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Stanley Black & Decker Robert W. Baird Industrial Conference: Last year the tool business, which CEO James Loree described as the world’s largest, was about $9 billion. This year it will be about $10 billion. In Loree’s first six months as CEO he spent $3 billion on acquisitions, including Craftsman, Lenox/Irwin, Nelson Fastener and MTD. Retailers want exclusives. When they gave Lowe’s exclusive rights to sell Craftsman in the home channel, they gave Home Depot the exclusive rights for Stanley and Stanley FatMax. Household formations are well above average, and they believe they are going to continue to occur, whether in multifamily or single family. People need a little time to adjust to the sticker shock of rising rates and some rising costs, even though rates remain historically very low. They have raised prices in concert with some of the headwinds they have encountered, including material inflation and cost inflation and now more tariffs. The $250 million they plan to trim off costs will be 60% to 70% people-related costs, which in addition to salaries and benefits, includes equipment, travel, services, etc. The remainder will be indirect expenses. FlexVolt, introduced about 2 1/2 years ago, is growing in the double digits without any significant active promotion this year. The MTD acquisition should produce billions of dollars of growth by 2021 or 2022. Craftsman is not really an international brand. It plays well in Canada, Mexico, the Caribbean and Northern Latin America, but is not truly international. It’s possible that if Sears goes through a true bankruptcy, SB&D could have a quarter that reflects a “fire sale” in Craftsman at Sears, but those Sears’ products will not be comparable to the full line of completely redesigned Craftsman products that they have introduced. Other News: SB&D says they will make all plastic packaging reusable by 2025. SB&D has joined a global initiative that includes 250 other businesses and governments committing to using more sustainable packaging. Other companies that have already signed on include Target, Pepsi and Coca-Cola. CFO Don Allan criticized the new and pending tariffs, saying that the 25% tariffs on steel, aluminum and finished goods and retaliatory tariffs by China are having a significant impact on their business. Allen was addressing an audience of manufacturing executives and other businesspeople at a conference in Trumbull. Allen said even if the tariffs are actually a negotiating tactic, they are already having a negative impact on business. He also noted that the stronger dollar is making exported goods more expensive and increasing commodity prices. Allen pointed out that SB&D, who makes and manufacturers half of their products in the US, is very disadvantaged by the tariffs, where a competitor that makes all of their tools in China and ships to the US is not. SB&D recalled Black & Decker, Bostich and Porter-Cable hammer drills and drill drivers because the side handle can slip or break, causing the operator to lose control of the tool and risking injury. SB&D is advising consumers to stop using the affected drills sold at The Home Depot, Lowe’s, major home and hardware stores and online from January 2010 through July 2018 immediately. They are offering a free replacement handle. Trimble Q3 revenue grew 19% to $805 million with organic growth of more than 10%, with currency subtracting less than 1% and acquisitions adding 9%. Buildings and Infrastructure delivered 7% organic growth, with continued growth in both civil construction and buildings. With acquisitions, the segment was up 36%. Trimble expects Q4 revenue between $791 million and $821 million and anticipates continuing improvement in both revenue and profitability in 2019. Trimble entered a collaboration with HCSSTrimble and HCSS to tightly couple estimating and bidding workflows to field operations, driving increased jobsite productivity in today’s construction environment. Trimble and HCSS are also exploring how to bring HCSS’s leading software applications in construction to key markets globally. The companies plan to begin working together early next year. Metabo Hitachi Power Tools has officially changed its name to Metabo HPT for North America and is launching their new MultiVolt platform under the new name. The platform offers the choice of whether to operate the dozen plus tools as either corded or cordless. Current Hitachi Power Tool Products will begin to transition to Metabo HPT in January and retain their current brand identity with the same color, model numbers, warranties and battery interchangeability. Packaging and POS during the transition will feature both names and logos to make it easy for the customer to understand what is happening. Metabo HPT is based in Braselton, Georgia and is a brand within Koki Holdings America, the North American division of Koki Holdings Ltd. © Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.
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