CRANE PAYMENT & MERCHANDISING TECHNOLOGIES KURT GALLO PRESIDENT, CRANE PAYMENT INNOVATIONS
Crane Payment & Merchandising Technologies Overview and Results Cash Usage & Innovation Growth Drivers Summary 2
Crane Payment & Merchandising Technologies Payment Innovations Merchandising Systems Notes Coins Cold Drink & Snack/Food Hot Coffee Cashless & Software Note & Coin Recycling Cashless, Wireless & Software 3
Payment: We Touch Your Life Every Day Payment Kiosks Self-Checkout Parking Vending Machines POS Cashier Systems Fare Collection Gaming Slots Smart Safes Service Kiosks Bank Automation Consumer Convenience Driving the Need for Automation 4
Major Customers Are Industry Leaders Payment Kiosks Self-Checkout Parking Vending Machines POS Cashier Systems Fare Collection Gaming Slots Smart Safes Service Kiosks Bank Automation Automation Improves Our Customers Efficiency 5
2015 Key Messages Outperforming Expectations Organic growth of 6% Operating margin expanded +240 bps YOY* Strong Growth Payment Innovations delivering growth Merchandising vision has become reality Margin Expansion Successful integration delivering synergies CBS driven productivity * Excludes Special Items. Please see non-gaap Financial Measures tables for details. 6
Payment & Merchandising Technologies (in $ Millions) 2012 2013 2014 2015 2016G Sales 372 381 712 703 723 Operating Profit* 37 41 93 108 120 Operating Margin* 10.1% 10.7% 13.0% 15.4% 16.6% Crane Merchandising Systems 29% Emerging Markets 15% Japan/ANZ 15% Payment & Merchandising Technologies 26% Crane Payment Innovations 71% Western Europe 23% US / Canada 47% 6% Organic Growth Outperforming Expectations in 2015 * Excludes Special Items. Please see non-gaap Financial Measures tables for details. 7
Savings ($ Million) CPI Integration Huge Success! Delivering on Increased $33M Synergy Target $35 Expect: $33 $30 $25 Actual: $24 $20 $15 $10 $5 $0 Actual: $10 Targeted: $7M Targeted: $17M Targeted: $25M 2014 2015 2016G 8
CPI Integration Activities Driving Productivity Toronto Assembly 25,000 sq-ft Space Queretaro Facility Existing 80,000 sq-ft space Geneva Assembly 12,000 sq-ft space 27 Kaizen events 38,000 sq-ft freed up 50% increase in Capacity 9
Continuously Driving Margin Enhancement in Existing Facilities Freeing Space to Support Revenue Growth 10
Crane Payment & Merchandising Technologies Overview and Results Cash Usage & Innovation Growth Drivers Summary 11
Cash Remains Dominant Method of Payment India China Russia Italy Brazil 99% 98% 95% 89% 89% Japan Germany 69% 75% UK. USA Canada 47% 45% 53% Source: McKinsey on Payments, March 2013 12
Number of Transactions per Month Cash Dominates Smaller Transactions Consumer Cash Usage in North America (Under $25 Transaction Value) 70% 60% 58% 50% 40% 30% 20% 10% 0% 21% 12% 3% 6% Cash Debit Credit Check Other Source: Evidence from the Diary of Consumer Payments Choice: Shaun O Brien, June 2014 13
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 All Denominations Continue to Grow 40 Volume of U.S. Currency in Circulation (Billions of Notes) 35 30 25 20 15 10 5 $100 Notes $50 Notes $20 Notes $10 Notes $5 Notes $2 Notes $1 Notes 0 Note: Data as of December 31 of each year. Include Federal Reserve notes, U.S. notes, and currency no longer issued, but excludes denominations larger than the $100 note. Source: Federal Reserve 14
Countries Continuously Innovate Currency Advancing Note Design Color Shifting Ink Security Thread Advancing Coin Design and Composition Inner Plastic Ring Polycarbonate Materials Embedded with Taggant Over 1000 Currency Modifications per Year 15
Growing Demand for Advanced Technology Note Cashless Coin MAGNETIC MAGNETIC SWIPE PLANAR COILS CAPACITIVE ARRAY NFC MULTI-FREQUENCY ULTRA VIOLET BLUETOOTH HELMHOLTZ INFRA-RED CHIP AND PIN OPTICAL Excellence in Sensors and Algorithms for Superior Protection 16
Crane Payment & Merchandising Technologies Overview and Results Cash Usage & Innovation Growth Drivers Summary 17
Market Demand for Cash Handling Traditional Approach Accept Dispense Reduced Labor (Increase Productivity) Reduces Float Customer Convenience Recycling Innovation Recycle 18
Long-Term Growth in Public Transit China Most Rapidly Growing Transit Network in the World Indian Railways Just Initiating Automation CPI is Share Leader with Complete Solution for Cash Handling 19
Long-Term Growth in Public Transit Current State China 1.35B 25,000 TVMs / 25% CAGR India 1.25B 450 TVMs Opportunity CPI Leader in Emerging Markets with Total Cash Handling Solution 20
Bank Branch Automation Driving Growth Traditional Branch Branch of the Future Trends Branch Headcount # Express Banking Kiosks 9 0 6 2 Major Banks Embracing Automation to Deliver Consumer Convenience and Profitability Growth 21
Vending Industry Demand for Cashless Driving CPI Incremental Machine Content Current Norm is 65% Lost Machine Sales 15% Machine Sales Growth Cash Only Cashless Only Cash + Cashless Crane s Leadership Share, Uniquely Positioned: Capturing Cashless Growth 22
While Industry Demand for Cashless is Growing 15% CAGR Over the Next 10 Years (POS in 000 s) Projected Industry Cashless (Wireless) Installed Base Growth 2000 1800 1600 1400 1200 1000 800 600 400 Vending Point s of Sale 200 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: Company estimates. 23
Enabling Crane Merchandising s Digitally Connected Vision to Become Reality Integrated Cashless Delivering Higher Sales Shopping Cart Drives +30% Multi-purchase Touch Screen with Nutritional Browsing Intelligent Store Remote Management and Reporting Digital Advertising Drives +20% Lift in Sales Customized Solutions +60% Same Store Increases 24
Crane Payment & Merchandising Technologies Overview and Results Cash Usage & Innovation Growth Drivers Summary 25
Payment & Merchandising Technologies 1 Leading market share position in attractive and growing end markets 2 Innovative technology and product solutions 3 Delivering productivity and margin expansion Outperforming Expectations 26