Carpenter Technology Corporation · NYSE:CRS
Carpenter Technology — Q1 2024 Earnings Presentation
19 slides from Carpenter Technology's earnings presentation, Oct 26, 2023
Slide 1: Carpenter Technology Corporation 1st Quarter Fiscal Year 2024 Earnings Call
October 26, 2023 CARPENTER TECHNOLOGY CORPORATION st 1 Quarter Fiscal Year 2024 Earnings Call 1
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: 1st Quarter Fiscal Year 2024
st 1 QUARTER FISCAL YEAR 2024 Tony Thene | President and Chief Executive Officer 3
Slide 4: Safety is Our Highest Value
Safety is Our Highest Value Total Case Incident Rate (TCIR) 4 3.5 3.3 3 2.5 2.2 2.1 2.1 2.0 2 1.7 1.5 1.3 1.2 1.1 1.0 1 0.6 0.5 0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 YTD © 2023 CRS Holdings, LLC. All rights reserved. 4
Slide 5: First Quarter Summary
First Quarter Summary • Delivered operating income of $69.0 million, 10% increase sequentially, driven by higher prices and ongoing targeted product mix shift • SAO segment continues to build momentum, exceeding expectations with operating income of $80.8 million and adjusted operating margin of 19.
Slide 6: Demand Outlook Across End-Use Markets
Demand Outlook Across End-Use Markets Continue to see strong demand environment across end-use markets % Revenue* 100% • Global travel surging, with ongoing demand increases • More material wanted sooner across the supply chain Aerospace & • Customers prioritizing security of supply Defense • Defens
Slide 7: First Quarter Sales
First Quarter Sales MARKET Q1-24 NET SALES EX. VS. Q4-23 VS. Q1-23 Through higher prices, targeted mix management and SURCHARGE ($M)* productivity improvements, profitability increased on lower sequential sales $260.9 AEROSPACE & DEFENSE -11% +42% • Volumes decreased sequentially primarily due to fe
Slide 8: Financial Overview and Business Update
st 1 QUARTER FISCAL YEAR 2024 FINANCIAL OVERVIEW AND BUSINESS UPDATE Tim Lain | Senior Vice President and Chief Financial Officer 8
Slide 9: Income Statement Summary
Income Statement Summary SEQUENTIAL YEAR-OVER- $ millions, except per-share amounts Q1-24 Q4-23 Q1-23 CHANGE YEAR CHANGE Pounds (‘000) 50,228 61,428 44,890 (11,200) 5,338 Net Sales 651.9 758.1 522.9 (106.2) 129.0 Net Sales ex. Surcharge Revenue* 492.8 560.0 375.7 (67.2) 117.1 Gross Profit 124.1 119.
Slide 10: SAO Segment Summary
SAO Segment Summary SEQUENTIAL YEAR-OVER- $ millions Q1-24 Q4-23 Q1-23 CHANGE YEAR CHANGE Pounds ('000) 49,992 61,528 44,562 (11,536) 5,430 Net Sales 570.1 667.0 447.3 (96.9) 122.8 Net Sales ex. Surcharge Revenue 417.3 477.2 305.7 (59.9) 111.6 Operating Income 80.8 80.0 19.9 0.8 60.9 Operating Margi
Slide 11: PEP Segment Summary
PEP Segment Summary SEQUENTIAL YEAR-OVER- $ millions Q1-24 Q4-23 Q1-23 CHANGE YEAR CHANGE Pounds ('000)* 2,302 3,328 2,326 (1,026) (24) Net Sales 101.8 118.7 93.2 (16.9) 8.6 Net Sales ex. Surcharge Revenue 93.1 107.6 87.7 (14.5) 5.4 Operating Income 9.1 5.9 6.3 3.2 2.8 Operating Margin 8.9% 5.0% 6.8
Slide 12: Adjusted Free Cash Flow Summary
Adjusted Free Cash Flow Summary $ millions Q1-24 Q4-23 Q1-23 Net Income + Non-Cash Items 90.0 84.2 32.1 Inventory (67.8) 73.2 (121.2) Working Capital / Other (10.2) 17.5 11.1 Total Net Working Capital / Other (78.0) 90.7 (110.1) Pension Plan Contributions (4.6) — — Net Cash Provided from (Used for)
Slide 13: Closing Comments
st 1 QUARTER FISCAL YEAR 2024 CLOSING COMMENTS Tony Thene | President and Chief Executive Officer 13
Slide 14: Key Takeaways
Key Takeaways • Delivered 10% sequential increase in operating income, a meaningful step up over historical trends In strong position to • SAO segment continues to build momentum, exceeding expectations with operating income of $80.8 million and adjusted operating margin of 19.4% take meaningful ste
Slide 15: Near-Term and Long-Term Financial Outlook
Compelling Near-Term and Long-Term Financial Outlook Projecting 28%-35% increase in operating income performance in On path to achieve goal of doubling FY19 operating income by 2H FY24 over 1H FY24 FY27 Operating Income ($M) Operating Income ($M) 2x 460-500 28-35% 174-189 136-141 310-330 243 133 H1F
Slide 16: Appendix of Non-GAAP Schedules
APPENDIX OF NON-GAAP SCHEDULES 16
Slide 17: Non-GAAP Schedules: Adjusted Operating Margin
Non-GAAP Schedules Adjusted operating margin, excluding surcharge revenue $ millions Q1-24 Q4-23 Q1-23 Net Sales 651.9 758.1 522.9 Less: Surcharge Revenue 159.1 198.1 147.2 Net Sales Excluding Surcharge Revenue 492.8 560.0 375.7 Operating Income 69.0 62.9 8.3 Operating Margin 10.6% 8.3% 1.6% Adjuste
Slide 18: Non-GAAP Schedules: Adjusted Free Cash Flow
Non-GAAP Schedules Adjusted Free Cash Flow $ millions Q1-24 Q4-23 Q1-23 Net cash provided from (used for) operating activities 7.4 174.9 (78.0) Purchases of Property, Plant, Equipment and Software (22.0) (30.8) (13.5) Adjusted Free Cash Flow (14.6) 144.1 (91.5) Management believes that the adjusted
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