Black & Decker 2015 Annual Report Download - page 5

03
The Evolution Of Stanley Black & Decker
Stanley Black & Decker has undergone a notable transformation over the
last  years — evolving from a small cap building products company to a
large cap diversified industrial. This transformation encompassed three
distinct phases:
• A period of restructuring in the late s through the early s when
we were primarily a tools and doors company, generated low growth and
a low-teens operating margin rate, and when we began our move towards
acquisitions to position the Company for growth
• The Security platform build between  and , a period when we
initiated our now successful and pervasive operating system, SFS, and
built the Security platform with over  acquisitions, creating a more
balanced portfolio with a higher operating margin rate
• The post-Black & Decker merger era of  through the present day,
when we became the global leader in tools & storage, the number two
player in both commercial electronic security and engineered fastening
solutions and achieved annual average organic growth closer to %
with a mid-teens operating margin rate
Over this -year period, we have grown our revenues from $ billion+ to over
$ billion, market capitalization from $. billion to $. billion, and
employees from , to more than , while generating total shareholder
returns exceeding %, far surpassing the S&P  (+%) and many elite
industrial companies. Measured against our peers, we’ve produced top quartile
sales growth over the last five years, with EBITDA growth well above average
during that time, while over the last  years our free cash flow conversion
ranks near the top. The Stanley Black & Decker of today is a fundamentally
dierent and stronger organization than the Company of the past.
We believe the success of our transformation is a result of our ability to
incorporate many of the best attributes of high performing industrial
companies, including:
While we stack up well in many of these areas, we have set the bar high and
believe opportunities remain to continue to improve in several respects,
including increasing operating margins, expanding the reach of our SFS
operating system beyond its traditional roots to generate growth and
margin expansion, and continuing to enhance the portfolio. We are actively
addressing each of these opportunities through further reducing our SG&A
via Functional Transformation, generating meaningful operating leverage
and improving Security’s margins, refreshing our core operating system
with the launch of SFS ., and actively managing our portfolio through
strategic M&A.
• A world-class operating system
and high performance culture
• Strong organic and
acquisitive growth
• A focus on consistently
improving margins
• Strong free cash flow conversion
• A balanced approach
to capital allocation
• Active portfolio management
• A track record of delivering
on expectations
15 YEARS OF PURPOSEFUL
TRANSFORMATION —
2000 TO 2015
Revenues
$2B+ to $11B
Market Cap
$2.7B to $16.4B
Employees
15.5K to 50K+
Total Shareholder Return
>400%
EXECUTING ON OUR
STRATEGIC FRAMEWORK
Continue Organic Growth Momentum
• Utilize SFS 2.0 as a Catalyst
• Mix into Higher Growth,
Higher Margin Businesses
• Increase Relative Weighting of
Emerging Markets — Goal of >20%
Be Selective and
Operate in Markets Where:
• Brand Is Meaningful
• Value Proposition Is Definable and
Sustainable Through Innovation
• Global Cost Leadership
Is Achievable
Pursue Focused Acquisitive Growth
• Consolidate Tool Industry and
Strengthen the Core
• Expand Industrial Platform —
(Engineered Fastening /
Infrastructure)