Stanley Black & Decker, Inc. · NYSE:SWK
Stanley Black & Decker — Investor Presentation (November 2023)
41 slides from Stanley Black & Decker's investor presentation, Nov 3, 2023
Slide 1: Investor Presentation
Investor Presentation Ve rs i on 11.3.2023
Slide 2: Contents
Contents Contacts Dennis Lange SWK Overview Pages 4 – 14 Vice President, Investor Relations 860-827-3833 Tools & Outdoor Pages 15 – 25 dennis.lange@sbdinc.com Industrial Pages 26 – 32 Christina Francis Director, Investor Relations Appendix Pages 33 – 41 860-438-3470 christina.francis@sbdinc.com Chri
Slide 3: Cautionary Statement
Cautionary Statement This presentation contains “forward-looking statements,” that is, statements that address anything other than historical facts. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often con
Slide 4: More Streamlined Company With Great Franchises
More Streamlined Company With Great Franchises Tools & Outdoor Industrial World-Wide Leader In Tools & Outdoor Highly-Engineered B-2-B Businesses Outdoor Power Infrastructure Equipment 26%1 25% 2022 Revenue1: $16.9B Power Tools & Equipment Market Cap: ~$13B 47% $14.4B Hand Tools, Storage & STANLEY E
Slide 5: Geographic Reach
Geographic Reach Stanley Black & Decker Segments Tools & Outdoor Industrial* 10% 12% 9% 13% 11% 16% 15% 15% 16% 55% 63% 65% U.S. Europe Emerging Markets ROW Diversified Globally With 60%-65% Of Our Revenues Generated In The U.S. Percentages As Of Fiscal Year 2022 Totals * Includes Divested Oil & Gas
Slide 6: 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 7: Global Cost Reduction Plan
Global Cost Reduction Plan Rapidly Aligning Organization & Operating Model Around More Focused Portfolio... ~$2 Billion Total Pre-Tax Run-Rate Cost Savings By 2025 | $1 Billion Pre-Tax Run-Rate By 2023 Supply Chain Transformation SG&A Initiatives $1.5 Billion Total | $0.5 Billion By 2023 $0.5 Billio
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 $875M Complexity Reduction Ops Excellence 3Q’23 Quarter-To-Date
Slide 9: Stanley Black & Decker Value Creation Model
Stanley Black & Decker Value Creation Model Strong, Innovation-Driven Businesses World Class Brands In Diverse, Global Markets Attractive Growth Platforms Key Long-Term Metrics: Powered By: • Organic Revenue* Growth: 2-3x Market • 35%+ Adjusted Gross Margin* By 2025 Scalable, Defensible Franchises •
Slide 10: Balance Sheet & Liquidity
Balance Sheet & Liquidity 2022 2018Actuals Actual Liquidity Key Points 4Q’22 Free Cash Flow ($M)* $521 • Maintain Investment Grade Credit Ratings • $4.0B In Credit Facilities Backed By A Well Capitalized, Diversified Book Debt/FY’22 EBITDA* 8.3x | 4.9x** Bank Group • No Term Debt Maturities Until 1Q
Slide 11: 2023 Guidance
2023 Guidance StanleyBlack&Decker
Slide 12: 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 13: Inventory & Gross Margin Update
Inventory & Gross Margin Update (From 3Q Earnings Call) 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 Dec
Slide 14: Currency Impact
Currency Impact Currency Trends Vs. USD (12/31/21 – 9/30/2023) Hedging Approach 25% - Hedge Key Currency Exposures (CAD, (10%) (7%) (7%) 11% (11%) EUR, GBP, & AUD, Among Other) 20% - Intent Is To Dampen Volatility And 15% Allow Time For Business Teams To Mitigate Fluctuations With Cost & 10% Price A
Slide 15: Tools & Outdoor
Tools & Outdoor
Slide 16: Tools & Outdoor
Tools & Outdoor 2022 Revenues: $14.4B Power Tools: $6.7B | Hand Tools Accessories & Storage: $4.0B | Outdoor Equipment: $3.7B 2022 Revenue Profile Segment Adjusted Operating Margins* Emerging ROW 17% 16% 16% 18% 17% Markets 9% 11% 8% Europe U.S. 15% DIY Pro Outdoor 65% Outdoor 17% FY17 FY18 FY19 FY2
Slide 17: A Global Leader In Tools & Outdoor
A Global Leader In Tools & Outdoor Proven Market Outperformance Driven By Our Powerful Growth Formula… A POWERFUL GROWTH FORMULA: COMMERCIALIZATION INNOVATION BRAND Across 5 Major Product Categories POWER TOOLS // OUTDOOR // HAND TOOLS // ACCESSORIES // STORAGE CONSUMER / DIY OUTDOOR PRODUCTS And 4
Slide 18: Mission: Driving Organic Growth
Mission: Driving Organic Growth To Be The WORLDWIDE LEADER In Our Product Categories: Supply Chain World-Class Innovation Globalization Brand Building Excellence Organization From $600M Hand Tool Company To $14B Diversified Tools And Outdoor Industry Leader Investor Presentation 18
Slide 19: Hand & Power Tool Brand Positioning
Hand & Power Tool Brand Positioning HPP MPP OPP Consumer Tradesman Professional Automotive/Industrial DIY Advanced DIY Investor Presentation 19
Slide 20: Investments In Technology
Investments In Technology Electrical Charging Digital Motors & Electronics Faster Speed Asset Tracking Battery Cells Multiple Batteries Most Comprehensive Loss Most Power Dense Cordless Broadest Range Of Charging Prevention Solutions Solutions In The Industry Solutions In The Industry In The Industr
Slide 21: Applying Technology Across Our Cordless Platform
Applying Technology Across Our Cordless Platform Smaller Smarter Stronger Body Grip Tools 20V Core Tools 20V Expansion Tools High Power Tools POWER Investor Presentation 21
Slide 22: DEWALT Wave Of Innovation
DEWALT Wave Of Innovation Power Of Cordless Freedom With The Largest PRO Tool Brand In The World Investor Presentation 22
Slide 23: Cordless System
Cordless System Focused On Increased Penetration Through Expanding The Cordless Power Tools System Investor Presentation 23
Slide 24: Hand Tools, Accessories & Storage Opportunities
Hand Tools, Accessories & Storage Opportunities $4B Global Business… Leader In $42B Total Market - $34B Addressable 30+ Categories THREE KEY AREAS OF FOCUS TO SERVE EVERY END USER, JOB SITE & AUTO SHOP IN THE WORLD: Elite Series Accessories Own The Toolbox Mechanics Tools Of The Future Unmatched Per
Slide 25: Outdoor Growth Opportunity
Outdoor Growth Opportunity Completed Two Major Complementary Acquisitions In 4Q 2021… ~$3.7 Billion Lawn & Garden Platform With Broad Coverage Across $25B+ Outdoor Category Fastest Growing Franchise In Cordless/Electric Outdoor Power Equipment MTD & Excel Acquisitions Provide Compelling Capacity Exp
Slide 26: Industrial
Industrial Engineered Fastening Infrastructure
Slide 27: Stanley Industrial Overview
Stanley Industrial Overview $2.4 BILLION (2022 Revenue) - DIVERSIFIED INDUSTRIAL SEGMENT* Vision Mission Our Purpose A Global Leader Of Highly The #1 Innovation Catalyst & Solution Engineered, Application Based Partner For Industrial Customers FOR THOSE WHO MAKE Solutions, Where Safety, Reliability
Slide 28: Engineered Fastening Business Overview
Engineered Fastening Business Overview 2022 Revenue: ~$1.9B Global Fastener Segment - $85B Geographic End Market 7% 19% Automotive Asia Americas Industrial 24% 29% 40% 10% 20% ~$29B 49% 20% Value Add 51% Market Segments 20% Europe 11% General Industry Electronics Automotive Construction Aerospace Ae
Slide 29: Engineered Fastening Advantage
Engineered Fastening Advantage To Be The Worldwide Leader In Highly Engineered Products Vision With Opportunities To Grow Organically & Through Acquisitions Engineering Capabilities Leading Industry Technologies Growth Strategy Enhance The Core New Fastening Markets & Technologies Build Regional Sca
Slide 30: Addressable Market Increases Significantly For EV vs ICE
Addressable Market Increases Significantly For EV vs ICE Internal Combustion (ICE) Vehicle - Average Content Fully Electric & Hybrid Electric Vehicle - Projected Content Common Applications To ICE & EV $9.5/car Chassis / BIW Interior Trim Exterior Trim Low Voltage Wiring Auto Electronics $15/car $30
Slide 31: Electrification Opportunities In STANLEY Industrial
Electrification Opportunities In STANLEY Industrial Electrification Across The Industrial Platform Focus Areas Attachment Auto Industrial Tools Chassis EV Tier Applications Suppliers Wire Harness EV Battery Mgmt. System And Thermal Management Cordless Rail Drill Heavy Equip Transfer Safety Solutions
Slide 32: Attachment Tools
Attachment Tools Segment Overview • 2022 Revenues: $550M Paladin Sweeper, Bucket, & Fork • Leader In Specialized Attachments For Off-Highway Construction Equipment That Build And Maintain The World’s Infrastructure Legend Series Shear • Focused On Professional End-Users And Applications Jobsite Inte
Slide 33: Appendix
Appendix StanleyBlack&Decker
Slide 34: Non-GAAP & Other Financial Measures
Non-GAAP & Other Financial Measures This presentation may include non-GAAP and other financial measures as defined below. 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 mon
Slide 35: 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 36: Reconciliation Of GAAP To Non-GAAP Measures
Reconciliation Of GAAP To Non-GAAP Measures Free Cash Flow Adjusted EBITDA* 4Q’22 FY’22 FY’21 FY’20 (MILLIONS OF DOLLARS) FY’22 FY’21 FY’20 Net earnings before equity Net Cash (Used In) interest $ 170 $ 1,532 $ 1,146 Provided By Operating Activities 651 (1,460) 663 2,022 Interest income (55) (10) (1
Slide 37: End Categories
End Categories End Categories - % Of Revenue* Industrial Tools & Outdoor SWK Existing Residential / Repair / DIY 0% 22% 19% New Residential Construction 0% 26% 23% Non-Resi. / Commercial Construction 0% 16% 13% Industrial & Automotive Repair 31% 10% 13% Automotive OEM 37% 0% 5% Infrastructure 23% 0%
Slide 38: Portfolio Transformation
Portfolio Transformation ~$10B Has Been Invested In Acquisitions Since 2005 To Advance Growth Opportunities Tools & Outdoor Industrial Divestitures Purchase Purchase Purchase Year Company Year Company Year Company Price ($M) Price ($M) Price ($M) 2005 National $170 2010 CRC-Evans (Infrastructure) $4
Slide 39: Material Spend
Material Spend Direct Material Spend* Components Finished Goods 2022 ($M) Finished Goods $1,840 25% Components 3,900 52% Steel 690 9% Resin / Plastic Moldings 530 7% Packaging 350 5% Base Metals 130 2% $7,440 Top Three Raw Material Exposures (Finished Goods + Direct + Components) 1. Steel 2. Resin 3
Slide 40: Liquidity
Liquidity Near Term Liquidity Sources Long-Term Debt Outstanding ($M) September 2023 Cash Position $0.3B Revolving Credit Facilities $4.0B Notes/Bonds Total Near-Term Liquidity $4.3B O/S 5-Year Agreement – Sep 2026 $2.5B 364-Day Facility – Sep 2024 $1.5B Adequate Liquidity To Meet The Needs Of The C
Slide 41: Investor Presentation
Investor Presentation Ve rs i on 11.3.2023
Stanley Black & Decker — Investor Presentation (November 2023) on 6ix