2016 Year in Review


It is an honor and a privilege to have been named Stanley Black & Decker’s Chief Executive Officer as of last August. I am both excited and humbled by the opportunity to lead this Company, recognizing the true depth of the responsibility of being just the 13th leader in our long and storied history.

I have dedicated the last 18 years of my life to serving this organization, first as Chief Financial Officer for a decade, and most recently as Chief Operating Officer for more than seven years. From a $2 billion market cap company with a strong brand and a modest portfolio of hand tools, hinges, hydraulic tools, entry doors and automatic doors, we have evolved into a $19 billion large cap, diversified industrial with iconic brands, the world’s largest tools and storage company, the world’s second largest commercial electronic security services provider and a leading provider of engineered fastening solutions. And importantly, we have generated total shareholder return (TSR) exceeding 400% over this period, well above the S&P 500 and a number of elite industrials.

In 2018, we will be celebrating Stanley Black & Decker’s 175th anniversary. Fewer than 50 U.S. publicly traded companies have achieved this critical milestone, and it is a testament to the Company’s openness and willingness to adapt to changing circumstances over the years. It is clear that in today’s dynamic world, that same resilience and agility is a prerequisite to success and, increasingly, corporate longevity.

We have built a winning organization that insists upon high performance in growth, profitability, asset efficiency and cash flow. At the same time, we have demonstrated a commitment to grow and develop our people, provide for their health and safety, and foster an inclusive and respectful work environment. We conduct ourselves responsibly, with integrity and sustainability at the heart of everything we do. We are bold and agile, yet thoughtful and disciplined. This approach is what has driven our history, our results and our evolution through the years, and will be what continues to make us successful in the future.

President & Chief Executive Officer

Our Purpose

We are for those who make the world

Our Focus Going Forward

Innovation with Impact

Digital Industrial Leadership

Top-Quartile Performance in Action

Social Responsibility – A Force for Good


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 = 20%+)

Be Selective and
Operate in Markets Where:

  • Brand Is Meaningful
  • Value Proposition Is Definable and Sustainable Through Innovation
  • Global Cost Leadership Is Achievable

Acquisitive Growth

  • Build upon Global Tools Platform
  • Expand Industrial Platform / Diversify Engineered Fastening and Infrastructure
  • Consolidate Commercial Electronic Security Industry


In 2016, the Stanley Black & Decker team once again distinguished itself with strong progress against our long-term strategic and financial objectives. It was a year characterized by breakthrough and core innovation, transformation and financial success. The Company performed well in terms of organic growth, margin expansion and free cash flow generation. As always, our entire organization remained focused on generating value for our shareholders, delivering 10% TSR in 2016. We also continued to build upon our growth culture, driven by innovation, digital and commercial excellence, a passion to exceed our customers’ expectations every day, and elevating our already strong commitment to social responsibility.

Our 2016 financial results included top-quartile organic growth of 4%, along with record earnings per share, operating margin rate and working capital turns. In addition, 2016 highlights included:

  • Launching the revolutionary DEWALT FlexVolt battery system, which contributed approximately $100 million of revenues in just four months
  • Announcing the $1.95 billion acquisition of Newell Tools in October 2016—our first major acquisition since 2013
  • Completing our Security portfolio assessment in December 2016, resulting in our decision to retain the commercial electronic and automatic doors portions of the Security business and sell the majority of our Mechanical Security businesses for $725 million

These meaningful successes in 2016, in addition to our agreement to purchase the Craftsman brand from Sears Holdings announced in January 2017, provide for a very strong setup for 2017.

Solid organic growth was again a hallmark of our results, with solid increases in several businesses. Tools & Storage generated an impressive 7% organic growth rate, with each Tools & Storage region demonstrating increases, including 7% in North America, 8% in Europe and 5% in the Emerging Markets.

This growth was driven by the successful launch of FlexVolt and other innovative new products, investments in e-commerce and other commercial excellence initiatives, as well as the continued success of our mid-price-point product launches in the Emerging Markets, which have now expanded beyond corded to include cordless power tools.

Importantly, our Security business posted 1% organic growth, its first year of organic growth since 2012, driven by improved field execution and commercial wins. Industrial declined organically reflecting pressured industrial end markets and challenges with one major electronics customer.

Our operating margin rate rose to 14.4%, up 20 basis points over 2015. We demonstrated the ability to deliver meaningful operating leverage through disciplined price management, robust productivity and cost control in the face of significant foreign currency headwinds, while concurrently investing in growth. Tools & Storage reported its third consecutive year of record operating margin rate, ending the year up 60 basis points at 17.0%. Security’s margin increased 140 basis points to 12.8%, reflecting improved field productivity, SG&A cost actions and benefits from a more disciplined assessment of new commercial opportunities.

We maintained our balanced capital allocation approach, increasing Stanley Black & Decker’s annual dividend for the 49th consecutive year, opportunistically repurchasing approximately $350 million of shares and announcing the acquisition of Newell Tools and the sale of the majority of our Mechanical Security businesses. Our cash flow return on investment (CFROI) improved significantly, as we increased this important shareholder return metric by 320 basis points to 16.1%.

We believe that our industry-leading global franchises, world-class brands and powerful SFS 2.0 operating system position the Company for sustainable above-market organic growth, margin expansion and free cash flow generation, and offer the potential to create continued exceptional shareholder value over the long term.

An Era of Transformation 2000–2016


Acquisitions Reflecting
$6B Total Investment


Compounded Annual
Growth in Revenue


Shareholder Return









free cash



free cash flow















market cap



market cap


Small cap leader in hand tools and doors


Large cap global industrial

#1 in Tools and Storage
#2 in Commercial Electronic Security
Global leader in Engineered Fastening

22/22 VISION

We have set a bold vision for the future, continuing on our path to become a great diversified industrial and doubling the size of the Company to $22 billion in revenue by 2022. Our plan contemplates generating 4%–6% annual organic revenue growth and $5 billion to $9 billion of revenue from acquisitions over this time horizon across our business segments, while aspiring to deliver top-quartile total shareholder return.

One of the most important roles of the CEO is to ensure the organization’s long-term sustainability and success—no small challenge in today’s environment of socio-political instability, rapid digital disruption and changing customer expectations. To evolve and stay ahead of the curve and reach our aggressive performance goals, we must essentially disrupt ourselves before others do it to us.

To successfully operate in this environment and add richness and texture to our vision of $22 billion by 2022, we are focused on three key strategic themes:

Becoming Recognized as One of the World’s Most Innovative Companies

In this environment of rapid innovation and digital disruption, nurturing a culture of innovation and digital transformation is paramount. Our enhanced operating system, SFS 2.0, is at the heart of this objective.

Taking a playbook from leading innovators, we are supplementing our traditional efforts and focus on core innovation with separate Breakthrough Innovation and “Special Forces” teams around the organization. This is enabling us to innovate forward-looking, future products without the traditional day-to-day pressures historically faced by teams working in a results-driven, performance-oriented culture. To help facilitate this work, we have set up “maker” spaces in various locations and established relationships with leading universities and venture companies.

DEWALT FlexVolt is the first result of our Breakthrough Innovation initiative. FlexVolt represents the most extensive global new product launch in DEWALT’s history and it is changing the professional jobsite by eliminating the need for corded tools. Powered by a unique battery system, products as powerful as a table saw, for example, no longer require cords, which is also an essential safety improvement. Feedback from our retail partners and end users has been extremely positive, and we significantly surpassed our initial sales expectations in 2016. See more on FlexVolt in our Building On Innovation and Digital Transformation section.

To rapidly enable a digital transformation across the Company we formed a Digital Accelerator team in Atlanta during 2015, which will double to about 100 employees by the end of this year. This team is comprised of world-class technology talent from leading universities and companies, with expertise in Internet of Things, cloud, advanced analytics, social media, mobile applications, search engine optimization, and digital products, among others. The team is infusing digital capabilities into our products, processes and business models across the Company. They are also exploring future technologies that can help drive business growth and protect our franchises from disruption. DIYZ is a great example of the type of work that is being produced by the Accelerator. It is a mobile app for your smartphone that helps DIYers tackle their home improvement projects. With step-by-step instructions, DIY videos, tool suggestions, and the option to video chat with a pro advisor, it makes home improvement easy. Introduced just nine months ago, DIYZ has already been downloaded over 450,000 times and was featured in the Apple Store “New Apps We Love” section.

Included as part of our digital initiative is a strong commitment to embrace Industry 4.0. We recently selected two of our manufacturing facilities to become “lighthouse” factories where we will incorporate digital capabilities as well as other elements of Industry 4.0 to build truly “Smart Factories.” These facilities will incorporate the latest in robotics, manufacturing execution systems (MES), new machines, 3-D printing, innovation labs and “maker” spaces to drive the next wave of flexibility, cost efficiency and quality improvement.

We are on a path to become known as one of the world’s great innovators, fostering a culture of innovation and an open-minded, collaborative approach within and between our various business units, infusing the organization with digital talent and staying ahead of disruptive threats.

Continuing to Deliver Top-Quartile Performance

There is little disagreement that in this high volatility, low growth world, day-to-day execution and focus on performance are more important than ever. For the foreseeable future, we are expecting an intrinsic global economic growth rate of only about 2%–3% per year. In this environment, SFS 2.0, Stanley Black & Decker’s operating system, differentiates our performance. The enablers of SFS 2.0—Core SFS, Functional Transformation, Breakthrough Innovation, Commercial Excellence and Digital Excellence—are the tenets that will allow us to achieve our revenue growth and profitability targets.

Stanley Black & Decker Value Creation Model

World-Class Brands
Attractive Growth Platforms
Scalable, Defensible Franchises
Differentiable Through Innovation

Strong, Innovation-Driven Businesses In Diverse, Global Markets

  • Outsized, Capital-Efficient Organic Growth
  • Attractive, Expandable Operating Margin Rate
  • Outstanding Free Cash Flow Conversion

Investor-Friendly Capital Allocation




Return Cash To Shareholders

Long-Term Financial Objectives

  • 4%–6% Organic Growth
  • 10%–12% Total Revenue Growth
  • 10%–12% EPS Growth
    (Including Acquisitions)
  • Free Cash Flow ≥ Net Income
  • 10+ Working Capital Turns

World-Class Branded Franchises With Sustainable Strategic Characteristics That Create Exceptional Shareholder Value

Value Creation Model

Our well-established value creation model produces exceptional shareholder value. It starts with our world-class brands, attractive growth platforms, and scalable and defensible franchises. Importantly, it leverages the power of our SFS 2.0 operating system to generate outsized organic growth, operating margin rate expansion and strong free cash flow conversion—unleashing the potential for continued strong total shareholder returns.

We also employ an investor-friendly capital allocation model. Our historical, long-term approach, which we intend to continue in the future, is to return approximately 50% of our capital to shareholders in the form of dividends and/or opportunistic share repurchases, with the remaining 50% earmarked for acquisitions to further strengthen our business portfolio and fuel growth.

M&A Opportunities

In early 2017, we were pleased to announce an agreement to purchase the Craftsman brand from Sears Holdings. The transaction will give Stanley Black & Decker the rights to develop, manufacture and sell Craftsman-branded products in non-Sears retail, industrial and online sales channels across the U.S. and in other countries.

Craftsman is a legendary, American brand with tremendous consumer awareness built on a legacy of producing quality products at a great value and standing behind them. The agreement represents a significant opportunity for Stanley Black & Decker to invest in the brand and product innovation and grow the market by increasing consumer availability of Craftsman products in previously under-penetrated channels. Today, only roughly 10% of Craftsman sales occur outside Sears’ retail channels. This is an investment in organic growth: we are expecting the Craftsman brand to add one-half to one full point of organic growth annually to our overall organic growth rate, beginning in year two, following the purchase of the brand.

To accommodate the future growth of the Craftsman brand, we intend to expand our manufacturing footprint in the U.S., consistent with our “make where we sell” strategy. Manufacturing in the U.S. is nothing new to Stanley Black & Decker. We have made products in the U.S. since our founding almost 175 years ago, and our current U.S. manufacturing footprint still includes our tape measure plant in New Britain, Connecticut, where our global headquarters is also located. In fact, we have increased U.S. tools manufacturing jobs by 40% over the last three years, and plan to expand from close to 40% localized manufacturing today to more than 50% over the next three years.

While manufacturing in the U.S. is not always an obvious choice to some, it makes good business sense for us. We know our end users generally like to buy products made in their own countries, especially professionals in the trades. Our make where we sell strategy improves the supply chain, mitigates currency exposure and lessens harmful environmental impact.

We already manufacture many products cost effectively in the U.S. and, in some cases, we have been able to bring manufacturing back to the U.S. at a lower cost than producing overseas. Industry 4.0 has become a critical element of our localization strategy, to significantly improve the effectiveness and efficiency of our manufacturing plants.

Newell Tools represented our first major acquisition since 2013. This transaction will enhance the offerings and broaden the reach of our Tools & Storage business. The $1.95 billion acquisition, with over $700 million of revenues, includes the iconic Lenox brand and the strong Irwin brand, as well as an array of high performing, high quality industrial cutting, hand tool and power tool accessories—opening up new avenues of growth. Newell Tools provides both a source of inorganic growth in year one and an organic boost thereafter—an acquisition consistent with our strategy of driving above-market growth in a low growth world.

The sale of the majority of our Mechanical Security businesses allows us to sharpen our focus on the more strategically attractive commercial electronic security and automatic doors businesses, and to deploy capital in a more accretive and growth-oriented manner.

Our primary M&A focus remains on strengthening the core—executing tools acquisitions, pursuing bolt-ons to expand our Industrial businesses, and further consolidating the commercial electronic security industry—as well as pursuing longer-term adjacency opportunities that possess a sound industrial logic and fit with our value creation model.





Blick &
Frisco Bay














Black &




de Sécurité

(formerly ADT France)















Tong Lung


GQ Tools




Mechanical Security






Elevating Our Commitment to Corporate Social Responsibility

Particularly in today’s volatile geopolitical environment, a commitment to corporate social responsibility is not only the right thing to do, but has become a necessity for attracting and retaining top talent and customers and maintaining permission to operate in many markets.

Our people create products, tools and solutions for those who make the world, and we take that accountability seriously. We want to make sure that we are operating in a way that generates a sustainable impact, and research has proven that purpose-driven companies—those that operate with a mission beyond profits—deliver better results and have longer-term sustainable enterprises.

Stanley Black & Decker has made a considerable commitment in this space already. Our sustainability plan, ECOSMART,™ extends across our business from product design and manufacturing to marketing, selling and transportation. We are focused on substantially decreasing our environmental impacts by an additional 20% over our 2015 baseline by 2020, through reducing our operational energy and water consumption, waste generation and carbon emissions. We are consistently recognized for our sustainability progress, for six consecutive years by the Dow Jones Sustainability Index and four consecutive years on CDP’s Climate “A” List.

Over the next several years, we will become a much more purpose-driven organization powered by Purpose-Driven Performance which will allow us to continue our historical top-quartile results while finding ways to match who we are as a company with social needs that can be fulfilled by our products, our resources and our people.

The Stanley Black & Decker team is excited about each of these strategic themes and fully embraces their importance for our long-term success.

Welcoming Sir George Buckley As Chairman

We are honored to have Sir George Buckley, former Chairman, CEO and President of 3M as our new Chairman. Dr. Buckley joined our Board in 2010, having been a director of Black & Decker since 2006. Before leading 3M, he was Chairman and CEO of Brunswick Corporation. He is also Chairman of Smiths Group plc and a Director of Hitachi, Ltd. and PepsiCo, Inc. 

Dr. Buckley started as an electrician apprentice at a legacy Stanley Works Sheffield, UK plant near his childhood home. The company (where his mother and sister also worked) sponsored his undergraduate degree program. This close personal connection to and passion for Stanley Black & Decker, with his breadth and depth of experience leading multi-national industrial companies, make him a perfect fit for this role. With George as Chairman we look to continue to create long-term shareholder value and build on our foundation as an innovative, high performing and human-centered industrial company.

In Closing

In closing, I would like to thank John Lundgren for his extraordinary contributions to Stanley Black & Decker. There is no doubt that he is leaving the Company in an exponentially better place than when he joined the organization. Over his tenure, John and I had a highly successful and rewarding business partnership, and we enjoyed many successful years working together. I also want to thank our entire Board for orchestrating a seamless CEO succession process which has served the Company well during this time of transition.

John set the tone for our high performing, growth-oriented company culture that is based on a company-first mentality, a winning spirit and a sense of humility. He provided unwavering support for the leadership team, and me personally, and will be recognized for the legacy he leaves behind—leading this Company through its amazing transformational journey:

  • From $2 billion to $11 billion in revenues
  • $2 billion to $18 billion in market cap
  • Over 10x working capital turns
  • And importantly, the execution of one of the great industrial mergers of our time which created Stanley Black & Decker

2017 is certain to be an exciting year, and Stanley Black & Decker is well positioned. We have the plans in place to continue executing on our vision of being one of the great industrial companies of our time, driving innovation and a digital transformation across the organization, focusing on top-quartile performance, and elevating our commitment to corporate social responsibility.


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