Slide 1: Company Overview: 1st Quarter 2019 Earnings Conference Call
Company Overview ////////////////// 1st Quarter 2019 Earnings Conference Call April 25, 2019
Slide 2: Safe Harbor
Safe Harbor ////////////////// Today’s presentation includes forward-looking statements that reflect management’s current expectations about the Company’s future business and financial performance. These statements are subject to certain risks and uncertainties that could cause actual results to dif
Slide 3: Conference Call Logistics
Conference Call Logistics ////////////////// The release, accompanying slides and replay webcast are available online at www.graco.com/ir Telephone replay will be available after 2 p.m. ET, April 25, 2019. The replay by telephone will be available through April 29, 2019. ▶ 888-203-1112 – Conference
Slide 4: Financial Results
Financial Results ////////////////// Statement of Earnings First Quarter $ in millions except per share amounts 2019 2018 Change Sales $ 405 $ 406 0% Gross Profit 216 222 (3)% % of Sales 53.4 % 54.7 % (1.3) pts Operating Earnings 105 112 (6)% % of Sales 25.8 % 27.5 % (1.7) pts Net Earnings $ 87 $ 86
Slide 5: Sales
Sales ////////////////// Components of Net Sales Change First Quarter 2019 Segment Region Industrial Process Contractor Americas EMEA Asia Pacific Consolidated Volume and Price 0% 10 % 0% 5% 5% (8)% 2% Acquisitions 0% 0% 0% 0% 0% 0% 0% Currency (3)% (1)% (2)% 0% (7)% (4)% (2)% Total (3)% 9% (2)% 5%
Slide 6: Operating Earnings
Operating Earnings ////////////////// First Quarter 2018 Operating Earnings ($M and % of sales) $ 112 27 % Translation effect (6) 0 Price and cost, product and channel mix 2 (1) Unallocated corporate expense, stock compensation (1) 0 Volume effect on expense leverage (2) 0 2019 Operating Earnings ($
Slide 7: First Quarter 2019
First Quarter 2019 ////////////////// Sales Modest underlying growth was offset by currency translation rates compared to last year Gross Rate down 1.3 percentage points from first quarter 2018 Unfavorable effect of currency translation driving half of the decrease, realized pricing partially offs
Slide 8: Cash Flow and Liquidity
Cash Flow and Liquidity ////////////////// Net Earnings, as Adjusted, and Cash from Operations $110M $112M $114M $86M $92M $86M $83M $84M $83M $80M $73M $66M $67M $57M $59M $59M $50M $51M Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Net Earnings, as Adjusted Cash Flow from Operations Signif
Slide 9: Other Discussion Items
Other Discussion Items ////////////////// Capital expenditure expectations of approximately $40 million in 2019, excluding brick and mortar. Current estimate of 2019 building projects to increase production and distribution Cap. Ex. capacity is approximately $110-$115 million Additional building p
Slide 10: 2019 Environment and Outlook
2019 Environment and Outlook ////////////////// Constant currency basis and excluding acquisitions completed in the prior 12 months Americas EMEA Asia Pacific Worldwide Current Sales Change Sales Change Sales Change Sales Change Q1 2019 5% Q1 2019 5% Q1 2019 (8%) Q1 2019 2% Environment Environment U
Slide 11: Industrial Segment
Industrial Segment ////////////////// 11
Slide 12: Industrial Segment Results
Industrial Segment Results 2019 Industrial Segment ////////////////// Sales as % of Graco Sales First Quarter $ in millions 2019 2018 Change Americas $ 81 $ 74 9% EMEA 58 60 (4) Asia Pacific 50 61 (18) 47% Total $ 189 $ 195 (3)% Operating $ 65 $ 69 (6)% Earnings % of sales 34 % 35 % Components of En
Slide 13: Operating Margins: Industrial Segment
Industrial Segment Results ////////////////// Change in % of sales First Quarter 2018 Operating Earnings (% of sales) 35 % Translation effect (1) 2019 Operating Earnings (% of sales) 34 % Industrial Segment Sales and Operating Margins Industrial Segment Operating Earnings QTD $250 M 40% 35% ($4M) $2
Slide 14: Process Segment
Process Segment ////////////////// 14
Slide 15: Process Segment Results
Process Segment Results 2019 Process Segment ////////////////// Sales as % of Graco Sales First Quarter $ in millions 2019 2018 Change Americas $ 57 $ 51 11 % EMEA 16 15 5 Asia Pacific 14 14 2 21% Total $ 87 $ 80 9% Operating $ 20 $ 18 13 % Earnings % of sales 23 % 22 % Components of Environment Net
Slide 16: Operating Margins: Process Segment
Process Segment Results ////////////////// Change in % of sales First Quarter 2018 Operating Earnings (% of sales) 22 % Translation effect 0 Expense leverage 1 2019 Operating Earnings (% of sales) 23 % Process Segment Sales and Operating Margins Process Segment Operating Earnings QTD $120 M 25% $4M
Slide 17: Contractor Segment
Contractor Segment ////////////////// 17
Slide 18: Contractor Segment Results
Contractor Segment Results 2019 Contractor Segment ////////////////// Sales as % of Graco Sales First Quarter $ in millions 2019 2018 Change Americas $ 94 $ 96 (2)% EMEA 26 26 (2) Asia Pacific 9 9 4 32% Total $ 129 $ 131 (2)% Operating $ 27 $ 31 (16)% Earnings % of sales 21 % 24 % Components of Envi
Slide 19: Operating Margins: Contractor Segment
Contractor Segment Results ////////////////// Change in % of sales First Quarter 2018 Operating Earnings (% of sales) 24 % Translation effect (1) Volume, channel and product mix, product cost (2) 21 2019 Operating Earnings (% of sales) 21 % Contractor Segment Sales and Operating Margins Contractor S
Slide 20: Financial Results Adjusted for Comparability
Financial Results Adjusted for Comparability ////////////////// Certain items have caused fluctuation in the Company’s financial results. Excluding the impact of these items presents a more consistent basis for comparison of financial results. A calculation of the non-GAAP measurements follows: Non-
Slide 21: Worldwide Leaders in Fluid Handling
MOVE / MEASURE / MIX / CONTROL / DISPENSE / S P R AY WORLDWIDE LEADERS IN FLUID HANDLING www.graco.com