Black & Decker 2014 Annual Report Download - page 3
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We achieved record earnings per share
and free cash flow and a cash conversion
ratio of over 130% while delivering
5% organic growth in a slower global
GDP environment. We enjoyed share
gains in many of our businesses, most
notably CDIY and Engineered Fastening,
as well as success with our Vertical
Markets initiative in Security. A sharp
focus on cost control and a proactive
approach to managing pricing and mix
led to margin expansion across much
of our portfolio despite severe foreign
currency headwinds. A clear priority
in 2014 was addressing our Security
business’ recent underperformance.
We were pleased with the progress
on this front, as Security stabilized in
the first half of the year and continued
forward on the path to recovery in
the second half. Our Vertical Markets
initiative has been a success in North
America and the operational and
commercial improvements implemented
in Security Europe have positioned this
business for improved results during
2015 and beyond. As a result of the
overall Company’s strong financial
performance, we exited the year with
a strong balance sheet and, consistent
with our near-term capital allocation
plan, we are positioned to ramp up our
planned stock repurchases in 2015.
The market clearly recognized our
performance as reflected in the
19% increase in our share price in 2014
compared to 2013, outperforming our
peer group (up 14%) and the overall
S&P (up 11%).
Our long-term mission and objectives
remain firmly in place — to continue
to invest in building world-class
franchises with sustainable strategic
characteristics that create exceptional
shareholder value. Our opportunity is
significant across our businesses: we
plan to both leverage and build upon our
existing scalable, world-class Tools and
Engineered Fastening platforms while
continuing to improve Security in order
to reach its full potential.
In 2014 Stanley Black & Decker made
significant progress towards our long-term
financial objectives while continuing to
position for a strong future.
LETTER TO SHAREHOLDERS
SUMMARY OF RESULTS
• Total revenues increased 4% to a
record $11.3 billion, with organic
growth of 5%
• Operating margin increased to
13.6%* compared to 12.7%* in 2013,
a 90 basis point increase in the
face of approximately $85 million
of foreign currency headwinds
• Earnings per share increased 14% to
a record $5.67* from $4.98* in 2013
• Free cash flow totaled a record
$1 billion, up $477 million from 2013,
and we rewarded our shareholders
with our 47th consecutive annual
dividend increase
• Working capital turns increased by
over a full turn to 9.2 demonstrating
the continued success of the Stanley
Fulfillment System, with CDIY
exceeding 10 turns for the first time
* Excluding charges