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Stanley Black & Decker UBS Global Industrials & Transportation Conference: SB&D was represented by CFO Don Allan at this virtual conference. SB&D revised their guidance upwards for the second time in two weeks, stating that they had originally planned for business to be down a potential 35% to 45% for the full quarter; at the time they made that forecast they were through the first four weeks of April and were down about 40% in shipments and revenue. At a conference two weeks later, they projected that they would be down between 20% and 30% based on continued strength in POS in US retail and outstanding performance from the Security business. June 3, they revised their guidance again, and stated they expect organic revenue to decline just 15% to 20%. They believe the inventory corrections they were dealing with that were being caused by a few customers were behind them and with POS matching shipments and revenue they felt comfortable upwardly revising their guidance. They now expect Security to be down 10% rather than the 25% originally forecast and are seeing strong performance in Tools and Storage sales. Their Q2 earnings call will be July 30, and they will provide more color at that point, as well as an outlook for the second half of the year. The current strength they are seeing in US retail is being driven by DIY activity. One of the areas of uncertainty is how long that will continue once people start to go back to work, kids are out of virtual school for the summer and the family has more options for how to spend their time. They feel very good about inventory levels in Tools, and think they got through the destocking in US retail very quickly in April and early May. Within Tools there is a little bit of a negative mix because of the DIY component, with brands like Black & Decker selling through at much higher levels than you would normally see. They are at a slightly lower level of profitability. Craftsman is selling very strongly; that brand covers DIY consumers as well as tradesmen and Pros. That profitability is close to line average. Stanley and Stanley Fatmax brands are at or above line average. They think there are two or three really big opportunities that will come out of all this. One is ecommerce. They are on many ecommerce platforms as well as on the platforms of their major retail customers. They are looking at a very big ecommerce launch sometime next year for the Black & Decker brand. There are certain countries around the globe where their Tools business is not as strong as they would like it to be, so that is a very big opportunity. The Pros are just beginning to come back to work, so that activity will pick up. They think that commercial real estate construction will be sluggish, especially since so many companies are looking at reducing their footprint and having more people work virtually. Security has been strong, but they stopped short of saying they’d decided to keep the business; they have been considering selling it for quite some time. They are seeing some commodity deflation that is offsetting some of the headwinds they’ve dealt with coming from inflation, tariffs and commodities. They think they could be looking at really robust gross margin and operating margin rates once they get past the downturn and start to grow again They want to move about $1 billion in cost that they currently manufacture in China to various countries, with a heavy weighting to Mexico and the US. Other News: SB&D made its first appearance on the 100 Best Corporate Citizens ranking, coming in #45 overall and #6 in the Capital Goods Industry category. The ranking is based on 141 environmental, social and governance (ESG) transparency and performance among the largest 1,000 US public companies. SB&D says their strategy focuses the company’s efforts on three key pillars: empowering makers, innovating with purpose and creating a more sustainable world. The Ranking debuted in 1999; the top 1000 companies by size is based on the Russell 1000 Index. Metabo HPT Joe Leffler is the new CEO and President of Metabo HPT, a subsidiary of Kiki Holdings, formerly part of Hitachi. Hiro Yumoto will become interim COO of the Americas and will continue to serve as the chairman of the board of Koki Holdings America. Leffler was previously COO and General Manager for Metabo HPT; he has been with the company since 1994. According to Leffler, Metabo (formerly Hitachi) offers an extensive line of professional grade power tools and accessories for woodworking, metalworking, drilling and fastening, concrete drilling and cutting and outdoor power equipment. They also produce a complete line of pneumatic nailers, staplers, compressors and collated fasteners. © Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.
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