Stanley Black & Decker, Inc. · NYSE:SWK
Stanley Black & Decker — Q3 2020 Earnings Presentation
16 slides from Stanley Black & Decker's earnings presentation, Oct 27, 2020
Slide 1: Third Quarter 2020 Overview
Third Quarter 2020 Overview October 27, 2020
Slide 2: Participants
Participants Jim Loree President & CEO Don Allan Executive VP & CFO Dennis Lange VP, Investor Relations 3Q’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: 3Q 2020 Financial Highlights
3Q 2020 Financial Highlights Record Quarterly Operating Margin Rate & Earnings Per Share*… • Revenues Of $3.9 Billion, Up 6% Versus Prior Year Led By 11% Organic Growth In Tools & Storage • Gross Margin Rate Was 35.9%*, Up 160 Bps Versus Prior Year • Operating Margin Rate Was A Record 17.7%*, Up 320
Slide 5: 3Q'20 Segment Overview
3Q’20 Segment Overview Tools & Storage Industrial Security $633 $95 $2,804 $603 $587 $466 $460 $51 $50 $2,534 $72 $421 (1%) (24%) +43% +11% (7%) 15.0% 12.3% (1%) 16.6% 21.5% 10.9% 11.0% 3Q '19 3Q '20 3Q '19 3Q '20 3Q '19 3Q '20 3Q' 19 3Q '20 3Q '19 3Q '20 3Q '19 3Q '20 Revenue Profit* Revenue Profit
Slide 6: Free Cash Flow & Liquidity
Free Cash Flow & Liquidity 2020 YTD Free Cash Flow QTD YTD 3Q'19 3Q'20 V$ 3Q'19 3Q'20 V$ Net Income $ 231 $ 395 $ 164 $ 759 $ 767 $ 8 Deprec / Amort 141 145 4 420 431 11 Working Capital (278) 52 330 (859) (668) 191 Pre-tax Gain on Sale of Business - - - (17) - 17 Other 99 85 (14) (41) 70 111 Operati
Slide 7: 4Q Scenario Planning
4Q Scenario Planning 4Q Planning Assumption Range: 3% - 5% Organic Growth Recent Key Trends Organic Growth Organic Growth • U.S. T&S Retail → POS Growth Currently Low-20’s For 4Q Range Sep + Oct MTD VPY Last 4 & 8 Week Period Tools & Storage +8% To +10% +12% • European T&S → Double Digit Organic Gro
Slide 8: Cost Reduction Program
Cost Reduction Program Cost Actions 3Q Update ~$500M 2020 | ~$125M 2021 • Organization Focused On Delivering Sustainable Cost Savings In 2020 & 2021 Indirect Cost Deflation • ~$350M Benefit Achieved YTD Through 3Q | Prof Services, MRO, IT, Fin. Goods, Components, Expecting ~$150M 4Q Benefit Marketin
Slide 9: Summary – FY 2020 Financials
Summary – FY 2020 Financials • Revenues: Given The Uncertainties In The Global Economic Outlook, Organic Growth Planning Assumption Range: 4Q (+ 3% – 5%) • Cost Structure Considerations: $180M In Cost Savings (Announced Oct’19) & $500M (Announced Apr’20). Tariff & FX Headwinds Currently $165M, With
Slide 10: Summary – Record 3Q Performance
Summary – Record 3Q Performance Retain Discipline On Costs And Margin Resiliency While Investing In Key Share Gain Opportunities… Reconnecting With eCommerce Health & Safety The Home & Garden Security Re-Imagined Global eCommerce Core & Breakthrough Innovation …Confident In Our Ability To Generate S
Slide 11: Q&A Thank You
StanleyBlack&Decker Q&A THANK YOU
Slide 12: Appendix
StanleyBlack&Decker APPENDIX
Slide 13: Global Presence
Global Presence Canada 3Q’20 YTD Organic 18% 3% % SWK 5% 5% Europe 3Q’20 YTD Organic 2% (10%) Japan 3Q’20 YTD US 3Q’20 YTD % SWK 19% 19% Organic (15%) (12%) Organic 4% (5%) % SWK 2% 2% % SWK 61% 61% Emg Mkt 3Q’20 YTD Australia 3Q’20 YTD Organic 5% (12%) Organic 23% 4% % SWK 11% 11% % SWK 2% 2% 3Q’20
Slide 14: 3Q 2020 Regional Revenue Breakout
3Q 2020 Regional Revenue Breakout Tools & Storage Industrial Security $2,804M $587M $460M Emerging Other Emerging Markets Other Markets Emerging 4% 17% 9% 1% Markets 12% Europe N.America 17% 59% Europe N.America Europe 16% 68% N.America 40% 57% 3Q’20 OVERVIEW 14
Slide 15: Non-GAAP definitions: organic sales growth, operating margin, free cash flow
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 16: Stanley Black & Decker
StanleyBlack&Decker
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