Robert Bosch GmbH announced that its healthcare unit, Bosch Healthcare Solutions, has developed a rapid test for CV19 that can produce reliable results within a few hours. Bosch worked with molecular diagnostics group Randox Laboratories to develop one of the first fully automated molecular diagnostic tests in the world. The kit is in accordance with World Health Organization requirements (WHO), which requires results be available within two and a half hours. It took Bosch and Randox just six weeks to develop the test, which is expected to be available in Germany and other countries shortly.
Stanley Black & Decker
In early April SB&D provided an update on their current business and financial condition in light of the expanding impact of CV19. They also pulled the guidance previously issued for the year and promised to present a better picture at their first quarter earnings conference April 30.
Actions currently being taken include adjusting the supply chain and manufacturing labor base to match the current demand environment, substantially reducing indirect spending, currently $1.7B annualized and reducing non-essential staffing while remaining prepared for a demand recovery.
Raymond James Investors Conference:
At this conference in early March, CFO Don Allen reviewed SB&Ds revenue goals, affirming that their vision remains $22 billion in revenue by 2022. For them to continue to be successful, Allen said they need to continue to attract top talent, invest in technology and be highly innovative.
Allen acknowledged the environment has been extremely volatile over the past three years, with tariffs, commodity inflation, currency pressure and now CV19.
They have ten major plants in China, six of them Tools plants and four of them Industrial. Their existing local business in China produces about $250 million in annual revenue, with about 80% of that Industrial; the rest is Global Tools & Storage revenue.
China has not generated much local business in the first quarter. The supply chain in China serves 40% of their capacity across the company, with about $2.5 billion in sourcing happening from China, including vendors that provide parts and components to the US and Europe and actual manufacturing of products. About $2 billion in sourcing is manufactured in China and shipped out of the country; the remaining $0.5 billion is parts and components sent to manufacturing plants around the world.
They have had a strategy in place to localize their manufacturing and get closer to their customers. About 40% of what they sell in the US is made in the US; in Europe, it’s about 30%. Their objective over the next three years is to move that number closer to 75% to 80% in both markets.
In China, ten plants were shut down as usual for two weeks for Chinese New Year; the following week they opened up and currently those plants are up to about 50% to 60% of average production. One of the challenges they face is getting enough workers. Employees are wearing masks and being checked for symptoms. They estimate it will be early April before the plants are running at full capacity, assuming that the situation in China does not get worse.
The current situation is going to impact revenues in March and April but they have a process in place to deal with these types of situations.
They are going after additional opportunities throughout their supply chain to help their vendors become more efficient and also to capture deflationary opportunities around commodities.
Their rollout of Craftsman into Lowe’s, NAPA Auto Parts and on Amazon has been very successful and they see that as a $1 billion annual program by 2021.
Stanley and Stanley FatMax has been very successful within Home Depot, as has FlexVolt. They are still planning on rolling out three to five new products each year for these brands.
DeWalt Xtreme and DeWalt Atomic will be growth catalysts in 2020 and 2021.
Tools & Storage is still an area where they are looking for appropriate mergers and acquisitions.
Typically, in February there is a dramatic increase in production, and in March, April and early May they really start selling into major customers around the globe for the spring selling season. There are some delays being created by the CV19 situation; they are looking at alternatives, including doing some things in Mexico.
Their Security business is not affected by any of the factors impacting Tools & Storage, and is very stable in times of volatility. Even so, it has not performed financially as needed but has been making good progress over the past two quarters.
CEO James Loree’s total 2019 compensation package was $18.7 million, up from $13.6 million in FY2018.
FY 2019 Conference Call Mid-March:
Chairman Horst Pudwill announced that 2019 was a record year, and that while CV19 is a global concern, they believe they are in good position to still deliver a solid performance this year.
CFO Frank Chan stated that organic sales for 2019 increased 9.2% to USD 7.7 billion and were up 10.7% excluding currency impact. It was the 10th consecutive year of record revenue.
Growth was mainly driven by the launch of new cordless products across all categories, verticals and geographies.
Milwaukee was the major growth driver, with sales increasing 21.7% globally in local currencies. The Ryobi cordless platforms generated double-digit growth.
The Power Equipment division accounted for 88.6% of the group’s total revenue, delivering sales growth of 13% or 14.6% in local currency. The Ryobi outdoor business also increased 14.5%.
Geographically, all regions delivered double-digit growth in local currency. North America remained their major market, growing 10.2% in local currency and accounting for 77.1% of the group’s revenue.
They are confident that the strong sales momentum can continue, with the launch of their new Milwaukee MX Fuel Equipment System and their established battery platform.
CEO Joe Galli said they remain hyper-focused on research and development, new development and expanding their end-user conversion programs globally. They are expanding their in-store reps in key customers such as Home Depot.
Galli said their Leadership Development Program continues to be a major investment focus. Last year they hired more than 1,000 new college graduates worldwide that they hand-selected from campuses in the US and around the globe.
For this year, they expect to grow the top line in high single digits and expand gross margins. They are planning for the Milwaukee business to grow at a rate of 20% or more.
They believe they are doing an excellent job of working very closely with the Chinese authorities on the new requirements that have been put in place due to CV19 and thus far have seen few disruptions in their supply chain.
Their M18 full-sized, 18-volt cordless platform for Milwaukee is the fastest growing cordless platform in the world, and they plan to continue to expand it by introducing a myriad of new cordless products. They are also the global leaders in subcompact M12 global products.
This year they will roll out a third platform of Milwaukee, MX Fuel. MX Fuel is a high-voltage, high performance product aimed at the global equipment market. The products they are introducing are all designed to replace either gas-powered or pneumatic products or AC products. There is currently no cordless in this class of products.
Their global storage system called Packout has been amazingly successful. It allows users to organize and easily transport tools as well as store tools back in the workshop. They will be expanding the system with a series of additional products this year.
Their safety equipment includes respirators, so short-term sales have been crazy; they feel this will also help them introduce Milwaukee safety equipment to the world.
Their fast-growing hand tools business has been very well received and they believe they have incredible potential.
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