Stanley Black & Decker, Inc. · NYSE:SWK
Stanley Black & Decker — Investor Presentation (November 2022)
49 slides from Stanley Black & Decker's investor presentation, Nov 8, 2022
Slide 1: Investor Presentation
Investor Presentation Ve rs i on 11.08.2022
Slide 2: Contents
Contents Contacts Dennis Lange SWK Overview Pages 4 – 23 Vice President, Investor Relations 860-827-3833 Tools & Outdoor Pages 24 – 34 [email protected] Industrial Pages 35 – 41 Cort Kaufman Senior Director, Investor Relations Appendix Pages 42 – 49 860-515-2741 [email protected] Christi
Slide 3: Cautionary Statement
Cautionary Statement This presentation contains “forward-looking statements,” that is, statements that address future, not past events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words su
Slide 4: More Streamlined Company With Great Franchises
More Streamlined Company With Great Franchises Tools & Outdoor Industrial2 2021 Revenue: $12.8 Billion | $15.6 Billion Pro Forma 1 2021 Revenue: $2.5 Billion Outdoor Power Power Tools Equipment1 Infrastructure 2021 Revenue3: $15.3B | $18.1B Pro Forma 47% 25% 25%2 Market Cap: $11.3B Engineered Fasten
Slide 5: Expanding Geographic Reach
Expanding Geographic Reach Stanley Black & Decker Segments Tools & Outdoor Industrial* 9% 9% 14% 14% 13% 17% 17% 17% 61% 51% 60% 18% U.S. Europe Emerging Markets ROW Diversified Globally With Approximately 60% Of Our Revenues Generated In The U.S. Percentages As Of Fiscal Year 2021 Totals * Includes
Slide 6: Transforming To Accelerate Organic Growth
Transforming To Accelerate Organic Growth A Clear Vision And New Strategy For Long-Term Success… Reduce Complexity – Invest in Core Growth Enhance ~$2B Cost Savings In 3 Years $300M - $500M Shareholder Return Organic Revenue OPTIMIZE I N N O VAT I O N Growth 2-3X Market C O R P O R AT E S T R U C T
Slide 7: Global Cost Reduction Plan
Global Cost Reduction Plan Rapidly Aligning Organization & Operating Model Around More Focused Portfolio... ~$2 Billion Total Cumulative Cost Savings By 2025 | $1 Billion Annualized By 2023 Supply Chain Transformation SG&A Initiatives $1.5 Billion Total | $0.5 Billion By 2023 $0.5 Billion Total By 2
Slide 8: Cost Reduction Plan On Track
Cost Reduction Plan On Track Delivered $65 Million 3Q Savings Primarily In SG&A And On Track To Deliver $150-200M In 2022… SG&A Actions Implemented Activating Phase 1 Of Supply Chain Transformation SKU Reduction & Product Platforming ✓ Simplify Corporate & Investment Prioritization • ~50% Of Target
Slide 9: 2022 Guidance
2022 Guidance StanleyBlack&Decker
Slide 10: 2022 Guidance
2022 Guidance Expect Low Double-Digit Total Revenue Growth Vs. Prior Year And Adjusted EPS Of $4.15 To $4.65*... 2022 Updated Outlook Tools & Outdoor* Industrial* Organic: Mid-To-High Single Digit Decline Organic: High-Single Digits To Low- Organic Double Digit Increase Growth & Margin: Down YoY Fro
Slide 11: Currency Impact
Currency Impact Currency Headwinds Due To Stronger USD… Currency Trends Vs. USD (12/31/20 – 9/30/2022) Hedging Approach 15% (18%) (8%) (20%) (4%) (17%) - Hedge Key Currency Exposures (CAD, 10% EUR, GBP, & AUD, Among Other) - Intent Is To Dampen Volatility And Allow Time For Business Teams To 5% Miti
Slide 12: Global Franchises – Long Term Value Drivers
Global Franchises – Long Term Value Drivers A Company That Has Built Well Established, Global Franchises… Business Value Drivers • Brands • Innovation & Outdoor Electrification The Tool & In Tools & • Global Scale #1 Outdoor » Power & Hand Tools Outdoor Company To Own » Construction, DIY, Auto Repai
Slide 13: Stanley Black & Decker Value Creation Model
Stanley Black & Decker Value Creation Model Strong, Innovation-Driven Businesses World Class Brands In Diverse, Global Markets Attractive Growth Platforms Powered By: Scalable, Defensible Franchises Key Metrics: • Organic Revenue Growth: 2-3x Market Differentiable Through Innovation • 35%+ Gross Mar
Slide 14: SBD Operating Model
SBD Operating Model Investor Presentation 14
Slide 15: Global Brand Power
Global Brand Power A Powerful Portfolio Of Well Managed Brands Investor Presentation 15
Slide 16: Global Brand Support
Global Brand Support 2.3 Billion + 404 Million 48.6 Million 1.9 Million Potential Fan Reach Sponsorship Social Media Followers Brand Website Visits Brand Mentions Web Visits: Primary web domains for SBD, STANLEY, CRAFTSMAN, B+D, DEWALT, MAC TOOLS, Porter Cable, Proto, IRWIN Brand Mentions: Crisp Mon
Slide 17: Our Approach To ESG
Our Approach To ESG Grounded By Stakeholder Capitalism Ro o te d I n O u r P u r p o s e - Fo r T h o s e W h o M a ke T h e Wo r l d ™ ENVIRONMENT SOCIAL GOVERNANCE Planet People Prosperity Governance Protecting The Planet Furthering Progress Fostering Purpose & Progress At Work Communities Against
Slide 18: Leading The Charge
Leading The Charge ESG FOCUS AREAS Climate Change D E I & Ta l e n t D e v e l o p m e n t Governance Go Beyond Carbon Neutral By 2030 Racial Equity Plan Diverse & Inclusive Board Zero Waste to Landfill Gender Parity Shareholder Rights Sustainable Water Use Skillset Development Risk Management & Ove
Slide 19: Electrification: We Have A Significant Growth & ESG Opportunity
Electrification: We Have A Significant Growth & ESG Opportunity Electrification Supports Carbon Reduction And Is A Multibillion Dollar Growth Opportunity ELECTRIC VEHICLES OUTDOOR PRODUCTS Electrification Drives 3x To 6x Higher Content $ Potential Per Well-Positioned To Be An Electrification Leader
Slide 20: ESG: Measuring Our Progress
ESG: Measuring Our Progress Our 2030 Strategy/Overall Objectives* Sustainability Performance* Link: 2021 Online ESG Report We Remain Focused On Our 2030 Goals Elevating & Executing On Our Commitment To Corporate Social Responsibility *Results Include The Convergent Security Solutions (“CSS”) Busines
Slide 21: Corporate Governance
Corporate Governance Board Composition And Governance Features Board Refreshment And Tenure* ✓ Independent Chairperson Average Tenure Of 6 Years ✓ 5 New Non-Management Directors In The Last 3 Years ✓ Balance Of Institutional Knowledge And Fresh Perspective 6 <= 3 years ✓ Key Governance Features: 6 >
Slide 22: Remain A Top Performer (Return On Operating Assets)
Remain A Top Performer (Return On Operating Assets) Top Performer Compared To Industrial And Tools & Outdoor Peers… 33% 30% 29% 27% 26% 26% 26% Catalysts For Continued 24% Improvement 23% 23% 22% 22% 20% • Organic Revenue Growth 2-3X Market 19% 18% 18% 17% 17% • Gross Margin Expansion • DSI Reductio
Slide 23: Balance Sheet & Long-Term Capital Allocation Strategy
Balance Sheet & Long-Term Capital Allocation Strategy Maintain A Hybrid Model: A Company Focused On Growth… Balance 2018 SheetActual - 2021 Actual Capital Allocation Strategy • Continue To Invest In Our Core Franchises | Capital Expenditures ~3.0%-3.5% Of Free Cash Flow ($M)* $144 Net Sales Book Deb
Slide 24: Tools & Outdoor
Tools & Outdoor
Slide 25: Tools & Outdoor: 2021 Revenues
Tools & Outdoor: 2021 Revenues: $12.8B | $15.6B Pro Forma Power Tools: $7.3B Hand Tools Accessories & Storage: $4.3B Outdoor Equipment: $1.2B | ~$4B Pro Forma** Revenue 2021 Results Emerging ROW Markets 13% 9% Revenue Operating Profit Operating Margin $12.8B +16% VPY* Europe 17% By Region 20% Organi
Slide 26: The World’s Leading Tool & Outdoor Company
The World’s Leading Tool & Outdoor Company Proven Market Outperformance Driven By Our Powerful Growth Formula… A POWERFUL GROWTH FORMULA: COMMERCIALIZATION INNOVATION BRAND Across 5 Major Product Categories POWER TOOLS // OUTDOOR // HAND TOOLS // ACCESSORIES // STORAGE CONSUMER / DIY AUTO REPAIR And
Slide 27: Mission: Driving Organic Growth
Mission: Driving Organic Growth To Be The WORLDWIDE LEADER (#1 Or #2 Position) In Defined Market Categories In Which Our Products Compete Through: Supply Chain World-Class Innovation Globalization Brand Building Excellence Organization From $600M Hand Tool Company To $14B Diversified Tools And Outdo
Slide 28: Hand & Power Tool Brand Positioning
Hand & Power Tool Brand Positioning HPP MPP OPP Consumer Tradesman Professional Automotive / Industrial Investor Presentation 28
Slide 29: Investments In Technology
Investments In Technology Electrical Charging Digital Motors & Electronics Faster Speed Asset Tracking Battery Cells Multiple Batteries Most Comprehensive Loss Most Power Dense Cordless Broadest Range Of Charging Prevention Solutions Solutions In The Industry Solutions In The Industry In The Industr
Slide 30: Applying Technology Across Our Cordless Platform
Applying Technology Across Our Cordless Platform Smaller Smarter Stronger Body Grip Tools 20V Core Tools 20V Expansion Tools High Power Tools POWER Investor Presentation 30
Slide 31: DEWALT Wave Of Innovation
DEWALT Wave Of Innovation 2011 125+ New Products Power Of Cordless Freedom With The Largest PRO Tool Brand In The World Investor Presentation 31
Slide 32: Cordless System
Cordless System 30 ~95 Coming Products Products Soon Fastest Growing Brand In The Industry… $1B+ In Power Tools Investor Presentation 32
Slide 33: Hand Tools, Accessories & Storage Opportunities
Hand Tools, Accessories & Storage Opportunities $4B Global Business… #1/#2 In $25B Addressable Market 22+ Categories THREE KEY AREAS OF FOCUS TO SERVE EVERY END USER, JOB SITE & AUTO SHOP IN THE WORLD: Elite Construction Cutting Own The Toolbox Mechanics Tools Of The Future State Of The Art Material
Slide 34: Outdoor Growth Opportunity
Outdoor Growth Opportunity Completed Two Major Complementary Acquisitions In 4Q 2021… ~$4 Billion Lawn & Garden Platform With Broad Coverage Across $25B+ Outdoor Category Fastest Growing Franchise In Cordless/Electric Outdoor Power Equipment 2021 Combined Pro Forma Revenue ~$3B 2021 Revenue ~$0.9B M
Slide 35: Industrial
Industrial Engineered Fastening Infrastructure
Slide 36: Stanley Industrial Overview
Stanley Industrial Overview $2.5 BILLION - DIVERSIFIED INDUSTRIAL SEGMENT* Vision Mission Our Purpose A Global Leader Of Highly The #1 Innovation Catalyst & Solution Engineered, Application Based Partner For Industrial Customers FOR THOSE WHO MAKE Solutions, Where Safety, Reliability & Productivity
Slide 37: Engineered Fastening Business Overview
Engineered Fastening Business Overview 2021 Revenue: ~$1.8B Global Fastener Market - $85B Geographic End Market 7% 19% Automotive Asia Americas Industrial 24% 31% 46% 41% 50% 10% 20% ~$29B 20% Value Add Market Segments Europe 23% 9% General Industry Electronics Automotive Construction Aerospace Aero
Slide 38: Engineered Fastening Advantage
Engineered Fastening Advantage To Be The Worldwide Leader In Highly Engineered Products Vision With Opportunities To Grow Organically & Through Acquisitions Engineering Capabilities Leading Industry Technologies Inorganic Growth Strategy Enhance The Core New Fastening Markets & Technologies Build Re
Slide 39: Addressable Market Increases Significantly For EV vs ICE
Addressable Market Increases Significantly For EV vs ICE Internal Combustion (ICE) Vehicle - Average Content Fully Electric & Hybrid Electric Vehicle - Projected Content Common Applications To ICE & EV $9.5/car Chassis / BIW Interior Trim Exterior Trim Low Voltage Wiring Auto Electronics $15/car $30
Slide 40: Electrification Opportunities In STANLEY Industrial
Electrification Opportunities In STANLEY Industrial SEGMENTS FOCUS AREAS WHY WE WIN ELECTRIC BUS & TRUCK • Extensive Customer Relationships Chassis Applications • Auto–Industrial Platform $400M 12% EV Tier Suppliers ‘20 Market CAGR • Local Manufacturing Footprint ELECTRIC TWO WHEELER • Supplier: 20+
Slide 41: Attachment Tools
Attachment Tools: 2021 Revenues: $480M Segment Overview • Provider Of Tools For Applications That Build And Paladin Sweeper, Maintain The World’s Infrastructure Bucket, & Fork • Leader In Specialized Attachments For Off-Highway Construction Equipment Legend Series Shear Jobsite Intelligence • IES At
Slide 42: Appendix
Appendix StanleyBlack&Decker
Slide 43: Non-GAAP & Other Financial Measures
Non-GAAP & Other Financial Measures This presentation also contains non-GAAP and other financial measures, including organic sales growth, operating profit, free cash flow, working capital turns and cash flow return on investment (“CFROI”). Organic sales growth is defined as the difference between t
Slide 44: Reconciliation Of FCF & EBITDA
Reconciliation Of FCF & EBITDA Free Cash Flow EBITDA* 2021 2020 2019 (MILLIONS OF DOLLARS) 2021 2020 2019 Net earnings before equity interest $ 1,580 $ 1,177 $ 968 Net Cash Provided By Operating Activities 663 2,022 1,506 Interest income (10) (18) (52) Less: Capital And Software Interest expense 185
Slide 45: End Markets
End Markets End Market Industrial Tools & Outdoor SWK Existing Residential / Repair / DIY 0% 29% 25% New Residential Construction 0% 23% 20% Non-Resi. / Commercial Construction 0% 15% 13% Industrial / Electronics 31% 5% 9% Retail 0% 3% 2% Automotive Production 37% 0% 5% Automotive Aftermarket 0% 4%
Slide 46: Portfolio Transformation
Portfolio Transformation ~$10B Has Been Invested In Acquisitions Since 2005 To Advance Growth Opportunities Tools & Outdoor Industrial Divestitures Purchase Purchase Purchase Year Company Year Company Year Company Price ($M) Price ($M) Price ($M) 2005 National $170 2010 CRC-Evans (Infrastructure) $4
Slide 47: Material Spend
Material Spend Direct Material Spend Components Finished Goods 2021* ($M) Finished Goods $2,000 29% Components 3,300 47% Steel 570 8% Resin / Plastic Moldings 640 9% Packaging 350 5% Base Metals 100 1% $6,960 Top Three Raw Material Exposures (Finished Goods + Direct + Components) 1. Steel 2. Resin 3
Slide 48: Liquidity
Liquidity Near Term Liquidity Sources Combined Debt Outstanding ($M) September 2022 Cash Position $0.4B Revolving Credit Facilities $4.5B Notes/Bonds Total Near Term Liquidity $4.9B O/S 5-Year Agreement – Sep 2026 $2.5B 364-Day Facility – Sep 2023 $1.5B 364-Day Facility – Sep 2023 $0.5B Adequate Liq
Slide 49: Investor Presentation
Investor Presentation Ve rs i on 11.08.2022
Stanley Black & Decker — Investor Presentation (November 2022) on 6ix