Slide 1: 3rd Quarter 2021 Earnings Conference Call
////////////////// 3rd Quarter 2021 Earnings Conference Call October 21, 2021
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/ir Telephone replay will be available after 2 p.m. ET October 21, 2021. The replay by telephone will be available through 2 p.m. ET October 28, 2021. ▶ 855-859-2056
Slide 4: Financial Results
Financial Results ////////////////// Statement of Earnings Third Quarter September Year to Date $ in millions except per share amounts 2021 2020 Change 2021 2020 Change Net Sales $ 486.7 $ 439.3 11 % $1,448.0 $1,179.8 23 % Gross Profit 248.2 229.0 8% 759.4 610.1 24 % % of Net Sales 51.0% 52.1% (1.1)
Slide 5: Financial Results Adjusted for Comparability
Financial Results Adjusted for Comparability ////////////////// Certain items have caused fluctuation in the Company’s financial results. Excluding the impacts of these items presents a more consistent basis for comparison of financial results. A calculation of the non-GAAP measurements follows: Non
Slide 6: Net Sales
Net Sales ////////////////// September 2021 Quarter to Date Segment Region Industrial Process Contractor Americas EMEA Asia Pacific Consolidated Volume and Price 19 % 21 % (5)% 1% 20 % 27 % 9% Acquisitions 1% 0% 0% 0% 2% 0% 0% Currency 2% 1% 1% 0% 2% 5% 2% Total 22 % 22 % (4)% 1% 24 % 32 % 11 % Sept
Slide 7: Operating Earnings
Operating Earnings ////////////////// Third Quarter September Year to Date 2020 Operating Earnings, as Reported ($M and % of sales) $ 125 28 % $ 260 22 % Non-cash impairment - 0 35 3 2020 Operating Earnings, as Adjusted $ 125 28 % $ 295 25 % Translation effect 3 1 16 1 Volume, net of product cost 14
Slide 8: Third Quarter 2021
Third Quarter 2021 ////////////////// ► Up 11 percent from 2020, up 9 percent at consistent translation Net Sales rates ► Rate down 1.1 percentage points from third quarter 2020 Favorable effect of realized pricing, higher production volume and favorable effect of currency translation rates were n
Slide 9: September Year to Date 2021
September Year to Date 2021 ////////////////// ► Up 23 percent from 2020, up 20 percent at consistent translation Net Sales rates ► Rate up 0.7 percentage point from 2020 Favorable effects of realized pricing, higher production volume, favorable currency translation rates and favorable product and
Slide 10: Outlook
Outlook ////////////////// 2021 Organic Net Sales by Segment - Compared to 2020 Bookings July August September 6 Week Avg. Industrial Segment 13% 23% 21% 35% Process Segment 23% 31% 11% 51% Contractor Segment 5% (17%) (2%) 8% 11% 6% 10% 27% ▶ Broad based end market recovery in Industrial and Process
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 Q3 2021 1% Q3 2021 20% Q3 2021 27% Q3 2021 9% Environment YTD 2021 16% YTD 2021
Slide 12: Cash Flow and Liquidity
Cash Flow and Liquidity ////////////////// Net Earnings, as Adjusted, and Cash from Operating Activities $ in millions $136 $131 $137 $119 $120 $118 $102 $106 $102 $102 $108 $100 $82 $88 $77 $65 $62 $54 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Net Earnings, as Adjusted Cash from Operati
Slide 13: Other Discussion Items
Other Discussion Items ////////////////// Cap Ex Capital expenditure expectations of approximately $150 million in 2021, including approximately $80 million in facilities expansion Expenses Unallocated corporate expenses in 2021 are expected to be approximately $26 - $28 million No share repurchases
Slide 14: Other Discussion Items – 2022 Change in Organizational Structure
Other Discussion Items – 2022 Change in Organizational Structure As previously announced, effective January 1, 2022, our high performance coatings and foam product offerings within the Applied Fluid Technologies division of the Industrial segment will be realigned and managed under the Contractor se
Slide 15: Industrial Segment Results
Industrial Segment Results ////////////////// 2021 Industrial Segment Sept. YTD Net Sales as % of Graco $ in millions Third Quarter September Year to Date 2021 2020 Change 2021 2020 Change Net Sales Americas $ 87 $ 76 14% $ 254 $ 209 22% EMEA 68 53 30 185 134 38 Asia Pacific 56 44 27 161 122 32 Tota
Slide 16: Operating Margins
Industrial Segment Results ////////////////// Change in % of net sales Third Quarter Sept. Year to Date 2020 Operating Earnings 35 % 32 % Currency Translation 1 1 Volume and product and channel mix 0 1 Increase in sales and earnings-based costs (2) (2) Volume effect on expense leverage 1 3 2021 Oper
Slide 17: Process Segment Results
Process Segment Results ////////////////// 2021 Process Segment $ in millions Third Quarter September Year to Date Sept. YTD Net Sales as % of Graco 2021 2020 Change 2021 2020 Change Net Sales Americas $ 58 $ 52 12% $ 175 $ 153 14% 20% EMEA 14 12 20 44 41 9 Asia Pacific 24 15 58 66 49 34 Total $ 96
Slide 18: Operating Margins
Process Segment Results ////////////////// Change in % of net sales Third Quarter Sept. Year to Date 2020 Operating Earnings 21 % 19 % Currency Translation 0 1 Volume, product and channel mix 0 1 Effect of acquired and divested business operations 0 1 Increase in sales and earnings-based costs (3) (
Slide 19: Contractor Segment Results
Contractor Segment Results ////////////////// 2021 Contractor Segment $ in millions Third Quarter September Year to Date Sept. YTD Net Sales as % of Graco 2021 2020 Change 2021 2020 Change Net Sales Americas $ 134 $ 149 (9)% $ 418 $ 367 14% EMEA 33 29 14 110 78 41 39% Asia Pacific 12 10 18 35 27 30
Slide 20: Operating Margins
Contractor Segment Results ////////////////// Change in % of net sales Third Quarter Sept. Year to Date 2020 Operating Earnings 29 % 26 % Currency translation 0 1 Product cost and product and channel mix (6) (2) Increase in sales and earnings-based costs 0 (2) Volume effect on expense leverage (3) 1
Slide 21: Worldwide Leaders in Fluid Handling
MOVE / MEASURE / MIX / CONTROL / DISPENSE / S P R AY WORLDWIDE LEADERS IN FLUID HANDLING www.graco.com