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TTI/Techtronic Industries First half sales grew 6.3% to US $7.3 billion. The TTI Power Equipment segment grew sales 7.1% in local currency to $6.9 billion. The Milwaukee brand grew 11.2% in local currency and Ryobi outperformed the market and grew in the mid-single digits. They finished the first half of 2024 with $403 million in inventory, down $71 million from the end of 2023. They had $554 million in inventory at the end of the first half of 2023. New CEO Steve Richman and Milwaukee President Shane Moll joined Chairman Horst Pudwill on the call. They made strategic investments in new product development and technology, increasing R&D spend from 3.5% of sales to 4.1%. They have also reduced selling expenses from 17.3% of sales to 17%. They see their Value Pro segment as a big opportunity, particularly in the Americas and Australia. They describe Value Pros as Pros who want great products but can only afford to invest so much. Today the Value Pro only accounts for about 20% of the business. The Value Pro segment increases when interest rates are low and residential is booming. They contribute more during boom periods of residential construction, remodeling, downtown commercial structure, etc. TTI thinks that when interest rates come down that business will boom. The Ryobi brand continues to be a favorite with Value Pros. Milwaukee has delivered compound annual growth of 23% over the past 15 years. They estimate the market itself has only grown in the mid-single digits, so their market share has grown significantly. They are positioning Milwaukee as the Solutions provider and have entered the hand tools, storage, outdoor power equipment and personal protective gear markets to better serve their core user group of professionals. They have expanded their addressable market opportunity from their historic US $10 billion to more than $50 billion. They believe Milwaukee has become the leader in lithium-ion cell design and battery pack development and motor design and manufacturing by building a cumulative foundation of new technology. They are also leveraging artificial intelligence and machine learning to help them develop innovative solutions and solve the toughest problems on jobsites. Steve Richman addressed the rumor that Makita is considering pulling out of the US market; CEO Steve Richman commented that Makita’s strategy is very different and has not proved to be sustainable. © Robert Bosch Tool Corporation. All rights reserved, no copying or reproducing is permitted without prior written approval.
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