Slide 1: Fourth Quarter Earnings Call
FOURTH QUARTER EARNINGS CALL January 30, 2024
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: Financial Results
FINANCIAL RESULTS Statement of Earnings Fourth Quarter Full Year $ in millions except per share amounts 2023 2022 Change 2023 2022 Change Net Sales $ 566.6 $ 555.0 2% $2,195.6 $2,143.5 2% Gross Profit 299.9 272.8 10 % 1,161.0 1,057.4 10 % % of Net Sales 52.9% 49.2% 3.7 pts 52.9% 49.3% 3.6 pts Operat
Slide 4: Net Sales
NET SALES Components of Net Sales Change 2023 Fourth Quarter Segment Region Contractor Industrial Process Americas EMEA Asia Pacific Consolidated Volume and Price 1% (1)% 4% 3% 0% (4)% 1% Acquisitions 0% 0% 0% 0% 0% 0% 0% Currency 1% 2% 0% 0% 5% (1)% 1% Total 2% 1% 4% 3% 5% (5)% 2% 2023 Full Year Se
Slide 5: Operating Earnings
OPERATING EARNINGS Fourth Quarter Full Year 2022 Operating Earnings, as reported ($M and % of sales) $ 153 27 % $ 573 27 % Translation effect 2 0 (5) (1) Price, product cost and mix 24 4 107 4 Volume effect on expense leverage (9) (1) (28) (1) 2023 Operating Earnings ($M and % of sales) $ 170 30 % $
Slide 6: Fourth Quarter 2023
FOURTH QUARTER 2023 • Up 2 percent from fourth quarter 2022, up 1 percent at consistent Net Sales translation rates • Margin rate up 3.7 percentage points compared to fourth quarter 2022 Gross Margin > Realized pricing and lower product cost • Up $17 million compared to fourth quarter 2022 Operating
Slide 7: Full Year 2023
FULL YEAR 2023 • Up 2 percent from 2022, currency translation rates had no significant Net Sales impact • Margin rate up 3.6 percentage points compared to 2022 Gross Margin > Strong realized pricing and favorable mix more than offset higher product cost • Up $74 million compared to 2022 Operating Ea
Slide 8: 2024 Outlook
2024 OUTLOOK Constant currency basis and excluding acquisitions completed in the prior 12 months Americas EMEA Asia Pacific Worldwide Current Q4 2023 3% Q4 2023 0% Q4 2023 (4%) Net Sales Change Q4 2023 1% Full Year 2023 4% Full Year 2023 0% Full Year 2023 (1%) Environment Full Year 2023 2% Contracto
Slide 9: Cash Flow and Liquidity
CASH FLOW AND LIQUIDITY Net Earnings, as Adjusted, and Cash from Operating Activities $ in millions $209 $191 $160 $124 $127 $129 $131 $137 $116 $117 $115 $105 $100 $100 $104 $91 $137 $31 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Net Earnings, as Adjusted Cash from Operating Activites •
Slide 10: Other Discussion Items
OTHER DISCUSSION ITEMS • Capital expenditure expectations of approximately $120 million in 2024, Cap Ex including approximately $60 million in facility expansion projects • In the fourth quarter of 2023, the Company transferred $147 million of its Pension pension obligations to an insurance company
Slide 11: Contractor Segment Results
CONTRACTOR SEGMENT RESULTS 2023 Contractor Segment $ in millions Fourth Quarter Full Year Net Sales as % of Graco 2023 2022 Change 2023 2022 Change Net Sales Americas $ 172 $ 173 0% $ 730 $ 739 (1)% EMEA 48 44 8 180 177 1 45% Asia Pacific 19 18 4 76 83 (9) Total $ 239 $ 235 2% $ 986 $ 999 (1)% Opera
Slide 12: Contractor Segment Operating Margins
CONTRACTOR SEGMENT RESULTS Change in % of net sales Fourth Quarter Full Year 2022 Operating Earnings 25 % 25 % Price, product cost and mix 6 5 Volume effect on expense leverage (2) (1) 2023 Operating Earnings 29 % 29 % Contractor Segment Net Sales and Operating Margins Contractor Segment Operating E
Slide 13: Industrial Segment Results
INDUSTRIAL SEGMENT RESULTS $ in millions Fourth Quarter Full Year 2023 Industrial Segment Net Sales as % of Graco 2023 2022 Change 2023 2022 Change Net Sales Americas $ 73 $ 63 15% $ 264 $ 239 10% EMEA 64 64 0 207 206 1 Asia Pacific 55 63 (13) 192 204 (6) Total $ 192 $ 190 1% $ 663 $ 649 2% 30% Oper
Slide 14: Industrial Segment Operating Margins
INDUSTRIAL SEGMENT RESULTS Change in % of net sales Fourth Quarter Full Year 2022 Operating Earnings 37 % 36 % Currency translation (1) (1) Price and product cost 2 1 Volume effect on expense leverage (1) (1) 2023 Operating Earnings 37 % 35 % Industrial Segment Net Sales and Operating Margins Indust
Slide 15: Process Segment Results
PROCESS SEGMENT RESULTS 2023 Process Segment $ in millions Fourth Quarter Full Year Net Sales as % of Graco 2023 2022 Change 2023 2022 Change Net Sales Americas $ 83 $ 81 1% $ 344 $ 304 13% 25% EMEA 20 18 13 77 69 11 Asia Pacific 33 31 7 126 122 3 Total $ 136 $ 130 4% $ 547 $ 495 11% Operating Earni
Slide 16: Process Segment Operating Margins
PROCESS SEGMENT RESULTS Change in % of net sales Fourth Quarter Full Year 2022 Operating Earnings 25 % 25 % Price, product cost and volume 3 4 Volume effect on expense leverage 0 1 2023 Operating Earnings 28 % 30 % Process Segment Net Sales and Operating Margins Process Segment Operating Earnings QT
Slide 17: Adjusted Financial Results
ADJUSTED FINANCIAL RESULTS Non-GAAP Reconciliation Fourth Quarter Full Year Financial results have been adjusted $ in millions except per share amounts 2023 2022 Change 2023 2022 Change for comparability. The pension Operating Earnings, as reported $ 169.9 $ 152.5 11 % $ 646.8 $ 572.7 13 % settlemen
Slide 18: Worldwide Leader in Fluid Handling
WORLDWIDE LEADER IN FLUID HANDLING MOVE • MEASURE • MIX • CONTROL • DISPENSE • SPRAY