Stanley Black & Decker, Inc. · NYSE:SWK
Stanley Black & Decker — FY2022 Earnings Presentation
20 slides from Stanley Black & Decker's earnings presentation, Feb 2, 2023
Slide 1: Fourth Quarter And Full Year 2022 Overview
Fourth Quarter And Full Year 2022 Overview February 2, 2023
Slide 2: Participants
Participants Don Allan President & CEO Corbin Walburger VP, Interim CFO Dennis Lange VP, Investor Relations 4Q And FY 2022 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: 4Q & FY 2022 Key Messages
4Q & FY 2022 Key Messages 4Q Was Another Meaningful Step Forward On Our Journey To Simplify & Transform Stanley Black & Decker FY’22 Key Financials • Delivered FY’22 Revenues Of $16.9 Billion, Up 11% Versus Prior Year Led By Outdoor Power Equipment Acquisitions, Industrial Segment Growth & Price Rea
Slide 5: 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 3-Year Cost Savings $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 U R
Slide 6: Advancing Innovation & Electrification
Advancing Innovation & Electrification Innovation And Electrification With The End User In Focus... Outdoor Electrification Expansion Cordless Construction Solutions And Technology Continuing To Launch Battery-Powered Innovation Across The Leading In Total Jobsite Solutions For The Commercial & Conc
Slide 7: Business Streamlining & Transformation On Track
Business Streamlining & Transformation On Track Delivered $200 Million Savings In The Second Half 2022 Primarily In SG&A… Organizational And SG&A Update Advancing Phase 1 Of Supply Chain Transformation ✓ New Leadership Team Appointments SKU Reduction & Product Platforming • ~50% Of Target Reduction
Slide 8: 4Q'22 Segment Overview
4Q’22 Segment Overview Demand Environment Consistent With Prior Quarters, Led By Strength In Professional And Industrial Demand Revenue Operating Margin* • 4Q Organic Growth* (5%) With (7%) N.A., (3%) Europe, +1% EM $3,372 $3,383 • FY Organic Growth* (5%) Tools & Outdoor 11.4% • (6%) N.A., (6%) Euro
Slide 9: Inventory & Gross Margin Update
Inventory & Gross Margin Update Positive Inventory Reduction Trend Throughout 2H’22... $775 Million Inventory Reduction In 2H’22 And Expect Gross Margins Are Now At An Inflection Point To Continue Trend Into 1H’23 ~$300M High-20s (2H Acceleration) Decrease ~$500M FY’23 Target Decrease ↓$750M Mid-To-
Slide 10: 2023 Guidance Scenario Planning
2023 Guidance Scenario Planning 2023 EPS Expected To Be GAAP ($1.65)-$0.85 And Adjusted $0.00-$2.00 | Free Cash Flow* $0.5B-$1.0B 2023 Guidance Deeper Slowdown Base Case 2H Acceleration Scenarios Organic Growth Down Mid-Single Digits Down Low-Single Digits Relatively Flat Tools & Outdoor Down Low-Si
Slide 11: Clear Path Forward
Clear Path Forward Stanley Black & Decker Has The Best Brands, Innovation & People... More Focused Company With Great Franchises Reducing Organizational Complexity Enabling Speed & Agility Reinvesting In Our Core Businesses …Our Vision Will Better Serve Our Customers, Accelerate Growth And Deliver S
Slide 12: Q&A
Q&A StanleyBlack&Decker
Slide 13: FY 2022 Free Cash Flow
FY 2022 Free Cash Flow* Prioritized Inventory Reduction Through Targeted Production Curtailment… QTD YTD 4Q'21 4Q'22 V$ 4Q'21 4Q'22 V$ $M Net Earnings (Loss) from Continuing Operations $ 279 $ (101) $ (380) $ 1,551 $ 170 $ (1,381) Net Earnings from Discontinued Operations 49 56 7 137 893 756 Deprec
Slide 14: Global Presence
Global Presence Canada 4Q’22 YTD Organic (5%) +2% % SWK 4% 5% Europe 4Q’22 YTD Organic +3% (3%) Japan 4Q’22 YTD U.S. 4Q’22 YTD % SWK 14% 15% Organic +3% +3% Organic (4%) (4%) % SWK 2% 2% % SWK 65% 64% EMG. MKT 4Q’22 YTD Australia 4Q’22 YTD Organic (7%) +1% Organic (5%) +6% % SWK 12% 12% % SWK 3% 2%
Slide 15: 4Q 2022 Regional Revenue Breakout
4Q 2022 Regional Revenue Breakout Tools & Outdoor Industrial $3,383M $604M Emerging Markets Other 15% Other 4% Emerging 8% Markets Europe 11% 16% Europe 14% N.America 71% N.America 61% 4Q And FY 2022 Earnings Call | 15
Slide 16: Reconciliation Of GAAP To Non-GAAP Measures
Reconciliation Of GAAP To Non-GAAP Measures Q4 2021 Q4 2022 GAAP Acquisition-Related Non-GAAP Gross GAAP Acquisition-Related Non-GAAP Gross Gross Profit Charges & Other Profit Gross Profit Charges & Other Profit $1,127.0 $28.2 $1,155.2 $753.5 $24.5 $778.0 28.3% 29.0% 18.9% 19.5% GAAP Acquisition-Rel
Slide 17: Reconciliation Of GAAP To Non-GAAP Segment Profit
Reconciliation Of GAAP To Non-GAAP Segment Profit Q4 2021 Q4 2022 Tools & Outdoor GAAP Acquisition-Related Non-GAAP Segment GAAP Acquisition-Related Non-GAAP Segment Segment Profit Charges & Other Profit Segment Profit Charges & Other Profit $235.2 $386.0 $3.4 $33.2 $150.8 $29.8 7.0% 11.4% 0.1% 1.0%
Slide 18: Reconciliation Of GAAP To Non-GAAP Sales Growth
Reconciliation Of GAAP To Non-GAAP Sales Growth Stanley Black & Non-GAAP Organic GAAP Sales Growth Acquisitions Divestitures Currency Decker – FY 2022 Sales Growth 11% 17% 0% -3% -3% GAAP Non-GAAP Organic Acquisitions Divestitures Currency Outdoor FY 2022 Tools & Sales Growth Sales Growth 13% 21% 0%
Slide 19: Reconciliation Of GAAP To Non-GAAP Sales Growth
Reconciliation Of GAAP To Non-GAAP Sales Growth Stanley Black & Non-GAAP Organic Decker – GAAP Sales Growth Acquisitions Divestitures Currency Q4 2022 Sales Growth 0% 7% 1% -3% -3% GAAP Non-GAAP Organic Acquisitions Divestitures Currency Outdoor Q4 2022 Tools & Sales Growth Sales Growth 0% 8% 0% -3%
Slide 20: 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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