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Robert Bosch Leaders from Bosch were key presenters at the Internet of Things (IoT) workshop hosted by the Robert C Byrd Institute (RCBI). Attendees learned what IoT actually is, how to apply the technology to their own manufacturing operations and how to achieve strategic advantages by connecting physical and digital technologies to improve efficiency, promote innovation and reduce costs. The IoT workshop was the first of several workshops in the Industry 4.0 series. Robert Bosch has invested in Chinese artificial intelligence start-up AutoAI Co. Bosch expects the investment to improve the competitiveness of their AI offerings. Bosch presented the “Factory of the Future” at Hannover Messe, the world’s leading trade show for industrial technology. Bosch envisions a future with autonomous transport vehicles that deliver components to digital workspaces, robotics solutions that support workers in manufacturing and quality inspections performed with the help of artificial intelligence. Thanks to 5G networks, communication between machine and systems is running smoothly and in near real time. Bosch believes that AI is a key technology of the future, and with the help of AI, machines can learn to be smart and anticipate. Their goal is that by the middle of the next decade all Bosch products will be equipped with AI, or AI will have played a part in their development and manufacture. Bosch has pioneered many Industry 4.0 applications already, and by 2022 Bosch expects to generate sales of more than one billion euros with Industry 4.0. Stanley Black & Decker Raymond James Institutional Investor’s Conference: SB&Ds goal is to be regarded as a leader in innovation, not just within their market segments, but in the larger universe. In 2019 they will focus on organic growth and returning to margin expansion within the first half of the year. Approximately 50% of their free cash flow goes back into the business and 50% goes to shareholders. They will continue to roll out five to seven new products each year using their FlexVolt technology. Getting into the Craftsman business gave them an opportunity to get into the outdoor category in a big way. Before they bought a stake in outdoor products manufacturer MTD their outdoor products were all hand-held. If their 20% investment goes well, in the next three to four years they will exercise their option to purchase the remaining 80% of the company. They plan to double their revenue to $22 billion by 2022. Stanley Fulfilment 2.0 is the operating model that really cuts across all of their businesses and will allow them to reach their goal. They rolled out some new pricing for the Tools segment at the beginning of the year. For the last few years Tools has been close to 7% organic growth, but they expect that to drop to 5% to 6% growth this year. Their working capital returns need to improve. They used to be in the tens; lately they have been in the eights. They would like to get them back closer to ten. Sometimes they have to take market action in response to what their competitors are doing. Their competitors all run their businesses using different business models. Sometime in the next 18 months they will have another big innovation to announce, most likely in the Tools business. They define breakthrough innovation as something with the opportunity to generate a minimum of $100 million in revenue. They are expecting a slow, modest growth environment this year, and are not anticipating a recession. Other News: SB&D is suing Sears for violating their agreement that limited how Sears could market the Craftsman brand of tools. Stanley cited unflattering social media posts to prove that Sears is causing confusion among customers by positioning Sears as “the real home of the broadest assortment of Craftsman.” Sears emerged from bankruptcy February 8 and is once again under the leadership of Eddie Lampert. They recently introduced a line of professional-grade mechanics’ tools under the sub-brand “Craftsman Ultimate Collection.” SB&D has asked the courts to impose a temporary halt on Sears’ marketing, advertising and sales of the collection until the case can be heard. As long ago as last August a Sears blog post claimed that Sears still had the largest Craftsman selection of any US retailer and referred to Sears as the “original” and “real” home of Craftsman. SB&D says their agreement with Sears puts limits on how Sears can use the Craftsman brand and the new collection is in violation of that agreement. SB&D acquired Paladin and Pengo Business Units of International Equipment Solutions from KPS Capital Partners, along with all brands and operations within those units. Genesis and Crento Global will be operated as standalone businesses. Terms were not disclosed. SB&D earned a perfect score of 100 on the 2019 Corporate Equality Index, the benchmarking survey administered by the Human Rights Campaign Foundation. The survey addresses corporate policies and practices related to LGBTQ workplace equality issues. More than 560 major US businesses also earned high marks this year. SB&D made significant changes throughout 2018 in order to improve their policies and efforts on inclusivity, including providing unconscious bias training. CEO Jim Loree said that he passionately believes that diversity and inclusion are key to a workplace where purpose-driven top performers can thrive. An analyst’s update on SB&D estimated that the company is well-positioned to hit their target of $12B to $14B revenue for Tools & Storage in 2022. They estimated that SB&Ds investment in Craftsman and associated initiatives is capable of driving more than $1.1B of 2022 revenue. TTI/Techtronic Industries Full Year 2018 Conference Call: In 2018 organic sales increased 15.8% to USD $957 million and total revenue grew to USD $7 billion. It was their ninth consecutive year of record revenue. Record sales were mainly driven by their focus on innovative cordless products along with strong category channels and geographic expansion. Milwaukee revenue increased 28.2% and the RYOBI ONE+ cordless system delivered double-digit growth. Milwaukee outperformed the market by more than 400%. They believe they can grow the Milwaukee business 20% per year over the next three years. Margins expanded by 50 basis points to 37.2%, the tenth consecutive year of gross margin improvements. The increase was mainly driven by the introduction of innovative products, category expansion, mix improvements and productivity gains. Effective supply chain management offset any commodity inflation. The Power Equipment division accounted for 85.6% of the group’s revenue and delivered 17% sales growth over 2017. CEO Joe Galli stated that they have a new product coming out that will “blow your mind.” They invest heavily in R&D to drive product development, and believe that right now they are in an environment where there is so much opportunity for them to expand they need to take advantage of every opportunity Joe Galli said that people incorrectly perceive that their growth is tied to the housing market. Galli said some of that perception is due to some of their competitors blaming performance that is below expectations on a lagging housing market. He pointed to the fact that TTI sales were up 17% and the company operates in the same countries and markets as their competitors. They are no longer an industrial company but are now a technology company. They are constantly investing in new product development and geographic expansion. The Home Depot is their largest customer and expects them to deliver product when they need it. So they produced more inventory in order to be ready for improved sales. They have been investing in campus recruiting and hiring and focusing on hiring blue-chip, high-potential college graduates from more than 75 campuses around the world. This year they plan to hire more than 780 hand-picked superstars who will populate their sales, marketing, engineering, logistics and finance organizations. Their Leadership Development program (LDP) is special because most companies struggle with the investment needed, as it takes three or four years for a college graduate to actually produce a good return on the company’s investment. They consider the program highly successful and are very committed to it. They currently have more than 12 vice-president-level execs in the company who started as college graduates in their LDP program. They believe they are the number one consumer DIY power tool company, and their five major competitors are all tied for number two. Chairman Horst Pudwill announced that they have been included in the Hang Seng stock Index, one of 50 companies in the index. Other News: TTI plans to open a new $50 million warehouse and distribution center in an existing industrial park in Gaffney, South Carolina. They’ll be moving into a building that’s been vacant since early 2016. Cherokee County will give TTI special tax breaks for coming to the area and creating 100 jobs. © Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.
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