Stanley Black & Decker, Inc. · NYSE:SWK
Stanley Black & Decker — Q4 2023 Earnings Presentation
22 slides from Stanley Black & Decker's earnings presentation, Feb 1, 2024
Slide 1: Fourth Quarter And Full Year 2023 Overview
Fourth Quarter And Full Year 2023 Overview February 1, 2024
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 4Q And FY 2023 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: 2023: Transformation Progress On Multiple Fronts
2023: Transformation Progress On Multiple Fronts Achieved Tangible Results In First Year And A Half Of The Strategic Transformation... Transformation Initiated In Mid-2022 Refocused And Reenergized In 2023 • Cost Optimization: Over $1 Billion Pre-Tax Run-Rate Program-To- Date Cost Savings And On-Tra
Slide 5: 4Q 2023 Key Messages
4Q 2023 Key Messages Focused Execution Delivered Gross Margin Expansion And Strong Free Cash Flow* Generation… 4Q’23 Key Financials $3.7B • 4Q’23 Revenues Of $3.7 Billion, Down Versus Prior Year Primarily Due To Lower Outdoor And DIY Total Revenue Volume As Well As Infrastructure Customer Destocking
Slide 6: 4Q 2023 Segment Overview
4Q 2023 Segment Overview Profitability Improved Leveraging The Global Cost Reduction Program And Lower Transportation Costs Revenue Adjusted Segment Margin* • 4Q Organic Revenue* (8%) With +1% PT, (6%) HTAS, (31%) OPG • (10%) N.A., (1%) Europe, (1%) EM (Mid-Single Digit Organic* Growth Excluding Rus
Slide 7: Heavy Duty Platform Expansion In 2024
Heavy Duty Platform Expansion In 2024 Revolutionary Platform Of Cordless Solutions For The Concrete Industry… Heavy Duty Line Of Concrete Solutions Debuted At World Of Concrete …Advancing The Trade With The Impressive Power, Runtime, And Reliability Of Our Battery-Operated Solutions 4Q And FY 2023 E
Slide 8: Strategic Transformation On-Track
Strategic Transformation On-Track On-Track For $2.0 Billion Pre-Tax Run-Rate Cost Savings By End Of 2025… Progress Achieved Supply Chain Transformation Pre-Tax Run-Rate Cost Savings Strategic Sourcing Facility Consolidation $160M $1B+ Complexity Reduction Ops Excellence 4Q’23 Quarter-To-Date Program
Slide 9: Inventory & Gross Margin Update
Inventory & Gross Margin Update ~$850 Million Free Cash Flow* And Gross Margin Improvements In FY’23… Delivered Over $1 Billion Inventory Reduction In 2023 Exiting 2023 Approaching ~30% Adjusted Gross Margin* ~$300M Decrease ~$500M 28.7% Decrease ~$200M Decrease ~$375M Decrease ~$300M 2024 Adj. Gros
Slide 10: 2024 Guidance
2024 Guidance Anticipating Relatively Flat Organic Growth Representing Modest Share Gain Against A Tough Macro Environment… 2024 Outlook Organic Revenue* Total Company Tools & Outdoor Industrial And Adjusted Organic: Relatively Flat YoY +/- 2pts Organic: Relatively Flat YoY +/- 2pts Organic: Flat To
Slide 11: Stronger And More Focused Enterprise
Stronger And More Focused Enterprise Centered Around Our Core Market Leadership Positions And Built Upon The Strength Of Our People And Culture Unleashing End-User Empowering Brand Power Inspired Innovation People 4Q And FY 2023 Earnings Call | 11
Slide 12: Q&A
Q&A StanleyBlack&Decker For those who make the world.”
Slide 13: Free Cash Flow & Liquidity
Free Cash Flow* & Liquidity 4Q’23 Free Cash Flow* Liquidity Key Points QTD YTD • Maintain Investment Grade Credit Ratings 4Q'22 4Q'23 V$ 4Q'22 4Q'23 V$ $M • $4.0B In Credit Facilities Backed By A Well Capitalized, Diversified Net (Loss) Earnings $ (45) $ (304) $ (259) $ 1,063 $ (310) $ (1,373) Bank
Slide 14: Global Presence
Global Presence Canada 4Q'23 YTD Organic* (1%) (4%) % SWK 4% 5% Europe 4Q'23 YTD Organic (3%) (2%) Japan 4Q'23 YTD U.S. 4Q'23 YTD % SWK 15% 16% Organic +16% +6% Organic (10%) (7%) % SWK 3% 3% % SWK 62% 62% EMG. MKT 4Q'23 YTD Australia 4Q'23 YTD Organic 4% (4%) Organic (32%) (29%) % SWK 14% 12% % SWK
Slide 15: 4Q 2023 Regional Revenue Breakout
4Q 2023 Regional Revenue Breakout Tools & Outdoor Industrial $3,154M $582M Emerging Markets Other Other 17% 4% 10% Emerging Markets 13% Europe 18% N.America Europe 68% 15% N.America 55% 4Q And FY 2023 Earnings Call | 15
Slide 16: Reconciliation Of GAAP To Non-GAAP Measures
Reconciliation Of GAAP To Non-GAAP Measures Q4 2022 Q3 2023 Q4 2023 GAAP Non-GAAP Non-GAAP Gross GAAP Non-GAAP Non-GAAP Gross GAAP Non-GAAP Non-GAAP Gross Gross Profit Adjustments Profit Gross Profit Adjustments Profit Gross Profit Adjustments Profit $753.5 $778.0 $1,060.6 $1,092.8 $1,104.4 $1,114.3
Slide 17: Reconciliation Of GAAP To Non-GAAP Segment Profit
Reconciliation Of GAAP To Non-GAAP Segment Profit Q4 2022 - QTD Q4 2023 - QTD Tools & Outdoor GAAP Non-GAAP Non-GAAP GAAP Non-GAAP Non-GAAP Segment Profit Adjustments Segment Profit Segment Profit Adjustments Segment Profit $3.4 $29.8 $33.2 $293.5 $22.3 $315.8 0.1% 1.0% 9.3% 10.0% GAAP Non-GAAP Non-
Slide 18: Reconciliation Of GAAP To Non-GAAP Segment Profit
Reconciliation Of GAAP To Non-GAAP Segment Profit FY 2022 FY 2023 Tools & Outdoor GAAP Non-GAAP Non-GAAP GAAP Non-GAAP Non-GAAP Segment Profit Adjustments Segment Profit Segment Profit Adjustments Segment Profit $971.9 $235.4 $1,207.3 $687.6 $196.7 $884.3 6.7% 8.4% 5.1% 6.6% GAAP Non-GAAP Non-GAAP G
Slide 19: 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) -6% 0% 0% 1% -7% GAAP Non-GAAP Organic Tools & Outdoor Sales Growth Acquisitions Divestitures Currency Sales G
Slide 20: 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 – YTD (Decline) (Decline) -7% 0% 1% 0% -6% GAAP Non-GAAP Organic Tools & Outdoor Sales Growth Acquisitions Divestitures Currency Sales G
Slide 21: EBITDA Reconciliation
EBITDA Reconciliation FOURTH QUARTER YEAR-TO-DATE 2023 2022 2023 2022 NET (LOSS) EARNINGS FROM CONTINUING OPERATIONS $ (276.1) $ (100.6) $ (281.7) $ 170.3 % of Net Sales -7.4% -2.5% -1.8% 1.0% Interest - net 87.6 83.9 372.5 283.8 Income taxes on continuing operations 197.3 (51.6) (94.0) (132.4) Depr
Slide 22: 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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