Crane Company · NYSE:CR
Crane — Investor Day (March 2023)
23 slides from Crane's investor day presentation, Mar 9, 2023
Slide 1: Strategic Overview
STRATEGIC OVERVIEW Max Mitchell President and Chief Executive Officer, Crane Company
Slide 2: Today's Key Messages and Themes
TODAY’S KEY MESSAGES AND THEMES ▪ Separating from a position of strength following record 2022 results − New journey starting with two highly attractive strategic growth platforms ▪ We are driving accelerating growth across the portfolio − Confident in 4%-6% long-term average core sales growth ▪ Exe
Slide 3: Agenda
AGENDA TIME TOPIC PRESENTER 8:30-8:35 Welcome and Introductions Jason Feldman 8:35-8:55 Strategic Overview Max Mitchell 8:55-9:15 Financial Overview Rich Maue 9:15-9:30 Equity Story and Valuation Jason Feldman 9:30-9:45 Break 9:45-10:15 Process Flow Technologies Alex Alcala 10:15-10:30 Q&A for Proce
Slide 4: Agenda
AGENDA ▪ Separation Overview and Rationale ▪ “New” Crane - Who We Are ▪ How We Operate ▪ Substantial Value Creation Potential 4
Slide 5: Two Best-in-Class Industrial Technology Leaders
TWO BEST-IN-CLASS INDUSTRIAL TECHNOLOGY LEADERS ▪ Aerospace & Electronics and Process Flow ▪ Crane Payment Innovations (CPI) Technologies strategic growth platforms and Crane Currency ▪ ~$2 billion sales in a ~$25 billion market ▪ ~$1.4 billion sales in a $7+ billion market ▪ Ticker “CR” on NYSE ▪ T
Slide 6: Strategic Rationale for Separation
STRATEGIC RATIONALE FOR SEPARATION ▪ Deeper operational focus, accountability and flexibility to meet customer requirements ▪ Increased operating and financial flexibility to pursue growth opportunities ▪ Tailored capital allocation strategies ▪ Will attract a shareholder base aligned with each busi
Slide 7: Financial Rationale for Separation
FINANCIAL RATIONALE FOR SEPARATION Valuation Discount vs. Peers Above average EV/EBITDA (Next 12-Months) discount vs. 7.0x industrial peers 6.0x 5.0x 4.0x Long-term average discount 3.0x 2.0x 1.0x 0.0x 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Current valuation does not reflect business stre
Slide 8: Timing Is Right for Separation Today
TIMING IS RIGHT FOR SEPARATION TODAY ▪ Business stronger than ever − Record financial results in 2022 − Record backlog in attractive and growing end markets − Accelerating momentum with growth strategies and initiatives ▪ Scale and balance sheet strength to create separate companies with financial f
Slide 9: Agenda
AGENDA ▪ Separation Overview and Rationale ▪ “New” Crane - Who We Are ▪ How We Operate ▪ Substantial Value Creation Potential 9
Slide 10: Crane Company Highlights
CRANE COMPANY HIGHLIGHTS ▪ Highly-engineered, technology-differentiated 2023G Adjusted Operating Profit* products and solutions for large (~$25 billion) and attractive markets Engineered Materials Process Flow 7% Technologies ▪ Respected brands and leadership positions ▪ Mission-critical, high cost
Slide 11: Accelerating Results from Organic Investments
ACCELERATING RESULTS FROM ORGANIC INVESTMENTS New Product Development Breakthrough Innovation Technology Investment Localization Commercial Excellence 11
Slide 12: Strong Core Sales Growth Outlook
STRONG CORE SALES GROWTH OUTLOOK Aerospace & Electronics ▪ Cyclical recovery of commercial A&E markets ▪ Content already won on large defense programs ramping over next few years ▪ Sole-sourced content on all major aerospace platforms ▪ Strong alignment with secular trends, most notably electrificat
Slide 13: Strong Core Sales Growth Outlook
STRONG CORE SALES GROWTH OUTLOOK Aerospace & Electronics Process Flow Technologies ▪ Cyclical recovery of commercial A&E markets ▪ Accelerating NPD with new product vitality at record levels ▪ Content already won on large defense programs ramping over next few years ▪ Secular trends supporting conti
Slide 14: Agenda
AGENDA ▪ Separation Overview and Rationale ▪ “New” Crane - Who We Are ▪ How We Operate ▪ Substantial Value Creation Potential 14
Slide 15: Building on a Strong Foundation
BUILDING ON A STRONG FOUNDATION ▪ Ethical culture ▪ Philanthropy, Sustainability and Equality ▪ Crane Business System 15
Slide 16: Ethics at the Core of Our Culture
ETHICS AT THE CORE OF OUR CULTURE I am resolved to conduct my business in the strictest honesty and fairness; to avoid all deception and trickery; to deal fairly with both customers and competitors; to be liberal and just toward employees; and to put my whole mind upon the business. Resolution Made
Slide 17: Management Cadence and Disciplined Execution
MANAGEMENT CADENCE AND DISCIPLINED EXECUTION ▪ Rigorous, data-driven management cadence ▪ Continuous improvement focused ▪ Highest integrity and commitment to quality ▪ Empowered, customer- focused BU General Managers Extreme accountability in all aspects of our business 17
Slide 18: Agenda
AGENDA ▪ Separation Overview and Rationale ▪ “New” Crane - Who We Are ▪ How We Operate ▪ Substantial Value Creation Potential 18
Slide 19: Substantial Growth Opportunities
SUBSTANTIAL GROWTH OPPORTUNITIES ▪ Fragmented end markets with robust M&A pipeline ▪ Strong balance sheet to support organic and inorganic strategic growth objectives, while providing a dividend in-line with peers ▪ ~$1 Billion of M&A Capacity available today, growing to ~$4 Billion through 2028 19
Slide 20: History of Successful Acquisitions
HISTORY OF SUCCESSFUL ACQUISITIONS Deployed over $2 billion on acquisitions since 2010
Slide 21: Long-Term Vision for Strategic Growth Platforms
LONG-TERM VISION FOR STRATEGIC GROWTH PLATFORMS 2023G 2028F ~$1.8B Sales / ~20.5% Segment EBITDA / MSD Growth ~$4B Sales / ~Mid-20s Segment EBITDA / HSD Growth A&E PFT A&E PFT ▪ Focus on high-return acquisitions that create value for shareholders and improve the strength of our strategic growth plat
Slide 22: Exciting Value Creation Opportunity
EXCITING VALUE CREATION OPPORTUNITY ~$2B aftermarket sales from ~40% 4-6% in sales core sales growth strategic growth platforms 35%-40% ~19.5% Substantial operating leverage* pre-corporate Adjusted EBITDA margin** (2023G) M&A opportunity Expect double-digit core EPS growth with upside from capital d
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