Slide 1: Carpenter Technology Corporation 2nd Quarter Fiscal Year 2024 Earnings Call
January 25, 2024 CARPENTER TECHNOLOGY CORPORATION 2nd 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: 2nd Quarter Fiscal Year 2024
nd 2 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 1.9 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: Second Quarter Summary
Second Quarter Summary • Delivered operating income of $69.8 million, demonstrating continued strong performance • Exceeded expectations in SAO segment with operating income of $83.3 Delivered another strong million, realizing adjusted operating margin of 20.0% quarter, building momentum • Generated
Slide 6: Second Quarter Sales
Second Quarter Sales Q2-24 NET SALES EX. Strong demand environment continues to provide support for MARKET VS. Q1-24 VS. Q2-23 expanded profitability outlook SURCHARGE ($M)* $246.7 • Volume and sales remained relatively flat sequentially; AEROSPACE & DEFENSE -5% +23% continuing to unlock incremental
Slide 7: 2nd Quarter Fiscal Year 2024 Financial Overview
nd 2 QUARTER FISCAL YEAR 2024 FINANCIAL OVERVIEW Tim Lain | Senior Vice President and Chief Financial Officer © 2024 CRS Holdings, LLC. All rights reserved. 7
Slide 8: Income Statement Summary
Income Statement Summary SEQUENTIAL YEAR-OVER- $ millions, except per-share amounts Q2-24 Q1-24 Q2-23 CHANGE YEAR CHANGE Pounds (‘000) 49,082 50,228 50,500 (1,146) (1,418) Net Sales 624.2 651.9 579.1 (27.7) 45.1 Net Sales ex. Surcharge Revenue* 485.3 492.8 420.8 (7.5) 64.5 Gross Profit 122.6 124.1 7
Slide 9: SAO Segment Summary
SAO Segment Summary SEQUENTIAL YEAR-OVER- $ millions Q2-24 Q1-24 Q2-23 CHANGE YEAR CHANGE Pounds ('000) 50,114 49,992 49,442 122 672 Net Sales 549.4 570.1 495.8 (20.7) 53.6 Net Sales ex. Surcharge Revenue* 416.2 417.3 346.2 (1.1) 70.0 Operating Income 83.3 80.8 30.3 2.5 53.0 Adjusted Operating Margi
Slide 10: PEP Segment Summary
PEP Segment Summary SEQUENTIAL YEAR-OVER- $ millions Q2-24 Q1-24 Q2-23 CHANGE YEAR CHANGE Pounds ('000)* 2,318 2,302 2,978 16 (660) Net Sales 95.7 101.8 106.7 (6.1) (11.0) Net Sales ex. Surcharge Revenue** 87.9 93.1 98.0 (5.2) (10.1) Operating Income 7.1 9.1 9.3 (2.0) (2.2) Adjusted Operating Margin
Slide 11: Adjusted Free Cash Flow Summary
Adjusted Free Cash Flow Summary $ millions Q2-24 Q1-24 6 MOS FY24 6 MOS FY23 Net Income + Non-Cash Items 83.9 90.0 173.8 80.9 Inventory (89.7) (67.8) (157.5) (226.7) Working Capital / Other 20.5 (10.2) 10.4 (18.7) Total Net Working Capital / Other (69.2) (78.0) (147.1) (245.4) Pension Plan Contribut
Slide 12: 2nd Quarter Fiscal Year 2024 Outlook
nd 2 QUARTER FISCAL YEAR 2024 OUTLOOK Tony Thene | President and Chief Executive Officer © 2024 CRS Holdings, LLC. All rights reserved. 12
Slide 13: Strong Near-Term Growth Outlook
Strong Near-Term Growth Outlook Projecting $171 million to $191 million in operating income performance in 2H FY24, in line with previous guidance Operating Income ($M) • Strong operating performances in Q1 and Q2 set second best first half on record 97-112 310-330 • Building momentum each quarter w
Slide 14: Compelling Long-Term Goal with ~50% of Target Expected in FY24
Compelling Long-Term Goal with ~50% of Target Expected in FY24 Continued progress towards goal of doubling FY19 operating income Drivers of Carpenter Technology value proposition by FY27 Operating Income ($M) 2x Commitment to Strategy 460-500 310-330 243 Consistency of Performance 133 Sustainable Ma
Slide 15: Appendix of Non-GAAP Schedules
APPENDIX OF NON-GAAP SCHEDULES © 2024 CRS Holdings, LLC. All rights reserved. 15
Slide 16: Non-GAAP Schedules
Non-GAAP Schedules Adjusted Operating Margin ex. Surcharge Revenue $ millions Q2-24 Q1-24 Q2-23 Net Sales 624.2 651.9 579.1 Less: Surcharge Revenue 138.9 159.1 158.3 Net Sales ex. Surcharge Revenue 485.3 492.8 420.8 Operating Income 69.8 69.0 22.6 Operating Margin 11.2% 10.6% 3.9% Adjusted Operating
Slide 17: Non-GAAP Schedules
Non-GAAP Schedules Adjusted Segment Operating Margin ex. Surcharge Revenue SAO SAO SAO PEP PEP PEP $ millions Q2-24 Q1-24 Q2-23 Q2-24 Q1-24 Q2-23 Net Sales 549.4 570.1 495.8 95.7 101.8 106.7 Less: Surcharge Revenue 133.2 152.8 149.6 7.8 8.7 8.7 Net Sales ex. Surcharge Revenue 416.2 417.3 346.2 87.9
Slide 18: Non-GAAP Schedules
Non-GAAP Schedules Adjusted Free Cash Flow $ millions Q2-24 Q1-24 6 MOS FY24 6 MOS FY23 Net Cash Provided from (Used for) Operating Activities 14.6 7.4 21.9 (164.5) Purchases of Property, Plant, Equipment and Software (25.3) (22.0) (47.3) (31.0) Adjusted Free Cash Flow (10.7) (14.6) (25.4) (195.5) M
Slide 19: 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