Slides
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November 4, 2025 Third Quarter 2025 Overview
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2 Participants 3Q 2025 Earnings Call Michael Wherley Vice President, Investor Relations Pat Hallinan Executive Vice President, CFO Chris Nelson President & Chief Executive Officer
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3 Cautionary Statement This Presentation and related discussions contain “forward -looking statements” within the meaning of Section 27A of the Securiti es Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All such statements other than statements of historical fact are “forward -looking statements” for purposes of federal and state securities laws, inc luding, but not limited to: any statements of goals, targets, priorities, projections, or guidance, of earnings, EPS, plannin g assumptions or scenarios regarding earnings, EPS, income, revenue, profit, margins, cash flow, costs of sales, sales, growth, profitability, demand volume, market share, credit ratings, SG&A, shareholder value or other financial items; any statements of the plans, strategies and objectives of management for future operations including expectations around the Company’s ongoing transformation and future operational strategies following completion of the transformation, run -rate cost savings, or debt reduction; any statements concerning market share gain, proposed new products, services, developments, investments, or i nnovation and brand prioritization strategies; any statements regarding future economic conditions or performance; any statements concerning future dividends or share repurchases; any statements and assumptions regarding geopolitical events , possible tariff and tariff impact projections (including the amount, timing and materiality thereof) and related mitigation plans including obtaining price increases and supply chain adjustments, and related mitigation timing; any stateme nts of beliefs, plans, intentions or expectations; and any assumptions underlying any of the foregoing; and any such statements may include, among others, the words “may,” “will,” “estimate,” “intend,” “could,” “project,” “plan,” “continue,” “believe,” “expect,” “anticipate”, “run-rate”, “annualized”, “forecast”, “commit”, “design”, “positioned or positioning”, “guidance ” “looking forward”, “future”, “vision”, “strategy”, “long-term”, “on-track” or any other similar words. You are cautioned not to rely on these forward-looking statements, which are based on the Company’s current expectations and assumptions of future events. Each of the forward-looking statements involves risks and uncertainties that could cause actual results to differ materi ally from those expressed or implied in these forward-looking statements. Factors that might cause actual results, performance and achievements to differ materially from estimates or projections contained in forward -looking statements include, but are not limited to: the Company’s continued success with its ongoing transformation, complexity reduction, cost containment, and supply chain improvements; changes in macroeconomic conditions, including interest rates and geopolitical ev ents; changes in trade-related regulations and restrictions such as import and export controls, tariffs, raw material and rare earth related clearances or controls and other monetary and non -monetary trade regulations or barriers, and the Company’s ability to predict the timing, extent, materiality, impact or disruptiveness to the Company of such regulations, restrictions, tariffs and import/export controls or clearances; the Company’s ability to successfully mitigate or respond to such macroeconomic, geopolitical, or trade, tariff and rare earth policy changes including, obtaining price increases from customers, repositions of supply chain, reprioritizing resources all within estimated time frames and costs and successful go vernment engagement efforts; the Company successfully developing, marketing and achieving sales from new products and services and the continued acceptance of current products and services as well as successful execution of, and realization of expected benefits from, the Company’s brand prioritization and investment strategy, including potential licensing initiatives and related restructuring efforts, and its ability to estimate and mitigate negative consequences from the same including, bu t not limited to, reduced ability to generate sales, and those factors set forth in the Company’s corresponding Press Release and Form 8-K and its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and its other filings with the SEC. Forward-looking statements in this Presentation and related discussions speak only as of the date hereof, and forward -looking statements in documents that are incorporated by reference herein speak only as of the date of those documents. The Company u ndertakes no obligation or intention to update or revise any forward -looking statements, whether because of future events or circumstances, new information or otherwise, except as required by law. Additionally, Non-GAAP Financial Measures Are Referenced In This Presentation And Related Discussions. For Applicable Reconcilia tions To The Related GAAP Financial Measure And Additional Information, As Applicable, Please Refer To The Appendix Of These Materials And The Corresponding Press Release Which Are Available On Our Website Under The “Investors” Heading. 3Q 2025 Earnings Call
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4 Building A World Class, Branded Industrial Company 3Q 2025 Earnings Call Focused On Organic Growth*, Margin Expansion, Cash Generation & Shareholder Return; *Non-GAAP Financial Measures. Refer To Appendix For Additional Information On Revenue, Gross Margin And Other GAAP And Non-GAAP Financial Measures Delivering Long-Term Value By Solving Our End Users’ Most Pressing And Complex Challenges Driving Operational Excellence Activating Brands With Purpose Accelerating Innovation Competing To Win In Industries Positioned For Long-Term Growth Committed To Achieving 35% AGM* And A Solid Investment Grade Balance Sheet
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5 3Q 2025 Key Messages Solid Third Quarter Execution Amid Dynamic Operating Environment With Continued Growth In DEWALT And Year Over Year Gross Margin Expansion Focused On Creating Significant Value From Our Powerful Brands And Businesses • Revenues Of $3.8 Billion, In Line With The Prior Year As Price (+5%) And Currency (+1%) Were Offset By Anticipated Lower Volume (-6%) • Adjusted Gross Margin* Was 31.6%, Up 110 Basis Points Versus Prior Year Driven By The Benefits From Price And The Supply Chain Transformation • EPS Was $0.34; Adjusted EPS* Was $1.43 Inclusive Of A Tax Rate Benefit (Full Year Tax Rate* Unchanged) • Net Cash From Operating Activities Was $221 Million; Free Cash Flow* Was $155 Million • Management’s Planning Assumption For 2025 EPS Is Revised To $2.55 - $2.70 On A GAAP Basis (From $3.45 (+/-$0.10)) And The Company Is Planning For 2025 Adjusted EPS* Of ~$4.55 (From ~$4.65) • The Company Is Targeting Annual Free Cash Flow* To Approximate $600 Million, Unchanged From Last Quarter Pre-Tax Run-Rate Cost Savings $120M $1.9B Third Quarter Program-To-Date $3.8 Billion Total Revenue 31.6% Adj. Gross Margin* $1.43 Adjusted EPS* 3Q’25 Key Financials (1%) Organic Revenue* *Non-GAAP Financial Measures. Refer To Appendix For Additional Information On Revenue, Gross Margin, EPS, Cash From Operating Activities, And Other GAAP And Non-GAAP Financial Measures 3Q 2025 Earnings Call
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6 3Q 2025 Segment Overview Delivered Growth In DEWALT, Automotive And Aerospace Fasteners *Non-GAAP Financial Measures. Refer To Appendix For Additional Information On Revenue, Segment Margin, And Other GAAP And Non-GAAP Financial Measures 3Q 2025 Earnings Call Tools & Outdoor Revenue Engineered Fastening 3Q’25 Adj. Segment Margin Rate* 12.8% | Down VPY But Expanded 200 Basis Points Sequentially Versus 2Q’25 As The Automotive Market Improved Adjusted Segment Margin* Revenue Adjusted Segment Margin* $M $M $3,263 $3,256 3Q'24 3Q'25 Flat 11.1% 12.0% 3Q'24 3Q'25 3Q’25 Adj. Segment Margin Rate* 12.0% | Up VPY Due To Price, Supply Chain Transformation Efficiencies, Partially Offset By Tariffs, Lower Volume, And Inflation $488 $501 3Q'24 3Q'25 +3% 13.9% 12.8% 3Q'24 3Q'25 • 3Q Organic Revenue* (-2%) With (-2%) PT, Flat HTAS, (-3%) OPG • (-2%) N.A., Flat Europe, (-1%) Rest Of World • Price (+5%), Currency (+1%) And Product Line Transfer (+1%), Were Offset By Volume (-7%) • Expected Tariff Related Promotional Reductions And A Soft Consumer Backdrop Were Partially Offset By Continued DEWALT Growth • 3Q Organic Revenue* +5% • Volume (+4%), Price (+1%), And Currency (+1%), Were Partially Offset By Product Line Transfer (-3%) • Supported By The Stronger Than Anticipated Automotive Market And Continued Strength In Aerospace, Partially Offset By Lower Industrial Volume
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7 Adjusted Gross Margin Trajectory Demonstrating Positive Momentum 3Q 2025 Earnings Call Providing Greater Flexibility For Reinvestment And Strengthening The Company’s Competitive Position Unlocking Profitability With Execution Agility In Support Of Our Brands And End Users *Non-GAAP Financial Measures. Refer To Appendix For Additional Information On Gross Margin And Other GAAP And Non-GAAP Financial Measures Global Cost Reduction Program To Deliver Targeted ResultsAdjusted Gross Margin* Expansion Year Over Year Pre-Tax Run-Rate Cost Savings $120M Third Quarter Program-To-Date $1.9B Adjusted Gross Margin* 30.5% 31.6% 3Q'24 3Q'25 Long-Term Target: 35%+ Adjusted Gross Margins* • 3Q’25 Expansion Versus Prior Year Due To Benefits From Our Pricing Strategies And Supply Chain Transformation Efficiencies, Partially Offset By Tariffs, Lower Volume, And Inflation • Planning For ~33% Adjusted Gross Margin* In 4Q With Continued Year-Over-Year Expansion • Executing With Discipline To Deliver Sustainable Productivity Gains And Cost Leadership • Driving Annual Productivity Beyond The Transformation To Fuel Investments *
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8 2025 Planning Assumptions 3Q 2025 Earnings Call*Non-GAAP Financial Measures. Refer To Appendix For Additional Information On EPS, Cash From Operating Activities, Revenue, Earnings And Other GAAP And Non-GAAP Financial Measures **Forecasted Total Revenue Reflects The Impact Of Forecasted Foreign Currency Assuming The End Of September 2025 Rates And Excludes The Impact Of Acquisitions And Divestitures Not Yet Consummated Other Planning Assumptions Pre-Tax Non-GAAP Adjustments: ~$370M-$400M, ~45% Being Non-Cash, Driven By 3Q Trade Name Impairment Charges And Write Down Of Certain Minority Investments Associated With Legacy Corporate Ventures Other Net*: ~$270M Net Interest Expense: ~$320M Depreciation*: ~$365M | Intangible Amortization: ~$150M Capex: ~$0.3B Adjusted Tax Rate*: ~15% | Shares: ~152M 4Q’25 Adj. EPS*: ~$1.29 EPS Total Company Total Revenue** VPY Flat To (-1%) Currency & Divestitures VPY Net Neutral Organic Revenue* Flat To (-1%) Adjusted EBITDA Margin* Positive YoY Earnings Per Share $2.55 - $2.70 Adjusted EPS* ~$4.55 Free Cash Flow* ~$600M Segments Tools & Outdoor Organic Revenue* ~(-1%) Adj. Segment Margin* Positive YoY Engineered Fastening Organic Revenue* +Low Single Digits Adj. Segment Margin* Declining YoY
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9 Stronger And More Focused Enterprise We’re Accelerating Our Growth Culture With Operational Excellence At Its Core 3Q 2025 Earnings Call More Focused Company Delivering Strong Execution Compelling Shareholder Value Creation Opportunity Building a Growth Culture
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10 Q&A
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11 Liquidity And Free Cash Flow Reconciliation 3Q 2025 Earnings Call Financial Flexibility In A Challenging And Dynamic Environment Liquidity Key Points • Target: Maintain Solid Investment Grade Credit Ratings • $3.5B In Credit Facilities Backed By A Well Capitalized, Diversified Bank Group Which Supports The Commercial Paper Program • Upcoming Debt Maturity 1Q 2026: ~$500M Liquidity Sources As Of 3Q’25 3Q’25 Free Cash Flow Debt Reduction Remains A Top Priority Cash On Hand $0.3B Addl. Commercial Paper Capacity ($3.5B Max) $2.1B Total Additional Liquidity $2.4B Third Quarter Cash Generation Supports Ongoing Capital Allocation Priorities Focused On Shareholder Dividends And Further Debt Reduction $M Net Earnings 91$ 51$ (40)$ 99$ 244$ 145$ Deprec / Amort 155 130 (25) 450 389 (61) Working Capital (61) (39) 22 (23) (380) (357) Other 101 79 (22) (98) (237) (139) Cash From Operating Activities 286 221 (65) 428 16 (412) CapEx (87) (66) 21 (240) (211) 29 Free Cash Flow 199$ 155$ (44)$ 188$ (195)$ (383)$ 2024 Year-to-DateThird Quarter V$ 20252024 V$2025
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12 Reconciliation Of GAAP To Non-GAAP Measures 3Q 2025 Earnings Call
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13 Reconciliation Of GAAP To Non-GAAP Segment Profit 3Q 2025 Earnings Call
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14 Reconciliation Of GAAP To Non-GAAP Measures 3Q 2025 Earnings Call
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15 EBITDA Reconciliation 3Q 2025 Earnings Call
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16 Summary of Non-GAAP Adjustments 3Q 2025 Earnings Call
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17 Non-GAAP Financial Measures 3Q 2025 Earnings Call The Company has provided a discussion of its results both inclusive and exclusive of certain gains and charges. The results and measures, including gross profit, SG&A, Other, net, Income taxes, and segment profit, on a basis excluding certain gains and charges, free cash flow, organic revenue and organic growth are Non-GAAP financial measures. Organic revenue or organic sales is defined as the difference between total current and prior year sales less the impact of companies acquired and divested in the past twelve months, foreign currency fluctuations, and transfers of product lines between segments. Organic revenue growth, organic sales growth or organic growth is organic revenue or organic sales divided by prior year sales. Gross profit is defined as sales less cost of sales. Gross margin is gross profit as a percent of sales. Segment profit is defined as sales less cost of sales and selling, general and administrative (“SG&A”) expenses (aside from corporate overhead expense). Segment margin is segment profit as a percent of sales. EBITDA is earnings before interest, taxes, depreciation and amortization. EBITDA margin is EBITDA as a percent of sales. Gross profit, gross margin, SG&A, segment profit, segment margin, earnings, EBITDA and EBITDA margin are adjusted for certain gains and charges, such as supply chain transformation costs, asset impairments, voluntary retirement program costs, environmental charges, acquisition and divestiture-related items, restructuring, and other adjusting items. Income taxes attributable to Non-GAAP adjustments are determined by calculating income taxes on pre-tax earnings, both inclusive and exclusive of Non-GAAP adjustments, taking into consideration the nature of the Non-GAAP adjustments and the applicable statutory income tax rates. Management uses these metrics as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. Adjusted earnings per share or adjusted EPS, is diluted GAAP EPS excluding certain gains and charges. Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners and is useful information for investors. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items. Free cash flow conversion is defined as free cash flow divided by net income. The Non-GAAP statement of operations and business segment information is reconciled to GAAP on pages 13 through 18 of the press release. The Company considers the use of the Non-GAAP financial measures above relevant to aid analysis and understanding of the Company’s results, business trends and outlook measures aside from the material impact of certain gains and charges and ensures appropriate comparability to operating results of prior periods. The Company provides expectations for the non-GAAP financial measures of full-year 2025 adjusted EPS, presented on a basis excluding certain gains and charges, as well as 2025 organic revenue growth. Forecasted full-year 2025 adjusted EPS and 2025 organic revenue growth are reconciled to forecasted full-year 2025 GAAP EPS and total 2025 revenue growth, respectively, on slide 8. Consistent with past methodology, the forecasted full-year 2025 GAAP EPS excludes the impacts of potential acquisitions and divestitures, future regulatory changes or strategic shifts that could impact the Company's contingent liabilities or intangible assets, respectively, potential future cost actions in response to external factors that have not yet occurred, and any other items not specifically referenced on slide 8. Forecasted 2025 organic revenue growth assumes the impact of foreign currency using historical rates and excludes the impacts of potential acquisitions and divestitures. In addition to 2025 adjusted EPS and 2025 organic revenue growth, the Company also provides additional expectations for forward-looking non-GAAP financial measures, presented on a basis excluding certain gains and charges, as well as forecasted free cash flow (slide 8). A reconciliation of forecasted free cash flow to its most directly comparable GAAP estimate is not available without unreasonable effort due to high variability and difficulty in predicting items that impact cash flow from operations, which could be material to the Company’s results in accordance with U.S. GAAP. A reconciliation of the differences between other forward-looking non-GAAP measures and the most directly comparable GAAP measures is not available without unreasonable effort due to the inherent difficulty of forecasting the timing and/or amount of various items that have not yet occurred, including the high variability and low visibility with respect to certain gains or charges that would generally be excluded from non-GAAP financial measures and which could be material to the Company’s results in accordance with U.S. GAAP. Additionally, estimating such GAAP measures and providing a meaningful reconciliation consistent with the Company’s accounting policies for future periods requires a level of precision that is unavailable for these future periods and cannot be accomplished without unreasonable effort. The Company believes such reconciliations would also imply a degree of precision that is inappropriate for these forward- looking measures.