Slide 1: Carpenter Technology Corporation 3rd Quarter Fiscal Year 2024 Earnings Call
May 1, 2024 CARPENTER TECHNOLOGY CORPORATION 3rd Quarter Fiscal Year 2024 Earnings Call © 2024 CRS Holdings, LLC. All rights reserved.
Slide 2: Cautionary Statement
Cautionary Statement Forward-looking statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those proj
Slide 3: 3rd Quarter Fiscal Year 2024
rd 3 QUARTER FISCAL YEAR 2024 Tony Thene | President and Chief Executive Officer © 2024 CRS Holdings, LLC. All rights reserved. 3
Slide 4: Safety is Our Highest Value
Safety is Our Highest Value Total case incident rate 3.3 2.1 2.2 2.0 1.7 1.7 1.2 1.3 1.1 1.0 0.6 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 YTD © 2024 CRS Holdings, LLC. All rights reserved. 4
Slide 5: Performance: Beat Q3 FY24 Guidance; Raising Q4 FY24 Outlook
Performance: Beat Q3 FY24 Guidance; Raising Q4 FY24 Outlook Beat Q3 FY24 guidance by ~18% with improved operating Raising Q4 FY24 outlook by ~8%, building on operating performance and expanding margins momentum from Q3 FY24 Adjusted Operating Income ($M) Adjusted Operating Income ($M) ~8% ~18% 110-1
Slide 6: Third Quarter Summary
Third Quarter Summary • Delivered record adjusted operating income of $90.0 million, up 29% sequentially and 129% year-over-year, outperforming third quarter outlook • Exceeded expectations in SAO segment with operating income of $103.5 Exceeded expectations with million, realizing adjusted operatin
Slide 7: Third Quarter Sales
Third Quarter Sales Q3-24 NET SALES EX. % NET SALES EX. Optimizing mix for profitability in strong demand environment MARKET VS. Q2-24 SURCHARGE ($M)* SURCHARGE • Sales up 14% sequentially on higher volumes, improving $315.1 57% mix and pricing actions AEROSPACE & DEFENSE +28% • Aerospace and Defens
Slide 8: 3rd Quarter Fiscal Year 2024 Financial Overview
rd 3 QUARTER FISCAL YEAR 2024 FINANCIAL OVERVIEW Tim Lain | Senior Vice President and Chief Financial Officer © 2024 CRS Holdings, LLC. All rights reserved. 8
Slide 9: Income Statement Summary
Income Statement Summary SEQUENTIAL YEAR-OVER- $ millions, except per share amounts Q3-24 Q2-24 Q3-23 CHANGE YEAR CHANGE Pounds (‘000) 50,208 49,082 57,302 1,126 (7,094) Net Sales 684.9 624.2 690.1 60.7 (5.2) Net Sales ex. Surcharge Revenue* 553.8 485.3 491.5 68.5 62.3 Gross Profit 147.0 122.6 93.5
Slide 10: SAO Segment Summary
SAO Segment Summary SEQUENTIAL YEAR-OVER- $ millions Q3-24 Q2-24 Q3-23 CHANGE YEAR CHANGE Pounds ('000) 50,846 50,114 56,516 732 (5,670) Net Sales 608.5 549.4 603.4 59.1 5.1 Net Sales ex. Surcharge Revenue* 483.0 416.2 411.5 66.8 71.5 Operating Income 103.5 83.3 49.0 20.2 54.5 Adjusted Operating Mar
Slide 11: PEP Segment Summary
PEP Segment Summary SEQUENTIAL YEAR-OVER- $ millions Q3-24 Q2-24 Q3-23 CHANGE YEAR CHANGE Pounds ('000)* 2,618 2,318 3,232 300 (614) Net Sales 102.4 95.7 115.1 6.7 (12.7) Net Sales ex. Surcharge Revenue** 94.6 87.9 103.8 6.7 (9.2) Operating Income 9.2 7.1 10.2 2.1 (1.0) Adjusted Operating Margin ex.
Slide 12: Adjusted Free Cash Flow Summary
Adjusted Free Cash Flow Summary $ millions Q3-24 Q2-24 Q1-24 9 MOS FY24 9 MOS FY23 Net Income + Non-Cash Items 109.7 83.9 90.0 283.5 141.5 Inventory 1.8 (89.7) (67.8) (155.6) (213.5) Working Capital / Other (28.0) 20.5 (10.2) (17.6) (88.2) Total Net Working Capital / Other (26.2) (69.2) (78.0) (173.
Slide 13: 3rd Quarter Fiscal Year 2024 Outlook
rd 3 QUARTER FISCAL YEAR 2024 OUTLOOK Tony Thene | President and Chief Executive Officer © 2024 CRS Holdings, LLC. All rights reserved. 13
Slide 14: Drivers of Carpenter Technology Value Proposition
Drivers of Carpenter Technology Value Proposition Unique Set of Commitment to Sustainable Market Consistency of Attractive Growth Capabilities and Strategy Strength Performance Outlook Assets • Leverage core strength • Strong underlying • Difficult to replicate • Consistently achieving • Acceleratin
Slide 15: Pulling Forward FY27 Goal With Accelerating Earnings Growth
Pulling Forward FY27 Goal With Accelerating Earnings Growth Through Multiple Initiatives Building momentum each quarter with increasing productivity Pulling forward FY27 goal with accelerating earnings growth and expanding operating margins Adjusted Operating Income* ($M) Adjusted Operating Income (
Slide 16: Appendix of Non-GAAP Schedules
APPENDIX OF NON-GAAP SCHEDULES © 2024 CRS Holdings, LLC. All rights reserved. 16
Slide 17: Non-GAAP Schedules: Adjusted Operating Margin
Non-GAAP Schedules Adjusted Operating Margin ex. Surcharge Revenue and Special Item $ millions Q3-24 Q2-24 Q3-23 Net Sales 684.9 624.2 690.1 Less: Surcharge Revenue 131.1 138.9 198.6 Net Sales ex. Surcharge Revenue 553.8 485.3 491.5 Operating Income 75.9 69.8 39.3 Special Item: Goodwill Impairment 1
Slide 18: Non-GAAP Schedules: Adjusted Segment Operating Margin
Non-GAAP Schedules Adjusted Segment Operating Margin ex. Surcharge Revenue SAO SAO SAO PEP PEP PEP $ millions Q3-24 Q2-24 Q3-23 Q3-24 Q2-24 Q3-23 Net Sales 608.5 549.4 603.4 102.4 95.7 115.1 Less: Surcharge Revenue 125.5 133.2 191.9 7.8 7.8 11.3 Net Sales ex. Surcharge Revenue 483.0 416.2 411.5 94.6
Slide 19: Non-GAAP Schedules: Adjusted Diluted Earnings Per Share
Non-GAAP Schedules Adjusted Diluted Earnings Per Share $ millions, except per share amounts Q3-24 Q2-24 Q3-23 Diluted Earnings per Share $0.12 $0.85 $0.38 Net Income 6.3 42.7 18.6 Special Items, net of tax: Goodwill Impairment 14.1 — — Pension Settlement Charge 39.5 — — Special Items, net of tax: 53
Slide 20: Non-GAAP Schedules: Adjusted Free Cash Flow
Non-GAAP Schedules Adjusted Free Cash Flow $ millions Q3-24 Q2-24 Q1-24 9 MOS FY24 9 MOS FY23 Net Cash Provided from (Used for) Operating Activities 83.4 14.6 7.4 105.4 (160.2) Purchases of Property, Plant, Equipment and Software (21.6) (25.3) (22.0) (68.9) (51.5) Proceeds from Disposals of Property
Slide 21: Your trusted partner in innovation.
Your trusted partner in innovation. Carpenter Technology Corporation (NYSE: CRS) is a global leader in high-performance specialty alloy-based materials and process solutions for critical applications in the aerospace, defense, medical, transportation, energy, industrial and consumer electronics mark