Stanley Black & Decker, Inc. · NYSE:SWK
Stanley Black & Decker — Q3 2023 Earnings Presentation
19 slides from Stanley Black & Decker's earnings presentation, Oct 27, 2023
Slide 1: Third Quarter 2023 Overview
Third Quarter 2023 Overview October 27, 2023
Slide 2: Participants
Participants Don Allan President & CEO Chris Nelson COO, Executive Vice President And President, T&O Pat Hallinan Executive Vice President, CFO Dennis Lange Vice President, Investor Relations 3Q’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: 3Q 2023 Key Messages
3Q 2023 Key Messages Advanced Strategic Business Transformation With Cost And Inventory Reduction Improvements Versus Prior Year 3Q’23 Key Financials • 3Q’23 Revenues Of $4.0 Billion, Down Versus Prior Year Primarily Due To Lower Outdoor And DIY Volume As $4.0B Well As Attachment Tool Customer Desto
Slide 5: 3Q 2023 Segment Overview
3Q 2023 Segment Overview Improved Profitability From Lower Inventory Destocking Costs, Transformation Benefits & Reduced Shipping Revenue Adjusted Operating Margin* • 3Q Organic Revenue* (5%) $M • (5%) N.A., (3%) Europe, (4%) EM (Mid-Single Digit Organic Growth Excluding Russia) Tools & Outdoor 480
Slide 6: Investing For Growth
Investing For Growth Evolving Our Offerings Focused On The Trades And Cordless Outdoor Expansion… High-Powered Cordless Electrification Innovating For The Trades For The Winter Season TOUGHSYSTEM® 2.0 20V MAX* XR® ½ Inch High 21 Inch Dual-Port Charger Torque Impact Wrench 60V MAX** Single-Stage Snow
Slide 7: 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 8: Business Streamlining & Transformation On-Track
Business Streamlining & Transformation On-Track On-Track For $2.0 Billion Pre-Tax Run-Rate Cost Savings By 2025… Progress Achieved Supply Chain Transformation Pre-Tax Run-Rate Cost Savings Strategic Sourcing Facility Consolidation $215M $875M Complexity Reduction Ops Excellence 3Q’23 Quarter-To-Date
Slide 9: Inventory & Gross Margin Update
Inventory & Gross Margin Update Adjusted Gross Margin Improvements And Inventory Reductions Contribute To ~$360 Million FCF In 3Q’23… On-Track To Deliver Continued Adjusted Gross Margin* Improvement ~$1 Billion Inventory Reduction In 2023 ~$300M Sequential Decrease ~$500M Decrease ~$200M ~28% Improv
Slide 10: 2023 Guidance
2023 Guidance 2023 EPS Guidance Range To Be GAAP ($1.45)-($1.00) And Adjusted* $1.10-$1.40 | Free Cash Flow* $0.6B-$0.9B 2023 Guidance Assumptions FY’23 Organic Revenue* Tools & Outdoor Industrial Down Mid-Single Digits Down Mid-To-High Single Digits Relatively Flat Normalized Production Fourth Quar
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 3Q’23 Earnings Call | 11
Slide 12: Q&A
Q&A StanleyBlack&Decker
Slide 13: Free Cash Flow & Liquidity
Free Cash Flow* & Liquidity 3Q’23 Free Cash Flow Liquidity Key Points QTD YTD • Maintain Investment Grade Credit Ratings $M 3Q'22 3Q'23 V$ 3Q'22 3Q'23 V$ • $4.0B In Credit Facilities Backed By A Well Capitalized, Diversified Net Earnings (Loss) from Continuing Operations $ 37 $ 5 $ (32) $ 271 $ (5)
Slide 14: Global Presence
Global Presence Canada 3Q'23 YTD Organic* +2% (4%) % SWK 5% 5% Europe 3Q'23 YTD Organic (1%) (2%) Japan 3Q'23 YTD U.S. 3Q'23 YTD % SWK 15% 16% Organic +6% +3% Organic (4%) (6%) % SWK 2% 2% % SWK 64% 63% EMG. MKT 3Q'23 YTD Australia 3Q'23 YTD Organic (7%) (7%) Organic (40%) (27%) % SWK 12% 12% % SWK
Slide 15: 3Q 2023 Regional Revenue Breakout
3Q 2023 Regional Revenue Breakout Tools & Outdoor Industrial $3,355M $599M Emerging Markets Other Other 16% 3% 9% Emerging Markets 12% Europe 18% Europe 14% N.America 71% N.America 57% 3Q’23 Earnings Call | 15
Slide 16: Reconciliation Of GAAP To Non-GAAP Measures
Reconciliation Of GAAP To Non-GAAP Measures Q3 2022 Q2 2023 Q3 2023 Acquisition- Acquisition- Acquisition- GAAP Non-GAAP Gross GAAP Non-GAAP Gross GAAP Non-GAAP Gross Related Charges Related Charges Related Charges Gross Profit Profit Gross Profit Profit Gross Profit Profit & Other & Other & Other $
Slide 17: Reconciliation Of GAAP To Non-GAAP Operating Profit
Reconciliation Of GAAP To Non-GAAP Operating Profit Q3 2022 Q3 2023 Tools & Outdoor GAAP Acquisition-Related Non-GAAP GAAP Acquisition-Related Non-GAAP Operating Profit Charges & Other Operating Profit Operating Profit Charges & Other Operating Profit $228.4 $10.6 $239.0 $273.4 $39.4 $312.8 6.5% 6.8
Slide 18: Reconciliation Of GAAP To Non-GAAP Sales Growth (Decline)
Reconciliation Of GAAP To Non-GAAP Sales Growth (Decline) GAAP Non-GAAP Organic Stanley Black & Sales Growth Acquisitions Divestitures Currency Sales Growth Decker – QTD (Decline) (Decline) -4% 0% 1% 1% -4% GAAP Non-GAAP Organic Tools & Outdoor Sales Growth Acquisitions Divestitures Currency Sales G
Slide 19: Non-GAAP Financial Measures
Non-GAAP Financial Measures Organic revenue or organic sales 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. Organic revenue growth, organic sales growth or organic
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