Slide 1: Investor Presentation First Quarter 2025
INVESTOR PRESENTATION FIRST QUARTER 2025
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: Distribution of Global Sales
DISTRIBUTION OF GLOBAL SALES WORLDWIDE 61% 48% $528M 44% 23% 16% 8% First Quarter 2025 AMERICAS EMEA ASIA PACIFIC CONTRACTOR INDUSTRIAL EXPANSION MARKETS 69% 63% 52% Americas EMEA 26% 22% Asia Pacific 21% 20% 17% 10% CONTRACTOR INDUSTRIAL EXPANSION MARKETS INVESTOR PRESENTATION – Q1 2025 3
Slide 4: 2024 Net Sales by End Market
2024 NET SALES BY END MARKET 1% Wood 1% White Goods 2% Mining 3% Electronics 3% Oil & Natural Gas 4% Public Works 4% Vehicle Services 47% 9% Other Construction 9% Automotive 17% Industrial & Machinery INVESTOR PRESENTATION – Q1 2025 4
Slide 5: Trusted Solutions to Keep Jobs Moving & Fluids Pumping
TRUSTED SOLUTIONS TO KEEP JOBS MOVING & FLUIDS PUMPING INVESTOR PRESENTATION – Q1 2025 5
Slide 6: Niche Diversified Fluid Handling Business
DIVERSIFIED FLUID HANDLING BUSINESS NICHE Difficult applications; corrosive, viscous, hard-to-move materials 6.1% Organic Revenue CAGR* *20-year average, constant currency ~40% Of revenue is parts and accessories INVESTOR PRESENTATION – Q1 2025 6
Slide 7: High Customer Value, Strong Product Differentiation
HIGH CUSTOMER VALUE, STRONG PRODUCT DIFFERENTIATION Best in class delivery Material supplier relationships Niche markets Strong channel partners CUSTOMER ROI Leading new Stringent product Best in class End user Lowest total product investment requirements quality interaction cost of ownership INVEST
Slide 8: Growth Plans and Earnings Drivers
GROWTH PLANS AND EARNINGS DRIVERS STRATEGIC INITIATIVES • New Product Development • New Markets 10% Targeted Revenue CAGR • Global Expansion • End-user Conversion • Acquisitions 12%+ Targeted Earnings CAGR Through a cycle. INVESTOR PRESENTATION – Q1 2025 8
Slide 9: Growth Plans and Earnings Drivers
GROWTH PLANS AND EARNINGS DRIVERS Through a cycle. 12%+ Acquisition s 3-4% 9-10% Strategic initiatives 1-2% 5-7% Price 1-2% 3% Industrial Targeted Targeted Targeted Production Average Organic CAGR Revenue CAGR Earnings CAGR Growth Rate INVESTOR PRESENTATION – Q1 2025 9
Slide 10: Low Volume, High Mix Delivers Customer ROI
LOW VOLUME, HIGH MIX DELIVERS CUSTOMER ROI AVERAGE NUMBER OF UNITS 2024 SALES SOLD PER DAY NUMBER OF SKUS ($ IN MILLIONS) HIGHLY-VALUED PRODUCTS AT 0–1 56,500 93% $ 1,011 48% LOW VOLUMES 2-5 6 - 10 2,500 700 4% 1% $ 321 $ 162 15% 8% 48% of our revenue comes from products 11 - 15 300 1% $ 90 4% that
Slide 11: Exceptional Returns
EXCEPTIONAL RETURNS 6.1% 24% 38% 17% ORGANIC REVENUE RETURN ON RETURN ON RETURN ON CAGR INVESTED CAPITAL EQUITY ASSETS Based on a 20-year average. Organic revenue at constant currency. INVESTOR PRESENTATION – Q1 2025 11
Slide 12: Business Model
BUSINESS MODEL • Brand Promise • Engineering Excellence • Manufacturing Excellence • Service Excellence • Extensive Reach • Culture & Talent INVESTOR PRESENTATION – Q1 2025 12
Slide 13: Brand Promise
BRAND PROMISE GRACO’S BRICK AND MORTAR VALUES . • Customer focus • Quality • Continuous improvement • Fact-based decision making • Results driven The result of these values is our promise to our customers: We are committed to delivering innovation, quality and service. INVESTOR PRESENTATION – Q1 202
Slide 14: Engineering Excellence
ENGINEERING EXCELLENCE TARGET DOUBLE-DIGIT RETURNS ON NEW PRODUCTS ANNUAL R&D INVESTMENT: • >1.5x* our peer group • 4.0%* as a percent of sales vs. peers at 2.7% *Peers: ITW, LECO, DOV, IEX, NDSN, based on a 5-year average, 2020 - 2024. INVESTOR PRESENTATION – Q1 2025 14
Slide 15: Manufacturing Excellence
MANUFACTURING EXCELLENCE • >80% product based in USA • Zero cost change goal on the same basket of goods (year over year) • <1% warranty costs INVESTOR PRESENTATION – Q1 2025 15
Slide 16: Service Excellence
SERVICE EXCELLENCE • Orders in by noon, ship the same day • 95% in-stock service level goal INVESTOR PRESENTATION – Q1 2025 16
Slide 17: Extensive Reach
EXTENSIVE REACH CUSTOMERS IN INSTALLED BASE FACILITIES IN +30K OUTLETS/DISTRIBUTORS 100+ COUNTRIES ~100 YEARS OLD 15+ COUNTRIES INVESTOR PRESENTATION – Q1 2025 17
Slide 18: Culture & Talent
CULTURE & TALENT 4,300 1,900 23 10 AVERAGE AVERAGE TOTAL EMPLOYEES YEARS OF YEARS OF NUMBER OF OUTSIDE OF EXECUTIVE EMPLOYEE EMPLOYEES THE U.S. TENURE TENURE *Based on data as of 12/27/2024 INVESTOR PRESENTATION – Q1 2025 18
Slide 19: Contractor
CONTRACTOR
Slide 20: Contractor
KEY END MARKETS • Residential and non-residential construction • Residential and non-residential remodeling • Transportation Infrastructure CONTRACTOR GROWTH DRIVERS & TRENDS 2025 March, • End user conversion from brush and roll three-month performance • Product innovation and channel expansion $255
Slide 21: Industrial
INDUSTRIAL
Slide 22: Industrial
KEY END MARKETS • General Industrial • Automotive • Vehicle services INDUSTRIAL • Pharmaceutical, food and beverage 2025 March, GROWTH DRIVERS & TRENDS three-month performance • Factory movement and upgrades $232M • Automation • Technology upgrades SEGMENT REVENUE • Energy-efficiency upgrades • Mate
Slide 23: Expansion Markets
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Slide 24: Expansion Markets
KEY END MARKETS EXPANSION • Semiconductor • Oil and natural gas MARKETS • Environmental 2025 March, GROWTH DRIVERS & TRENDS three-month performance • Factory movement and upgrades • Technology and energy-efficiency upgrades $41M • Asset life maintenance • Environmental regulations SEGMENT REVENUE SE
Slide 25: Capital Allocation
CAPITAL ALLOCATION
Slide 26: Long-Term Cash Deployment Priorities
LONG-TERM CASH DEPLOYMENT PRIORITIES ORGANIC GROWTH ACQUISITIONS SHAREHOLDER RETURN • International footprint • Supplement to organic growth • Solid dividend history • Product development • Leverage core competencies into adjacencies • Approximately 9.0 million shares remaining on repurchase authori
Slide 27: Key Investment Attributes
KEY INVESTMENT ATTRIBUTES • Drive long-term, above-market growth • Premium products that deliver strong ROI for end users • Leading industry positions • Serve niche markets where customers are willing to purchase quality, technology-based products • Products perform mission-critical functions • Recu
Slide 28: Key Acquisitions
KEY ACQUISITIONS
Slide 29: Key Acquisitions
KEY ACQUISITIONS 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 INVESTOR PRESENTATION – Q1 2025 29
Slide 30: Financial Results
FINANCIAL RESULTS
Slide 31: First Quarter 2025 Financial Performance
FIRST QUARTER 2025 FINANCIAL PERFORMANCE +7% 52.6% +2% +1% REVENUE GROSS NET INCOME EPS GROWTH MARGIN GROWTH GROWTH (As Reported) INVESTOR PRESENTATION – Q1 2025 31
Slide 32: Financial Results
FINANCIAL RESULTS Statement of Earnings First Quarter $ in millions except per share amounts 2025 2024 Change Net Sales $ 528.3 $ 492.2 7% Gross Profit 277.7 266.2 4% % of Net Sales 52.6% 54.1% (1.5) pts Operating Earnings 144.0 133.0 8% Net Earnings $ 124.1 $ 122.2 2% Diluted Net Earnings Per Share
Slide 33: Financial Results Adjusted for Comparability
FINANCIAL RESULTS ADJUSTED FOR COMPARABILITY Non-GAAP Reconciliation First Quarter $ in millions except per share amounts 2025 2024 Change Income taxes, as reported $ 27.4 $ 18.1 51 % Excess tax benefit from option exercises 3.6 9.6 Income taxes, adjusted $ 31.0 $ 27.7 12 % Effective income tax rate
Slide 34: First Quarter 2025
FIRST QUARTER 2025 • Up 7 percent from first quarter 2024. Sales from acquired businesses contributed 6 Net Sales percentage points of growth. Currency translation reduced net sales by 2 percentage points. • Margin rate down 2 percentage points compared to first quarter 2024 Gross Margin > Unfavorab
Slide 35: Cash Flow and Liquidity
CASH FLOW AND LIQUIDITY Net Earnings, as Adjusted, and Cash from Operating Activities $209 $191 $185 $178 $160 $129 $131 $137 $132 $139 $122 $120 $125 $127 $113 $119 $110 $91 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Q1 25 Net Earnings, as Adjusted Cash from Operating Activites Other Significa
Slide 36: Net Sales
NET SALES Components of Net Sales Change 2025 First Quarter Segment Region Expansion Contractor Industrial Americas EMEA Asia Pacific Consolidated Markets Volume and Price (1)% 5% 12 % 3% (1)% 6% 3% Acquisitions 13 % 0% 0% 3% 13 % 10 % 6% Currency (1)% (2)% 0% (1)% (3)% (3)% (2)% Total 11 % 3% 12 %
Slide 37: 2025 Outlook
2025 OUTLOOK Constant currency basis and excluding acquisitions completed in the prior 12 months Americas EMEA Asia Pacific Worldwide Current Net Sales Change Q1 2025 3% Q1 2025 (1%) Q1 2025 6% Environment Q1 2025 3% Contractor Net Sales Change Segment Q1 2025 (1%) Q1 2025 1% Q1 2025 (9%) Q1 2025 1%
Slide 38: Other Items
OTHER ITEMS Cap Ex • Capital expenditure expectations of approximately $50 - $60 million in 2025 Expenses • Unallocated corporate expenses in 2025 are expected to be approximately $39 - $42 million • During the first quarter, we repurchased 2.8 million shares. Subsequent to the end of the quarter, w
Slide 39: 2025 Change in Financial Reporting Segments
2025 CHANGE IN FINANCIAL REPORTING SEGMENTS As previously announced, effective January 1, 2025, the Company has classified its business into three reportable segments: Contractor, Industrial and Expansion Markets. • The Industrial segment consists of the newly formed Industrial Division and the Powd
Slide 40: Financial Summary
FINANCIAL SUMMARY 2024 Appendix
Slide 41: Financial Performance
FINANCIAL PERFORMANCE Net Sales Operating Margin $2,500 30% 25% $2,000 20% Sales ($ millions) Operating Margin $1,500 15% $1,000 10% $500 5% $0 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 AS REPORTED Diluted EPS $0.56 $0.77 $0.81 $1.12 $1.22 $1.95 $0.24 $1.45 $1.97
Slide 42: Stock Dividend Growth
STOCK DIVIDEND GROWTH $1.20 $1.10 $1.00 $0.84 $0.80 $0.64 $0.60 $0.44 $0.40 $0.20 Dividends adjusted for stock splits $- 2016 2019 2022 2025 INVESTOR PRESENTATION – Q1 2025 42
Slide 43: Strong Cash Generation
STRONG CASH GENERATION ($ Millions) 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 Operating Cash Flows $ 622 $ 651 $ 377 $ 457 $ 394 $ 419 $ 368 $ 338 $ 269 $ 190 % of Net Income 128% 129% 82% 104% 119% 122% 108% 134% 661% 55% Capital Expenditures 107 185 201 134 71 128 54 40 42 42 Free Cash Flo
Slide 44: OVING MATERIALS THAT MATTER”
OVING MATERIALS THAT MATTER”