Most companies find it difficult to keep up significant year-over-year growth in revenue, especially without turning to acquisitions. It is just a fact of how percentages work that after growing 20 percent one year, reaching the same level of growth requires a heavier lift the next year.
Brookfield-based Milwaukee Tool, however, is not like most companies. In 2016, the company grew revenue 19.8 percent and followed it up with 21.7 percent growth in 2017. Results reported this week by its Hong Kong-based parent company Techtronic Industries Co. showed a 28.2 percent increase in sales in 2018.
TTI does not break out revenue figures for Milwaukee Tool, but the brand crossed $2 billion in revenue for the first time in 2015. Three subsequent years of significant growth would give the company sales of more than $3.7 billion last year.
“We still are just getting started here,” Joe Galli Jr., chief executive officer of TTI, told investors. He said Milwaukee Tool would see 20 percent growth for at least the next three years.
That pace would put revenue near $6.5 billion by the end of 2021.
The iconic brand has emphasized battery technology and new product development for professional power and hand tool users to fuel its growth in recent years.
“Right now we’re in a land grab,” Galli said. “We are literally in an environment where there’s so much opportunity with our competitive set. We think there’s massive opportunity to expand geographically and we are going to seize that opportunity and continue to invest.”
Milwaukee Tool has already been investing in its Brookfield campus, undertaking two major office expansions in recent years as part of a $67 million investment. The company has also pledged to create nearly 950 jobs in addition to retaining more than 800.
The growth has not been limited to sales either. TTI has increased its gross profit margin by at least 40 basis points every year since 2009. Gross margin has gone from 30.8 percent in 2008 to 37.2 percent last year. Galli said Milwaukee Tool has been a major part of driving that growth and the company expects to see 50 basis point improvements each of the next three years.
Galli stressed that the growth of Milwaukee Tool is not tied directly to the housing cycle, emphasizing the company’s new product development for users in transportation maintenance, power utilities, electrical, mechanical, HVAC and plumbing.
“Here’s why you need to stop worrying about the housing cycle please and stop reading our competitors’ press releases,” he said. “We are transforming the global market for power tools and equipment from traditional power sources to revolutionary lithium powered cordless.”
Galli said that in 2008 the average core tradesman had around four cordless tools and three batteries, relying instead on corded tools. Last year, the average tradesman had 39 tools and 30 batteries.
