Crane Company · NYSE:CR
Crane — Crane Company 2023 Investor Conference
23 slides from Crane's conference presentation, Mar 9, 2023
Slide 1: Financial Overview
FINANCIAL OVERVIEW Rich Maue Executive Vice President and Chief Financial Officer
Slide 2: Agenda
AGENDA ▪ Separation Mechanics, Details and Timing ▪ 2022 Performance Highlights ▪ 2023 Outlook ▪ Capital Allocation Strategy 2
Slide 3: Separation Update and Key Milestones
SEPARATION UPDATE AND KEY MILESTONES ✓ Organizational design for post-separation companies complete ✓ Crane NXT CEO and CFO appointed ✓ Capital structure design for both organizations complete ✓ Financing commitments in place ✓ Form 10 Registration Statement effective “When-Issued” trading expected
Slide 4: Key Upcoming Dates
KEY UPCOMING DATES March 23 March 29 April 3 April 4 5:00pm ET (on or about) 5:00pm ET Record date for When-Issued trading Distribution date the distribution begins at the NYSE Shareholders of record ▪ Crane Holdings, Co. First trading date will receive one share of continues to trade “regular for C
Slide 5: Agenda
AGENDA ▪ Separation Mechanics, Details and Timing ▪ 2022 Performance Highlights ▪ 2023 Outlook ▪ Capital Allocation Strategy 5
Slide 6: Very Strong Finish to 2022
VERY STRONG FINISH TO 2022 $ Millions GAAP Adjusted* except per-share amounts Q4 2022 Q4 2021 Change Q4 2022 Q4 2021 Change Sales $824 $825 (0%) $824 $825 (0%) Operating Profit $129 $93 +39% $153 $99 +54% Operating Margin 15.7% 11.3% +440 bps 18.6% 12.0% +660 bps Earnings per Share $1.71 $1.22 +40%
Slide 7: Overall Record Results in 2022
OVERALL RECORD RESULTS IN 2022 $ Millions GAAP Adjusted* except per-share amounts FY 2022 FY 2021 Change FY 2022 FY 2021 Change Sales $3,375 $3,408 (1%) $3,375 $3,408 (1%) Operating Profit $370 $529 (30%) $597 $528 +13% Operating Margin 10.9% 15.5% (460 bps) 17.7% 15.5% +220 bps Earnings per Share $
Slide 8: CBS Drives Consistent, Differentiated Execution
CBS DRIVES CONSISTENT, DIFFERENTIATED EXECUTION Achieved record results despite: ▪ Supply chain disruptions ▪ Severe inflation ▪ Labor market challenges ▪ Divestiture of Crane Supply Management cadence and disciplined execution drives differentiated execution 8
Slide 9: History of Strong Operational Execution
HISTORY OF STRONG OPERATIONAL EXECUTION Adjusted Operating Margin for Strategic Growth Platforms* (Aerospace & Electronics and Process Flow Technologies) On-Track for Record Margins in 2023 with Substantial Upside 18.0% 18.3% 17.8% 17.1% 17.0% 16.4% 15.8% 16.0% 15.3% 15.6% 15.2% 14.8% 14.3% 13.4% 13
Slide 10: Agenda
AGENDA ▪ Separation Mechanics, Details and Timing ▪ 2022 Performance Highlights ▪ 2023 Outlook ▪ Capital Allocation Strategy 10
Slide 11: Two Extremely Well Positioned Growth Platforms
TWO EXTREMELY WELL POSITIONED GROWTH PLATFORMS Crane At-a-Glance ($ millions) 2023G 2023G Adjusted Operating Profit* Sales $1,980 Engineered Materials 7% Pre-corporate Adjusted EBITDA* $386 % of Sales 19.5% Aerospace & 51% Process Flow Technologies Electronics 42% Segment Adjusted Operating Profit*
Slide 12: Crane Company Initial Operational Guidance
CRANE COMPANY INITIAL OPERATIONAL GUIDANCE ($ millions) GAAP Adjusted Adjusted Ex-Supply 2023G vs. 2022A Adj. ex-Supply Additional Details Sales 2022A 2022A* 2022A** 2023G Change FX Core Aerospace & Electronics 667 667 667 735 10% (0.1%) 10% ▪ Guidance assumes constrained and mixed overall Process F
Slide 13: Crane Company Initial EPS Guidance
CRANE COMPANY INITIAL EPS GUIDANCE ($ millions, except per-share amounts) Additional Details Guidance 2023G* Segment Operating Profit $345 ▪ Continue to expect separation will be completed in April 2023; Consequently, Corporate ($65) first quarter will be reported on a Crane Holdings, Co. consolidat
Slide 14: Crane Company Post-Separation Capital Structure
CRANE COMPANY POST-SEPARATION CAPITAL STRUCTURE Additional Details ≤0.5x Net ~$650-$700 Million ▪ Estimated Net Debt (total debt less total cash) Debt-to-EBITDA Liquidity of ~$100-$150 million at separation ▪ 2023 Guidance pro forma EBITDA of ~$321 million implies net Debt-to-EBITDA of ≤0.5x $500 Mi
Slide 15: Agenda
AGENDA ▪ Separation Mechanics, Details and Timing ▪ 2022 Performance Highlights ▪ 2023 Outlook ▪ Capital Allocation Strategy 15
Slide 16: Disciplined Capital Allocation Strategy
DISCIPLINED CAPITAL ALLOCATION STRATEGY Maintain Strong Credit Metrics and Flexible Balance Sheet While Funding: Internal Investments Acquisitions Competitive to Drive Organic Growth to Enhance Growth Returns to Shareholders ▪ Capital expenditures ▪ Pursuing bolt-on transactions ▪ Target dividend pa
Slide 17: Capital Deployment Potential
CAPITAL DEPLOYMENT POTENTIAL ~$4 Billion Available from 2023-2028 Incremental ~$4 Billion Debt Capacity Available for M&A and/or M&A and/or Repurchases repurchases while retaining strong, target credit metrics Operating Cash Flow Dividends Capital Expenditures Sources Uses Substantial additional val
Slide 18: Well Positioned for M&A
WELL POSITIONED FOR M&A Target Areas for M&A Aerospace & Electronics Process Flow Technologies ▪ Power Conversion ▪ Chemical Solutions ▪ Condition and Position Sensing ▪ Pharmaceuticals and Aseptic ▪ Pressure and Flow Measurement ▪ Wastewater treatment ▪ Flow Management ▪ Industrial Automation ▪ Liq
Slide 19: Data-Driven and Analytical Approach to M&A
DATA-DRIVEN AND ANALYTICAL APPROACH TO M&A IDENTIFICATION BY SEGMENT Higher Space Attractiveness $5B estimated EV Lower Lower Extendibility for Crane Higher 19 Note: Illustrative only.
Slide 20: History of Overdelivering on Acquisition Synergies
HISTORY OF OVERDELIVERING ON ACQUISITION SYNERGIES ~1.5x-2x Strict M&A Financial Criteria: 10% ROIC by Year 5 Forecast Synergies Actual Synergies Instrumentation & Sampling Over last 10 years, acquisition synergy realization 1.5-2x original forecast 20
Slide 21: M&A Criteria
M&A CRITERIA All acquisitions must meet both strategic and financial criteria ▪ Strategic criteria − Attractiveness − Extendibility − Alignment with capabilities / “right to win” ▪ Financial criteria − 10% ROIC by year 5 Strict strategic and financial discipline 21
Slide 22: Exciting Value Creation Story
EXCITING VALUE CREATION STORY Solid organic growth profile, Continued margin expansion, led by technology innovation 35% - 40% led by superior products, 4-6% Core and new product Operating strong pricing, and Growth development Leverage operational excellence Growth 0.5x net Disciplined approach to
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