Slide 1: 4th Quarter 2021 Earnings Conference Call
////////////////// 4th Quarter 2021 Earnings Conference Call February 1, 2022
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 Telephone replay will be available after 2 p.m. ET February 1, 2022. The replay by telephone will be available through 2 p.m. ET February 8, 2022. ▶ 855-859-2056 – C
Slide 4: Financial Results
Financial Results ////////////////// Statement of Earnings Fourth Quarter Full Year $ in millions except per share amounts 2021 2020 Change 2021 2020 Change Net Sales $ 539.6 $ 470.3 15 % $1,987.6 $1,650.1 20 % Gross Profit 274.5 244.8 12 % 1,033.9 854.9 21 % % of Net Sales 50.9% 52.1% (1.2) pts 52.
Slide 5: Financial Results Adjusted for Comparability
Financial Results Adjusted for Comparability ////////////////// Certain items have caused fluctuation in the Company’s financial results. Excluding the impacts of these items presents a more consistent basis for comparison of financial results. A calculation of the non-GAAP measurements follows: Non
Slide 6: Net Sales
Net Sales ////////////////// 2021 Fourth Quarter Segment Region Industrial Process Contractor Americas EMEA Asia Pacific Consolidated Volume and Price 13 % 35 % 8% 13 % 6% 33 % 15 % Acquisitions 1% 0% 0% 0% 2% 0% 0% Currency (1)% 0% (1)% 0% (4)% 1% 0% Total 13 % 35 % 7% 13 % 4% 34 % 15 % 2021 Full Y
Slide 7: Operating Earnings
Operating Earnings ////////////////// Fourth Quarter Full Year 2020 Operating Earnings, as Reported ($M and % of sales) $ 132 28 % $ 392 24 % Non-cash impairment - 0 35 2 2020 Operating Earnings, as Adjusted $ 132 28 % $ 427 26 % Translation effect (1) 0 15 1 Volume, product cost and mix 31 (1) 164
Slide 8: Fourth Quarter 2021
Fourth Quarter 2021 ////////////////// ► Up 15 percent from 2020, the same at consistent translation Net Sales rates ► Rate down 1.2 percentage points from fourth quarter 2020 Favorable product and channel mix, realized pricing and increased production volume were not enough to offset the unfavora
Slide 9: Full Year 2021
Full Year 2021 ////////////////// ► Up 20 percent from 2020, up 19 percent at consistent translation Net Sales rates ► Rate up 0.2 percentage point from 2020 Favorable effects of higher production volume, realized pricing, favorable currency translation rates were able to offset higher product Gro
Slide 10: Outlook
Outlook ////////////////// 2021 Organic Net Sales by Segment - Compared to 2020 Bookings October November December 6 Week Avg. Industrial Segment 33% 5% 4% 18% Process Segment 55% 25% 27% 49% Contractor Segment 16% 4% 3% 19% 30% 8% 8% 25% ▶ Broad based end market recovery and demand levels remain st
Slide 11: Outlook
Outlook ////////////////// Constant currency basis and excluding acquisitions and divestitures completed in the prior 12 months Americas EMEA Asia Pacific Total Sales Growth Sales Growth Sales Growth Sales Growth Current Q4 2021 13% Q4 2021 6% Q4 2021 33% Q4 2021 15% Environment Full Year 15% Full Y
Slide 12: Cash Flow and Liquidity
Cash Flow and Liquidity ////////////////// Net Earnings, as Adjusted, and Cash from Operating Activities $ in millions $131 $137 $119 $120 $118 $116 $102 $106 $102 $102 $108 $100 $100 $82 $89 $65 $62 $54 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Net Earnings, as Adjusted Cash from Operat
Slide 13: Other Discussion Items
Other Discussion Items ////////////////// Cap Ex Capital expenditure expectations of approximately $190 million in 2022, including approximately $140 million in facility expansion projects Expenses Unallocated corporate expenses in 2022 are expected to be approximately $28 - $30 million No share rep
Slide 14: Other Discussion Items
Other Discussion Items ////////////////// Pension Settlement In the fourth quarter of 2021, the Company transferred $63 million of its pension obligations to an insurance company through the purchase of an annuity contract. As a result, a non-cash settlement loss of $12 million ($0.05 per diluted sh
Slide 15: Industrial Segment Results
Industrial Segment Results ////////////////// 2021 Industrial Segment $ in millions Fourth Quarter Full Year Net Sales as % of Graco 2021 2020 Change 2021 2020 Change Net Sales Americas $ 100 $ 86 17% $ 354 $ 295 20% EMEA 72 73 (2) 257 207 24 Asia Pacific 68 54 26 229 176 30 Total $ 240 $ 213 13% $
Slide 16: Operating Margins - Industrial Segment Results
Industrial Segment Results ////////////////// Change in % of net sales Fourth Quarter Full Year 2020 Operating Earnings 37 % 33 % Currency Translation 0 1 Volume and product and channel mix 1 1 Increase in sales and earnings-based costs (1) (2) Volume effect on expense leverage 0 2 2021 Operating Ea
Slide 17: Process Segment Results
Process Segment Results ////////////////// 2021 Process Segment $ in millions Fourth Quarter Full Year Net Sales as % of Graco 2021 2020 Change 2021 2020 Change Net Sales 20% Americas $ 68 $ 53 27% $ 243 $ 206 18% EMEA 15 12 25 60 53 13 Asia Pacific 30 18 67 95 67 43 Total $ 113 $ 83 35% $ 398 $ 326
Slide 18: Operating Margins - Process Segment Results
Process Segment Results ////////////////// Change in % of net sales Fourth Quarter Full Year 2020 Operating Earnings 22 % 20 % Product cost, product and channel mix (2) 0 Effect of acquired and divested business operations 0 1 Increase in sales and earnings-based costs (2) (2) Volume effect on expen
Slide 19: Contractor Segment Results
Contractor Segment Results ////////////////// 2021 Contractor Segment $ in millions Fourth Quarter Full Year Net Sales as % of Graco 2021 2020 Change 2021 2020 Change Net Sales Americas $ 135 $ 128 5% $ 553 $ 496 12% EMEA 38 34 11 147 111 32 38% Asia Pacific 14 12 19 50 39 27 Total $ 187 $ 174 7% $
Slide 20: Operating Margins - Contractor Segment Results
Contractor Segment Results ////////////////// Change in % of net sales Fourth Quarter Full Year 2020 Operating Earnings 23 % 25 % Currency translation 0 1 Product cost and product and channel mix (4) (2) Increase in sales and earnings-based costs 0 (2) Volume effect on expense leverage 0 1 2021 Oper
Slide 21: Worldwide Leaders in Fluid Handling
MOVE / MEASURE / MIX / CONTROL / DISPENSE / S P R AY WORLDWIDE LEADERS IN FLUID HANDLING www.graco.com