Slide 1: 2nd Quarter 2019 Earnings Conference Call
////////////////// 2nd Quarter 2019 Earnings Conference Call July 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, July 25, 2019. The replay by telephone will be available through July 29, 2019. ▶ 888-203-1112 – Conference ID
Slide 4: Financial Results
Financial Results ////////////////// Statement of Earnings Second Quarter Year-to-Date $ in millions except per share amounts 2019 2018 Change 2019 2018 Change Sales $ 428 $ 425 1% $ 833 $ 831 0% Gross Profit 227 230 (1)% 443 452 (2)% % of Sales 53.0 % 54.1 % (1.1) pts 53.2 % 54.4 % (1.2) pts Operat
Slide 5: Sales
Sales ////////////////// Components of Net Sales Change Second Quarter 2019 Segment Region Industrial Process Contractor Americas EMEA Asia Pacific Consolidated Volume and Price 2% 1% 5% 4% 10 % (6)% 3% Acquisitions 0% 0% 0% 0% 0% 0% 0% Currency (3)% (1)% (1)% (1)% (6)% (4)% (2)% Total (1)% 0% 4% 3%
Slide 6: Operating Earnings
Operating Earnings ////////////////// Second Quarter Year-to-Date 2018 Operating Earnings ($M and % of sales) $ 113 27 % $ 225 27 % Translation effect (5) (1) (11) (1) Price and cost, product and channel mix 4 (1) 6 (1) Unallocated corporate expense, stock compensation (1) 0 (2) 0 Volume effect on e
Slide 7: Second Quarter 2019
Second Quarter 2019 ////////////////// Changes in currency translation rates offset underlying growth. For the Sales second quarter, sales up 1 percent (up 3 percent at consistent currency rates) Rate down 1.1 percentage points from second quarter 2018 Unfavorable effect of currency translation Gr
Slide 8: June 2019 Year to Date
June 2019 Year to Date ////////////////// Underlying growth was offset by currency translation rates compared to last Sales year. Sales up 3 percent at consistent currency rates Rate down 1.2 percentage points from 2018 Unfavorable effect of currency translation driving nearly half of the decrease
Slide 9: Cash Flow and Liquidity
Cash Flow and Liquidity ////////////////// Net Earnings, as Adjusted, and Cash from Operations $110M $112M $113M $114M $86M $92M $86M$83M $86M $84M $83M $80M $67M $73M $66M $59M $59M $51M Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Net Earnings, as Adjusted Cash Flow from Operations Signif
Slide 10: 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 capacity is approximately $110-$115 Cap Ex million Additional building pro
Slide 11: 2019 Environment and Outlook
2019 Environment and Outlook ////////////////// Constant currency basis and excluding acquisitions completed in the prior 12 months Americas EMEA Asia Pacific Total Current Sales Q2 2019 4% Sales Q2 2019 10% Sales Q2 2019 (6%) Sales Q2 2019 3% Environment 2019 4% 2019 7% 2019 (7%) 2019 3% Environmen
Slide 12: Industrial Segment Results
Industrial Segment Results ////////////////// $ in millions Second Quarter Year-to-Date 2019 Industrial Segment 2019 2018 Change 2019 2018 Change Sales as % of Graco Sales Americas $ 81 $ 79 2% $ 162 $ 153 5% EMEA 59 56 5 117 $ 117 0 Asia Pacific 49 55 (11) 99 $ 116 (14) Total $ 189 $ 190 (1)% $ 378
Slide 13: Operating Margins - Industrial Segment
Industrial Segment Results ////////////////// Change in % of sales Second Quarter Year-to-Date 2018 Operating Earnings (% of sales) 35 % 35 % Translation effect (1) (1) Product and channel mix, volume, cost (1) (1) Volume effect on expense leverage 1 1 2019 Operating Earnings (% of sales) 34 % 34 %
Slide 14: Process Segment Results
Process Segment Results ////////////////// $ in millions Second Quarter Year-to-Date 2019 Process Segment 2019 2018 Change 2019 2018 Change Sales as % of Graco Sales Americas $ 55 $ 55 1% $ 112 $ 106 6% EMEA 14 14 (1) 30 29 2 Asia Pacific 16 16 (1) 30 30 0 Total $ 85 $ 85 0% $ 172 $ 165 4% Operating
Slide 15: Operating Margins - Process Segment
Process Segment Results ////////////////// Change in % of sales Second Quarter Year-to-Date 2018 Operating Earnings (% of sales) 20 % 21 % Translation effect 0 0 Volume effect on expense leverage 2 1 2019 Operating Earnings (% of sales) 22 % 22 % Process Segment Sales and Operating Margins Process S
Slide 16: Contractor Segment Results
Contractor Segment Results ////////////////// $ in millions Second Quarter Year-to-Date 2019 Contractor Segment Sales as % of Graco 2019 2018 Change 2019 2018 Change Sales Americas $ 118 $ 112 6% $ 212 $ 208 2% EMEA 28 26 7 53 52 2 Asia Pacific 9 11 (21) 19 20 (10) Total $ 155 $ 149 4% $ 284 $ 280 1
Slide 17: Operating Margins - Contractor Segment
Contractor Segment Results ////////////////// Change in % of sales Second Quarter Year-to-Date 2018 Operating Earnings (% of sales) 26 % 25 % Translation effect (1) (1) Channel and product mix, product cost, volume 0 (1) Volume effect on expense leverage 1 0 2019 Operating Earnings (% of sales) 26 %
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 impact of these items presents a more consistent basis for comparison of financial results. A calculation of the non-GAAP measurements follows: Non-
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