Exhibit 99.3
Crane Currency acquisition announcement call December 6, 2017
Forward-Looking Statements - Disclaimer 2 » www.craneco.com The information in this presentation includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical information or statements about our current condition. You can identify forward-looking statements by the use of terms such as “believes,” “contemplates,” “expects,” “may,” “could,” “should,” “would,” or “anticipates,” other similar phrases, or the negatives of these terms. We have based the forward-looking statements relating to our operations on our current expectations, estimates and projections about us and the markets we serve. We caution you that these statements are not guarantees of future performance and involve risks and uncertainties. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, actual outcomes and results may differ materially from what we have expressed or forecast in the forward-looking statements. Any differences could result from a variety of factors, including those detailed on Page 1 of our Annual Report on Form 10-K for 2016 and in our subsequent disclosures filed with the Securities and Exchange Commission.
Crane Currency Acquisition 3 » www.craneco.com Transaction Overview and Strategic Rationale Financial Summary and Value Creation Crane Currency Introduction Summary
Acquisition Snapshot Expect to Close First Quarter 2018 Agreement to purchase 100% of the equity of Crane & Co., Inc. (“Crane Currency”)Fully integrated global supplier of banknotes and leader in security technology for currencyPurchase PriceAll cash transaction$800 million on a “cash free” and “debt free” basisApproximately 8.5x 2017E adjusted EBITDA*FinancingCombination of cash on hand and additional debtCommitments in place to cover 100% of required financingContingent upon regulatory approvals and other customary conditions * Please see non-GAAP Financial Measures tables for details.
1855 Founded 1801 Stamford Headquarters Boston Foundry based businessin Chicago Began as Paper mills in New England Global, diversifiedmanufacturer of highlyengineered industrial products Today Global, fully integrated supplierof banknotes; full portfolio of security solutions ~11,000 Employees150 Locations globally Employees ~1,100 EmployeesSales in ~50 countries Combination of Two Historic Companies Nearly 380 Years of Combined History
Significant Value Creation * Based on the midpoint of 2017 and 2018 EPS guidance, excluding Special Items. Please see non-GAAP Financial Measures tables for details. Further Upside Possible from Additional Capital Deployment Acquisition Provides Path to Better Than 10% Adjusted EPS CAGRfor Next Several Years Accretion from Acquisition 5.10 10%+ EPS CAGR
Sophisticated Technology Highly Engineered Solutions
Long History of Acquisitions Substantial Addition to Our Portfolio 2nd Largest Acquisition in Crane Co.'s History
Experienced Acquirer in the P&MT Space 1985 1997 1999 2000 2006 2010 2013 2017
Track Record of Success * Excludes Special Items. Please see non-GAAP Financial Measures tables for details. Successful M&A Execution Track Record Payment & Merchandising Technologies ~1900 bps Improvement
Crane Currency Acquisition 11 » www.craneco.com Transaction Overview and Strategic Rationale Financial Summary and Value Creation Crane Currency Introduction Summary
Guidance Update On-Track for 2017; Expect Accelerating Core Sales in 2018 Reaffirming 2017 adjusted EPS guidanceGAAP EPS of $4.38-$4.48 (was $4.41-$4.51) given incremental transaction related costsAdjusted* EPS of $4.45-$4.55Introducing preliminary 2018 EPS guidanceCore sales +2% to +4%EPS of $4.85-$5.05, excluding any potential impact from pending Crane Currency acquisitionSegment details to be provided on the Q4 earnings call * Excludes Special Items. Please see non-GAAP Financial Measures tables for details.
Key Transaction Details and Metrics Attractive Multiple and Compelling Value Creation $800 million purchase price on a cash free/debt free basis2017E adjusted EBITDA* of ~$94 million and Sales ~$500 millionRepresents ~8.5x 2017 adjusted EBITDAMeets all strategic and financial M&A criteriaExpect $0.15 EPS accretion in Year 1, excluding Special Items$1.00 EPS accretion by 2021, excluding Special ItemsAlready planning for growth and productivity investmentsCompletion of new world-class banknote printing facility in MaltaAccelerating investment in security productsSite improvements at other facilities * Please see non-GAAP Financial Measures tables for details.
Capital Allocation * Company forecasts based on rating agency methodologies. Expect to De-Lever Rapidly via Short-term Debt Repayment and EBITDA Growth Target 2x–3x adjusted debtto EBITDAExpect to be disciplinedand maintain current investment grade ratingNear-term: No repurchases Retain bolt-on M&A flexibility, particularly outside U.S.Medium-term:Acquisition gives Crane better scale, and more flexibility forcapital deployment Adjusted Debt to EBITDA*
Flexibility for Capital Deployment Additional Value Creation Potential 2018–2021 Capital Deployment ~$1.5B Available for M&A and/or Repurchases while Retaining Investment Grade Credit Metrics
P&MT Segment Post-Acquisition Crane Currency Nearly as Large as CPI Payment & Merchandising Technologies (2017E Sales of ~$770M) Payment & Merchandising Technologies(2017E Pro Forma Sales of ~$1.3B)
Crane Co.(2017E Sales of ~$2.8B) Crane Co. Post-Transaction(2017E Pro Forma Sales of ~$3.3B) Crane Co. Post-Acquisition Portfolio Increasingly Positioned for Growth Fluid Handling Payment & Merchandising Technologies Aerospace & Electronics Engineered Materials Fluid Handling Payment & Merchandising Technologies Engineered Materials Aerospace & Electronics
Crane Currency Acquisition 18 » www.craneco.com Transaction Overview and Strategic Rationale Financial Summary and Value Creation Crane Currency Introduction Summary
Crane Currency at a Glance One of Three Global Fully Integrated Providers Fully integrated global currency providerBanknote designSubstrate manufacturingBanknote printingSecurity technologies2017E Sales~1/3 U.S. vs. ~2/3 International
Strong Position in Attractive Market 2nd Largest Player in Served Market ~$4.4 Billion Addressable Market Currency Security Features CurrencySubstrate BanknotePrinting Bill and Coin Validation
Global Banknote Issuance is a Steady Growth Market Banknote Production Continues to Grow Source: Company and industry research Expect Market Trends to Remain Favorable 4.5% CAGR
Growing Demand for Advanced Security Features Security Content Per Note is Growing Security Features Expected to Drive Revenue Growth Across more and more denominationsBecoming larger proportion of total banknote spend Illustrative Cost Structure Per Note 35%+ 2x Increase
Crane Currency Has Transformed Itself *Purchased Swedish Substrate Mill From Substrate to a Leader in Design, Printing, and Security ~13% Sales CAGR 68 ~500
Pioneer in Micro-Optics Security Portfolio Provides Path to Growth Global Industry Leader in Micro-Optic Security Security built into substrate and/or added at printSecurity features increasingly added to smaller denomination notesFull portfolio of micro-optic solutions with numerous optionsNever been successfully counterfeited
Summary More to Come on March 1 at Investor Day… 2nd largest deal in our history Extremely attractive metrics and value creationHighly engineered solutions for a growth marketGreat adjacency to existing Payment business
Appendix 26 » www.craneco.com Non-GAAP Information
Non-GAAP Explanation 27 » www.craneco.com Certain non-GAAP measures have been provided to facilitate comparison with the prior year.The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that non-GAAP financial measures which exclude certain non-recurring items present additional useful comparisons between current results and results in prior operating periods, providing investors with a clearer view of the underlying trends of the business. Management also uses these non-GAAP financial measures in making financial, operating, planning and compensation decisions and in evaluating the Company's performance. Non-GAAP financial measures, which may be inconsistent with similarly captioned measures presented by other companies, should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.
Non-GAAP Financial Measures 28 » www.craneco.com
Non-GAAP Financial Measures 29 » www.craneco.com
Non-GAAP Financial Measures 30 » www.craneco.com