Stanley Black & Decker, Inc. · NYSE:SWK
Stanley Black & Decker — Q1 2020 Earnings Presentation
21 slides from Stanley Black & Decker's earnings presentation, Apr 30, 2020
Slide 1: First Quarter 2020 Overview
First Quarter 2020 Overview April 30, 2020
Slide 2: Participants
Participants Jim Loree President & CEO Don Allan Executive VP & CFO Dennis Lange VP, Investor Relations 1Q’20 OVERVIEW 2
Slide 3: Cautionary Statements
Cautionary Statements 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 Th
Slide 4: Navigating The COVID-19 Pandemic
Navigating The COVID-19 Pandemic Aligning The Organization Around Key Priorities… #1 #2 #3 #4 ENSURE THE HEALTH MAINTAIN BUSINESS SERVING OUR DOING OUR PART TO AND SAFETY OF OUR CONTINUITY AND CUSTOMERS AS THEY HELP MITIGATE THE EMPLOYEES & FINANCIAL STRENGTH PROVIDE ESSENTIAL IMPACT OF THE VIRUS SU
Slide 5: Key Priorities
Key Priorities Employee Health & Safety Financial Strength And Stability • Daily Temperature Screening And Face Masks For All • Withdrew Guidance On 4/2 | Currently Expect 2Q Revenue Employees, All Facilities Trough • Travel Restrictions & Virtual Work For Employees Who Can • $1 Billion Cost Reducti
Slide 6: 1Q 2020 Financial Highlights
1Q 2020 Financial Highlights Pandemic Impacted Revenue As The First Quarter Unfolded… • Revenues Of $3.1 Billion, Down 6% Versus Prior Year Driven By 7% Organic Decline Primarily Related To Impacts From COVID-19 • Diluted Adjusted EPS Was $1.20* | Reflecting $60 Million In External Headwinds And Cor
Slide 7: 1Q'20 Segment Overview
1Q’20 Segment Overview Tools & Storage Industrial Security $2,292 $50 $591 $278 $555 $486 $468 $35 $77 $78 $2,071 $238 (31%) (15%) +2% (10%) 12.1% 11.5% +6% 13.9% (4%) 10.3% 7.4% 13.2% 1Q '19 1Q '20 1Q '19 1Q '20 1Q '19 1Q '20 1Q' 19 1Q '20 1Q '19 1Q '20 1Q '19 1Q '20 Revenue Profit* Revenue Profit*
Slide 8: Scenario Planning
Scenario Planning Assumed Initial Revenue Impact (2Q) Organic Growth Scenarios Larger Initial Decline 2019 Shipments 2Q FY Rev ($B) Indicator MTD 4/26 Auto Fasteners $ 1.0 Light Vehicle Prod. (35%) – (45%) (15%) – (30%) Aero Fasteners* $ 0.4 Com. Aero Prod. • Base Case (U-Shaped Recovery) – Sized NA
Slide 9: Responding With Cost Reduction
Responding With Cost Reduction Cost Actions Planning Assumptions ~$1B Annualized Savings | ~$500M 2020 • ~40% Decremental Margins Prior To Cost Cutting Actions Indirect Cost Compensation • Indirect Cost & Deflation Prof Services, MRO, IT, Furloughs, Reductions In Opportunity ~60% Of Total Marketing,
Slide 10: Performance During Past Recessions (Pro Forma)
Performance During Past Recessions (Pro Forma) 2001 2008 – 2009 Sales Decline Sales Decline ~(5%) ~(23%) (Peak-To-Trough) (Peak-To-Trough) Decremental Margin Low Decremental Margin High-Teens (Post Cost Cutting)* Double-Digits (Post Cost Cutting) Avg. Organic Avg. Organic ~(3%) ~(13%) Sales Decline
Slide 11: Liquidity Update
Liquidity Update Debt Maturities Key Points Short Term Borrowings • Maintain Strong, Investment Grade Credit Ratings LT Debt Maturity • $3B Revolving Credit Facilities Backed By A Well Equity Unit Remarketing Capitalized, Diversified Bank Group • Covenant Modified: EBITDA Interest Coverage > 2.5X &
Slide 12: Summary – FY 2020 Financials
Summary – FY 2020 Financials • Revenues: Expect Negative FY Revenue Dependent On Controlling The Health Crisis. Multiple Scenarios Depth/Duration Of Revenue Impact As Well As Shape & Speed Of The Recovery Contemplated – Planning Assumption: 2Q (-35% To -45%) | FY (-15% To -30%) • Decremental Margins
Slide 13: Remain Well Positioned With Growth Catalysts
Remain Well Positioned With Growth Catalysts Organic Growth Catalysts Future Acquisitions Breakthrough Innovation eCommerce Executing A Number Of Growth Catalysts That Will Help Us Perform In This Environment 1Q’20 OVERVIEW 13
Slide 14: Summary
Summary COVID-19 Presenting Unprecedented Challenges To Start 2020… • Aligning The Organization Around Four Key Priorities • Ensure The Health And Safety Of Our Employees & Supply Chain Partners • Maintain Business Continuity And Financial Strength And Stability • Serving Our Customers As They Provi
Slide 15: Q&A Thank You
StanleyBlack&Decker Q&A THANK YOU
Slide 16: Appendix
StanleyBlack&Decker APPENDIX
Slide 17: 1Q 2020 Free Cash Flow
1Q 2020 Free Cash Flow 6.0 WCT +0.2T VPY Q1'19 Q1'20 V$ Net Income $ 170 $ 133 $ (37) Deprec / Amort 138 141 3 Working Capital (617) (513) 104 Other (122) (166) (44) Operating CF (431) (405) 26 CapEx (90) (83) 7 Free Cash Flow $ (521) $ (488) 33 1Q’20 OVERVIEW 17
Slide 18: Global Presence
Global Presence Canada 4Q’19 1Q’20 Organic -12% +4% % SWK 4% 5% Europe 4Q’19 1Q’20 Organic +1% -6% Japan 4Q’19 1Q’20 US 4Q’19 1Q’20 % SWK 20% 21% Organic +2% -8% Organic +4% -7% % SWK 3% 3% % SWK 59% 59% Emg Mkt 4Q’19 1Q’20 Australia 4Q’19 1Q’20 Organic -5% -14% Organic -2% -2% % SWK 13% 11% % SWK 1
Slide 19: 1Q 2020 Regional Revenue Breakout
1Q 2020 Regional Revenue Breakout Tools & Storage Industrial Security $2,071M $591M $468M Emerging Other Markets Emerging Emerging 4% 15% Other Markets Markets Europe 9% 2% 12% 20% N.America 59% N.America Europe Europe 67% 17% 39% N.America 56% 1Q’20 OVERVIEW 19
Slide 20: Organic sales growth definitions
Organic sales growth is defined as total sales growth less the sales of companies acquired and divested in the past twelve months and any foreign currency impacts. Operating margin is defined as sales less cost of sales and selling, general and administrative expenses. Management uses operating marg
Slide 21: Stanley Black & Decker
StanleyBlack&Decker
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