Graco Inc. Transforms Organizational Structure for Growth

Graco Inc. Transforms Organizational Structure for Growth

Graco Inc. (NYSE:GGG), a leading name in commercial and industrial fluid and powder handling systems, has recently announced a significant organizational shift aimed at unlocking global growth opportunities. This strategic change is set to enhance operational efficiency and profitability for the company.

New Market-Oriented Structure

The transition to a market-oriented global structure is intended to fortify Graco's competitive stance in the long term. As Mark Sheahan, the President and Chief Executive Officer of Graco, emphasized, this move is crucial for entering new markets, seizing major opportunities, and accelerating growth.

Effective Date of Changes

Starting from January 1, 2025, Graco will implement a global, customer-centric operating structure featuring four distinct business divisions: Industrial, Expansion Markets, Contractor, and Powder. This new framework will see the integration of the previously independent regions of South and Central America (SCA), Europe, Middle East and Africa (EMEA), and Asia Pacific (AP) into these divisions.

Overview of the New Divisions

Industrial Division

The current Industrial and Lubrication Equipment Divisions, in addition to the Process Transfer Equipment segment, will amalgamate to create the global Industrial Division. Peter J. O’Shea, who was previously in charge of the Worldwide Lubrication Equipment Division and the South and Central America operations, is slated to be the President of this newly formed division. Anthony J. Gargano, formerly the President of Asia Pacific, will take on the role of Global Sales Lead for the Industrial Division.

Expansion Markets Division

Graco’s new Expansion Markets Division aims to catalyze inorganic growth by exploring adjacent markets. This division will encompass the company’s current businesses in environmental products, semiconductor technology, high-pressure valves, and electric motors, as well as promising ventures and acquisitions. Timothy R. White, who has been leading the Worldwide Process Division, will transition into the role of President for the Expansion Markets Division.

Contractor and Powder Divisions

The Contractor Equipment Division will be rebranded as the Contractor Division, emphasizing a global approach to meet customer needs. Meanwhile, the Powder Division remains structured as a global business, continuing its operations under existing executive leadership.

Sheahan noted that this restructured organization will streamline operations, enhance market responsiveness, and create better alignment across various business units. The goal is to prioritize customer satisfaction, drive innovation, and align investments with strategic growth opportunities.

Financial Reporting Changes

Beginning January 1, 2025, Graco will categorize its business into three reportable segments: Contractor, Industrial, and Expansion Markets. This classification marks a significant change in how the company will report its financial outcomes moving forward.

Segment Breakdown

• The Industrial segment will feature both the newly created Industrial Division and the Powder Division.
• The Expansion Markets segment will include the newly formed Expansion Markets Division.
• The Contractor segment, inclusive of the Contractor Division, will remain as it was without changes relative to past periods.

Graco plans to present its financial reporting under these segments starting with the first quarter of 2025. Additionally, financial information will be updated on the company’s website regarding prior segments in connection with their fourth quarter earnings release.

Leadership Transition

Caroline Chambers, who has served as President for EMEA, will be leaving Graco on December 31, 2024, following her contributions to the transition. Sheahan acknowledged Caroline's significant impact on Graco’s success and expressed gratitude for her dedication to the company and its customers.

About Graco Inc.

Graco Inc. provides advanced technology and expertise in managing fluids and coatings across both industrial and commercial applications. The company designs and manufactures systems and equipment for moving, measuring, controlling, dispensing, and spraying fluid and powder materials. Based in Minneapolis, Graco serves a diverse clientele worldwide in manufacturing, processing, construction, and maintenance sectors. For more information about Graco Inc., please visit www.graco.com.

Frequently Asked Questions

What prompted Graco Inc.'s organizational changes?

Graco's new organizational structure aims to enhance growth potential, streamline operations, and improve customer service and efficiency.

When will the new structure take effect?

The organizational changes will officially begin on January 1, 2025.

How are the divisions structured under the new plan?

The new structure includes four divisions: Industrial, Expansion Markets, Contractor, and Powder, each focusing on specific operational goals.

What changes will occur in financial reporting?

Beginning with the first quarter of 2025, Graco will categorize its financial results under three reportable segments.

Who will lead the new divisions?

Leadership roles include Peter J. O'Shea for the Industrial Division and Timothy R. White for the Expansion Markets Division, among others.

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