Stanley Black & Decker, Inc. · NYSE:SWK
Stanley Black & Decker — Q2 2022 Earnings Presentation
21 slides from Stanley Black & Decker's earnings presentation, Jul 28, 2022
Slide 1: Second Quarter 2022 Overview
Second Quarter 2022 Overview July 28, 2022
Slide 2: Participants
Participants Don Allan President & CEO Corbin Walburger VP, Interim CFO Dennis Lange VP, Investor Relations *Non-GAAP Financial Measures. See Appendix For Reconciliation of GAAP To Non-GAAP Measures Used in This Presentation. 2Q’22 Earnings Call | 2
Slide 3: Cautionary Statement
Cautionary Statement Certain Statements Contained In This Presentation Are Forward Looking. These Are Based On Assumptions Of Future Events Which May Not Prove To Be Accurate. They Involve Risk And Uncertainty. Actual Results May Differ Materially From Those Expected Or Implied. We Direct You To The
Slide 4: 2Q 2022 Key Messages
2Q 2022 Key Messages 2Q Revenue +16% Driven By Strategic Acquisitions And Price Execution • Delivered $4.4 Billion Of Revenue, Up 16% Versus Prior Year, Driven By Strategic Outdoor Key Financials Power Equipment Acquisitions & 7% Price Realization $4.4B Total Revenue • Implementing Global Cost Reduc
Slide 5: Market Demand Environment
Market Demand Environment Demand Environment Softened Across The Last Portion Of The Quarter... US Retail POS Trends Moderating Versus 2019… …Short Cycle Markets Signaling Demand Slowdown • Slowing Trends Across Global Tools Markets • US Retail POS Moderating 2Q’22 4-Week Moving Average • European D
Slide 6: Streamlining Company To Advance Our Core Businesses
Streamlining Company To Advance Our Core Businesses Investing In The Core To Unlock Runway For Growth & Margin Expansion… PORTFOLIO MARKET STRENGTHENED LEADERSHIP INNOVATION & SUPPLY CHAIN ELECTRIFICATION TRANSFORMATION …Vision & Strategy: Improve Our Great Franchises, Better Serve Our Customers & C
Slide 7: Global Cost Reduction Plan To Deliver ~$2 Billion Within 3 Years
Global Cost Reduction Plan To Deliver ~$2 Billion Within 3 Years Rapidly Aligning Organization & Operating Model Around More Focused Portfolio... Total Cumulative Cost Savings ✓ Simplify Corporate Structure 2023 Annualized Savings: $0.2B • Redeploy Corporate Centers Of Excellence Into Businesses • E
Slide 8: Supply Chain Transformation To Deliver $1.5 Billion Within 3 Years
Supply Chain Transformation To Deliver $1.5 Billion Within 3 Years Operational Mandate To Reshape Our Supply Chain... Closer To Our Customer More Responsive To Demand Faster Innovation Cycle Efficiency & Resiliency Benefits Product Platforming Strategic Sourcing Facility Consolidation Operational Ex
Slide 9: 2Q'22 Segment Overview
2Q’22 Segment Overview Slowing Demand Trends Emerging In Tools & Outdoor Amid Continued Dynamic Economic Backdrop Revenue Operating Margin* • 2Q Organic Growth* (9%) • (11%) N.A., (10%) Europe, Flat EM | (6%) PT, (8%) HTAS, (8%) OPG ProForma • Price Contributed +7% Accelerating ~1.5 Pts Vs. 1Q’22 To
Slide 10: Acting With Urgency To Reduce Inventory
Acting With Urgency To Reduce Inventory Slowing Demand, Elongated Supply Chain & Inflation Contributing To Record Inventory Levels... 2Q Ending Inventory ~$6.6 Billion Inventory Action Plan 1. Congested & Elongated Supply Chain Leading To Higher • Production Curtailments Goods In Transit, Raw Materi
Slide 11: Path Back To Historical Gross Margins
Path Back To Historical Gross Margins* Gross Margin* Remains Pressured Due To The Confluence Of Supply Chain, Inflation & Slowing Demand... Responding Aggressively To Improve Pace Current Situation – Gross Margin* & Trajectory Of Improvement Accelerate Gross Margin* To Low-30s ~28% Plan For 2H’22 Su
Slide 12: 2022 Guidance
2022 Guidance Expect Low Double-Digit Total Revenue Growth Vs. Prior Year And Adjusted EPS Of $5.00 To $6.00*... 2022 Updated Outlook Drivers For Updated Adjusted Diluted EPS* Tools & Outdoor* Industrial* Apr’22 Guidance (Midpoint) $10.00 Organic: Mid-To-High Single Digit Decline Organic: High-Singl
Slide 13: Clear Path Forward
Clear Path Forward Stanley Black & Decker Has The Best Brands, Innovation & People... More Focused Company With Great Franchises Reducing Organizational Complexity Enabling Speed & Agility Reinvesting In Our Core Businesses …Our Vision Will Better Serve Our Customers, Accelerate Growth And Deliver S
Slide 14: Q&A
Q&A StanleyBlack&Decker
Slide 15: 2Q 2022 Free Cash Flow
2Q 2022 Free Cash Flow* Slowing Demand, Elongated Supply Chain & Inflation Contributing To Higher Working Capital … QTD YTD 2Q'21 2Q'22 V$ 2Q'21 2Q'22 V$ Net Earnings from Continuing Operations $ 433 $ 79 $ (354) $ 892 $ 234 $ (658) Net Earnings from Discontinued Operations 26 9 (17) 53 29 (24) Depr
Slide 16: Global Presence
Global Presence Canada 2Q’22 YTD Organic +18% +8% % SWK 6% 6% Europe 2Q’22 YTD Organic (9%) (6%) Japan 2Q’22 YTD U.S. 2Q’22 YTD % SWK 16% 16% Organic +1% Flat Organic (9%) (5%) % SWK 2% 2% % SWK 62% 62% EMG. MKT 2Q’22 YTD Australia 2Q’22 YTD Organic +1% +4% Organic +4% +6% % SWK 12% 12% % SWK 2% 2%
Slide 17: 2Q 2022 Regional Revenue Breakout
2Q 2022 Regional Revenue Breakout Tools & Outdoor Industrial $3,745M $648M Emerging Other Markets Other 4% 16% 9% Emerging Markets Europe 12% 17% Europe N.America 15% 69% N.America 58% 2Q’22 Earnings Call | 17
Slide 18: Reconciliation Of GAAP To Non-GAAP Measures
Reconciliation Of GAAP To Non-GAAP Measures 2Q’22 Earnings Call | 18
Slide 19: Reconciliation Of GAAP To Non-GAAP Segment Profit
Reconciliation Of GAAP To Non-GAAP Segment Profit Q2 2021 Q2 2022 Acquisition- Acquisition- Tools & Outdoor GAAP Non-GAAP GAAP Non-GAAP Related Charges Related Charges Segment Profit Segment Profit Segment Profit Segment Profit & Other & Other $627.0 $9.2 $636.2 $361.6 $41.3 $402.9 19.6% 19.9% 9.7%
Slide 20: Reconciliation Of GAAP To Non-GAAP Sales Growth
Reconciliation Of GAAP To Non-GAAP Sales Growth Decker – Q2 ‘22 QTD Non-GAAP GAAP Stanley Black & Acquisitions Divestitures Currency Organic Sales Sales Growth Growth 16% 24% 0% -2% -6% Non-GAAP GAAP Tools & Outdoor Acquisitions Divestitures Currency Organic Sales Sales Growth Growth QTD 17% 28% 0%
Slide 21: Non-GAAP Financial Measures
Non-GAAP Financial Measures Organic sales growth, or organic growth, is defined as the difference between total current and prior year sales less the impact of companies acquired and divested in the past twelve months and any foreign currency impacts divided by prior year sales. Operating profit is
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