Robert Bosch is focusing on smart homes, smart cities, connected mobility and industry 4.0, announced Dr. Werner Struth, Bosch board of management, during the recent Consumer Electronics Show in Las Vegas. Struth says that devices are becoming intelligent companions that make everyday life easier and safer at home, in the city, in the car and at work. According to a recent study more than 60% of respondents believed that intelligent assistants make sense. ENP Newswire described Bosch as a “one stop shop for the Internet of Things (IoT).” Bosch has a goal of networking all of their electronic products and offering a connected service package for each product tailored to individual needs and usage habits. At home, users will be able to rely on the IoT for a broad range of intelligent helpers that make life easier and safer. The Bosch smart home system makes it possible to control connected devices at home using a single app.
Bosch is also developing products specifically designed to be personal assistants. Assistants will also play a significant role in networked manufacturing. For example, the APAS robot takes on strenuous, dangerous or monotonous tasks and is designed to cooperate closely with humans. Bosch’s new Gateway solution also offers operators of older machines the ability to connect. Bosch believes that connectivity is more than technology, it is part of our lives that will improve mobility, shape the cities of the future, make homes smarter, healthcare more efficient and connect industry.
STANLEY BLACK & DECKER
SB&D is buying the Craftsman tool brand from cash-strapped Sears for $900 million. They’ll pay Sears Holdings $525 million when the deal closes and $250 million at the end of year three. Sears will also get annual payments of between 2.5% and 3.5% on new Stanley Black & Decker sales of Craftsman products for 15 years. Sears will be able to continue to sell Craftsman-branded products in their Sears, Kmart, and Sears Hometown stores royalty-free for 15 years after the deal closes.
The acquisition gives SB&D the rights to develop, manufacture and sell Craftsman-branded products outside of Sears. A spokesperson for Sears confirmed that Sears’ famous lifetime warranty for Craftsman tools will remain. Loree also pledged to bring Craftsman manufacturing back to America.
Craftsman accounts for about $1.9 billion in annual sales: 35% in tools, 25% in storage and related categories and 40% in lawn and garden. Only 10% of sales are outside of Sears, and most of those come from Ace Hardware and Orchard Supply Hardware.
SB&D expects the sale of Craftsman branded products to contribute approximately $100 million of average annual revenue growth for approximately the next ten years.
SB&D CEO Jim Loree plans to grow Craftsman sales through retail, industrial, online and mobile channels. He said that interest is “very high” from several major U.S. retailers, and sees growth on the retail side coming from expanded distribution to big box stores, where Craftsman brand has never been available before.
Loree described Craftsman as an “iconic brand” and said that he remembered spending hours going through the Sears catalogs in the 1960s and 1970s, marveling at the scope and good value of American-made Craftsman tools.
After a short-term transition, Stanley plans to increase manufacturing capacity in the U.S. to achieve growth with Craftsman, and plans to open a new $35 million manufacturing plant in the U.S. SB&D currently has a U.S. staff of about 3,000 and plans to add another 1,200 U.S. manufacturing jobs over the next year. The location of the new plant has not yet been decided.
From SB&D’s acquisition conference call:
They expect the acquisition to add 1/2 to 1 full point of organic growth annually. They think there will be some cannibalization, but most of it will be outside of their brand portfolio.
They operate 30 plants in the U.S. today, including 11 in the tools and storage segment.
Craftsman is a leading player in the $12 billion lawn and garden segment, which will allow SB&D to strengthen their presence in the tools, lawn and garden and storage segments.
They expect the deal to close sometime in 2017. If Sears filed for Chapter 11 or Chapter 13 bankruptcy before the deal closed, that would negate the deal. However, they don’t believe that will happen, as both companies have invested months structuring a deal that is favorable to both parties over the long term.
They acknowledged that part of the impetus behind their commitment to create more manufacturing in the U.S. is the uncertainty surrounding President Donald Trump’s plans to enact a “border tax” that would make it more costly to import product made elsewhere for sale in the U.S. They have about $80 million in capital included in their plan, about $35 million to build the new plant and another $40 million to expand existing production capacity in the U.S. Craftsman brand tools were made in America fifty years ago; today they are primarily manufactured overseas.
They described the hand tools market as incredibly fragmented and brutally competitive.
Q4 revenues were up 3% to $2.9 billion, with organic growth of 4% offset by –1% from currency.
Full year revenues were up 2% to $11.4 billion. Organic growth of 4% was partially offset by a 2% negative impact from currency.
Annual sales for the Tools & Storage division rose 6% to $1.93 billion, with volume, up 6%, and price, up 1%, more than offsetting unfavorable currency, which trimmed 1% from results. All regions generated organic growth, with North America up 8% thanks in part to contributions from the rollout of FlexVolt.
Working capital turns for the quarter were 10.6, up 1.4 turns from the fourth quarter of 2015. SB&D attributed the improvement to their intense focus on capital management.
SB&D expects growth of 4% this year, assuming organic growth of 4%, commodity inflation of $50 to $55 million and foreign exchange headwinds of less than $50 million.
The acquisitions of Lenox, Irwin and Craftsman are expected to contribute to growth this year and in the coming years and will help them achieve their corporate objective of doubling the size of the company by 2022 while expanding their margin rate. The sale of the majority of their Mechanical Security businesses will allow them to move capital from a low growth business and invest it in more robust growth opportunities, according to CEO James Loree.
From their Fiscal 2016 Conference Call:
The FlexVolt launch has been extremely well received by customers and end users, according to Loree, and delivered slightly more than $100 million in revenue in just four months of 2016. They expect to more than double that in 2017, and also expect to introduce more FlexVolt tools this year. They are currently projecting more than $400 million in revenue this year.
They expect their recent deals to expand their market reach. Their acquisition of Newell Brands’ Irwin and Lenox brands and the acquisition of Craftsman from Sears will extend their reach in the plumbing and electrical trades, as well as the auto mechanics channel, the power tools accessory space, outdoors products and garage storage markets.
Loree said they have been interested in the Newell Tools business and the Craftsman business for many years, and while they might have preferred that the deals had been spaced further apart, they felt that they had to take advantage of the opportunities.
They are excited about their continuing digital investments across the entire Tools & Storage business, which are well underway.
They expect Tools & Storage to post mid-single-digit organic growth in 2017, with share gains expected to continue in the U.S., Europe and Emerging Markets. They think that DeWalt’s FlexVolt battery system will account for about 1.5 points of incremental growth in 2017.
They expect the Newell acquisition to close in the first quarter pending some non-U.S. regulatory reviews.
They expect the Craftsman acquisition to close this year and contribute $100 million of average annual growth over the next decade.
They intend to keep the Craftsman limited lifetime warranty in place. Craftsman is seen as a unique brand in tools that spans virtually all the channels, including auto mechanics, industrial, professional tradesman and DIY.
They are going to try to partner up with a large ecommerce company so they can make Craftsman products broadly available through ecommerce. The ecommerce company they are working with says that Craftsman brand products are one of the single biggest searches that go unfulfilled.
They see more impact from currency in the first half of the year than in the second half. They think commodity inflation will be more evenly paced throughout the year.
They import a lot of product into the U.S., which is pretty much the standard model in the tool industry. They have been aggressively ramping up their manufacturing footprint in the U.S. over the past few years and now have 3,000 employees manufacturing tools in the U.S. and 11 plants, and expect that to increase, not only because of the current political climate, but because end users really like tools made in the U.S.
The new plant they are going to open in the U.S. in conjunction with the Craftsman deal will be very highly technologically equipped so that it can produce the highest quality tools at the best cost in the world; it will become their showcase plant.
They are not looking at any major acquisitions in the near future, but might do a small bolt-on in the $100 to $200 million range if it made sense. They would like to make an acquisition in the Engineered Fastenings Business, and think they are very underweight in the automotive and aerospace segments.
They think of FlexVolt as a battery system that is establishing an installed base that requires DeWalt tools to operate as aggressively and quickly as possible. They plan to introduce a wave of new tools every year that will enhance the system.
Trimble is selling their ThingMagic RFID business to Novatna for $20 million in cash. The deal is expected to close in the first quarter. "This transaction is consistent with our strategy to focus our efforts on domain-specific connected solutions in our core markets," said Michael Lesyna, vice president of Trimble. "We believe that we can create more value and sustainable differentiation by focusing on the software, data and sensor integration for solutions that leverage RFID versus owning and developing the technology."
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