Power Tool Industry September 2016
Bosch awarded their third round of energy research grants, which totaled $1.7 million, and sponsored 15 interns in the area of energy for 2015-16. Following a competitive grant selection process in 2015, the Bosch Energy Research Network (BERN) provided six seed-funding grants to faculty at five top U.S. universities. The grants continue Bosch’s long-term focus on energy-efficient technologies, in addition to their support of leading U.S. universities. BERN is a Bosch initiative in the United States for collaborative research into transformational energy technologies. In the U.S., BERN is allocating more than $10 million between 2011 and 2017 to support energy research at top engineering research universities and will fund more than 25 university research grants, with the goal of developing transformative energy technologies for series production. Following a two-stage competitive grant selection process, Bosch chose six proposals – on topics of combustion, energy conversion, energy storage and energy usage efficiency/smart grid – to receive two-year grants of up to $150,000 per year. The selected proposals include investigating the next generation of solid state lithium-ion batteries from the University of Michigan and high performance solid electrolytes for batteries from the University of California at Berkeley. More than half of Bosch’s $7.1 billion R&D budget for 2015 was focused on products that contribute to energy efficiency, environmental protection and resource conservation. Nearly 55,800 Bosch researchers and developers design, test and research innovative systems, components and methods worldwide; more than 2,800 Bosch associates are dedicated to R&D in the Americas.
From their Q2 conference call with analysts:
The 147% increase in net sales was primarily due to the Jarden acquisition. There will be a similar step-up impact of around $130 million in the third quarter because they expect virtually all of the remaining Jarden inventory to turn.
Advertising and promotion spending on Newell legacy businesses increased 50 basis points in the quarter, driven by incremental investments behind new products.
Core sales in North America, which represent 79% of total sales, grew 6.7%.
Tools net sales dropped 3.8%, reflecting continued weakness in Brazil and negative foreign currency. Core sales declined 2.3% as growth in North America was offset by Brazil macro challenges and industrial sector softness in China.
They’ve committed to achieve an incremental $300 million in Project Renewal savings over the next few years. Against that target, they’ve delivered $70 million in the first half of 2016.
They are making good progress on developing a new strategy for Newell Brands. Mark Tarchetti and his team led by Russ Torres is leading the dialog and much of the thinking. In August they solicited input from the Board of Directors.
They continue to expect 2016 full-year Newell Brands core sales growth of 3% to 4%. Where they fall in the range will depend on three things: the success of their second half drive periods of back-to-school on Writing and the holiday selling season on Yankee Candle; the delivery of Project Renewal cost savings and the transaction cost synergies and product line exits.
They expect to begin to exit product lines with $250 to $300 million of revenue over the next two to three years. They anticipate that two-thirds of that will come from Jarden businesses. They want to make whatever changes they are going to as quickly as possible.
As part of their joining together with Jarden, the executive team spent a full week going through operating reviews for every business unit. The cost savings generated will be used to help them unleash core capabilities that have the opportunity to differentiate their brands.
The current executive team is set, however they are considering adding a supply chain leader to the team.
They see a significant opportunity for IT investment in the Jarden businesses.
They will definitely be investing in ecommerce, both direct-to-consumer and with purely online retailers, as well as the online businesses of brick and mortar retailers. There is a shift in shopping behavior underway in the U.S. and they are committed to reaching customers where they shop. In order to do that, they need to invest in specialized skills, and they intend to continue to beef up their investment in this area. That doesn’t mean taking resources away from brick and mortar partners; Walmart is their biggest partner, and 95% of Walmart’s business with Newell Brands is in-store.
Q2 revenue rose 4% to $609.6 million. Engineering and Construction revenue rose 4% to $351.2 million. Foreign currency translation had a neutral impact on company revenue compared to the second quarter of 2015. CEO Steven Berglund said results met their expectations, and despite Brexit and the outcome of the U.S. elections they anticipate higher growth in the second half of 2016 and into 2017.
Trimble acquired AXIO-NET GmbH from Airbus Defence and Space. Based in Hannover, Germany, AXIO-NET is a major provider of Global Navigation Satellite System corrections and professional data services in Germany, the United Kingdom and Benelux. Financial terms were not disclosed. AXIO-Net was founded in 2008 and provides services for the geospatial market as well as emerging high-accuracy GNSS markets such as automotive.
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