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Aerospace & Electronics
Stephen M. Zimmerman, President
AGENDA
Results and Guidance
Market Overview
Growth and Investment Today
Investing for the Future
Efficient Execution
Summary
2
AEROSPACE & ELECTRONICS
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Advancing Customer Capabilities Through Innovative,
Reliable Solutions Which Deliver Superior Performance
AEROSPACE & ELECTRONICS SOLUTIONS
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Cabin Solutions Microwave Solutions Sensing Components & Systems
Fluid ManagementLanding Systems Electrical Power Solutions
»
Aerospace
& Electronics
22%
OEM Commercial
45%
OEM Military27%
Military Aftermarket
8%
Commercial Aftermarket
20%
AEROSPACE & ELECTRONICS
• CONSISTENTLY HIGH RETURNS & MARGIN PERFORMANCE WITH DIVERSIFIED PORTFOLIO
*Excludes Special Items. Please see non-GAAP Financial Measures tables for details.Note: Charts based on 2019 actual results.
»5
($ Millions) 2016 2017 2018 2019 2020G
Sales 746 691 744 799 775
Operating Profit* 150 151 165 193 182
Operating Margin* 20.1% 21.8% 22.2% 24.1% 23.5%
AGENDA
Results and Guidance
Market Overview
Growth and Investment Today
Investing for the Future
Efficient Execution
Summary
6
MARKET OVERVIEW
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44,000 AircraftNew Commercial Deliveries
2020–2038
$104B2020 DoD Research, Development,
Test & Evaluation
4.6% CAGRTraffic growth (RPK) 2020–2038
$15B IncreaseMaintenance, Repair & Overhaul 2020–2029
Commercial Defense Space
Source: Boeing Commercial Market Outlook and Department of Defense budget
Crane A&E Serves Broad & Growing Markets
CRANE A&E SERVED MARKET OVERVIEW AND OUTLOOK
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Our Value Proposition
Proprietary Technologies
Sole Source Positions
Diversified Customer Base
SpaceCrane 10-year Forecast Sales CAGR: 6%
DefenseCrane 10-year Forecast Sales CAGR: 3%
CommercialCrane 10-year Forecast Sales CAGR: 5%
AGENDA
Results and Guidance
Market Overview
Growth and Investment Today
Investing for the Future
Efficient Execution
Summary
9
»
• Commercial aftermarket moderating
• Robust defense spares order book
AEROSPACE & ELECTRONICS SALES OUTLOOK
• STRONG BACKLOG AND DEFENSE PROGRAMS MODERATING IMPACT OF 737 MAX
• Commercial impact of 737 MAX return to service timeline
• Continued strength in defense spending
OEM
Aftermarket
Segment Sales 2018 2019 2020G
Commercial 3% 5% (8%)
Defense 10% 12% 6%
Total OEM 7% 7% (3%)
Segment Sales 2018 2019 2020G
Commercial 12% 7% (7)%
Defense 3% 17% 15%
Total Aftermarket 10% 10% -
»10
LONG TERM GROWTH – BALANCED PORTFOLIO
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Pursuing New Growth Horizons &Inorganic Opportunities
Solid Legacy Business
High Volume Production & New Development
»
LONG TERM GROWTH – SOLID LEGACY BUSINESS
• LIFE-OF-PLATFORM PRODUCTS AND SERVICES»
Spares & RepairsMature Programs Aftermarket Support
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LONG TERM GROWTH – HIGH VOLUME PRODUCTION
• TOTAL FIRM RECORD BACKLOG STANDS AT MORE THAN $570M
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»
A320neo 737 MAXF-35
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LONG TERM GROWTH – NEW DEVELOPMENT
• HIGH RELIABILITY EQUIPMENT FOR MISSION CRITICAL APPLICATIONS
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»
AGENDA
Results and Guidance
Market Overview
Growth and Investment Today
Investing for the Future
Efficient Execution
Summary
15
TOP LINE GROWTH – STRATEGY DEPLOYMENT PROCESS
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Target Platforms
• New Commercial Aircraft
• Next Generation Defense Systems
• More Electric Aircraft
TOP LINE GROWTH – STRATEGY DEPLOYMENT PROCESS
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Technology
• Wireless Technology
• High Power Electrification
• Accessible Space
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Executing
Facility Expansionfor Growth
8%Forecasted Sales CAGR
Next 10 Years
60K Sq FtAdditional World-class Manufacturing
ELYRIA SITE EXPANSION
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Annual Sales
FORT WALTON BEACH – HIGH POWER LAB
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Significant Capability Increase
200 kW to > 1.5 MW
10,000 Sq Ft High Tech Infrastructure
+85%
16 Additional Design
Engineering Experts
$85M of New Product
Introductions in Next 5 Yrs
Northrop Grumman
HEMTT Program
Raytheon LTAMDS
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
LYNNWOOD FUEL FLOW TEST AND RESEARCH FACILITY
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Best In Class Research & Technology Capability
11%Sales CAGR
12,000 Sq Ft“State of the Art” Fuel Test Capability
Customer-Preferred
Fuel Flow
Transmitters
Annual Sales
AGENDA
Results and Guidance
Market Overview
Growth and Investment Today
Investing for the Future
Efficient Execution
Summary
21
LYNNWOOD / REDMOND CONSOLIDATION COMPLETE
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Increased Efficiency Via Integration of Departments
10,000Sq Ft
Manufacturing Space Freed-up
222 Associates Relocated
60,000Sq Ft
Office SpaceRemodeled
$3M in Annualized
Savings
BUSINESS EFFICIENCIES SINCE 2015
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Training & Development155,000 Hours
Facility Reduction
12 to 8
Process Improvement
408 Kaizens
Sales / Sq Ft27% Increase
Sales / Employee
20% Increase
CONTINUOUS IMPROVEMENT – “PRESIDENT’S KAIZENS”
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Crane Co. Kaizens~600 in 2019
Fuel Flow Transducer Machining
25% Reduction in Lead-time
On the Job TrainingA&E Wide Training Procedures
Automated Test Equipment Sustainability Strategy
Maintenance and Development Cost Reduction
A&E 2019 President’s Kaizens:
BUSINESS EFFICIENCY – 3D PRINTED CASTING CORE
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42 → 8Casting Pattern Reduction
81% ReductionProduct Lead Time
23% ReductionPart Cost
86% ImprovementCost of Poor Quality
AGENDA
Results and Guidance
Market Overview
Growth and Investment Today
Investing for the Future
Efficient Execution
Summary
26
»
VISIBILITY TO LONG-TERM SALES GROWTH
• OUR PLATFORM POSITIONS, TECHNOLOGY INVESTMENTS, CUSTOMER FOCUS, AND MARKET
FUNDAMENTALS ARE DRIVING LONG-TERM GROWTH MEETING OUR 3%-5% COMMITMENT
$500
$600
$700
$800
$900
$1,000
$1,100
$1,200
$1,300
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Actuals 3% CAGR 5% CAGR
»
$ Millions
27
»
SUMMARY
• WELL POSITIONED FOR CONTINUED PROFITABILITY & LONG-TERM GROWTH
Outstanding Technology in a Growing Market1
Program Wins & New Pursuits Driving Continued Growth2
Well Positioned for New Technology Insertion Opportunities3
Vigilant In Execution & Profitability4
»28
AEROSPACE & ELECTRONICS
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CraneAE.com
INNOVATIVE | TRUSTED | COLLABORATIVE
» www.craneco.com
