Slide 1: Second Quarter Earnings Call
SECOND QUARTER EARNINGS CALL July 27, 2023
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 Second Quarter June Year to Date $ in millions except per share amounts 2023 2022 Change 2023 2022 Change Net Sales $ 559.6 $ 548.5 2% $1,089.3 $1,042.8 4% Gross Profit 291.4 269.1 8% 576.6 523.5 10 % % of Net Sales 52.1% 49.0% 3.1 pts 52.9% 50.2% 2.7 pts Oper
Slide 4: Net Sales
NET SALES Components of Net Sales Change 2023 Second Quarter Segment Region Contractor Industrial Process Americas EMEA Asia Pacific Consolidated Volume and Price (3)% 4% 14 % 2% 5% 0% 3% Acquisitions 0% 0% 0% 0% 0% 0% 0% Currency (1)% (1)% (1)% 0% 2% (4)% (1)% Total (4)% 3% 13 % 2% 7% (4)% 2% 2023
Slide 5: Operating Earnings
OPERATING EARNINGS Second Quarter June Year to Date 2022 Operating Earnings, as reported ($M and % of sales) $ 149 27 % $ 277 27 % Translation effect (2) 0 (10) (1) Pricing and mix 24 3 65 3 Volume effect on expense leverage (14) (2) (18) 0 2023 Operating Earnings, as reported ($M and % of sales) $
Slide 6: Second Quarter 2023
SECOND QUARTER 2023 Net Sales • Up 2 percent from 2022, up 3 percent at consistent translation rates • Margin rate up 3.1 percentage points compared to 2022 Gross Margin > Realized pricing and favorable mix more than offset higher product cost • Up $8 million compared to 2022 Operating Earnings > Re
Slide 7: June Year to Date 2023
JUNE YEAR TO DATE 2023 Net Sales • Up 4 percent from 2022, up 6 percent at consistent translation rates • Margin rate up 2.7 percentage points compared to 2022 Gross Margin > Realized pricing and favorable mix more than offset higher product cost and adverse impact of changes in currency translation
Slide 8: 2023 Outlook
2023 OUTLOOK Constant currency basis and excluding acquisitions completed in the prior 12 months Americas EMEA Asia Pacific Worldwide Current Q2 2023 2% Q2 2023 5% Q2 2023 0% Net Sales Change Q2 2023 3% June YTD 7% June YTD 6% June YTD (1%) Environment June YTD 6% Contractor Net Sales Change Q2 2023
Slide 9: Cash Flow and Liquidity
CASH FLOW AND LIQUIDITY Net Earnings, as Adjusted, and Cash from Operating Activities $ in millions $191 $137 $137 $127 $129 $124 $108 $118 $100 $116 $100 $100 $117 $104 $115 $105 $91 $31 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Net Earnings, as Adjusted Cash from Operating Activites Ot
Slide 10: Other Discussion Items
OTHER DISCUSSION ITEMS • Capital expenditure expectations of approximately $200 million in 2023, Cap Ex including approximately $130 million in facility expansion projects • In July 2023, subsequent to the end of second quarter, repaid $75 million Debt private placement debt plus prepayment fee of $
Slide 11: Contractor Segment Results
CONTRACTOR SEGMENT RESULTS $ in millions Second Quarter June Year to Date June YTD 2023 Contractor Segment Net Sales as % of Graco 2023 2022 Change 2023 2022 Change Net Sales Americas $ 189 $ 200 (6)% $ 373 $ 370 1% EMEA 48 45 8 91 86 5 46% Asia Pacific 19 21 (11) 38 44 (12) Total $ 256 $ 266 (4)% $
Slide 12: Contractor Segment Results: Operating Margins
CONTRACTOR SEGMENT RESULTS Change in % of net sales Second Quarter June Year to Date 2022 Operating Earnings 26 % 25 % Currency translation 0 (1) Price and mix 4 5 Volume effect on expense leverage (3) (1) 2023 Operating Earnings 27 % 28 % Contractor Segment Net Sales and Operating Margins Contracto
Slide 13: Industrial Segment Results
INDUSTRIAL SEGMENT RESULTS $ in millions Second Quarter June Year to Date June YTD 2023 Industrial Segment Net Sales as % of Graco 2023 2022 Change 2023 2022 Change Net Sales Americas $ 66 $ 61 7% $ 129 $ 116 11% EMEA 49 46 8 97 93 4 Asia Pacific 49 51 (5) 88 94 (7) Total $ 164 $ 158 3% $ 314 $ 303
Slide 14: Industrial Segment Results: Operating Margins
INDUSTRIAL SEGMENT RESULTS Change in % of net sales Second Quarter June Year to Date 2022 Operating Earnings 35 % 36 % Currency Translation (1) (1) 2023 Operating Earnings 34 % 35 % Industrial Segment Net Sales and Operating Margins Industrial Segment Operating Earnings QTD $250 M 40% 35% $4M ($2M)
Slide 15: Process Segment Results
PROCESS SEGMENT RESULTS $ in millions Second Quarter June Year to Date June YTD 2023 Process Segment Net Sales as % of Graco 2023 2022 Change 2023 2022 Change Net Sales Americas $ 92 $ 77 19% $ 176 $ 145 21% 25% EMEA 18 18 4 37 36 6 Asia Pacific 30 30 2 61 59 3 Total $ 140 $ 125 13% $ 274 $ 240 14%
Slide 16: Process Segment Results: Operating Margins
PROCESS SEGMENT RESULTS Change in % of net sales Second Quarter June Year to Date 2022 Operating Earnings 25 % 24 % Price and cost 5 4 Volume effect on expense leverage 1 3 2023 Operating Earnings 31 % 31 % Process Segment Operating Earnings QTD Process Segment Net Sales and Operating Margins $200 M
Slide 17: Adjusted Financial Results
ADJUSTED FINANCIAL RESULTS Financial results have been adjusted for comparability. Excess tax benefit from stock option exercises has caused fluctuation in the Company’s financial results. Excluding the impact of this benefit presents a more consistent basis for comparison of financial results. A ca
Slide 18: Worldwide Leader in Fluid Handling
WORLDWIDE LEADER IN FLUID HANDLING MOVE • MEASURE • MIX • CONTROL • DISPENSE • SPRAY