INVESTOR PRESENTATION Version 08.09.2021 Cautionary Statements
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INVESTOR PRESENTATION Version 08.09.2021 Cautionary Statements This presentation contains “forward-looking statements,” that is, statements that address future, not past events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as: “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. These statements are based on assumptions of future events that may not prove accurate. They are also based on our current plans and strategy and such plans and strategy could change in the future. Actual results may differ materially from those projected or implied in any forward-looking statements. Please refer to our most recent SEC filings, including our 2020 Annual Report on Form 10-K, subsequently filed Quarterly reports on Form 10-Q, as well as our other filings with the SEC, for detailed information regarding factors that could cause or contribute to actual results differing materially from those expressed or implied in such forward-looking statements. We do not undertake to update our forward-looking statements. This presentation does not constitute an offer to sell or a solicitation of an offer to buy any securities of Stanley Black & Decker, Inc. (the "Company"). If the Company were to conduct an offering of securities in the future, it would be made under an effective registration statement, and a prospectus relating to that offering could be obtained from the underwriters of that offering or from the Company. Refer to the Appendix included herein for non-GAAP and other financial measures. INVESTOR PRESENTATION 2 Contents Contacts Dennis Lange SWK Overview Pages 4 – 28 Vice President, Investor Relations 860-827-3833 2021 Outlook Pages 29 – 31 [email protected] Tools & Storage Pages 32 – 46 Cort Kaufman Director, Investor Relations Industrial Pages 47 – 55 860-515-2741 [email protected] Security Pages 56 – 61 Christina Francis Director, Investor Relations SBD Operating Model Pages 62 – 70 (860) 438-3470 [email protected] Appendix Pages 71 – 77 Tandra Hall Sr. Financial Analyst, Investor Relations (410) 832-8993 [email protected] 1000 Stanley Drive New Britain, CT 06053 [email protected] INVESTOR PRESENTATION 3 A Global Leader With World Class Franchises STANLEY BLACK & DECKER (NYSE: SWK) 2020 Revenue: $14.5B Market Cap: $32B Cash Dividend Yield: 1.6% Dividend Paid Consecutively For 145 Years; Increased For Past 54 Consecutive Years Industrial $2.3B • STANLEY Engineered Fastening • Infrastructure Industrial Tools & Tools & Storage $10.3B Security Storage • Power Tools & Equipment • Hand Tools, Accessories & Storage Security $1.9B • Commercial Electronic Security • Automatic Doors Vision Known For Innovation Continued Top Quartile Performance Social Responsibility Market Cap & Dividend Yield As Of Market Close 07/30/2021 $197.05 Dividend Yield Based On 3Q’21 Annualized Dividend & Stock Price As Of Market Close 07/30/2021 INVESTOR PRESENTATION 4 Expanding Geographic Reach Stanley Black & Decker Segments Tools & Storage Industrial Security 9% 2% 5% 11% 9% 12% 12% 16% 19% 16% 40% 18% 53% 54% 61% 63% U.S. Europe Emerging Markets ROW Diversified Globally With Approximately 60% Of Our Revenues Generated In The U.S. INVESTOR PRESENTATION 5 Strategic & Financial Objectives Strategic Framework Our Long-Term Financial Goals Continue Organic Growth Momentum Revenue • ~4-6% Organic • Utilize SBD Operating Model As A Catalyst Growth • ~10-12% Total • Mix Into Higher Growth, Higher Margin Businesses • Increase SBD Weighting Of Emerging Markets • ~10-12% EPS Growth* Be Selective And Operate In Markets Where Financial • FCF ≥ Net Income Performance • Brand Is Meaningful • CFROI In 12-15% Range • Innovation Drives Definable & Sustainable Value Proposition • Global Cost Leadership Is Achievable Pursue Acquisitive Growth Dividend • Continued Growth • Build Upon Global Tools Platform • Expand Industrial Platform (Engineered Fastening | Infrastructure) Credit • Strong Investment Grade • Commercial Electronic Security Acquisitions [Pending Transformation] Rating Key Themes: Sustain Above-Market Organic Growth And Margin Expansion *10-12% Total EPS Growth (7-9% Organically) Excluding Acquisition Related Charges INVESTOR PRESENTATION 6 Global Franchises – Long Term Value Drivers A Company That Has Built Well Established, Global Franchises… Business Value Drivers • Brands • Innovation In Tools & • Global Scale The Tool Company #1 Storage » Power & Hand Tools To Own » Construction, DIY, Auto Repair & Industrial » Developed & Developing Market Presence Potential Margin In Commercial • High Value Added Solutions • Recurring Revenue Model Accretion #2 Electronic • CapEx Light Vs. Resi Model Opportunity Longer Security • Global Footprint Term • Highly Engineered, Value Added Innovative A Global Leader Solutions High Profitability; In Engineered Fastening • Recurring Revenue Model GDP + Growth • Global Scale …With Asset Efficiency And Customer Level Execution Aided By The SBD Operating Model INVESTOR PRESENTATION 7 Stanley Black & Decker Value Creation Model Strong, Innovation-Driven Businesses World Class Brands In Diverse, Global Markets Attractive Growth Platforms Powered By: Scalable, Defensible Franchises Long Term Financial Objectives • 4-6% Organic Growth • 10-12% Total Revenue Growth Differentiable Through Innovation • 10-12% EPS Growth* • Outsized, Capital-Efficient Organic Growth • FCF ≥ Net Income • Attractive, Expandable OM Rate • 10+ Working Capital Turns • Outstanding FCF Conversion • CFROI In 12-15% Range Investor-Friendly Capital Allocation ~1/2 Return Cash To ~1/2 M&A Shareholders World Class Branded Franchises With Sustainable Strategic Characteristics That Create Exceptional Shareholder Value *10-12% Total EPS Growth (7-9% Organically) Excluding Acquisition Related Charges INVESTOR PRESENTATION 8 Substantial Long Term Value Creation We Continue To Perform In The Same League As Elite Industrials 1005% Peer Group* 756% Average 353% S&P 500 Data From: Dec 2000 – July 2021 Note: Data As Of 07/31/2021; Median Excludes Stanley Black & Decker And S&P 500 TSR Defined As : Total Share Price Appreciation / (Depreciation) Including Any Dividends Reinvested In The Company / Index INVESTOR PRESENTATION 9 *Peer Group Includes DHR, DOV, EMR, GE, HON, IR, ITW, MMM, SPXC, TXT And RTX Our Evolving Operating Model INVESTOR PRESENTATION 10 Acquisitive Growth Active Pipeline For Potential Acquisition Targets… Acquisition Criteria Acquisitive Growth Areas • Strategic Fit Tool Industry Consolidation • Organizational Capacity • Financial Evaluation Industrial Segment Expansion » Organic Growth & Profitability Consistent With Company Targets » Accretive Year 1 Excluding Charges Lawn & Garden » Achieve 12-15% CFROI, Consistent With Our Long-Term Financial Objectives Commercial Electronic Security Pending Transformation » Value Creation Opportunity > Share Repurchase …Acquisitions Remain An Important Element Of Growth Formula INVESTOR PRESENTATION 11 Global Brand Power A Powerful Portfolio Of Well Managed Brands INVESTOR PRESENTATION 12 Global Brand Support 626 Million 45 Million 1 Million + 24 Billion Global Fan/Followers Reach Website Visits Brand Mentions/Month Global Media Impressions STANLEY, CRAFTSMAN, B+D, DEWALT And IRWIN Measured In Major Countries For Target Users INVESTOR PRESENTATION 13 Our Approach To ESG Grounded By Stakeholder Capitalism Rooted In Our Purpose - For Those Who Make The World™ ALIGNED TO WORLD ECONOMIC FORUM FRAMEWORK ENVIRONMENTAL SOCIAL GOVERNANCE Planet People Prosperity Governance Protecting The Planet Furthering Fostering Purpose & Progress Progress At Work Communities Against Key ESG Milestones OUR 2030 CSR STRATEGY EMPOWER INNOVATE CREATE A MORE MAKERS WITH PURPOSE SUSTAINABLE WORLD Enable 10 million creators and makers Innovate our products to enhance the lives of 500 Positively impact the environment to thrive in a changing world million people and improve environmental impacts through our operations INVESTOR PRESENTATION 14 Leading The Charge ESG FOCUS AREAS Climate Change DEI & Talent Development G o v e r n a n c e Go Beyond Carbon Neutral By 2030 Racial Equity 10 Point Plan Diverse & Inclusive Board Zero Waste to Landfill Gender Parity Shareholder Rights Sustainable Water Use Skillset Development Risk Management & Oversight PRODUCT & STRATEGY EXAMPLES Electrification // Circular Design // Product Lifecycle ADOPTED LEADING STANDARDS HIGHLY RECOGNIZED FOR ESG ENVIRONMENT REPUTATION DE&I CDP FORBES FORTUNE 3rd Consecutive Year—CDP A List for America’s Best Large Employers Climate Change & Water Security World’s Most Admired Companies America’s Best Employers for Women FAST COMPANY America’s Best Companies for Diversity DOW JONES SUSTAINABILITY INDEX #50 Best Workplace for Innovators 3rd Consecutive Year—World Index CORPORATE EQUALITY INDEX 10th Consecutive Year—North America Index Best Places to Work for LGBTQ Equality INVESTOR PRESENTATION 15 ESG: Measuring Our Progress Sustainability Performance Global 2030 CSR Strategy Exceeded All Five-Year Sustainability Goals Set In 2015 Link: 2020 Online ESG Report Elevating & Executing On Our Commitment To Corporate Social Responsibility INVESTOR PRESENTATION 16 Corporate Governance Board Composition And Governance Features Board Refreshment And Tenure ✓ Independent Chairman Average Tenure Of 6.8 Years ✓ 5 New Non-Management