kurt gallo, senior vice president · retailers combat rising labor cost through productivity...
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Payment & Merchandising Technologies
Kurt Gallo, Senior Vice President
AGENDA
Results and Guidance
Market Trends
Growth Initiatives
Productivity and Efficiency
Summary
2
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Payment & Merchandising Technologies
38%
Crane Payment
Innovations53%Crane
Merchandising Systems
17%
Crane Currency
30%
U.S./Canada51%
Western Europe
16%
Emerging Markets
24%
Developed Asia-Pacific
9%
PAYMENT & MERCHANDISING TECHNOLOGIES
• CONTINUED GROWTH AT ATTRACTIVE MARGINS
* For 2020G, we included acquisition-related revenue, which constitutes revenue reflected as pre-acquisition deferred revenue that would otherwise be recognized but for the purchase accounting treatment of acquisitions. Please see non-GAAP Financial Measures tables for details. ** Excludes Special Items. Please see non-GAAP Financial Measures tables for details.Note: Charts based on 2019 actual results.
»3
($ Millions) 2016 2017 2018 2019 2020G
Sales* 746 777 1,257 1,158 1,345
Operating Profit** 134 159 218 187 215
Operating Margin** 17.9% 20.5% 17.4% 16.2% 16.0%
1.8%
5.9%
7.8%7.0%
10.3%11.2%
6.1%7.0%
8.0%
10.1%10.7%
12.8%
15.1%
17.9%
20.5%
17.4%
16.2% 16.0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020G*
Cummins Allison
Acquisition
MEI Acquisition
Target Margin Range
of 18–22%
Currency Acquisition
TRACK RECORD OF SUCCESS
4
Adjusted Segment Margin* Improved ~1400 BPS since 2003,
even with Temporary Acquisition Related Dilution
*Excludes Special Items. Please see non-GAAP Financial Measures tables for details.
AGENDA
Results and Guidance
Market Trends
Growth Initiatives
Productivity and Efficiency
Summary
5
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MARKET GROWTH: GLOBAL CASH IN CIRCULATION CONTINUES TO GROW
• THE DEMISE OF CASH IS HIGHLY OVER-EXAGGERATED»6
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Africa Asia Europe North America South America
2011 2012 2013 2014 2015 2016 2017 2018
RETAILERS COMBAT RISING LABOR COST THROUGH PRODUCTIVITY INITIATIVES
7
$28
$31
$34
$37
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
“Walmart to use more robot technology for store tasks.”
“U.S. companies facing worker shortage race to automate.”
Employer Costs for Employee Compensation
Source: Bureau of Labor Statistics
“Japan firms near crisis as labor shortage
deepens”
“Increases in Britain’s minimum wage are
putting a growing number of workers at
risk of being replaced by machines”
“As mandated minimum
wages…continue to rise, retailers are
forced to pursue automated alternatives.”
AGENDA
Results and Guidance
Market Trends
Growth Initiatives
Productivity and Efficiency
Summary
8
BUSINESS GROWTH FUELED BY STRONG FUNDAMENTALS
Strategic Acquisitions
Continuing to build out the full cash cycle offering that provides
best in class products coupled with the service network.
New Product Development
Transforming our business from
component suppliers into customer-ready,
packaged solutions.
Technology Innovation
The connected vision brings all elements of the
customer cash cycle in to a unified, easy to
manage offering.
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Evolving the Business to a Full Solution Supplier
NEW PRODUCT DEVELOPMENT: EXPANDING INTOPACKAGED SOLUTIONS
10
NEW PRODUCT DEVELOPMENT: CASHLESS AND CONNECTIVITY DEVICES INCREASE SHARE OF WALLET
11
All-in-One Cashless
Reader/Telemeter
FULLY CONNECTED VISIONACROSS OEM AND CRANE PACKAGED SOLUTIONS
All
Payment
Loyalty
Programs
Digital
Advertising
Route
Analytics
Device
Management
CPI
Network
Vending Machines
Consumer
Coin Redemption
Back-Office
Note Counter
Attended Lane &
Smart SafesFully Connected Systems, Supported by aNational Service Network 12
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DESIGN AND TECHNOLOGY DRIVE GROWTH
• STRONGER THAN EVER ADOPTION OF CRANE MICRO-OPTICS IN LAST 10 YEARS
13
2014 20192009
»
32 Denominations
11 Countries, 1 Product 62 Denominations
27 Countries, 2 Products
137 Denominations
48 Countries
137 Denominations
48 Countries, 5 Products,
STRATEGIC ACQUISITIONS:SOLUTIONS FOR THE ENTIRE PAYMENT CYCLE
Validation & Processing Equipment
for OEMs
Back Office Automation for Operators
Currency Design & Manufacturefor Central Banks
Packaged Product Solutions for Operators
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CUMMINS ALLISON: BUILDING OUT THE CASH CYCLE OFFERING
• OUR CONNECTED VISION COMBINED WITH CUMMINS BACK-OFFICE AND SERVICE NETWORK
PROVIDE A PLATFORM FOR GROWTH
15
Remote Monitoring,Service Dispatching, & Back
Office Software
Back Office Currency Processing
Direct Consumer Applications
»
PMT HISTORY OF STRONG PROFITABLE GROWTH
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$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020G
CMS CPI CURRENCY
$ M
illi
on
s ~15% Sales CAGR
2009 Op. Profit*
$18M
2020G Op. Profit*
$215M
~25% Op. Profit*
CAGR
*Excludes Special Items. Please see non-GAAP Financial Measures tables for details.
AGENDA
Results and Guidance
Market Trends
Growth Initiatives
Productivity and Efficiency
Summary
17
RELENTLESS PURSUIT OF CONTINUOUS IMPROVEMENT
18
Accelerated / Strategic
Integration
Innovation in Design
Utilizing 3P and Break Through on Cost
Core Business Productivity
ACQUISITIONS DRIVING SIGNIFICANT BUSINESSWIDE SAVINGS
19
»2010 2015 2020
Over $60M in Integration Savings on the Past 10 Years
~$60M
MANUFACTURING INNOVATION
20
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VALUE ANALYSIS & VALUE ENGINEERING
• RIGOROUS AND STRUCTURED ENGINEERING-BASED APPROACH TO COST REDUCTION
21
»2013 2014 2015 2016 2017 2018 2019
4.9% Year-on-Year
Cost Reduction CAGR
AGENDA
Results and Guidance
Organic Growth Initiatives
Productivity and Efficiency
Market Trends
Summary
22
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SUMMARY
• FUNDAMENTALS THAT DRIVE FUTURE GROWTH
23
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Continued Solid Performance Track Record1
Positive Long-term Market Drivers2
Technology Leadership3
Scale Across Cash Cycle is a Differentiator4
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