Slide 1: Investor Presentation — Safe Harbor
5/9/2013 Investor Presentation — May 2013 Investor Presentation 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 uncerta
Slide 2: Overview: Business Overview
5/9/2013 Overview Enduring Business Model Strategies for Long-Term Growth – Invest in New Products – Expand Geographically – Target New Markets – Make Acquisitions Company Performance Business Overview • Graco manufactures premium equipment to pump, meter, mix and dispense a wide variety of fluids a
Slide 3: 2012 Sales; Industrial Equipment Segment
5/9/2013 2012 Sales $1.012 Billion Segment Geography $’s millions $’s millions Asia Pacific Contractor Industrial Americas Lubrication Europe 5 Industrial Equipment Segment • Growth Drivers and Trends – Factory movements and upgrades – Integration of equipment with factory data and control systems –
Slide 4: Lubrication and Contractor Equipment Segments
5/9/2013 Lubrication Equipment Segment • Growth Drivers and Trends – Fill product lines for a single source solution – Targeting competition in the industrial lubrication market • Other Representative Industry Participants – Lincoln, Vogel, Bijur, Hannay, Coxreels, and regional players 120 Lubricati
Slide 5: High Customer Value, Strong Product Differentiation
5/9/2013 Overview Enduring Business Model Strategies for Long-Term Growth – Invest in New Products – Expand Geographically – Target New Markets – Make Acquisitions Company Performance High Customer Value, Strong Product Differentiation Material Supplier Relationships Best in End Class User Delivery
Slide 6: Manufacturing and Engineering Excellence; Low-Volume, High-Mix
5/9/2013 Manufacturing and Engineering Excellence • 80%+ of production is based in the United States – High quality, efficient, engaged labor force – Centralization allows for leverage of overheads • Continuous improvement culture – Unique Graco cost to produce measurement tool • Ongoing capital inv
Slide 7: Graco's Growth Plans and Earnings Drivers
5/9/2013 Overview Enduring Business Model Strategies for Long-Term Growth – Invest in New Products – Expand Geographically – Target New Markets – Make Acquisitions Company Performance Graco’ ’s Growth Plans and Earnings Drivers 12%+ Acquisitions New Markets Graco Earnings Global CAGR 3% - 5% Expansi
Slide 8: Targeting Growth Through New Products and Markets
5/9/2013 Overview Enduring Business Model Strategies for Long-Term Growth – Invest in New Products – Expand Geographically – Target New Markets – Make Acquisitions Company Performance Targeting Growth Through New Products and Markets New Product Development Expense as a Percentage of Revenues - 2012
Slide 9: Industrial – Dual Control Electric Piston Pump; Electrostatic Applicators
5/9/2013 Industrial – Dual Control Electric Piston Pump • Combines the benefits of a pneumatic motor with the energy efficiency of an electric drive unit • Strong ROI for End User 17 Industrial – Electrostatic Applicators • Improved spray performance and transfer efficiency • Strong ROI when replaci
Slide 10: Industrial – Plural Component Line Expansion; Lubrication G1 Pump
5/9/2013 Industrial – Plural Component Line Expansion • Added four new sprayers • Graco XP50 – For jobs requiring more volume – Allows user to spray with multiple guns • Graco XP50 Quick-Set – For quick-setting hybrid and elastomeric urethane coatings • Graco XP35 – For low-pressure airless spray ap
Slide 11: Contractor – Handheld Guns; GH Big Rigs
5/9/2013 Contractor – Handheld Guns TrueCoat II • Generation II Handheld Airless TrueCoat Plus II – Variable Pressure Control – Sprays all Directions – Fully Repairable TrueCoat Pro II – New Corded Pro Model • XForce HD and ProShot HD ProShot II – Heavy Duty/High Pressure Airless for Protective and
Slide 12: InvisiPac Tank-Free Hot Melt Delivery System
5/9/2013 Overview Enduring Business Model Strategies for Long-Term Growth – Invest in New Products – Expand Geographically – Target New Markets – Make Acquisitions Company Performance InvisiPac Tank-Free Hot Melt Delivery System Revolutionary hot melt equipment for the packaging industry • Designed
Slide 13: Industrial – Passive Fire Protection; 3" Diaphragm Pump
5/9/2013 Industrial – Passive Fire Protection (PFP) • Plural-component sprayer • Sprays intumescent epoxy fire protection coatings • For structural steel on oil rigs and commercial buildings – Helps insulate structural steel from high-temp fires; buys time for people to evacuate • Data reporting let
Slide 14: Contractor – Field Striping; Asia Pacific New Markets
5/9/2013 Contractor – Field Striping • EZ Bead - Accessory Pressurized Bead System for the LineLazer Family of Stripers – The solution for Airport and Municipalities who often require pressurized application of beads • FieldLazer S90 – High-Pressure Airless, Battery Powered Field Marker for lines an
Slide 15: Finishing Group Acquisition
5/9/2013 Overview Enduring Business Model Strategies for Long-Term Growth – Invest in New Products – Expand Geographically – Target New Markets – Make Acquisitions Company Performance Graco Acquired on April 2, 2012 for $650 million Finishing Group 2011 Revenues* $375 million 2011 EBITDA* $80 millio
Slide 16: Consolidated Financial Results
5/9/2013 Overview Enduring Business Model Strategies for Long-Term Growth – Invest in New Products – Expand Geographically – Target New Markets – Make Acquisitions Company Performance Consolidated Financial Results $ millions except EPS First Quarter 2013 2012 Change Sales $ 269.0 $ 234.1 15 % Gross
Slide 17: Current Environment; Cash Deployment Priorities
5/9/2013 Current Environment Americas EMEA Asia Pacific Industrial Segment Stable: General Industrial, Automotive, Ag, Heavy Machinery Favorable: Emerging EMEA Stable: General Industrial Stable: Construction Challenging: Western Europe Challenging: Project Activity Contractor Segment Improving: Pro
Slide 18: Key Investment Attributes
5/9/2013 Key Investment Attributes • Strategies that will drive long-term above-market growth • Premium products that provide a strong ROI for end users • Leading industry positions • Serves niche markets where customers are willing to purchase quality, technology-based products • Products perform c
Slide 19: Financial Results – First Quarter
5/9/2013 Financial Results – First Quarter ($ Millions except EPS) 2013 2012 Change Sales $ 269.0 $ 234.1 15% Gross Profit Rate 56.0% 56.5% Operating Expenses 79.1 74.2 7% Operating Earnings 71.5 58.0 23% Net Earnings $ 52.1 $ 35.4 47% Earnings Per Share $ 0.84 $ 0.58 45% 37 First Quarter 2013 Resul
Slide 20: Financial Summary 2012 – Annual Sales
5/9/2013 Financial Summary 2012 – Appendix Investor Presentation Annual Sales ($ Millions) Target: 6-7% Organic 10%+ Overall 40 20
Slide 21: Historic Sales; Earnings Per Share
5/9/2013 Historic Sales ($ Millions) CAGR 9% $1,000 $100 $10 41 Earnings Per Share Target: 12%+ 42 21
Slide 22: Operating Margin; Strong Cash Generation
5/9/2013 - Disciplined spending Operating Margin - Increased manufacturing efficiency - Leverage volume increases - Continuous improvement culture 43 Strong Cash Generation ($ Millions) 2012 2011 2010 2009 2008 2007 2006 2005 2004 Operating Cash Flows $ 190 $ 162 $ 101 $ 147 $ 162 $ 177 $ 156 $ 153
Slide 23: Capital Efficiency – 5 Year Average
5/9/2013 Capital Efficiency – 5 Year Average Source: Interactive Data, 2013 Thomson Reuters 45 23