Industrial tool maker,
Stanley Black & Decker Inc.
) hosted its Investor Day 2013 on June 5, 2013. Discussions on
the financial aspects of the company's achievements and goals are
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The merger of Black & Decker has proved very beneficial for
Stanley Black & Decker as it now aims to realize cost
synergies of $500 million by the end of 2013 as against its
original target of $350 million only. Also, roughly $300 million
in revenue synergies have already been achieved compared with a
$300-$400 million target by the end of 2013. Since the merger, as
many as 1,500+ new products have been introduced by the company.
Stanley Black & Decker also mentioned that it remains focused
on expanding its organic growth through strategic initiatives
including: 1) Expansion in emerging markets through setting up of
SBUs for MPP Hand Tools, Power Tools & Commercial Hardware;
2) expansion through creation of Smart Tools & Storage
Market, expansion of MRP vending business; 3) RTLS Penetration
Healthcare /Security Verticals; 4) US Government
(Healthcare/Security/Industrial); 5) Aiming to tap opportunities
in offshore oil and gas pipeline market; and 6) Continuing To
Capture BDK Integration Revenue Synergies.
These six initiatives are likely to contribute $850 million of
annualized revenue growth and $200 million in operating income in
a 3 year-term period with $150 million in 2013 and $350 million
each in 2014 and 2015. To achieve this target, the company is
intent on investing $100 million as operating expenses (including
$20 million of brand development expense for the emerging
markets) and $50 million as capital spending.
Besides these strategic initiatives, Stanley Black & Decker
has a goal set for 2016-2017 that includes: $15 billion in sales;
operating margin greater than 15%; greater than 20% of revenues
in emerging markets; 15% return on capital/investment, and 10
working capital turns. Of the total revenue of $15 billion,
roughly $3.5-$4 billion are expected from Security, $7-$8 billion
from Tools, more than $2 billion from Engineered Fastening and
roughly $1-$2 billion from Infrastructure.
For 2013, management reiterated its guidance provided earlier.
Earnings per share, excluding one-time charges, are expected to
be within the $5.40-$5.65 range on the back of 2%-3% organic net
sales growth. GAAP EPS for 2013 is expected to be in the range of
$4.46-$4.71 versus $4.62-$4.87 predicted earlier. Free cash flow
is projected to be roughly $1.0 billion.
Also on the same day, Stanley Black & Decker announced a New
Brand Identity for its STANLEY® branded products, services and
Stanley Black & Decker currently has a $12.5 billion market
capitalization. Stocks that closely compete with Stanley Black
& Decker are
Lincoln Electric Holdings Inc.
), with a Zacks Rank #2 (Buy),