Robert Bosch Tool Corporation
Bosch Power Tools is putting aggressive plans in place to double sales by 2030, according to Henk Becker, president of Bosch Power Tools. FY22 sales rose 3% to $6.2 billion and Bosch invested more than $315 million in products and initiatives, including the expansion of their strong accessories business, infrastructure projects to boost capacity, and the further extension of their two multi-brand 18V battery systems: the AmpShare Alliance for professionals in trade and industry and the Power for All Alliance for applications in and around the home.
As part of their growth strategy, Bosch also plans to acquire a roughly 12% stake in Husqvarna AB to expand its multi-brand battery cooperation. This long established Swedish company markets Husqvarna brand as well as Gardena and Flymo.
North America, which makes up more than 40% of the power tool market worldwide, will be one area of focus. Bosch plans to sharpen their product portfolio to best meet the needs of North American users and expand their marketing activities and sales structures to make their power tools even more appealing to current users and to help them expand into new market segments.
Bosch will continue to focus on sustainability, and has been working steadily in recent years to reduce their environmental footprint. They have already rolled out projects to cut CO2 emissions and conserve resources. Since 2020, all business divisions of the Bosch Group have been climate neutral; not a single site worldwide leaves a carbon footprint today.
Bosch Power Tools is working relentlessly to make their entire product portfolio more sustainable. They are constantly exploring opportunities to use recycled materials and are learning their uses and limitations.
Bosch Power Tools looked at the entire supply chain to identify ways to save on materials, particularly on plastic, and replace them when possible with more environmentally friendly components. Henk Becker noted that even seemingly small changes add up and can make big impacts. He says their goal is to be a role model for the industry and to motivate everyone to do their part for a better living environment.
Bosch is also partnering with the World Wildlife Federation (WWF), which will provide a sounding board and expert consulting to further develop a climate-friendly packaging and products strategy. They will also collaborate on training and raising awareness of Bosch associates so they can participate and contribute to Bosch’s transformation to sustainability. In return, Bosch Power Tools will support WWF on nature conservation projects that are urgently needed in the current climate and biodiversity crisis. This commitment and partnership makes Bosch Power Tools a pioneer in the industry.
Stanley, Black & Decker
SB&D announced changes to their manufacturing and distribution network which will include US site expansions, site transformations into manufacturing centers of excellence and site consolidation. The Cheraw, South Carolina operations will be transferred to facilities in Jackson and Gallatin, Tennessee and the Fort Worth, Texas facility that manufactures Craftsman tools will be closed. The closing will impact 387 employees in Texas and South Carolina; the transfer of operations will add 80 jobs in Tennessee. The moves are part of their announced strategy to streamline operations and save $1.5 billion in costs.
TTI FY22 Earnings Call with Analysts
Sales increased by 0.4% or 2.8% in local currencies, driven by outstanding sales by the Milwaukee brand, new product innovation, field initiatives and geographic expansion. Revenue grew 0.3% in North America.
The Power Equipment division, representing 93% of the group's revenue, delivered 3.1% growth, or 5.5% in local currencies. Milwaukee global sales grew approximately 22% in local currencies, offsetting declines in consumer power tools and outdoor business due to softer consumer spending, unfavorable weather and destocking by major home improvement channels.
They aggressively cut costs but increased their investment in R&D, which accounted for 3.7% of sales in 2022, by $58.6 million. They estimate R&D spending will remain in the mid-3% level of sales going forward.
Last year they decided to stockpile even more critical components, semiconductors and cells needed for their batteries, because these critical components were in short supply. They are committed to ship at a 98%-plus service level. They also increased some WIP inventory but reduced the inventory of finished goods.
They believe they can get back on track and deliver mid-single digit growth this year despite the environment. They expect Milwaukee to grow in the solid teens despite the global economic environment and turmoil. Over the next five years they expect to further solidify their market leadership in cordless.
TTI’s annual report shows that while the company posted 0.4% revenue growth last year, revenue actually fell 8.7% in the second half of the year. Analysts expect the company to return to 6% growth this year, although they have not provided an updated outlook. Analysis showed that last year Milwaukee sales grew 18.78%, but Ryobi sales fell in the mid-single digits. However, Ryobi sales were still nearly 50% higher than in 2019, pre-pandemic, so could decline further this year.
After five years of operation in Vietnam, TTI wants to further push business development by fostering partnerships with local authorities and suppliers. They’ve invested in a modern manufacturing facility in Saigon Hi-Tech Park, known as the Silicon Valley of Ho Chi Minh City. TTI has reportedly identified Vietnam as a strategic location where they are committed to long-term investment and building a supply chain ecosystem. They intend to attract the talent needed to contribute to positioning Vietnam as a hub. TTI has nearly 8,000 employees working at eight production facilities, a representative office in Ho Chi Minh City, and Milwaukee Heavy Duty Centres in Ho Chi Minh City and Hanoi.
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