Crane NXT, Co. Jefferies Global Industrials Conference 2026

Great. All right. All right.

Well, thank you, Steve. Thank you for the introduction as well. It's wonderful to be here. My name's Aaron Saak. I'm the CEO of Crane NXT, and I'm joined by Christina Cristiano, our CFO, and we'll be certainly taking questions from Steve here in a few moments. As he alluded to, we thought it may make sense to start off with a few introductory comments and slides about the company for those who are new to our story, and even for those who've been with us since we went public about three years ago, to talk about the evolution that is today's Crane NXT. As the title slide here indicates, our focus of the company, everything we're doing, is around securing, detecting, and authenticating products for our customers, their most important assets. You'll see more of what that means here in a second.

I'll start with the normal customary disclaimers. This presentation is also available on our website as well, on the IR section of it. Let me first start with a little overview of the company, which is today, Crane NXT will be approaching $2 billion in sales. A hallmark of the company has been our adjusted EBITDA margins in the mid-20% range and very strong free cash flow. When you look at the company today, we've done quite a bit of diversification since we launched, with 35% of the business in printing, designing, and providing security features for currency, 25% in payment hardware, where we're validating, authenticating that currency, 15% in vending, and then we've expanded and diversified the company into brand authentication systems, inspection devices, and then the relevant services around those. Today, we have about 16,000 employees.

I think a hallmark of the company, and I would argue most of you, and I certainly haven't in my career, seen a company that has customers that have been with it for over 100 years. We do, and that includes many governments around the world, the most prominent being the U.S. And that's where we get a lot of our revenue, 50% here in North America. A highlight of the company, and one that continually helps us with our growth is our presence in emerging markets, which is now 25% of the revenue of the company. As Steve alluded to, while we're a new story, we're really entering the third phase of the evolution of the company. Phase one was leading up to the separation that formed Crane NXT from Crane Company, and that occurred back in April of 2023.

At that time, we were a $1.3 billion company with a TAM of about $7 billion that we were playing in. Since that time, we've purposely expanded the company around authentication, detection technologies, now growing the company up to, again, approaching $2 billion, almost doubling our TAM, all in these spaces, creating very wide moats in our technologies and our channels around authentication and traceability. What's driving us, where we're playing, is really centered on these three trends that we believe are durable, sustainable, and also where we have unique capabilities to take advantage of them. The first is the need for advanced counterfeiting technology. More things are getting counterfeited. In fact, today, most people believe about 2%-3% of all global commerce is counterfeit material, and that's coming from a variety of sources. That's obviously trillions of dollars of counterfeit.

What we're doing is fundamentally providing technology and services to help customers and governments protect against that. Secondly, supply chains are getting more digitized, and that really means track-and-tracing products through the point of manufacture, whether that's pharmaceuticals or food, or whether it's NFL or Major League Baseball apparel, all the way through the point of consumption to the consumer. That's a market that's growing. Then finally, emerging markets. For us, again, 25% of the portfolio and increasing as we position both organically and inorganically to take advantage of this trend. This is where we've grown the company in this TAM. We started at $7 billion with two operating companies called Crane Currency and CPI. We've made a series of acquisitions to form what we now call Crane Authentication, which takes us into the brand and further government identification space.

Most recently, earlier this year in April, we closed an acquisition of Antares Vision Group, which brings us into pharmaceuticals and food and beverage, all with the same core technologies of authenticating products, securing them, detecting that authentication, and then providing traceability through software. This is how we report today. We have two segments, Security and Authentication Technologies, or SAT for short, and Detection and Traceability Technologies. You can think of these two segments, and the way we think about them, is SAT provides the advanced science, the authentication or security technology, and DTT provides the equipment and services that actually authenticate those products, and some of the software that goes along with it. These are really the capabilities then, and how they fit together, from providing the secure technology, the track and trace software, the detection equipment.

What you see there is an example of a large piece of equipment that would be in a pharmaceutical line providing inspection and detection technology for different vials for a particular pharma product. The field service capabilities which commission that equipment and keep it up and running. Then I think a really unique capability that we have is the ability to sell across many parts of governments, from their equivalent of Department of the Treasuries to their FDAs to their Department of Homeland Security equivalents, where we talk about IDs. We have a real inherent capability of dealing with governments that's unique across the portfolio. Our legacy in the company has been built on a foundation of continuous improvement, and like many companies, we call that our business system or the Crane Business System.

Fundamentally centered for well over a decade in the same principles around Kaizen and Lean and 80/20 that the best-in-class industrials have nurtured. I am very proud to be coming from that type of pedigree and into a company that values it, and we continue to drive it. Over 140 Kaizens last year. We have what we call CBS tool champions. These are people trained in the tools to drive Lean and productivity across the enterprise, and you can see soon to be approaching 100,000 hours of training in the business system. This is our flywheel that we have put up here that shows how we use CBS to drive continuous improvement in the company. One of the hallmarks of the company is our free cash flow and our strong balance sheet. I wanted to spend a minute on how we think about capital allocation.

The first is to invest in organic growth to accelerate our top line, and we will be spending anywhere between 3%-5% of sales to grow the top line. A lot of that going in to expand our currency business, which has a backlog that is at an all-time high and a robust pipeline of opportunities that we see well into the future. Secondly is around M&A. We have done three sizable deals for us over our first three years. We will have about $1 billion of dry powder to deploy to continue to build on the franchise, and we will balance that as the case may be opportunistically with share repurchases, which are certainly possible for us as we de-lever the balance sheet. Then we pay a dividend that is approximately 15% of free cash flow.

I just wanted to share that as how we think about capital allocation in the business. Here is a summary of what we put out for the next several years. We see this business growing at a core growth of mid-single digits, revenue growing up to about $2.5 billion, while we keep net leverage below 3, while still producing approximately 100% free cash flow at mid-20s EBITDA margins. I would suggest if you screen any industrial company that has those type of EBITDA margins, 100% free cash flow, and mid-single-digit growth, it puts us into some rarefied space in a mid-cap industrial company.

That is why I am very bullish, as you would hope I would be, on why you should invest in Crane NXT, because I do think we have hit an inflection point in the company through this portfolio transition that is well underway and only accelerating. We are into a TAM now that is double where we were two to three years ago, with unique wide moats around this business that are as strong and deep as I have ever seen. That is due to the differentiated technology. We truly are the technology leader, both with inherent intellectual property that is know-how, and with patents.