2007 Analysts Meeting September 12, Analysts Meeting

Transcription

1 2007 Analysts Meeting September 12, 2007 Analysts Meeting

2 Agenda Overview Power Tools & Accessories: Industrial Products Group Consumer Products Group Europe Break Hardware & Home Improvement Fastening & Assembly Systems Financial Review Summary and Q&A Luncheon Nolan Archibald John Schiech Bruce Brooks Les Ireland Jim Caudill Mike Tyll Mike Mangan Nolan Archibald & Team All references to 2007 estimates in today s presentations are as of July 26, 2007, and are not being updated. In addition, please refer to disclosures regarding forward-looking statements and non-gaap financial measures in the presentation materials.

3 Today s Key Takeaway Black & Decker is Well Positioned: To Extend Our Leading Market Positions To Manage Through the Downturn Effectively To Use Strong Cash Flow to Drive Stock Price For Long-Term Double-Digit EPS Growth

4 Strong EPS Growth Over Cycle Diluted Continuing EPS Excluding Restructuring Charges, Goodwill Amortization, Insurance Settlement, Tax for AJCA Repatriation $6.73 $6.55 $6.35 -$6.50 $5.31 $3.76 $2.97 $2.22 '01 '02 '03 '04 '05 '06 '07E 19% CAGR Trough to Trough

5 Delivering Long-Term Results Sustainable Core Strengths Better Balance to Reduce Volatility Strong Free Cash Flow Excellent Stewardship of Capital Solid Growth Prospects

6 Core Strengths Unparalleled Product Innovation Superior Brands Strong and Broad Distribution Best-in-Class End-User Focus Cost Reduction Experienced Senior Management

7 Meaningful Innovation Nano Lithium Ion Cordless Smart Lockset Technology VPX High New Product Vitality LMR Stud Welding

8 Recognized as Innovation Leader Patent Board (Wall Street Journal, 2007) Time 2006 Best Inventions Booz Allen Hamilton (2006) Tools of the Trade Editors Choice

9 Analysts Meeting Superior Brands Great Brand Identity, Two Super Brands

10 World-Class Distribution Valued Supplier at Key Customers Merchandizing Expertise In-Store Execution Inventory Management Product Training Strong Presence in the Stores Effectively Balancing Channels Help Our Customers Differentiate Recognized For Adding Value

11 End-User Focus Swarm Teams 1992 Nascar 1993 Rodeo 1995 Web Re-Launch 2000 Hispanic Team 2003 CORE Program 2006 Evolving and Building Loyalty

12 Ongoing Cost Reduction Continuing Shift to Low-Cost Regions Manufacturing Footprint Rationalization Global Sourcing Lean Six Sigma Value Engineering/Improvement SG&A Expense Gating, Reductions Continuing to Drive Out Costs

13 Experienced Management Officers Average 19 Years at B&D All Over Seven Years 14 of 16 Over Ten Years All Officers Here During 01 Downturn Determined to Manage Tightly Results-Oriented Team

14 Experienced Management Operating Managers Early in Their B&D Careers John Schiech Years Nolan Archibald Years Jim Caudill Years Bruce Brooks Years Les Ireland Years Mike Tyll Years

15 Better Balance Reduces Volatility Geographical End-Market Distribution Channels Variable vs. Fixed Costs

16 Geographical Balance Approximate Split of Operating Income (Continuing Operations) Outside N.A. 19% North America 81% Outside N.A. 30% North America 70% International Margins Near Fleet Average

17 End-Market Balance Approximate Macro Drivers of Sales US Commercial/ Industrial ~10-15% US New Housing 15-20% International 36% in 2006 US Consumer Spending ~20% US Repair/ Remodel ~20% A Variety of End Markets

18 Distribution Channel Balance Approximate Split of 2006 Sales Fastening 10% Other (Primarily Retail) ~16% Non-NA (exc. Fastening) 24% Independent/ Wholesale ~17% Lowe s 13% Home Depot 20% Multiple Channels in Each Segment

19 Strong Free Cash Flow (CF from operations less net capex, in $millions) $480 $512 $515 $533 $360 $257 '01 '02 '03 '04 '05 '06 Five Straight Record Years

20 Disciplined Stewardship Uses of Cash, Share Buyback $1.5B Bolt-On Acquisitions $1.2B Dividends $0.3B Current Priorities Bolt-On Acquisitions Cash to Investors Share Buyback Bought 11.8m in 06 ~5m Authorized at 7/07 Buying in Q Dividends More Than Tripled in 4 Yrs Debt Repayment Low Priority Due to Solid B/S A Balanced Approach

21 Bolt-On Acquisition Strategy $278m in 2003 $768m in 2004 $158m in 2006 Synergies Make the Economics Work Manufacturing, SG&A, Marketing Complimentary Lines Within Current Segments Must Be Financially Compelling NPV Positive; ROCE Accretive within ~3 Years Looking Across Segments, Geographies Purchase prices are net of cash acquired, and include transaction costs.

22 Solid Growth Opportunities International Growth Across Segments Leverage Super Brands DEWALT on the Jobsite Black & Decker Around the Home Cordless Superior Technology Potential Expansion to New Categories HHI: Commercial, HPP Fastening: Aerospace, Industrial Both Organic and Acquisition

23 Summary Winning Through Core Strengths Better Balanced Than Ever Record Free Cash Flow Demonstrated Stewardship of Capital Weathering Slowdown Effectively Pursuing Many Growth Opportunities Building a Better Company Well-Positioned For Success