Power Tool Industry September 2017
Robert Bosch Tool Corporation
Robert Bosch intends to make artificial intelligence (AI) a core competence and to build machines that can learn and act intelligently, according to CEO Volkmar Denner. The Bosch Center for Artificial Intelligence (BCAI) is based in Renningen, Germany and expects to have one hundred employees by the end of the year. Bosch also plans to open AI research sites in Palo Alto, California and Bangalore, India.
Stanley Black & Decker
SB&D opened their new 4,500-square-foot makerspace in Towson, Maryland. The makerspace was created to offer SB&D’s employees a place where they could bring innovative new ideas to life. Employees in all departments will be able to use the workshop’s tools, materials and experts to learn techniques related to rapid prototyping. The space has machinery for woodworking, metalworking, welding, laser-cutting, 3D printing and more. A virtual reality apparatus is also available for use. Employees can use the space free of charge before or after work or during their lunch breaks, or during work hours with a manager’s permission. SB&D’s crowdsourcing program for power tools and equipment is headquartered ust a few miles from the makerspace. It has reportedly yielded products that increased revenue, grew levels of engagement within the company and resulted in SB&D creating a dedicated team that manages the portal. SB&D is also planning to use the makerspace to get involved with the local maker and education community, and hopes to assist local colleges and universities.
SB&D is preparing to tear down hundreds of thousands of square feet of long-abandoned factory space once known as the Hardware City in New Britain, Connecticut to make way for a huge data center with fuel cell power. SB&D is partnering with tech company Thunderbird, which is planning on remodeling four of the WWII-era buildings into a data center that will accommodate high-demand users such as Yale University, the University of Connecticut and others doing bioscience research. Thunderbird’s new project will not interfere with SB&D’s remaining manufacturing plant, a modern building that produces tape measures. The remaining historic buildings need to be torn down, as they are beyond salvage. Associations with Stanley are found in many parts of the town, which has AW Stanley Park, Stanley Golf Course, Stanley Street and even the Stanley meeting room at the public library, which is filled with copies of Stanley World, the employee magazine that dates back to the 1940s.
First half revenue increased 7.3% to a record U.S. $2.9 billion. Adjusted for foreign currency, revenue grew 8.1%. The Power Equipment business, which accounts for 85.6% of their business, grew 11.9% compared to the first half of 2016. Milwaukee sales grew 20.1% adjusted for currency. Ryobi brand business grew in the double digits, driven by the RYOBI ONE+ cordless system.
From Their First Half Conference Call with Analysts:
From a geographic perspective, North America accounts for more than 76% of the group’s revenue. Sales in North America grew 8.8%, with Power Equipment delivering double-digit growth.
They have increased their gross margin as a percent of sales for nine consecutive years, from 31.5% in 2008 to 36.6% this year. They expect that trend to continue, as they have a lot of high-margin accretive new product in the pipeline.
One of their measures of productivity is sales growth versus headcount. Their sales grew more than 8%, while their headcount grew 2.7%.
They were impressed with the performance of their largest competitor (SB&D), and proud that they outperformed them substantially.
They believe that SB&D’s launch of FlexVolt actually increased their cordless business for both Milwaukee and Ryobi, and they do not believe they lost any market share to SB&D. They also noted that they don’t worry about what their competitors are doing, but focus instead on things they can control.
Their research shows that Ryobi has become the number one brand in the world for DIY tools, taking over the top spot from SB&D.
The Ryobi ONE+ now offers more than 100 tools and they are about to launch more in the next six months than in any time during the company’s history.
Their outdoor power tools work off the same battery as their power tools, which means that more than 130 tools currently work off the same battery, which has not changed since they launched it 15 years ago, so they have a lot of backwards compatibility. They have also developed a 40-volt platform for Ryobi Outdoor and plan to launch many new products next year.
They are committed to being the global leader in industrial cordless and expect Milwaukee to be number one as they implement their strategies. They are launching many new products in the next six months, including a new family of impact wrenches, along with versions for the automotive market. They will also have a new full-size hacksaw that utilizes the Milwaukee FUEL technology. They will also be introducing the first ever cordless “mud mixer”, a device that mixes concrete paint, epoxy and various compounds used on job sites, and the first cordless heat gun.
They also have several new lighting lines for the job site and even lighting products for DIY use that can often be controlled from iPhones.
They are going heavily into the hand tools business, because it has lower distribution and transportation costs and there are very few returns at the retail level. Every tool they are launching is designed to be innovative, priced at a premium and to outperform the competition.
They plan to grow their business organically and see no need to do acquisitions.
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