Robert Bosch Power Tools
Bosch Power Tools will invest $130 million to expand their power tools accessory manufacturing in Lincolnton, North Carolina. The new 325,000-square-foot building for manufacturing, logistics and warehouse operations will support manufacturing power tool accessories for products including saws, drills and routers. According to Mike Mansuetti, president of Bosch North America, the expansion is part of Bosch’s commitment to develop local manufacturing. The North Carolina Department of Commerce (NCDC) contributed to the expansion through a 12-year Job Development Investment Grant that authorizes the potential reimbursement to Bosch of more than $2.7 million spread over 12 years based on incremental job creation that the NCDC says will grow the state’s economy by more than $1 billion over the twelve years.
Stanley, Black & Decker
UBS Global Industrials and Transportation Conference:
They are focused on getting their portfolio back to a 4% - 6% growth rate, about twice anticipated GDP growth and 35%gross margins.
They’re targeting $750,000 to one billion in overall inventory reduction for this fiscal year.
Tools is running ahead of their projections, with Pro leading the way.
New home construction and repair are down from their pandemic peaks but are still much stronger than anticipated this year.
They’ll be doing more promotions during the second half of the year but that basically means returning to their normal strong promotional activity around the holidays which was curtailed during the pandemic.
Their R&D spending is at a record level and they intend to keep investing in innovation. They’ll also be investing in more feet on the street and getting out and talking to end users.
They are currently running many of their facilities at 30% below capacity and will eventually have to increase production to get back to 35% margins. They had approximately 23% margins in the first quarter and are expecting similar margins in the current quarter.
Historically, the secret to the tools and outdoor business has been innovating for the Pro in a very powerful way that produces a big productivity advantage. It’s also important to have people out there interfacing with the Pro in-person and demonstrating just how productive these tools can make the individual. That helps drive products through the broader channel base and impacts the DIY consumer as well.
Wolfe Research Global Transportation & Industrials
The 60,000 SKUs they’re eliminating are not 60,000 products. Just one drill bit, for example, could be in several packs. Both their facilities and their channel partners only have room for so much inventory and so many innovative new products. They want all the shelf space and manufacturing space devoted to their products to be very productive.
They will be using more commonly available power tool components to take some of the complexity out of their plants.
Everyone is seeing the same thing: stronger Pro, weaker DIY. They have a relatively strong Pro with consistent purchasing patterns who is willing and able to pay and weaker DIY customer who are more price sensitive, especially at higher price points.
Parts of their supply chain were not performing at peak and now are healing themselves nicely and really improving momentum, even though Tools is still down slightly year over year.
They did about 2% price in the first quarter compared to a big 8% bump in the fourth quarter of 2022.
SB&D is reportedly in preliminary discussions to sell its International Equipment Solutions Attachment Group (IES), which produces excavator buckets for construction equipment. SB&D is working with financial advisers to divest themselves of some businesses in order to focus on their core strengths.
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