Slide 1: 2nd Quarter 2021 Earnings Conference Call
////////////////// 2nd Quarter 2021 Earnings Conference Call July 22, 2021
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 July 22, 2021. The replay by telephone will be available through 2 p.m. ET July 29, 2021. ▶ 855-859-2056 – Conf
Slide 4: Financial Results
Financial Results ////////////////// Statement of Earnings Second Quarter June Year to Date $ in millions except per share amounts 2021 2020 Change 2021 2020 Change Net Sales $ 507.2 $ 366.9 38 % $ 961.3 $ 740.5 30 % Gross Profit 263.9 182.5 45 % 511.2 381.2 34 % % of Net Sales 52.0% 49.8% 2.2 pts 5
Slide 5: 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 6: Net Sales
Net Sales ////////////////// Components of Net Sales Changes Second Quarter June 2021 Segment Region Industrial Process Contractor Americas EMEA Asia Pacific Consolidated Volume and Price 46 % 29 % 29 % 32 % 49 % 31 % 35 % Acquisitions and Divestitures 1% (7)% 0% 0% 0% (6)% (1)% Currency 6% 3% 3% 1%
Slide 7: Operating Earnings
Operating Earnings ////////////////// Second Quarter June Year to Date 2020 Operating Earnings, as Reported ($M and % of sales) $ 45 12 % $ 135 18 % Non-cash impairment 35 10 35 5 2020 Operating Earnings, as Adjusted $ 80 22 % $ 170 23 % Translation effect 7 1 13 1 Volume and product mix 76 2 119 1
Slide 8: Second Quarter 2021
Second Quarter 2021 ////////////////// ► Up 38 percent from 2020, up 34 percent at consistent translation Net Sales rates ► Rate up 2.2 percentage points from 2020 Gross Margin Favorable effects of changes in currency translation rates, realized pricing, higher production volume and favorable prod
Slide 9: June Year to Date 2021
June Year to Date 2021 ////////////////// ► Up 30 percent from 2020, up 26 percent at consistent translation Net Sales rates ► Rate up 1.7 percentage points from 2020 Gross Margin Favorable effects of changes in currency translation rates, realized pricing, higher production volume and favorable p
Slide 10: Outlook
Outlook ////////////////// 2021 Organic Net Sales by Segment - Compared to 2020 April May June Industrial Segment 65% 49% 31% Process Segment 35% 30% 22% Contractor Segment 68% 43% 2% 59% 43% 16% ▶ Booking and billing improvement continued in the second quarter of 2021 ▶ Incoming order rates in July
Slide 11: Outlook
Outlook ////////////////// Constant currency basis and excluding acquisitions and divestitures completed in the prior 12 months Americas EMEA Asia Pacific Total Sales Growth Sales Growth Sales Growth Sales Growth Current Q2 2021 32% Q2 2021 49% Q2 2021 31% Q2 2021 35% Environment YTD 2021 25% YTD 20
Slide 12: Cash Flow and Liquidity
Cash Flow and Liquidity ////////////////// Net Earnings, as Adjusted, and Cash from Operating Activities $ in millions $136 $131 $113 $119 $120 $118 $102 $106 $102 $102 $108 $86 $82 $89 $77 $65 $62 $54 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Net Earnings, as Adjusted Cash from Operatin
Slide 13: Other Discussion Items
Other Discussion Items ////////////////// Cap Ex Capital expenditure expectations of approximately $150 million in 2021, including approximately $90 million in facilities expansion Expenses Unallocated corporate expenses in 2021 are expected to be approximately $30 million No share repurchases were
Slide 14: Other Discussion Items – 2022 Change in Organizational Structure
Other Discussion Items – 2022 Change in Organizational Structure Effective January 1, 2022, our high performance coatings and foam product offerings within the Applied Fluid Technologies division of the Industrial segment will be realigned and managed under the Contractor segment. High performance c
Slide 15: Industrial Segment Results
Industrial Segment Results ////////////////// 2021 Industrial Segment June YTD Net Sales as % of Graco $ in millions Second Quarter June Year to Date 2021 2020 Change 2021 2020 Change Net Sales Americas $ 87 $ 58 49% $ 167 $ 133 26 % EMEA 60 35 72 117 81 44 Asia Pacific 58 40 43 105 78 35 Total $ 20
Slide 16: Operating Margins – Industrial Segment
Industrial Segment Results ////////////////// Change in % of net sales Second Quarter June Year to Date 2020 Operating Earnings 28 % 30 % Currency Translation 1 1 Volume and product and channel mix 2 2 Increase in sales and earnings-based costs (3) (2) Volume effect on expense leverage 6 4 2021 Oper
Slide 17: Process Segment Results
Process Segment Results ////////////////// 2021 Process Segment $ in millions Second Quarter June Year to Date June YTD Net Sales as % of Graco 2021 2020 Change 2021 2020 Change Net Sales 20% Americas $ 60 $ 46 30% $ 116 $ 101 15% EMEA 15 13 19 31 29 5 Asia Pacific 22 19 17 42 34 23 Total $ 97 $ 78
Slide 18: Operating Margins – Process Segment
Process Segment Results ////////////////// Change in % of net sales Second Quarter June Year to Date 2020 Operating Earnings 15 % 18 % Currency Translation 1 1 Volume, product and channel mix 2 2 Effect of acquired and divested business operations 2 1 Increase in sales and earnings-based costs (3) (
Slide 19: Contractor Segment Results
Contractor Segment Results ////////////////// 2021 Contractor Segment June YTD Net Sales as % of Graco $ in millions Second Quarter June Year to Date 2021 2020 Change 2021 2020 Change Net Sales Americas $ 155 $ 123 26% $ 283 $ 219 30% 40% EMEA 38 23 65 77 49 57 Asia Pacific 12 10 29 23 17 37 Total $
Slide 20: Operating Margins – Contractor Segment
Contractor Segment Results ////////////////// Change in % of net sales Second Quarter June Year to Date 2020 Operating Earnings 26 % 24 % Currency translation 1 2 Increase in sales and earnings-based costs (4) (3) Volume effect on expense leverage 1 3 2021 Operating Earnings 24 % 26 % Contractor Seg
Slide 21: Worldwide Leaders in Fluid Handling
MOVE | MEASURE | MIX | CONTROL | DISPENSE | SPRAY WORLDWIDE LEADERS IN FLUID HANDLING www.graco.com
Slide 22: 2nd Quarter 2021 Earnings Conference Call Appendix
2nd Quarter 2021 Earnings Conference Call Appendix July 22, 2021
Slide 23: 2022 New Segment Reporting − Historical Financial Data (Unaudited)
2022 New Segment Reporting − Historical Financial Data (Unaudited) $ in millions Segment Results 2Q21 1Q21 2020 4Q20 3Q20 2Q20 1Q20 2019 4Q19 3Q19 2Q19 1Q19 2018 Sales Industrial $ 144.5 $ 129.9 $ 481.5 $ 156.8 $ 122.6 $ 92.1 $ 110.0 $ 543.2 $ 143.8 $ 124.3 $ 137.7 $ 137.4 $ 571.6 Process 97.2 91.4
Slide 24: 2022 New Segment Reporting − Historical Financial Data (Unaudited)
2022 New Segment Reporting − Historical Financial Data (Unaudited) Components of Net Sales Change 1Q21 2Q21 Industrial Process Contractor Consolidated Industrial Process Contractor Consolidated Volume and Price 13 % 7% 28 % 19 % 49 % 29 % 31 % 36 % Acquisition/Divestitures 0% (3)% 0% (1)% 0% (8)% 1%