O c t o b e r 2 6 , 2 0 2 3

CARPENTER TECHNOLOGY CORPORATION

1st Quarter Fiscal Year 2024

Earnings Call

1

Cautionary Statement

Forward-looking statements

This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected, anticipated or implied. The most significant of these uncertainties are described in Carpenter Technology's filings with the Securities and Exchange Commission, including its report on Form 10-K for the fiscal year ended June 30, 2023, and the exhibits attached to that filing. They include but are not limited to: (1) the cyclical nature of the specialty materials business and certain end-use markets, including aerospace, defense, medical, transportation, energy, industrial and consumer, or other influences on Carpenter Technology's business such as new competitors, the consolidation of competitors, customers, and suppliers or the transfer of manufacturing capacity from the United States to foreign countries; (2) the ability of Carpenter Technology to achieve cash generation, growth, earnings, profitability, operating income, cost savings and reductions, qualifications, productivity improvements or process changes; (3) the ability to recoup increases in the cost of energy, raw materials, freight or other factors; (4) domestic and foreign excess manufacturing capacity for certain metals; (5) fluctuations in currency exchange and interest rates; (6) the effect of government trade actions; (7) the valuation of the assets and liabilities in Carpenter Technology's pension trusts and the accounting for pension plans; (8) possible labor disputes or work stoppages; (9) the potential that our customers may substitute alternate materials or adopt different manufacturing practices that replace or limit the suitability of our products; (10) the ability to successfully acquire and integrate acquisitions; (11) the availability of credit facilities to Carpenter Technology, its customers or other members of the supply chain; (12) the ability to obtain energy or raw materials, especially from suppliers located in countries that may be subject to unstable political or economic conditions; (13) Carpenter Technology's manufacturing processes are dependent upon highly specialized equipment located primarily in facilities in Reading and Latrobe, Pennsylvania and Athens, Alabama for which there may be limited alternatives if there are significant equipment failures or a catastrophic event; (14) the ability to hire and retain a qualified workforce and key personnel, including members of the executive management team, management, metallurgists and other skilled personnel; (15) fluctuations in oil and gas prices and production; (16) the impact of potential cyber attacks and information technology or data security breaches; (17) the inability of suppliers to meet obligations due to supply chain disruptions or otherwise; (18) the inability to meet increased demand, production targets or commitments; (19) the ability to manage the impacts of natural disasters, climate change, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as the COVID-19 pandemic; and (20) geopolitical, economic, and regulatory risks relating to our global business, including geopolitical and diplomatic tensions, instabilities and conflicts, such as the war in Ukraine and the war between Israel and HAMAS, as well as compliance with U.S. and foreign trade and tax laws, sanctions, embargoes and other regulations. Any of these factors could have an adverse and/or fluctuating effect on Carpenter Technology's results of operations. The forward-looking statements in this document are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this presentation or as of the dates otherwise indicated in such forward- looking statements. Carpenter Technology undertakes no obligation to update or revise any forward-looking statements.

Non-GAAP and other financial measures

Financial information included in this presentation is unaudited. Some of the information included in this presentation is derived from Carpenter Technology's consolidated financial information but is not presented in Carpenter Technology's financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Certain of these data are considered "non-GAAP financial measures" under SEC rules. These non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure. Reconciliations to the most directly comparable GAAP financial measures and management's rationale for the use of the non-GAAP financial measures can be found in the Appendix to this presentation.

© 2023 CRS Holdings, LLC. All rights reserved.

2

1st QUARTER FISCAL YEAR 2024

Tony Thene | President and Chief Executive Officer

3

Safety is Our Highest Value

Total Case Incident Rate (TCIR)

4

3.5

3

2.5

2

1.5

1

0.5

0

3.3

2.1

2.2

2.1

2.0

1.7

1.2

1.3

1.1

1.0

0.6

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24 YTD

© 2023 CRS Holdings, LLC. All rights reserved.

4

First Quarter Summary

  • Delivered operating income of $69.0 million, 10% increase sequentially, driven by higher prices and ongoing targeted product mix shift
  • SAO segment continues to build momentum, exceeding expectations with operating income of $80.8 million and adjusted operating margin of 19.4%
  • Continued to drive higher pricing on both contractual and transactional business
  • Generated $7.4 million of cash from operations; total liquidity remains healthy at $366.4 million
  • Realized increased productivity, improved product mix and higher selling prices, representing tailwinds throughout fiscal year 2024
  • Demand for our unique portfolio of solutions remains strong across end-use markets

© 2023 CRS Holdings, LLC. All rights reserved.

Continued to build operating momentum, exceeding already high expectations for sequential growth

5

Demand Outlook Across End-Use Markets

Continue to see strong demand environment across end-use markets

% Revenue*

100%

Aerospace &

Defense

53%

Medical

Transportation

14%

6%

6%

Energy

16%

Industrial &

Q1FY24

Consumer

© 2023 CRS Holdings, LLC. All rights reserved.

  • Global travel surging, with ongoing demand increases
  • More material wanted sooner across the supply chain
  • Customers prioritizing security of supply
  • Defense spending increasing due to global events
  • Elective surgery demand high with strong patient backlog
  • OEMs focused on increasing manufacturing activity to meet demand
  • Customers continue to push for accelerated deliveries
  • Light duty vehicle inventories remain well below pre-COVID levels
  • Customers demanding more supply especially of premium products
  • Oil & gas capital expenditure outlook remains high
  • Increasing power generation demand for new builds and overhauls
  • Customers immediately purchasing any capacity for premium solutions available to them
  • High long-term demand needs across sub-markets, especially semiconductor
  • Advanced portfolio of solutions in high demand by customers

*Percentages reflect sales ex. surcharge.

6

Excludes sales through Carpenter's Distribution businesses.

First Quarter Sales

MARKET

Q1-24 NET SALES EX.

VS. Q4-23

VS. Q1-23

SURCHARGE ($M)*

$260.9

AEROSPACE & DEFENSE

-11%

+42%

$66.6

MEDICAL

0%

+34%

$29.2

TRANSPORTATION

-21%

+23%

$29.2

ENERGY

-16%

+60%

$79.4

INDUSTRIAL & CONSUMER

-18%

+16%

© 2023 CRS Holdings, LLC. All rights reserved.

Through higher prices, targeted mix management and

productivity improvements, profitability increased on lower

sequential sales

  • Volumes decreased sequentially primarily due to fewer operating days and planned preventative maintenance
  • Realized higher pricesacross product portfolio
  • Given demand environment, further improved product mixby prioritizing highest profit portfolio
  • Continued to see margin expansion with SAO reaching an adjusted operating margin of 19.4%, up from 16.8% in Q4

FY23

*Excludes sales through Carpenter's Distribution businesses.

7

1st QUARTER FISCAL YEAR 2024 FINANCIAL OVERVIEW AND BUSINESS UPDATE

Tim Lain | Senior Vice President and Chief Financial Officer

8

Income Statement Summary

$ millions, except per-share amounts

Q1-24

Q4-23

Q1-23

SEQUENTIAL

YEAR-OVER-

CHANGE

YEAR CHANGE

Pounds ('000)

50,228

61,428

44,890

(11,200)

5,338

Net Sales

651.9

758.1

522.9

(106.2)

129.0

Net Sales ex. Surcharge Revenue*

492.8

560.0

375.7

(67.2)

117.1

Gross Profit

124.1

119.0

54.8

5.1

69.3

Selling, General and Administrative Expenses

55.1

56.1

46.5

(1.0)

8.6

Operating Income

69.0

62.9

8.3

6.1

60.7

Adj. Operating Margin ex. Surcharge Rev.

14.0%

11.2%

2.2%

2.8%

11.8%

Effective Tax Rate

16.1%

21.0%

11.5%

-4.9%

4.6%

Net Income (Loss)

43.9

38.4

(6.9)

5.5

50.8

Diluted Earnings (Loss) per Share

$0.88

$0.78

($0.14)

$0.10

$1.02

© 2023 CRS Holdings, LLC. All rights reserved.

*Detailed schedule included in Non-GAAP Schedules in Appendix. 9

SAO Segment Summary

$ millions

Q1-24

Q4-23

Q1-23

SEQUENTIAL

YEAR-OVER-

CHANGE

YEAR CHANGE

Pounds ('000)

49,992

61,528

44,562

(11,536)

5,430

Net Sales

570.1

667.0

447.3

(96.9)

122.8

Net Sales ex. Surcharge Revenue

417.3

477.2

305.7

(59.9)

111.6

Operating Income

80.8

80.0

19.9

0.8

60.9

Operating Margin

14.2%

12.0%

4.4%

2.2%

9.8%

Adj. Operating Margin ex. Surcharge Rev.

19.4%

16.8%

6.5%

2.6%

12.9%

Q1-24 Business Results

Q2-24 Outlook

  • Net sales excluding surcharge increased 37% year-over-year on 12% higher shipment volumes driven by strong demand for high value products in key end-use markets of Aerospace and Defense and Medical
  • Significant improvement in year-over-year and sequential operating margins demonstrates realization of higher pricing, continuing product mix optimization and increasing productivity

© 2023 CRS Holdings, LLC. All rights reserved.

  • Demand conditions remain strong across end-use markets, especially Aerospace and Defense, and Medical, with customers wanting more material sooner
  • Realize benefits of increasing productivity and optimizing capacity for higher-value product mix
  • Q2-24operating income expected to be in the range of $78.0 million to $82.0 million

10

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Disclaimer

Carpenter Technology Corporation published this content on 26 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 October 2023 13:57:40 UTC.