CRANE Co. Overview. Aerospace & Electronics. Engineered Materials. Merchandising. Fluid Handling

Transcription

1 CRANE Co. Overview Aerospace & Electronics Engineered Materials Merchandising Fluid Handling 1

2 Fluid Handling 2012 Sales: $1,289 Million (Includes Controls: $94 Million) Louis Pinkham President, Fluid Handling 2

3 Fluid Handling Attractive Niches Specialty fluid handling solutions: Engineering solutions matter Critical performance applications Well known and respected brands Strong global channels ~50% Aftermarket MRO Growth Profile Balanced across Geographies 66% International 14% Emerging Market Attractive end markets Chemical Oil & Gas Power Building Services Industrial Well Positioned for Long-term Growth 3

4 Fluid Handling Our Solutions Crane Valve Group CRANE ChemPharma & Energy Flow Solutions CRANE Building Systems & Utilities CRANE Nuclear CRANE Supply CRANE Pumps & Systems CRANE Barksdale / Environmental 70% 17% Critical service valves for demanding process applications; innovative valves, couplings and components for industrial, commercial and utility applications Canadian pipe, valves and fittings distributor 6% Centrifugal water & waste-water pumps 7% Valves and fluid sensors End Market Focused 4

5 ($ Millions) ($ Millions) Fluid Handling Overview Total Sales 1,109 1,092 1,229 1, Backlog Operating Overview % sales CAGR ( 09 to 12) 2012 OP margin of 13.5% Repositioning actions complete 4Q09 4Q10 4Q11 4Q12 5

6 Fluid Handling 2012 Overview Sales Growth: Results ($ Millions) 2012 vs Sales $1, % OP $ % 3-4% overall served market growth Crane Supply, Chemical and Nuclear market share gains ChemPharma MRO & projects Crane Supply strength in Canada Europe market contraction headwind Highlights ChemPharma & Energy (CP&E) Emerging Regions Order Growth 19% increase in China CP&E Bundled project wins Crane Supply new distribution center share gain WTA Synergy Growth New global lined ball valve growth Crane Nuclear wins for AP1000 units in China and US 6

7 Fluid Handling Diversified & Balanced 2012 Destination Sales Global Rest of World ROW 19% 35% United States Latin America Eastern 11% Europe 6% China 15% 6% India 7% Japan Western Europe 25% 21% Middle East & Africa 27% 20% 8% Australia Canada Other Asia 14% Emerging Market Sales 7

8 Fluid Handling 33 Distribution 31 Sales / Service Facilities 13 North America 9 Europe 2 Australia LCC Facilities 4 China 3 India 1 Mexico 1 Hungary 2 Slovenia Increased Global Presence with Local Support Effectively Positioned to Serve Our Customer s Requirements 8

9 Consistent Transformation 2012 Repositioning Actions Key Initiatives Krombach Process improvements Internal LCC transfers Headcount reductions Resistoflex Facility rationalization Business model change Headcount reductions $10M Annual Profit Improvement Across Fluid Handling Business Transformation Driving Improved Margins 9

10 Fluid Handling Results ($ Millions) E Sales $1,109 $1,092 $1,229 $1,289 $1,315 Operating Profit* $134 $130 $161 $174 $190 Operating Margin* 12.1% 11.9% 13.1% 13.5% 14.4% $224 Crane Supply $83 Crane Pumps & Systems Crane Valve Group $889 $94 Crane Barksdale / Environmental 2012 * Before Special Items. See Non-GAAP table for details 10

11 Fluid Handling Overview 2012 Market Size $18B 2012 Market Growth 3 4% 2012 Crane Sales $1,289M 2012 Operating Margin 13.5% 2013 Growth Drivers Relatively flat markets Positioned for continued growth Infrastructure build in emerging markets Repositioned in Europe Earnings growth with volume End market vertical focus Focused MRO and target project process Leverage Valve Group global sales force Coordinated support and strategy Bundle full Crane valve portfolio Winning new customers and in new markets 11

12 Fluid Handling End User Sector 2012 Sales General Industrial 21% 24% Chemical / Pharmaceutical Utilities / Gas & Water 9% Building Services 22% 24% Energy 12

13 Chemical / Pharmaceutical Sector 2012 $309M US Chemical Capacity Utilization** World Chemical Output* China Rest of Europe ROW 4% 16% 19% 20% Germany Market Size: $3.8B Market Growth 2012 Global 7 9% US / W. Eur. 5 7% 41% North America Market Drivers NA Europe ROW $1.7B $4.9B $6.3B Low cost feedstock (Shale Gas) shifting investment to US market Focus on safety and emissions regulations driving equipment upgrades Chemical / Pharmaceutical 3-year CAGR 2-4% overall Business Drivers Accelerated investment in developing regions Market applications focus and bundled sales opportunities Gaining Share and Positioned for Market Growth Sources: * American Chemistry Council. **NAICS 325 Data 13

14 Chemical / Pharmaceutical World Class Brands Engineered Products Global Customers 14

15 China OECD India Middle East Other Asia Middle East Latin America US/Canada Africa Europe Thousands MW Thousands of Barrels per Day Energy Sector 2012 $309M Global Fossil Power Capacity Additions ( )* Global Refining Upgrading Capacity Additions ( )** Europe China ROW 6% 20% 14% 60% North America ,500 3,000 2,500 2,000 1,500 1, Market Drivers Market Size: $4.9B Market Growth 2012: Global 6 8% US / W. Eur. 1 2% Developing regions growth in coal power; shale gas prices shifting US mix Continued production expansion in refining plants Energy 3-year CAGR 2 4% overall Business Drivers Strong focus on Refinery turnarounds and process unit upgrades Market applications focus and bundled sales opportunities Shale Developments Will Play Key Role in US Energy Market Source: * IEA World Energy Outlook-2012, **Oil & Gas Journal Refining Capacity database 15

16 Energy World Class Brands Engineered Products Global Customers 16

17 Building Services Sector 2012 $284M MENA Construction Growth* Canada Non-Residential Starts** Middle East UK ROW 5% 11% 15% 12% United States Buildings US$ Billions % Canada Market Drivers Market Size: $3.7B Market Growth 2012: Canada 5% UK (6)% MENA 4% Evolving migration to variable flow HVAC solutions Kingdom of Saudi Arabia leading with response to pressing social needs Building Services 3-year CAGR 3 4% globally, driven by ME Business Drivers Middle East investment in sales and local inventory with distribution center Relationship classification identifies profitable growth opportunities Broadest product line range with appropriate approvals NPD and Customer Affinity Positioning Crane Well for Middle East Growth Sources: * Global Construction ** Reed Construction Data Canadata 17

18 Building Services World Class Brands Engineered Products World Class Customers UK 18

19 2012 $116M UK AMP5 & 6 Investment Revised Program* Utilities Sector US Water & Sewer Construction** Middle East Rest of Europe ROW 7% 19% 13% Market Size: $2.2B 34% Market Growth 2012: UK (15)% US (1)% 27% UK North America UK Utility CapEx Bn Market Drivers Continued infrastructure investment in developing markets and replacement in mature markets Government budgetary constraints in America and Europe Utilities 3-year CAGR 1 2% globally Business Drivers Strengthening front end sales resource in targeting growth markets Industry leading service levels and lead times Data Trend 12MMT Forecast Growing Market Share With Increased Sales Focus & Strong Customer Metrics Sources: * OFWAT & Crane estimates. ** ITR Economics 19

20 Utilities World Class Brands Engineered Products World Class Customers 20

21 Index: 2007 = 100 Index: 2005 = 100 General Industrial Sector 2012 $271M US Industrial Production* Euro-17 Manufacturing Production** ROW 17% United States Europe 18% 43% Canada 22% Market Size: $3.7B Market Growth 2012: Global 4 6% US 2 4% Europe (2) 1% Market Drivers Industrial Production indicators up globally Population growth drives infrastructure growth in developing regions General Industrial 3-year CAGR 2 3% globally Business Drivers End-user focus with MRO expansion Strengthening channel to market Superior durability, customization and geographic expansion drive share Market Leading Service and Custom Solutions to Exceed Customer Expectations Source: *UBS, Crane Internal Estimates ** OECD, MAPI, Crane Internal Estimates 21

22 Market Growth Market Outgrowth Emerging Markets New Products Price Realization to the Customer From the FACTORY 22

23 Fluid Handling Market Outgrowth Global Project Management Early Identification Strategic Selling Global Sales Force and Coordination 60% of Projects Include Multiple ChemPharma & Energy Products Solution Provider Global Project Coordination Driving Higher Bundled Sales 23

24 Accelerating Growth Market Outgrowth Crane Nuclear CBS Business Model Performing Scope of Work Defined process execution Performance based Kaizens to implement Visual Management Track / improve results new customers 48% market share gain 57% reduction in rework Crane Business System Driving Higher Sales Our People Are Our Product 24

25 Accelerating Growth Market Outgrowth Crane Supply New Toronto Distribution Center and Strategic Relationship Classification New distribution center Inside pipe storage PVF value add on-site Best-in-class lead time and delivery Targeted 16% Sales CAGR Over 3 Years Prioritized effort on targeted customers Investment in Facility and Focus Delivering Results 25

26 Accelerating Growth Emerging Market Multinational Corp Localizing in China Partnering with Local Companies to Drive Growth Crane Value AML approvals Technical preference Local support Application knowledge Global Project Management Bundled Solution BASF Chongqing MDI Plant $4M Contract Awarded! Ying LiTe Acetic Acid $5M Contract Awarded! Sales Force Sophistication / Local Presence Bundle Crane Portfolio Photo: BASF - Artist Rendering of the future Chongqing MDI plant 26

27 Accelerating Growth Emerging Market Building Services & Utilities / ChemPharma & Energy Middle East Service Center Shorter MRO lead times Supports local Middle East sales presence Leverage infrastructure across all Crane Targeted 16% Sales CAGR Over 3 Years Global Supplier with Local Service and Support 27

28 Accelerating Growth New Product Development Xomox Global Lined Ball Valve Saunders S360 Actuator VOC External sealing critical Safety requirement for one-piece ball stem Solution Patented stem, cover seal and single piece ball stem design VOC Compact, lightweight Corrosion resistant Ease of installation Solution Modular polished stainless 360 rotation for installation flexibility Exceeding Sales Projections by Exceeding Customer Requirements 28

29 Fluid Handling Positioned for Profitable Growth Vertical Focus with Global Scale Aftermarket Focus Emerging Market Focus Positioned for Margin Expansion Customer Solutions with Portfolio Bundle Driving End-user and EPC Specifications Disciplined Project Pursuit Process Clear Market Value Proposition Cyclical Resiliency Significant Installed Base Data Mining of Opportunities 50% front end resources increase over last 4 years New Dubai Distribution Center Global Reach with local knowledge India Design Center 2012 Repositioning Multi-year Runway Strong Price Management and Realization Leveraging Best Value Global Supply Chain NPD Differentiation Providing Engineered Solutions for Critical Performance Applications 29

30 Fluid Handling Strategy & Execution is Working ($ Millions) $1,236 $1,259 $1,228 $1,289 $1,315 $1,030 $1, % 13.9% $1,109 $1, % 11.9% 13.1% 13.5% 14.4% 15.0% 10.4% 8.2% $85 $114 $149 $175 $134 $130 $161 $174 $ * 2008* 2009* 2010* * 2013** Sales Operating Profit % Margin Consistently Improving Margins * OP Excludes Special Items ** Crane Co. Estimates 30

31 Questions? 31

32 Summary Strong portfolio positions us well Accelerated EPS growth through share gains and productivity EPS growth of 11 16% in 2013 All business segments expecting higher sales, OP and Margins Leveraging existing facilities Achieving repositioning savings Addressed domestic pension exposure Leveraging the Crane Business System Robust MEI integration planning process identifying synergies Expecting Third Consecutive Year of Record EPS in

33 Questions? 33