Stanley Black & Decker First Quarter 2017 Overview April 21, - - PowerPoint PPT Presentation

▶
stanley black amp decker
SMART_READER_LITE
LIVE PREVIEW

Stanley Black & Decker First Quarter 2017 Overview April 21, - - PowerPoint PPT Presentation

Dec 18, 2022 202 likes •352 views

Stanley Black & Decker First Quarter 2017 Overview April 21, 2017 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

slide-1
SLIDE 1

Stanley Black & Decker

First Quarter 2017 Overview

April 21, 2017

slide-2
SLIDE 2

1Q'17 INVESTOR PRESENTATION

2

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 The Cautionary Statements Detailed In The Corresponding Press Release And Form 8-K And Our Recent ‘34 Act SEC Filings.

slide-3
SLIDE 3

1Q'17 INVESTOR PRESENTATION

3

Participants Jim Loree

President & CEO

Don Allan Jeff Ansell

Executive VP & CFO Executive VP & Group Executive, Global Tools & Storage

Greg Waybright

VP, Investor Relations

slide-4
SLIDE 4

1Q'17 INVESTOR PRESENTATION

4

1Q 2017 Financial Highlights

  • 1Q ’17 Revenues Of $2.8 Billion (Up 5% Vs. Prior Year) Fueled By 5% Organic Growth

‐ Tools & Storage (+6%), Industrial (+4%) & Security (+1%)

  • Operating Margin Rate, Excluding M&A Related Charges, Expanded 110 Basis Points To A Record 14.2%
  • 1Q ‘17 Diluted Adjusted EPS Of $1.29 Reflecting Strong Operational Performance Which More Than

Offset Currency, Higher Restructuring, One-Time Environmental Charge And Higher Shares

  • Closed Previously-Announced Acquisitions Of Newell Tools And The Craftsman Brand As Well As The

Divestiture Of The Majority Of Mechanical Security Businesses

  • Raising 2017 Full-Year Adjusted EPS Guidance Range* To $7.08 - $7.28 From $6.98 - $7.18

…Combined With Closing Of Three Important Portfolio Transactions Strong Start To 2017 Highlighted By 5% Organic Growth And Record 14.2%* OM Rate…

* Excludes M&A Related Charges And Gain On Sales Of Businesses

slide-5
SLIDE 5

1Q'17 INVESTOR PRESENTATION

  • Closed March 9, 2017
  • Dedicated Team In Place Focusing On Supply Chain Execution & Commercial Strategies
  • Strong Organic Growth Potential | ~$100M Of Avg. Annual Revenue Growth For ~Next 10 Yrs.
  • Earnings Accretion Of Approx. $0.08 Per Share In 2017, Excluding Charges

5

1Q 2017 Portfolio Transactions Update

  • Closed March 10, 2017
  • Integration Teams Formed And Actions Underway To Deliver Expected Results And Benefits

‐ $80 - $90 Million Of Total Cost Synergies ‐ Significant Potential Revenue Synergy Opportunities

  • Earnings Accretion Of ~$0.24 Per Share In 2017, Excluding Charges

Closed Three Portfolio Transactions In 1Q | Minimal 1Q EPS Impact* Consistent With Expectations… …Newell Tools & Craftsman “Integration” Activities Well Underway

* Excludes M&A Related Charges And Gain On Sales Of Businesses

slide-6
SLIDE 6

1Q'17 INVESTOR PRESENTATION

6

1Q 2017 Segment Overview

$262 $305 $1,707 $1,855 1Q ‘16 1Q ’17 1Q ‘16 1Q ‘17

+9%

Revenue Profit* $60 $51 $504 $478 1Q ‘16 1Q ‘17 1Q ‘16 1Q ‘17

  • 5%

Revenue Profit*

Tools & Storage Security

$76 $86 $461 $473 1Q ‘16 1Q ‘17 1Q ‘16 1Q ‘17

+3%

Revenue Profit*

Industrial

15.3% 16.4%

+16%

11.9% 10.7% 16.5% 18.3%

  • +6% Organic Growth
  • +8% NA, +6% EUR, +1% EM
  • +9% PTE, +3% HTAS
  • NA: Share Gains Fueled By New Product

Innovations, Including FLEXVOLT, And Strong Commercial Execution

  • EUR: Broad-Based Growth Driven By

Innovation & Expanded Retail Footprint

  • EM: Growth Led By Latin America & Asia |

Driven By MPP Products And Pricing Actions

  • +1% Organic Growth
  • +2% NA
  • FLAT EUR
  • NA: Growth Led By Higher Automatic

Doors & Healthcare Volumes

  • EUR: Strength In Nordics And UK

Offset By Weakness In France

  • EM: MSD Growth In Latin America And

Southeast Asia

  • +4% Organic Growth
  • +4% Eng. Fastening
  • +2% Infrastructure
  • EF: Strong Auto. System Volumes Offset

Electronics Weakness | Fuels Record OM Rate

  • INFRA: Higher Hydraulic Volumes

Driven By Commercial Actions And Improved Market Conditions; Oil & Gas Flat Vs. Prior Year

110 Bps OM Rate Increase Driven By Volume, Productivity / Cost Actions & Mix Mechanical Sale Impacts OM Rate By ~70 Bps | Balance Of Rate Decline Due Primarily To Mix & Investments Volume, Productivity / Cost Actions Drive 180 Bps OM Rate Expansion

* 1Q’17 Excludes M&A Related Charges & Gain On Sales Of Businesses

+14%

  • 15%
slide-7
SLIDE 7

1Q'17 INVESTOR PRESENTATION

7

1Q 2017 Free Cash Flow

Strong Working Capital Execution Led To +0.9 Turns, Excluding Acquisitions And Divestitures… …On Track To Achieve Full-Year Commitment Of 100% FCF Conversion*

* Excludes Gain On Sales Of Businesses

Net Income 189 $ 393 $ 204 $ Deprec / Amort 100 102 2 Pre-Tax Gain On Sales Of Businesses

  • (269)

(269) Working Capital (268) (410) (142) Other (114) 39 153 Operating CF (93) (145) (52) CapEx (65) (65) Free Cash Flow (158) $ (210) $ (52) $ 1Q'16 1Q'17 V$

6.7 WCT

slide-8
SLIDE 8

1Q'17 INVESTOR PRESENTATION

8

2017 Outlook

Raising Adjusted EPS Outlook* To $7.08 - $7.28 From $6.98 - $7.18, Up ~9% - 12% Versus Prior Year… FY2017 Guidance FY2017 Segment Outlook

Item Impact EPS Guidance

  • 2017 EPS, GAAP
  • 2017 EPS, Adjusted

$7.95 - $8.15 $7.08 - $7.28

EPS Guidance Details

  • Modest Increase To Organic Growth

Outlook (~4%+)

  • Higher One-Time 1Q’17 Environmental

Charge (~$17M)**

  • Incremental Cost & Productivity Actions

~$0.08 (~$0.08) ~$0.10

Org Rev Growth Margin Rate Tools & Storage

Mid Single Digit Positive Y-O-Y

Security

Low Single Digit Down*** Y-O-Y

Industrial

Relatively Flat Positive Y-O-Y

…Reiterating Free Cash Flow Conversion Rate Of Approximately 100%*

* Excludes M&A Related Charges And Gain On Sales Of Businesses | FCF Conversion Excludes Gain On Sales ** Reported In “Other, Net” *** Flat To Modestly Positive Excluding Mechanical Security Sale

Other

  • Reiterating Gross FX & Commodity HWs (~$100 - $105M)
  • Maintaining ~$50M Core Restructuring Estimate

(Includes ~$12M Pension Curtailment Charge)

  • 2Q-17 EPS To Be ~27% Of FY’17 Earnings
slide-9
SLIDE 9

1Q'17 INVESTOR PRESENTATION

9

Summary

  • Generated 5% Organic Growth With Record 1Q OM Rate Of 14.2%*
  • Raised 2017 Adjusted EPS Guidance Range* To $7.08 - $7.28 (From $6.98 - $7.18) | ~10% Increase

At Mid-Point Versus Prior Year On ~4%+ Organic Growth

  • Closed Three Important Portfolio Transactions | Newell Tools & Craftsman “Integration” Activities

Well Underway With Energetic And Positive Responses From Employees, Customers And Suppliers

  • SWK Investor Day To Be Held Morning Of May 16, 2017 In NYC

Overall Outlook For 2017 Remains Positive, Although Macro & Geopolitical Challenges Remain… …Focus On Solid Execution & SFS 2.0 Position SWK To Deliver On Updated 2017 Financial Outlook

* Excludes M&A Related Charges And Gain On Sales Of Businesses

slide-10
SLIDE 10

Appendix

slide-11
SLIDE 11

1Q'17 INVESTOR PRESENTATION

11

Global Presence

Canada 4Q’16 1Q'17 Organic +6% +8% % SWK 4% 5% US 4Q’16 1Q'17 Organic +5% +6% % SWK 52% 54% Emg Mkt 4Q’16 1Q’17 Organic +4%

  • 1%

% SWK 17% 14% Europe 4Q’16 1Q'17 Organic +1% +3% % SWK 22% 23% Japan 4Q’16 1Q'17 Organic +18% +19% % SWK 3% 3% Australia 4Q’16 1Q'17 Organic

  • 3%
  • 3%

% SWK 2% 1%

slide-12
SLIDE 12

1Q'17 INVESTOR PRESENTATION

12

Regional Revenue Breakout 1Q 2017

$478M

N.America 65% Europe 18% Emerging Markets 14% Other 3%

$1,855M

Tools & Storage

$473M

Security Industrial

N.America 58% Europe 37% Emerging Markets 4% Other 1% N.America 36% Europe 29% Emerging Markets 24% Other 11%

slide-13
SLIDE 13

1Q'17 INVESTOR PRESENTATION

13

Organic sales growth is defined as total sales growth less the sales of companies acquired 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 margin and its percentage of net sales as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items. Free cash flow conversion is defined as free cash flow divided by net income. The normalized statement of operations and business segment information, as reconciled to GAAP on pages 13 and 14 of the press release for 2017, is considered relevant to aid analysis of the Company’s margin and earnings results aside from the material impact of the acquisition-related charges and gain on sales of businesses.