Slide 1: 4th Quarter 2019 Earnings Conference Call
////////////////// 4th Quarter 2019 Earnings Conference Call January 28, 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, January 28, 2020. The replay by telephone will be available through 2 p.m. ET, February 1, 2020. ▶ 888-203-111
Slide 4: Financial Results
Financial Results ////////////////// Statement of Earnings Fourth Quarter Full Year $ in millions except per share amounts 2019 2018 Change 2019 2018 Change Sales $ 412 $ 406 1% $ 1,646 $ 1,653 0% Gross Profit 209 209 0% 860 883 (3)% % of Sales 50.8 % 51.4 % (0.6) pts 52.2 % 53.4 % (1.2) pts Operati
Slide 5: Sales
Sales ////////////////// Components of Net Sales Change Fourth Quarter December 2019 Segment Region Industrial Process Contractor Americas EMEA Asia Pacific Consolidated Volume and Price (1)% (4)% 9% 4% 12 % (19)% 1% Acquisitions 0% 5% 0% 0% 2% 3% 1% Currency (1)% 0% (1)% 0% (3)% (1)% (1)% Total (2)
Slide 6: Operating Earnings
Operating Earnings ////////////////// Fourth Quarter Full Year 2018 Operating Earnings ($M and % of sales) $ 97 24 % $ 436 26 % Translation effect (2) 0 (15) 0 Price and cost, product and channel mix 3 (1) 0 (1) Change in volume and earnings-based costs 10 2 14 1 Volume effect on expense leverage (4
Slide 7: Fourth Quarter 2019
Fourth Quarter 2019 ////////////////// Sales increase of 1% in the quarter, up 2% at consistent currency rates Sales Acquired businesses sales of $4 million account for 1 percentage point of growth Rate down 0.6 percentage point from fourth quarter 2018 Unfavorable factory volume and unfavorable
Slide 8: Full Year 2019
Full Year 2019 ////////////////// Sales decreased slightly from 2018, up 1 percent at consistent currency Sales rates Acquired businesses had no significant impact Rate down 1.2 percentage points from 2018 Unfavorable factory volume and unfavorable channel and product mix negatively Gross Margin
Slide 9: Cash Flow and Liquidity
Cash Flow and Liquidity ////////////////// Net Earnings, as Adjusted, and Cash from Operations $135M $112M $114M $113M $119M $92M $84M $86M$83M $86M $83M $80M $77M $82M $73M $59M $59M $51M Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Net Earnings, as Adjusted Cash Flow from Operations Net c
Slide 10: Other Discussion Items
Other Discussion Items ////////////////// Capital expenditure expectations of approximately $70 million in 2020, Cap Ex including approximately $30 million brick and mortar Unallocated corporate expenses in 2020 are expected to be approximately Expenses $30 million During 2019, we repurchased approx
Slide 11: 2020 Environment and Outlook
2020 Environment and Outlook Constant currency basis and excluding acquisitions completed in the prior 12 months Americas EMEA Asia Pacific Total Current Sales Q4 2019 4% Sales Q4 2019 12% Sales Q4 2019 (19%) Sales Q4 2019 1% Environment Full Year 2019 4% Full Year 2019 7% Full Year 2019 (15%) Full
Slide 12: Industrial Segment Results
Industrial Segment Results ////////////////// $ in millions Fourth Quarter Year-to-Date 2019 Industrial Segment Sales as % of Graco 2019 2018 Change 2019 2018 Change Sales Americas $ 85 $ 83 3% $ 324 $ 315 3% EMEA 68 60 13 240 234 2 Asia Pacific 42 57 (26) 183 232 (21) Total $ 195 $ 200 (2)% $ 747 $
Slide 13: Operating Margins
Industrial Segment Results ////////////////// Change in % of sales Fourth Quarter Year-to-Date 2018 Operating Earnings (% of sales) 32 % 35 % Translation effect 0 (1) Volume, product cost, channel and product mix (2) (1) Change in volume and earnings-based costs 2 1 Volume effect on expense leverage
Slide 14: Process Segment Results
Process Segment Results ////////////////// $ in millions Fourth Quarter Year-to-Date 2019 Process Segment 2019 2018 Change 2019 2018 Change Sales as % of Graco Sales Americas $ 55 $ 56 (3)% $ 222 $ 216 3% EMEA 16 15 5 62 58 5 Asia Pacific 18 17 9 61 64 (4) Total $ 89 $ 88 1% $ 345 $ 338 2% Operating
Slide 15: Operating Margins
Process Segment Results ////////////////// Change in % of sales Fourth Quarter Year-to-Date 2018 Operating Earnings (% of sales) 18 % 20 % Translation effect 0 0 Product cost, channel and product mix (1) 0 Effect of acquired business operations (1) 0 Change in volume and earnings-based costs 6 2 Vol
Slide 16: Contractor Segment Results
Contractor Segment Results ////////////////// $ in millions Fourth Quarter Year-to-Date 2019 Contractor Segment 2019 2018 Change 2019 2018 Change Sales as % of Graco Sales Americas $ 92 $ 84 10 % $ 414 $ 396 5% EMEA 29 26 10 105 100 4 Asia Pacific 8 9 (6) 35 38 (10) Total $ 129 $ 119 8% $ 554 $ 534
Slide 17: Operating Margins
Contractor Segment Results ////////////////// Change in % of sales Fourth Quarter Year-to-Date 2018 Operating Earnings (% of sales) 15 % 23 % Translation effect 0 (1) Volume, product cost, channel and product mix 4 0 Change in volume and earnings-based costs 1 1 Volume effect on expense leverage 2 0
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: Fou
Slide 19: Worldwide Leaders in Fluid Handling
MOVE | MEASURE | MIX | CONTROL | DISPENSE | SPRAY WORLDWIDE LEADERS IN FLUID HANDLING www.graco.com 19