Slide 1: 1st Quarter 2020 Earnings Conference Call
////////////////// 1st Quarter 2020 Earnings Conference Call April 23, 2020
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 23, 2020. The replay by telephone will be available through 2 p.m. ET, April 27, 2020. ▶ 888-203-1112 –
Slide 4: Financial Results
Financial Results ////////////////// Statement of Earnings First Quarter $ in millions except per share amounts 2020 2019 Change Sales $ 373.6 $ 404.9 (8)% Gross Profit 198.6 216.0 (8)% % of Sales 53.2% 53.4% (0.2) pts Operating Earnings 89.8 104.5 (14)% % of Sales 24.0% 25.9% (1.9) pts Net Earnings
Slide 5: Sales
Sales ////////////////// Components of Net Sales Changes First Quarter March 2020 Segment Region Industrial Process Contractor Americas EMEA Asia Pacific Consolidated Volume and Price (15)% (6)% 1% (4)% (11)% (18)% (8)% Acquisitions 0% 5% 0% 1% 1% 3% 1% Currency (1)% 0% (1)% 0% (2)% (2)% (1)% Total
Slide 6: Operating Earnings
Operating Earnings ////////////////// First Quarter 2019 Operating Earnings ($M and % of sales) $104.5 26 % Translation effect (2.8) (1) Volume, price and cost, product and channel mix (13.9) 0 Volume effect on expense leverage 2.0 (1) 2020 Operating Earnings ($M and % of sales) $ 89.8 24 % Operatin
Slide 7: First Quarter 2020
First Quarter 2020 ////////////////// Sales ► Down 8 percent from 2019, down 7 percent at consistent exchange rates Acquired businesses added 1 percentage point ► Rate down 0.2 percentage points from 2019 Gross Margin Strong realized pricing nearly offset adverse effects of lower factory volume,
Slide 8: Operational Updates
Operational Updates ////////////////// ▶ Nearly all locations worldwide are running and able to fulfill customer orders – Cleaning, disinfecting and social distancing guidelines have been implemented – People who can work from home are doing so in compliance with stay at home orders ▶ Incoming order
Slide 9: Solid Liquidity
Solid Liquidity ////////////////// Total debt $446M with remaining borrowing capacity of $464M Debt $250M borrowing on revolving credit facility is priced at LIBOR +100 BPS or 1.99% Structure Revolving credit facility matures December 2021 Series B and D Private placement debt matures in March
Slide 10: Cash Flow and Liquidity
Cash Flow and Liquidity ////////////////// Net Earnings, as Adjusted, and Cash from Operations $ in millions $135.7 $113.3 $119.3 $112.0 $113.7 $84.1 $82.7 $85.8 $83.5 $80.1 $85.9 $77.4 $82.0 $73.5 $65.0 $58.8 $50.5 $54.2 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Net Earnings, as Adjuste
Slide 11: Other Discussion Items
Other Discussion Items ////////////////// Cap Ex Capital expenditure expectations of approximately $70 million in 2020, including approximately $50 million facility expansion Expenses Unallocated corporate expenses in 2020 are expected to be approximately $30 million Shares During first quarter 2020
Slide 12: Industrial Segment Results
Industrial Segment Results 2020 Industrial Segment ////////////////// $ in millions First Quarter Q1 Sales as % of Graco 2020 2019 Change Sales Americas $ 74.4 $ 80.9 (8)% EMEA 46.2 58.1 (20) Asia Pacific 38.1 50.1 (24) Total $ 158.7 $ 189.1 (16)% 42% Operating Earnings $ 50.2 $ 65.2 (23)% % of sale
Slide 13: Operating Margins
Industrial Segment Results ////////////////// Change in % of sales First Quarter 2019 Operating Earnings (% of sales) 34 % Translation effect 0 Volume, product cost, channel and product mix 1 Volume effect on expense leverage (3) 2020 Operating Earnings (% of sales) 32 % Industrial Segment Sales and
Slide 14: Process Segment Results
Process Segment Results 2020 Process Segment ////////////////// $ in millions First Quarter Q1 Sales as % of Graco 2020 2019 Change Sales 23% Americas $ 55.1 $ 57.1 (4)% EMEA 15.8 15.8 0 Asia Pacific 15.2 14.0 9 Total $ 86.1 $ 86.9 (1)% Operating Earnings $ 18.1 $ 20.0 (10)% % of sales 21 % 23 % Com
Slide 15: Operating Margins
Process Segment Results ////////////////// Change in % of sales First Quarter 2019 Operating Earnings (% of sales) 23 % Translation effect 0 Volume, product cost, channel and product mix (1) Effect of acquired business operations (1) 2020 Operating Earnings (% of sales) 21 % Process Segment Sales an
Slide 16: Contractor Segment Results
Contractor Segment Results 2020 Contractor Segment ////////////////// $ in millions First Quarter Q1 Sales as % of Graco 2020 2019 Change Sales Americas $ 95.3 $ 94.0 1% EMEA 25.8 25.6 1 35% Asia Pacific 7.7 9.3 (18) Total $ 128.8 $ 128.9 0% Operating Earnings $ 28.7 $ 26.5 8% % of sales 22 % 21 % C
Slide 17: Operating Margins
Contractor Segment Results ////////////////// Change in % of sales First Quarter 2019 Operating Earnings (% of sales) 21 % Translation effect (1) Volume, product cost, channel and product mix 1 Volume effect on expense leverage 1 2020 Operating Earnings (% of sales) 22 % Contractor Segment Sales and
Slide 18: Financial Results Adjusted for Comparability
Financial Results Adjusted for Comparability ////////////////// Certain items have caused fluctuation in the Company’s financial results. Excluding the impacts of these items presents a more consistent basis for comparison of financial results. A calculation of the non-GAAP measurements follows: Non
Slide 19: Worldwide Leaders in Fluid Handling
MOVE | MEASURE | MIX | CONTROL | DISPENSE | SPRAY WORLDWIDE LEADERS IN FLUID HANDLING www.graco.com 19