Stanley Black & Decker, Inc. · NYSE:SWK
Stanley Black & Decker — Q2 2023 Earnings Presentation
19 slides from Stanley Black & Decker's earnings presentation, Aug 1, 2023
Slide 1: Second Quarter 2023 Overview
Second Quarter 2023 Overview August 1, 2023
Slide 2: Participants
Participants Don Allan President & CEO Pat Hallinan Executive Vice President, CFO Chris Nelson COO, Executive Vice President And President, T&O Dennis Lange Vice President, Investor Relations 2Q’23 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 2023 Key Messages
2Q 2023 Key Messages A Successful Step Forward In Executing Stanley Black & Decker’s Transformation 2Q’23 Key Financials • 2Q’23 Revenues Of $4.2 Billion, Down Versus Prior Year Due To Lower Consumer Outdoor & DIY Volume As $4.2B Well As The Oil & Gas Business Divestiture Total Revenue • Global Cost
Slide 5: 2Q 2023 Segment Overview
2Q 2023 Segment Overview Cost Controls Driving Sequential Margin Improvement | U.S. Retail POS Remains Above 2019 Levels Revenue Adjusted Operating Margin* • 2Q Organic Growth* (5%) $M • (6%) N.A., (1%) Europe, (3%) EM (High-Single Digit Organic Growth Excluding Russia) Tools & Outdoor 150 Bps** • (
Slide 6: Transforming To Accelerate Organic Growth
Transforming To Accelerate Organic Growth Executing On Our Clear Vision And 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
Slide 7: Investing For Growth
Investing For Growth Investing In Brands, Innovation, And Electrification… Pro-Inspired Innovation & New Product Launches Prioritizing Brand & Market Activation DEWALT 20V MAX* XR® Brushless Cordless 3/8” and 1/2” Sealed Head Ratchet DEWALT 20V MAX* XR® Brushless Cordless 3/16” and 1/4” Rivet Tools
Slide 8: Business Streamlining & Transformation On-Track
Business Streamlining & Transformation On-Track On-Track For $2.0 Billion Annualized Savings By 2025… Progress Achieved Supply Chain Transformation Cost Reduction Program Updates Cost Savings Complexity Reduction • Strategic Sourcing Traction Executing Wave 1 (SKU Reduction & Platforming) Implementa
Slide 9: Inventory & Gross Margin Update
Inventory & Gross Margin Update Continued Inventory Reduction And Gross Margin Improvement In The Second Quarter… On-Track To Deliver Continued Adjusted Gross Margin* Improvement $700 Million To $900 Million Inventory Reduction In 2023 ~$300M 2H’23 Assumptions Decrease ~$500M $1.4B Reduction Decreas
Slide 10: 2023 Guidance
2023 Guidance 2023 EPS Guidance Range To Be GAAP ($1.25)-($0.50) And Adjusted* $0.70-$1.30 | Free Cash Flow* $0.6B-$0.9B 2023 Guidance Assumptions FY’23 Organic Growth* Tools & Outdoor Industrial Down Mid-Single Digits Down Mid-To-High Single Digits Flat-To-Low Single Digit Growth Normalized Product
Slide 11: Stronger And More Focused Enterprise
Stronger And More Focused Enterprise Centered Around Our Core Market Leadership Positions And Built Upon The Strength Of Our People And Culture Unleashing End-User Empowering Brand Power Inspired Innovation People 2Q’23 Earnings Call | 11
Slide 12: Q&A
Q&A StanleyBlack&Decker
Slide 13: Free Cash Flow & Liquidity
Free Cash Flow* & Liquidity 2Q’23 Free Cash Flow Liquidity Key Points QTD YTD • Maintain Strong, Investment Grade Credit Ratings 2Q'22 2Q'23 V$ 2Q'22 2Q'23 V$ $M • $4.5B In Credit Facilities Backed By A Well Capitalized, Diversified Net Earnings (Loss) from Continuing Operations $ 79 $ 178 $ 99 $ 23
Slide 14: Global Presence
Global Presence Canada 2Q'23 YTD Organic (15%) (7%) % SWK 5% 5% Europe 2Q'23 YTD Organic +1% (2%) Japan 2Q'23 YTD U.S. 2Q'23 YTD % SWK 17% 17% Organic +3% +2% Organic (4%) (7%) % SWK 2% 2% % SWK 62% 62% EMG. MKT 2Q'23 YTD Australia 2Q'23 YTD Organic (5%) (7%) Organic (22%) (20%) % SWK 12% 12% % SWK
Slide 15: 2Q 2023 Regional Revenue Breakout
2Q 2023 Regional Revenue Breakout Tools & Outdoor Industrial $3,542M $617M Emerging Markets Other Other 14% 3% 9% Emerging Markets Europe 12% 19% Europe N.America 16% 69% N.America 58% 2Q’23 Earnings Call | 15
Slide 16: Reconciliation Of GAAP To Non-GAAP Measures
Reconciliation Of GAAP To Non-GAAP Measures Q1 2023 Q2 2023 GAAP Acquisition-Related Non-GAAP Gross GAAP Acquisition-Related Non-GAAP Gross Gross Profit Charges & Other Profit Gross Profit Charges & Other Profit $835.5 $908.9 $932.1 $983.5 $73.4 $51.4 21.2% 23.1% 22.4% 23.6% GAAP Acquisition-Related
Slide 17: Reconciliation Of GAAP To Non-GAAP Segment Profit
Reconciliation Of GAAP To Non-GAAP Segment Profit Q2 2022 Q2 2023 Tools & Outdoor GAAP Acquisition-Related Non-GAAP GAAP Acquisition-Related Non-GAAP Segment Profit Charges & Other Segment Profit Segment Profit Charges & Other Segment Profit $361.6 $41.3 $402.9 $102.0 $55.8 $157.8 9.7% 10.8% 2.9% 4.
Slide 18: Reconciliation Of GAAP To Non-GAAP Sales Growth
Reconciliation Of GAAP To Non-GAAP Sales Growth GAAP Non-GAAP Organic Decker – Q2 ‘23 Stanley Black & Acquisitions Divestitures Currency Sales Growth Sales Growth QTD -5% 0% 1% 0% -4% Tools & Outdoor GAAP Non-GAAP Organic Acquisitions Divestitures Currency Sales Growth Sales Growth QTD -5% 0% 0% 0%
Slide 19: 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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