Stanley Black & Decker, Inc. · NYSE:SWK
Stanley Black & Decker — Q3 2022 Earnings Presentation
19 slides from Stanley Black & Decker's earnings presentation, Oct 27, 2022
Slide 1: Third Quarter 2022 Overview
Third Quarter 2022 Overview October 27, 2022
Slide 2: Participants
Participants Don Allan President & CEO Corbin Walburger VP, Interim CFO Dennis Lange VP, Investor Relations 3Q’22 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 2022 Key Messages
3Q 2022 Key Messages Advanced Initiatives To Focus & Simplify Company And Transform Supply Chain Key Financials • Delivered $4.1 Billion Of Revenue, Up 9% Versus Prior Year, Driven By Strategic Outdoor Power Equipment Acquisitions, Strong Industrial Growth & 8% Price Realization $4.1B Total Revenue
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: Delivering Industry-First Innovation
Delivering Industry-First Innovation Continuing To Deliver Products With The Best Technology For End Users... POWERSTACK 5AH FLEXVOLT Advancement Our Most Powerful, Longest Lasting 20V Continuing To Expand Technology Across Battery In Its Class* Markets And End Users First Pouch Cell Battery For Pow
Slide 7: Cost Reduction Plan On Track
Cost Reduction Plan On Track Delivered $65 Million 3Q Savings Primarily In SG&A And On Track To Deliver $150-200M In 2022… SG&A Actions Implemented Activating Phase 1 Of Supply Chain Transformation SKU Reduction & Product Platforming ✓ Simplify Corporate & Investment Prioritization • ~50% Of Target
Slide 8: 3Q'22 Segment Overview
3Q’22 Segment Overview Bright Spots Within Professional Construction And Industrial Customer Demand Amid Macro Challenges Revenue Operating Margin* • 3Q Organic Growth* (5%) • (4%) N.A., (12%) Europe, (2%) EM | (2%) PT, (7%) HTAS, (12%) OPG Pro Forma • Tools & Outdoor Price Contributed +7% Which Was
Slide 9: Inventory & Gross Margin Update
Inventory & Gross Margin* Update Gross Margins Temporarily Pressured Due To Inflation, Production Curtailments & Destocking-Related Costs... 4Q Inventory Reduction Expected To Improve Meaningfully Planned Destocking Negatively Impacting Gross Margins From Levels Achieved In 3Q ~$290M High-20s Post I
Slide 10: 2022 Guidance
2022 Guidance Expect Low Double-Digit Total Revenue Growth Vs. Prior Year And Adjusted EPS Of $4.15 To $4.65*... 2022 Updated Outlook Drivers For Updated Adjusted Diluted EPS* Tools & Outdoor* Industrial* Jul’22 Guidance (Midpoint) $5.50 Organic: Mid-To-High Single Digit Decline Organic: High-Single
Slide 11: Clear Path Forward
Clear Path Forward Stanley Black & Decker Has The Best Brands, Innovation & People... More Focused Company With Great Franchises Reducing Organizational Complexity Enabling Speed & Agility Reinvesting In Our Core Businesses …Our Vision Will Better Serve Our Customers, Accelerate Growth And Deliver S
Slide 12: Q&A
Q&A StanleyBlack&Decker
Slide 13: 3Q 2022 Free Cash Flow
3Q 2022 Free Cash Flow* Initiated Production Curtailments To Reduce Inventory… QTD YTD 3Q'21 3Q'22 V$ 3Q'21 3Q'22 V$ $M Net Earnings from Continuing Operations $ 380 $ 37 $ (343) $ 1,272 $ 271 $ (1,001) Net Earnings from Discontinued Operations 35 808 773 88 837 749 Deprec / Amort 144 138 (6) 431 42
Slide 14: Global Presence
Global Presence Canada 3Q’22 YTD Organic (7%) +4% % SWK 5% 5% Europe 3Q’22 YTD Organic (7%) (6%) Japan 3Q’22 YTD U.S. 3Q’22 YTD % SWK 13% 15% Organic +9% +2% Organic (2%) (4%) % SWK 2% 2% % SWK 65% 63% EMG. MKT 3Q’22 YTD Australia 3Q’22 YTD Organic (1%) +3% Organic +20% +11% % SWK 13% 13% % SWK 2% 2
Slide 15: 3Q 2022 Regional Revenue Breakout
3Q 2022 Regional Revenue Breakout Tools & Outdoor Industrial $3,495M $625M Emerging Other Markets Other 4% 17% 9% Emerging Markets Europe 12% 15% Europe N.America 13% 71% N.America 59% 3Q’22 Earnings Call | 15
Slide 16: Reconciliation Of GAAP To Non-GAAP Measures
Reconciliation Of GAAP To Non-GAAP Measures Q3 2021 Q3 2022 Acquisition- Acquisition- GAAP Non-GAAP Gross GAAP Non-GAAP Gross Related Charges & Related Charges & Gross Profit Profit Gross Profit Profit Other Other $1,215.6 $1,220.7 $1,018.1 $1,015.6 $5.1 ($2.5) 32.2% 32.3% 24.7% 24.7% Acquisition- A
Slide 17: Reconciliation Of GAAP To Non-GAAP Segment Profit
Reconciliation Of GAAP To Non-GAAP Segment Profit Q3 2021 Q3 2022 Tools & Outdoor Acquisition- Acquisition- GAAP Non-GAAP GAAP Non-GAAP Related Charges & Related Charges & Segment Profit Segment Profit Segment Profit Segment Profit Other Other $478.5 $492.7 $228.4 $239.0 $14.2 $10.6 15.0% 15.5% 6.5%
Slide 18: Reconciliation Of GAAP To Non-GAAP Sales Growth
Reconciliation Of GAAP To Non-GAAP Sales Growth Stanley Black & Non-GAAP GAAP Q3 ‘22 QTD Acquisitions Divestitures Currency Organic Sales Decker – Sales Growth Growth 9% 16% 1% -4% -2% Non-GAAP GAAP Acquisitions Divestitures Currency Organic Sales Sales Growth Outdoor Tools & Growth QTD 10% 18% 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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