Slide 1: 4th Quarter 2022 Earnings Conference Call
////////////////// 4th Quarter 2022 Earnings Conference Call January 31, 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 dif
Slide 3: Financial Results
Financial Results ////////////////// Statement of Earnings Fourth Quarter Full Year $ in millions except per share amounts 2022 2021 Change 2022 2021 Change Net Sales $ 555.0 $ 539.6 3% $2,143.5 $1,987.6 8% Gross Profit 272.8 274.6 (1)% 1,057.4 1,033.9 2% % of Net Sales 49.2% 50.9% (1.7) pts 49.3% 5
Slide 4: Net Sales
Net Sales ////////////////// Components of Net Sales Change 2022 Fourth Quarter Segment Region Industrial Process Contractor Americas EMEA Asia Pacific Consolidated Volume and Price 17 % 16 % (4)% 4% 12 % 10 % 6% Acquisitions 0% 3% 0% 1% 0% 0% 1% Currency (7)% (4)% (3)% (0)% (11)% (10)% (4)% Total 1
Slide 5: Operating Earnings
Operating Earnings ////////////////// Fourth Quarter Full Year 2021 Operating Earnings, as Reported ($M and % of sales) $ 145 27 % $ 531 27 % Translation effect (14) (2) (40) (1) Product cost, pricing, sales volume 16 0 77 (2) Change in sales and earnings-based costs 8 1 17 1 Volume effect on expens
Slide 6: Fourth Quarter 2022
Fourth Quarter 2022 ////////////////// ► Up 3 percent from 2021, up 7 percent at consistent translation rates. Sales from acquired businesses contributed 1 percentage point Net Sales ► 2021 was a 53 week year with 14 weeks in the fourth quarter compared to 13 weeks in the fourth quarter of 2022 ► Ma
Slide 7: Full Year 2022
Full Year 2022 ////////////////// Up 8 percent from 2021, up 12 percent at consistent translation rates. Net Sales ► Sales from acquired businesses contributed 1 percentage point ► Margin rate down 2.7 percentage points from 2021 Realized pricing not enough to offset the unfavorable impact of high
Slide 8: 2023 Outlook
2023 Outlook ////////////////// Constant currency basis and excluding acquisitions completed in the prior 12 months Americas EMEA Asia Pacific Total Current Sales Growth Q4 2022 4% Sales Growth Q4 2022 12% Sales Growth Q4 2022 10% Sales Growth Q4 2022 7% Environment 2022 Full Year 11% 2022 Full Year
Slide 9: Cash Flow and Liquidity
Cash Flow and Liquidity ////////////////// Net Earnings, as Adjusted, and Cash from Operating Activities $ in millions $131 $137 $137 $118 $117 $124 $108 $116 $115 $106 $102 $102 $100 $100 $100 $104 $105 $31 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Net Earnings, as Adjusted Cash from Op
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 Unallocated corporate expenses in 2023 are expected to be approximately Expenses $31 - $34 million We repurchas
Slide 11: Industrial Segment Results
Industrial Segment Results ////////////////// $ in millions Fourth Quarter Full Year 2022 2021 Change 2022 2021 Change Net Sales Americas $ 63 $ 61 4% $ 239 $ 213 12 % EMEA 64 55 17 206 199 3 Asia Pacific 63 58 9 204 190 8 Total $ 190 $ 174 10 % $ 649 $ 602 8% Operating Earnings $ 70 $ 61 14% $ 231
Slide 12: Operating Margins - Industrial Segment
Industrial Segment Results ////////////////// Change in % of net sales Fourth Quarter Full Year 2021 Operating Earnings 35 % 33 % Currency Translation (1) 0 Product cost (1) (1) Volume effect on expense leverage 4 4 2022 Operating Earnings 37 % 36 % Industrial Segment Net Sales and Operating Margins
Slide 13: Process Segment Results
Process Segment Results ////////////////// $ in millions Fourth Quarter Full Year 2022 2021 Change 2022 2021 Change Net Sales Americas $ 81 $ 68 20 % $ 304 $ 243 25 % EMEA 18 16 15 69 60 15 Asia Pacific 31 29 4 122 95 29 Total $ 130 $ 113 15 % $ 495 $ 398 25 % Operating Earnings $ 33 $ 26 27 % $ 122
Slide 14: Operating Margins - Process Segment
Process Segment Results ////////////////// Change in % of net sales Fourth Quarter Full Year 2021 Operating Earnings 23 % 23 % Currency translation (1) 0 Product cost (2) (3) Volume effect on expense leverage 5 5 2022 Operating Earnings 25 % 25 % Process Segment Operating Earnings QTD Process Segmen
Slide 15: Contractor Segment Results
Contractor Segment Results ////////////////// $ in millions Fourth Quarter Full Year 2022 2021 Change 2022 2021 Change Net Sales Americas $ 173 $ 174 (1)% $ 739 $ 694 6% EMEA 44 54 (19) 177 205 (14) Asia Pacific 18 25 (25) 83 89 (6) Total $ 235 $ 253 (7)% $ 999 $ 988 1% Operating Earnings $ 58 $ 63
Slide 16: Operating Margins - Contractor Segment
Contractor Segment Results ////////////////// Change in % of net sales Fourth Quarter Full Year 2021 Operating Earnings 25 % 27 % Currency translation (2) (1) Product cost 1 (2) Volume effect on expense leverage 1 1 2022 Operating Earnings 25 % 25 % Contractor Segment Net Sales and Operating Margins
Slide 17: 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 18: Worldwide Leaders in Fluid Handling
MOVE / MEASURE / MIX / CONTROL / DISPENSE / S P R AY WORLDWIDE LEADERS IN FLUID HANDLING www.graco.com