Power Tool Industry March 2017
Robert Bosch Power Tools sold the Skil and Skilsaw brands to Chervon, a top manufacturer of power tools, outdoor power equipment and related products. Chervon is relocating their North American headquarters and more than 100 employees to Naperville, Illinois. Financial terms were not disclosed.
Bosch is partnering with IBM at the new Internet of Things Towers in Munich, Germany. The new IoT center will serve as a hub for collaboration between IBM and their clients and partners, including Bosch. IBM says this is a truly transformative technology. Bosch will integrate their industrial IoT Suite with IBM’s Bluemix and Watson IoT platforms to allow customers to update their IoT devices. Users will be able to access Bosch IoT rollouts via the IBM cloud.
STANLEY BLACK & DECKER
From the Barclay’s Select Industrial Conference, where SB&D was represented by CFO Don Allan.
They are very focused on breakthrough innovation, and ideally would like to see something breakthrough rolling out every year, but think it will be 2018 before another breakthrough concept is introduced. Right now they have 10 to 15 projects they are working on, and know that the vast majority of them will not be successful, either because they cannot be technically accomplished or because they can’t be commercialized. Their goal is to get one to two that can be commercialized and be successful.
They have not begun to talk about markets for Craftsman, as the deal still needs to close. But they have begun to think about it, and feel that there is an opportunity to sell through one or possibly two big box retailers, and definitely an opportunity to sell through their Mac Tool business. There are also many other areas that could be very lucrative including outdoor products and mechanics tools.
Bolt-on acquisitions will be their primary M&A target, with larger acquisitions being secondary targets, as they’ve recently made large acquisitions with both Newell and Craftsman. Many of the bolt-on acquisitions they are looking at are privately held, so timing is pretty flexible.
They are looking to move from 4% organic growth to 6% growth and will look at acquisitions that will help them move in that direction.
There are certain things they are doing within the Tools & Storage business like Tool connect products that are digitally oriented that are selling and delivering great value, but as far as return on investment, commercial has the highest return, breakthrough is second and then digital.
They are not expecting the kind of commodity inflation that would cause them to need to have conversations with customers about pricing.
They have contingency plans in place if there are tariffs or other restrictions on products coming in from China or Mexico. They have looked at how much manufacturing they could or would want to move back into the U.S. within a three-year timeframe. There are certain products that wouldn’t make sense to manufacture in the U.S. The initial shock might be tough on the bottom line, but they think they can neutralize it over three or four years. They are the only tools manufacturer currently manufacturing in the U.S. so that gives them a base to build on, and would make it easier for them to adapt than companies that would need to start from scratch.
They are very focused on getting their deals closed and starting the integration process, and that will be their primary focus for the remainder of this year.
DeWalt’s 10-millionth tool was produced by their North Carolina manufacturing plant in February. Executives noted that across all seven of their U.S. manufacturing plants DeWalt produced more than 90 million individual products made in the USA with global materials in 2016, an almost 50% increase from 62 million individual products produced in 2015.
Milwaukee Electric Tool wants to build two new buildings and renovate existing ones at their headquarters in Brookfield, Wisconsin. They’ve asked the city to approve an 18,000-square-foot expansion of their 16,500- square-foot research facility, which is known as the Rapid Innovation Center. They’re also planning a 10,000-square-foot expansion of their 5,600-square-foot annex building and intend to create new facades for both the research facility and their main headquarters building. Work underway on their headquarters building will add 207,000 square feet to their existing 183,000 square feet, as well as increase the building from a single story to four stories. They would like to start the latest projects this spring and complete them by fall when the headquarters addition is scheduled to be finished. Milwaukee employed about 300 people at the corporate campus in 2011; they have nearly 800 people working there now. The Brookfield Common
Council kicked in $6 million to help pay for the headquarters addition. Milwaukee says the expansion could add another 500 jobs within the next five years.
Q4 revenue rose 5% to $585.5 million. Engineering and Construction revenue rose less than 1% to $320.2 million. Fiscal 2016 revenue was up 3% to $2.4 billion. Engineering and Construction revenue rose 2% to $1.3 billion. Every segment reported organic revenue growth and margin expansion in the second half of the year, and they anticipate 2017 will bring continued growth and margin improvement.
Trimble acquired Beena Vision, which will become part of the Engineering and Construction section. Financial terms were not disclosed.
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