Bosch is partnering with General Electric to promote the connected industry concept of the Internet of Things. Representatives of GE Digital and Bosch Software Innovations have signed an agreement that aims to promote openness and growth in Industry 4.0.
Robert Bosch is partnering with software giant SAP to work together on improving connectivity and standards involving products used on the Internet of Things (IoT). Bosch is investing in building sensor systems and software that can analyze data from equipment such as forklifts, windmills, factory equipment and cars to speed up operations.
Bosch opened their expanded development center in the heart of Pittsburgh, Pennsylvania. Mike Mansuetti, president of Bosch in North America, said Pittsburgh is one of the smartest cities in the U.S., known for its innovative strength and start-up culture. Approximately 130 associates now work at the new central location, which will focus on developing internet and security technologies for the Internet of Things. In addition to basic research, the new location also houses the Bosch subsidiary Akustica which develops and markets MEMS microphones. The market for these tiny high-performance microphones, which are found in smartphones, tablets, wearables, and other devices, is growing rapidly. Bosch also recently expanded their technical center in Plymouth, Michigan, which focuses on key technologies for the mobility of the future.
STANLEY BLACK & DECKER
From the Morgan Stanley Laguna Conference, where SB&D was represented by CFO Don Allan:
Tools and Storage represents a very significant portion of their business, but they still see a lot of opportunity, because when you look at the business globally, they have just a 14% market share, despite being the market leader. They believe innovation and powerful brands will help them increase their global footprint and market share.
They have done more than 100 acquisitions in the last 12 years and their back office is not as efficient as it could be.
They estimate that the rollout of the new DeWalt FlexVolt system will contribute about $75 million in revenue in the back half of this year and about $200 million next year. They started shipping product in mid-August. They do not believe they will exceed estimates for 2016 because they are at shipping capacity for the line.
The initial rollout is not the entire family of tools that work with the system. There are about 20 different tools being rolled out along with the battery packs, and there will be subsequent phases of additional tools that will be rolled out in smaller collections of three to five tools at a time next year.
They do not know yet how much FlexVolt will cannibalize the corded tool business for both them and their competitors. It’s possible that ten years from now many of these corded products will have become obsolete. However, if you look at the conversion from nickel cadmium to lithium ion batteries, there are still nickel cadmium driven tools on the market, but now they only account for 10% to 20% of the total cordless markets.
FlexVolt costs 33% to 50% more than a comparable corded tool, which is another reason it could take
awhile for users to switch over. People will want to see how the tools perform in the real world before making major financial commitments.
High single-digit organic growth for the Tools and Storage segment is due to gains from innovations and revenue synergies still being generated by the Stanley and Black & Decker merger, which have allowed SB&D to outperform low to mid-single digit growth for the tools and storage market in the U.S. and emerging markets and low growth in Europe.
They are constantly evaluating concepts they believe have the potential to be breakthrough innovations, and typically have 20 to 30 different concepts in various stages of evaluation at any one time. FlexVolt is the innovation they went forward with in the past two years. In order to get that one breakthrough, they have to pursue many concepts.
Their mechanical lock business is profitable and grows 3% to 5% organically every year, but they are number four in the market in the U.S., and are therefore evaluating whether or not they should stay in the business. They hope to be able to announce a decision in the next three months to keep the entire security business, sell the entire security business or potentially sell only the mechanical lock business.
Their acquisition pipeline is quite busy at the moment, and they could use proceeds from the sale of the lock business for an acquisition and also put some proceeds towards buybacks. There is nothing that is off-limits for tool acquisitions now; while there are plenty of opportunities outside the U.S., there are also some attractive opportunities within the U.S., although some of them could have antitrust implications that could complicate a deal.
From Barclay’s Global Consumer Conference:
They have gone from less than 2% core sales growth in 2011 to more than 5% core sales growth over the past 18 months and have improved margins from around 12.5% to close to 14%.
Their top three competitors in their core categories, which include Writing, Home Fragrance, Baby, Food Storage & Preparation, Appliances & Cookware and Outdoor & Recreation, represent less than 50% of the total market, whereas in fast-moving consumer goods the top three tend to represent 75% of the market.
NR has a 60% share of voice in their core categories with less than 3% advertising investment as a percentage of revenue; in consumer goods the leader generally has a 28% share of voice with roughly 10% of revenue invested in advertising. This means they have a very low cost of growth.
They now expect to deliver $500 million in cost synergies by early 2019 or about three years from completing the deal, compared to their original guidance of three to four years.
They have established portfolio and geographic priorities with their board of directors and are beginning to act on them. They are going to focus on big opportunities and prioritize resources and people accordingly.
They will exit or dispose of between $250 and $300 million worth of businesses. That’s why they have core sales guidance for the full year projected at 3% to 4% growth but core growth over the first half projected at 5.1%.
50% of their $10 billion in U.S. revenue is concentrated among 20 retailers. Today they have four different selling structures to reach those 20 retailers; by the end of the year they will have integrated teams in place to handle several different channels, including home centers.
Ecommerce will occupy the entire second floor of their new corporate headquarters building in Hoboken, New Jersey.
Newell Brands put 10% of their portfolio up for sale in early October, including the vast majority of their Tools and Storage segment. The business they want to sell include Winter Sports, Heaters, Humidifiers and Fans and the Consumer Storage Container business. These business account for approximately $1.5 billion in annual sales.
Tom Sanford is NB’s new vice president of communications. He joins NB from executive roles at a series of large, multinational companies, including Aetna, Pfizer and Johnson & Johnson as well as communications giant Burson-Marseteller.
Sales for the six months ending June 30 rose 8.6% to $2.69 billion. The Power Equipment segment saw global sales rise 12.6% to $2.2 billion.
Milwaukee Tools sales rose 20.2%, driven by double-digit growth in their Consumer Power Tool and Outdoor Products brands.
Trimble is making new inroads into the Internet of Things (IoT). Their most recent introduction is a series of wireless, battery-powered sensors for water monitoring applications. They use low-power, long-range wireless communications to remotely measure and monitor water, wastewater and groundwater systems. The sensors track, measure and report water usage. The sensors can wirelessly report data down to five minute intervals.
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