Slide 1: 1st Quarter 2018 Earnings Conference Call
1st Quarter 2018 Earnings Conference Call April 26, 2018
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 differ from anticipate
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 26, 2018. The replay by telephone will be available through April 30, 2018 888-203-1112 – Conference ID #3053454 719-457-08
Slide 4: Financial Results
Financial Results Statement of Earnings First Quarter $ in millions except per share amounts 2018 2017 Change Sales $ 406 $ 341 19 % Gross Profit 222 186 20 % % of Sales 54.7 % 54.6 % 0.1 pts Operating Earnings 112 87 28 % % of Sales 27.5 % 25.7 % 1.8 pts Net Earnings $ 86 $ 61 41 % % of Sales 21.0
Slide 5: Financial Results: Components of Net Sales Change
Financial Results Components of Net Sales Change First Quarter March 2018 Segment Region Industrial Process Contractor Americas EMEA Asia Pacific Consolidated Volume and Price 13 % 10 % 11 % 9% 8% 23 % 11 % Acquisitions 5% 1% 1% 1% 7% 5% 3% Currency 7% 3% 3% 1% 13 % 8% 5% Total 25 % 14 % 15 % 11 % 2
Slide 6: Operating Earnings
Operating Earnings Change in Operating Earnings First Quarter 2017 Operating Earnings ($M and % of sales) $ 87 26 % Translation effect 8 1 Volume, product and channel mix, price and cost 23 0 Volume and earnings based incentives and market-driven share-based compensation (3) (1) Effect of acquisitio
Slide 7: First Quarter 2018 Results
First Quarter 2018 Results Sales Sales increase of 19% Favorable effect of currency translation rates increased sales by approximately $14 million, 5 percentage points Acquired businesses sales of $11 million account for 3 Q1 18 $221M $101M $84M percentage points of growth Gross margin rate up 0
Slide 8: Cash Flow and Liquidity
Cash Flow and Liquidity Net Earnings, as Adjusted, and Cash from Operations $120 M $114M $110M $100 M $92M $86M $84M $80 M $65M $68M $66M $67M $57M $57M$50M $59M $59M $60 M $51M $54M $40M $40 M $29M $20 M $- Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Net Earnings, as Reported Net Earnings
Slide 9: Other Discussion Items
Other Discussion Items Capital expenditure expectations are approximately $40 million in 2018, excluding bricks and mortar Planning and design for several production and distribution facilities that are nearing capacity is underway. Current estimate of 2018 projects is approximately $35 million wi
Slide 10: Current Environment and Outlook
Current 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 2018 9% Q1 2018 8% Q1 2018 23% Q1 2018 11% Environment Environment Unchanged Environ
Slide 11: Industrial Segment Results
Industrial Segment Results Sales 2018 Industrial Segment First Quarter Sales as % of Graco $ in millions 2018 2017 Change Americas $ 74 $ 69 7% EMEA 60 44 37 Asia Pacific 61 43 40 48% Total $ 195 $ 156 25 % Operating $ 69 $ 54 29 % Earnings % of sales 35 % 34 % 2018 Components of Current Environment
Slide 12: Operating Margins
Industrial Segment Results Change in % of sales First Quarter 2017 Operating Earnings (% of sales) 34 % Translation effect 1 Product and channel mix, net of favorable volume, price 0 Effect of acquired business operations (1) Expense leverage 1 2018 Operating Earnings (% of sales) 35 % Industrial Se
Slide 13: Process Segment Results
Process Segment Results Sales 2018 Process Segment Sales as % of Graco First Quarter $ in millions 2018 2017 Change Americas $ 51 $ 45 15 % EMEA 15 15 1 Asia Pacific 14 10 32 20% Total $ 80 $ 70 14 % Operating $ 18 $ 13 31 % Earnings % of sales 22 % 19 % 2018 Components of Current Environment Net Sa
Slide 14: Operating Margins
Process Segment Results Change in % of sales First Quarter 2017 Operating Earnings (% of sales) 19 % Translation effect 0 Volume, price, cost and mix 1 Volume and earnings based incentives (1) Expense leverage 3 2018 Operating Earnings (% of sales) 22 % Process Segment Sales and Operating Margins Pr
Slide 15: Contractor Segment Results
Contractor Segment Results Sales 2018 Contractor Segment First Quarter Sales as % of Graco $ in millions 2018 2017 Change Americas $ 96 $ 86 11 % EMEA 26 20 30 Asia Pacific 9 8 16 32% Total $ 131 $ 114 15 % Operating $ 31 $ 26 21 % Earnings % of sales 24 % 23 % 2018 Components of Current Environment
Slide 16: Operating Margins
Contractor Segment Results Change in % of sales First Quarter 2017 Operating Earnings (% of sales) 23 % Translation effect 1 Product and channel mix, volume, product cost 0 Volume and earnings based incentives (1) Expense leverage 1 2018 Operating Earnings (% of sales) 24 % Contractor Segment Sales
Slide 17: Non-GAAP Disclosure Reconciliation
Non-GAAP Disclosure Reconciliation Tax benefits related to stock option exercises have caused significant fluctuation in the Company’s effective tax rate. Excluding the impacts presents a more consistent basis for comparison of financial results. A calculation of the non-GAAP measurements of adjuste
Slide 18: Worldwide Leaders in Fluid Handling
move measure mix control dispense spray Worldwide Leaders in Fluid Handling www.graco.com