curtiss-Wright
I CURTISS WRIGHT
Slide 125: Summary
Investor Day – December 11, 2013 Summary Dave Adams President and CEO COMMERCIAL / INDUSTRIAL DEFENSE ENERGY
Slide 126: The Future of Curtiss-Wright
The Future of Curtiss-Wright We’re at an inflection point in our company Leading positions in key markets Talented and experienced leadership team Targeting top quartile performance One Curtiss-Wright - A Unique Opportunity for Value 126