Company: GGG
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000042888-25-000011
Chunk: 56

Company: GRACO INC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 56
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 Total(6)%0%(1)%(7)%2%0%0%2%

Industrial segment sales decreased 7 percent for 2024 as finishing system sales in the Americas were unable to offset reduced project activity for automotive, e-mobility and electronic projects in Asia Pacific and weakened industrial activity in EMEA. The operating margin rate for this segment decreased 2 percentage points for the year due to higher product costs from lower sales volumes, business reorganization expenses and the unfavorable effects of product and channel mix.

In this segment, sales in each geographic region are significant, and management looks at economic and financial indicators in each region, including gross domestic product, industrial production, capital investment rates, automobile production, building construction and the level of the U.S. dollar versus the euro, the Swiss franc, the Canadian dollar, the Chinese renminbi and various other Asian currencies.

Process Segment

The following table presents net sales and operating earnings as a percentage of sales for the Process segment (dollars in millions):

20242023SalesAmericas$334.5 $344.2 EMEA70.1 76.8 Asia Pacific100.2 126.1 Total$504.8 $547.1 Operating Earnings as a Percentage of Sales28 %30 %

The following table presents the components of net sales change by geographic region for the Process segment:

20242023Volume and PriceAcquisitionsCurrencyTotalVolume and PriceAcquisitionsCurrencyTotalAmericas(3)%0%0%(3)%13%0%0%13%EMEA(10)%0%1%(9)%10%0%1%11%Asia Pacific(20)%0%(1)%(21)%5%0%(2)%3%Segment Total(8)%0%0%(8)%11%0%0%11%

Process segment sales decreased in 2024 in all regions mainly due to decline in semiconductor end markets. Other end markets, such as mining, oil and gas, industrial pumps and vehicle services were weaker in 2024 compared to 2023. The operating margin rate for this segment decreased approximately 2 percentage points for the year as price realization was not enough to offset unfavorable expense leverage on lower sales volume.

Although the Americas represent the majority of sales for the Process segment, management monitors indicators such as levels of gross domestic product, capital investment, industrial production, oil and natural gas markets and mining activity worldwide.

29

Financial Condition and Cash Flow

Working Capital. The following table