STANLEY SECURITY. December 13 th, 2011

Transcription

1 STANLEY SECURITY SOLUTIONS December 13 th, 2011

2 A Diversified Global Leader Stanley Black & Decker (NYSE: SWK) 2011E Revenue: ~$10.5B* Market Cap: ~$11.3B Cash Dividend Yield: 2.2% - Increased for 44 years - Paid consecutively for 134 years Security ~$2.7B Mechanical Access Security Convergent Security Solutions Stanley Healthcare Solutions Security Industrial CDIY CDIY ~$5B Power Tools & Accessories Hand Tools & Storage Pfister Industrial ~$2.6B Industrial & Automotive Repair Engineered Fastening Infrastructure Solutions Diversified End Market Exposures *Assumes 12.5% Growth From $9.3B 2010 PF Base Does Not Include A FY Of Niscayah 2

3 Stanley Security Solutions Convergent Security Differentiation Is Service Excellence And Best In Class Monitoring eservices Vital For Capturing Data Mechanical Security Direct Go-To-Market Strategy Key Differentiator High Margin with Defensible Market Position Common Attributes Strong Cash Flow Generation High Recurring/Repeating Revenues Large, Commercial Diversified Customer Base Most Comprehensive Solutions Fragmented Competition Sustainable Model for Globalization 3

4 Mechanical Access Solutions (MAS) 4

5 Mechanical Access Solutions Overview Three Platforms Providing Comprehensive Products and Services 6% Global Share 25% Share In Americas Residential Hardware Commercial Hardware Automatic Doors Strong Financial Performance $650M $300M $250M ~$1.2B In Revenue Mid-Teens Operating Margin Strong Cash Flow Generation 8,000 Employees Largest Direct Field Force In The Industry Strong Competitive Differentiation 13 Factories / 9 DCs Only Direct To End-User Provider 92 Locations Globally Strong Brands Reputation For Quality Strong Cash Flow Generation Intense Service Focus Drives Product High Margin Business With Strong Expansion Opportunities 5

6 Mechanical Market Overview Mechanical Security Market Global Market ~$22B Down ~5% (Normalized +2-3%) Highly Profitable Industry with Excellent Cash Flow Large Installed Based to Mine Fragmented Competition Favorable Customer CTQs: Breadth of Line Fill Rates Service Capability Brand / Reasonable Price $22B Served Market Auto Doors 18% Residential Hardware 57% Commercial Hardware 25% Brand Strength Breadth of Line Direct Sales/ Service Global Penetration Market Position X #1 X #2 X #3 X X #4 X X #5 Competitive Overview Top 5 Providers ~48% Share X X #5 Defensible Market Position With Opportunity To Grow International Footprint 6

7 North American Mechanical Channel Coverage Channels to Stanle ey Market Brand s Home Centers Builder s HW Distributors Architectural HW Distrib. & Direct SHANAHAN'S Building Specialties Type of Co onstruction <$1B Market Remodel/DIY $3B Market $4 Market Heavy Commercial/ Light Commercial & Industrial Residential Construction Highly Complementary with Strong Coverage Everywhere Mechanical Security Products are Sold 7

8 MAS Competitive Advantages Trusted And Respected Brands Most Comprehensive Provider In The Industry Large Installed Base To Mine Only Direct, National Provider In The Industry Intense Service Focus Drives Product Selection New Product Innovation And Introduction Processes Brand, Product And Channel Marketing Expertise Dedicated And Experienced Leadership Team Established 1946 And a Family of Strong Brands Established in 1923 Established 1946 Established in 1857 Established in 1939 Established in 1901 Established 1904 Established in

9 Convergent Security Solutions (CSS) 9

10 CSS Overview FINANCIAL / BUSINESS PROFILE Revenue $1.7B 2011E PF with Niscayah ~350 Offices Globally & 24 Monitoring Centers KEY COMPETITIVE DIFFERENTIATORS Reputation For Service Excellence Ability To Provide Real-Time Data/Video Services To Customer Base Unique To The Industry 2011E PF Revenue Mix 2% 47% 51% 2011E PF Geographic Mix Security Product Install / Service Recurring Europe 47% 49% Asia/ANZ 4% N.America 10

11 5 Customer Touch Points The Five Customer Touchpoints Stanley Is Committed To Operational Excellence, Unparalleled Customer Service And Partnering With Our Customers To Meet Their Security, Safety And Business Needs. We Believe That Successful Business Relationships Are Built Upon Successful Everyday Interactions In The Five Customer Touchpoints: Single Source Solution On-time And Compliant Installation Projects In-standard d Service Response se By Stanley Technicians Customer Industry-leading Network Of ProtectionNet Customer Service Centers STANLEY CSS Successful Apprehensions Wide Array Of Billing Services Overall Customer Satisfaction 11

12 Niscayah Business Overview Description Solutions By Technology Commercial Security Solutions Provider Specializing In: Access Video Intrusion Fire Alarm Video Surveillance, Access Control, Intrusion Alarms & Control Surveillance Protection ti Systems Fire Alarm Systems Design & Installation Services, Maintenance And Repair, Monitoring Packaged Solutions Using Products From Range Of Suppliers Strong Presence With Financial And Retail Customers Three Business Areas Business Description Customers Implementation (Installation) Analysis, Design And Installation Of Security Systems Hardware And Software Sales Systems Management (Maintenance) Services Include Preventive Measures, Fault Localization And Repairs Of Security Systems System Operations (Monitoring) Operation And Monitoring Of Security Systems 12 Security Centers In Europe And US 12

13 Successful Integration Track Record Historical Security Acquisition OM% Improvement Post- SWK Integration ~2,500 Bps By Y/E 2011: 21 Months Post-Acquisition (Mid-Teens OM%) FACOM: 350 Bps OM% Improvement In Pan-European Integration Of IAR Business In ,800 Bps (In 15 Months) 1,300 Bps 1,300 Bps 1,100 Bps 300 Bps 400 Bps HSM Sonitrol X-Mark Best Access GdP ADT France ADT France: Case Study European Acquisitions SWK Acquired Struggling Operation In France In March 2010 Improved Operating Margins By 1,800 Bps In First 15 Months Total 2,500 Bps Improvement Expected In Less Than 2 Years Post-Acquisition Proven SWK Security Integration Process Yields 1,000 Bps Margin Improvement On Average 13

14 A Premier Commercial Security Franchise With Global Scale Niscayah 2011E Sales By Segment Monitoring Niscayah 2011E Sales By Geography Other France RoW Rest Of Europe U.S. 48% RMR Installation Maintenance Nordic Region Pro Forma Total Stanley Convergent Security Solutions: ~$1.7B RoW Nordic Region France North America Rest Of Europe 48% Recurring Revenue Mix Of $1.7B Pro Forma CSS Global Platform 14

15 Excellent Fit With CSS Growth Strategy Complementary Services & End Users Creates A Leading Security Solutions Provider To Government, Financial, Healthcare And Retailer End Markets On Two Continents Enhances Penetration In Fire Monitoring And Into Financial Verticals Complementary Geographic Fit With Established Strong Positions In U.S., Nordic, France, Spain & UK Extends Our Powerful Business Model Gain A Large Commercial Base, High Service Content, And Recurring Revenues Adds ~120K Subscribers be s In New Regions Creates An Expanded Direct Sales And Service Provider Across Multiple Regions Adds 15 Additional Countries To CSS Platform Adds Multilingual Monitoring Capabilities Expands Platform Through Segment Share Growth, New Penetration Across Europe; CSS Brings A Competitive/Attractive Product With eservices Offering Solid Platform For Consolidation Provides New Non-North American Consolidation Opportunities For RMR Growth Increases Scale To Allow Pursuit of Broader Convergence And Technology Strategies 15

16 Summary Security Remains Attractive Industry Although Organic Growth Has Been Adversely Affected By Construction Downturn The Past Few Years Capital Expenditures In Primary Verticals Improving While Commercial Constructions Continues To Be Sluggish Stanley Black And Decker Organized And Positioned To Capitalize On Security Growth Opportunities Convergent Security SSS Strategic Objectives Mechanical Security Focus On Underdeveloped Verticals To Enhance Core Business Model And Drive Recurring Revenue And Repeat Business Product Development And Commercialization To Underserved Segments Leveraging Brand Strength Increase Share Of Wallet With Installed Base Globally Continue Acquisition Strategy And Integration Success Supporting Global Growth And Product Expansion Strategy