Good morning, welcome. I'm Dennis Lange, the VP of Investor Relations. Thank you for taking the time to attend today's event or listen via the webcast. Before we get too far along, we are going to be making some forward-looking statements today. Please review the cautionary in the documents that you have in front of you or online. I want to thank many of our shareholders and analysts that provided feedback and questions that helped shape today's agenda. We hope that you find the content helpful and informative, most importantly, walk away as energized about the prospects for this company as we are. To quickly cover the agenda, we'll start with Jim Loree, who will walk you through the vision and the actions we are taking to position the company for success.
Jim will be followed by several of our leaders that will provide a richer understanding of the growth catalysts and the positioning of our Tools and Storage, and Engineered Fastening businesses for profitable growth. You will hear about some of the exciting transformational activities that are occurring across the company. We will address security, as well as how we are advancing our vision for the company, as you can see behind me, performance, innovation, corporate social responsibility. This includes our growing innovation ecosystem and many examples of how we are applying digital capabilities to support growth and margin expansion. Don will, of course, translate all of what you hear today what it means for the numbers. He'll address the trade and tariff topic at that time. As you know, the quantification of the various scenarios is a pretty well-traveled story at this point for the company.
In addition, he's going to share an overview of our financial framework, our capital allocation plans, our long-term financial objectives, this will be both a look back and a look ahead at how we're doing against our financial vision. We'll have two formal Q&A sessions for today. Please hold all tariff-related questions for the second session after Don has a chance to give his remarks. We also have time at lunch to interact with today's presenters. With that, I hope you enjoy the day. We'll play a quick video as our President and CEO, Jim Loree, takes the stage. Thank you.
Good morning. Thank you for joining us. Welcome to our 2019 Investor Day. It's great to be with you here in New York. It's great to see so many familiar faces some new ones. We truly appreciate your interest in our story. When I joined Stanley 20 years ago as CFO, our market cap was about $2 billion. Today, it's $20 billion. Our revenues were about $2.5 billion, now they're over $14 billion. Our stock was a little over $20 a share, now it's in the $130 range. It's been quite a journey of growth and value creation, as you'll see today, there's more runway ahead. In fact, we're gaining momentum. I look forward to framing up our story for you this morning. It's relatively straightforward.
Great company, outstanding growth track record, a great growth pipeline which has never been stronger, contemporary culture with purpose, and a pervasive commitment to innovation and social responsibility. Margins under stress by external forces at the moment, but we have a game plan to resume margin accretion. With outstanding growth and rebounding margins, an excellent opportunity to create value. That is Stanley Black & Decker on May 16th, 2019. Somewhat overshadowing all that in the short term is the U.S.-China trade conflict. Since the inception of tariffs last year, our stock has increased its volatility based on the latest trade-related news. Don Allan will cover the financial impact of various trade tariff scenarios later this morning. However, you should know that we are fully prepared with responsive plans and actions to minimize any potential negative impact on 2019 and 2020 financial results, regardless of whatever trade outcome develops.
This management team will not allow tariffs or trade policy to spoil the great story of future growth, execution, and value creation that we have put together for 2019 and beyond. Let me tell you about the leadership team that we've assembled to share that story and make it real for you in every way possible. It's a diverse, talented team of executives who together and individually are bold and agile, yet thoughtful and disciplined. It's a nice mix of longtime executives from legacy Stanley and legacy Black & Decker, with some great new additions from external hires as well. You can see those with asterisks on them are legacy Black & Decker, and the folks who don't have the asterisks are from legacy Stanley. We don't really even use the term legacy anymore. You can't tell the difference.
I thought it was interesting just to point out the mix, the amalgam of talent on the leadership team. Then we have some new ones that have the dotted ovals around them. Folks like Sudhi Bangalore and Mark Maybury, and Janet Link. I just want to give you a sense of their background so you get a feel for the level of talent that we're able to bring into the company now. Sudhi was the global head of Industry 4.0 for Wipro, an amazing company. He also had operations leadership roles focused mainly on technology at Siemens, Danaher, and Rockwell Automation. Mark Maybury had advanced technology leadership roles spanning 27 years at the MITRE Corporation. At one point, he was also the chief scientist of the U.S. Air Force. Janet came to us from JCPenney, where she was general counsel.
Previously, before that, she was a partner at Latham & Watkins. She did her undergrad work at Yale and received her JD from Columbia Law School. Just a sense for the quality of the talent that we're bringing into the company, and I think you'll enjoy seeing them in action too, in their presentations. Moving to the program, the first half of our program will focus on growth catalysts that we have developed, as well as review our larger businesses. During the latter half, we'll focus on how we are poised to expand margins across the company and how we are transforming Security as we conduct our strategic review. In addition, we'll cover some of the exciting cultural topics and finish it up with commentary on the overall financial outlook.
Here's some key messages that we'll convey today, and I hope you'll take away from the session. First, we have an array of catalysts positioning the company for growth with long-term margin expansion. This includes a host of revenue-generating initiatives and a major transformative program focused on margins, which Steve Broderick will articulate. We have a strong and effective value creation model powered by SFS 2.0 that underpins our differentiated performance in organic revenue growth, EPS growth, and asset efficiency. We're building a unique and powerful innovation ecosystem, enabling a robust pipeline of new innovations that will sustain organic growth, as well as provide a broad and deep window into the technological forces that are shaping and reshaping business models across our industries. Finally, all of this is supported by and accelerated by our corporate culture, which is rapidly evolving to position us to win in the 2020s.
We are a company which has thrived for 176 years now, and we are poised to do so for the long term. When I assumed the role of CEO in 2016, my challenge was to determine how to take the company to the next level of fitness and readiness, make it sustainable, and be a leader in the new age of industrial disruption. I believe that a new form of leadership and corporate citizenship is necessary to navigate through these times. In 2017, I laid out our vision for the company, and we remain focused on that today. To continue to deliver top-quartile financial performance, to become known as one of the world's great innovative companies, and to elevate our commitment to corporate social responsibility.
All of this is backed by our purpose, "For those who make the world." Since the year 2000, we have delivered top-quartile shareholder return versus our peer group and well in excess of the S&P 500. This starting point corresponds with the same time that four of our most senior executives arrived at the company, including Don Allan, our CFO, Jeff Ansell, our President of the Tools and Storage business, Joe Voelker, our CHRO, and me. The peer group used for this comparison is our industrial peers, including Danaher, Dover, Emerson, GE, Honeywell, 3M, and United Technologies, among others. Over this time frame, we have outperformed some very respectable companies. If you look at shorter periods, we compare favorably as well in all but the one-year comp, which was clouded by tariffs and the trade war.
We outperformed both the peer median and the overall market, this is a testament to our strategy, our value creation model, and the performance-based culture that we've developed. Most of all, it's a testament to our people. Our value creation model is the cornerstone of how we deliver total shareholder return. We operate strong, innovation-driven businesses in diverse global markets. We strive to provide outsized, capital-efficient organic growth, an attractive, expandable operating margin rate, and strong free cash flow generation. We deploy an investor-friendly capital allocation approach that earmarks half of our excess capital for M&A and returns the other half to shareholders in the form of dividends and repurchases. This is a model that has enabled us to deliver that exceptional shareholder value over the last two decades, and we believe we can continue to do so in the future.
The Stanley Fulfillment System is our business operating system, an engine for continuous improvement, driving operational excellence and strong results across the company. SFS 2.0 brings a next-generation focus on breakthrough innovation, digital excellence, commercial excellence, functional transformation, and core SFS or supply chain-related areas, seeking step function change impact on how we perform across various dimensions. Digital excellence is at the center of it all. Importantly, SFS also provides the framework to differentiate us among industrials, all of whom are dealing with a world where the pace of change is relentlessly accelerating. Where do we go from here? We've entered a new transformational era. You've seen the signs, higher volatility, unpredictability, increasing pace of change, technology disrupting business models. Industrials are not immune to the inexorable disruptive forces. It just takes longer to disrupt them because of their physical complexity and often mission-critical hardware components.
There's more risk in today's world, but also more opportunity. We are facing into these forces with an agile and open-minded approach, which includes the important concept of disrupting ourselves before others do. The reality is, our company has never been stronger. I'll discuss five areas that I believe will continue to differentiate us. First, we have the best set of market-leading franchises and growth catalysts that I've seen in my 20 years here. We have a rapidly evolving innovation ecosystem, which is both unique and powerful. We have embraced diversity and inclusion to attract and retain the best talent, fully engage them, and benefit from the power of diverse backgrounds and thinking to drive differentiated performance.
We're elevating our commitment to corporate social responsibility, a commitment which is shared individually by each of our 61,000 people, as well as by our teams and our organization in total. Finally, we have a purpose, values, and a culture that provide a rock-solid foundation for continued success. Wow, what a great set of attributes to be excited about. However, we acknowledge that the onslaught of external headwinds that began to emerge in 2018 has caused our margins to be under attack. Stanley Black & Decker has a long history of generating consistent operating margin rate expansion. In fact, we averaged 40 basis points per year of sequential margin accretion from 2013 to 2017. Then we saw $370 million of cost inflation, tariffs, and FX suddenly materialize mid last year. This created 260 basis points of margin headwind in 2018.
Fortunately, we were able to offset all but 80 basis points of that rate decline in 2018 through price increases, cost management, and other techniques. To address these pressures and their carryover impact into 2019, we took out $250 million of cost in the fourth quarter of 2018. We also launched a new major multi-year margin expansion program enabled by harnessing new technologies. This is a unique program in the sense that it taps the capabilities enabled by new technology in a systematic way to create value across virtually all company value pools. It's made possible by tapping the large and growing digital talent pool that we have assembled over the years. In a nutshell, it involves the intensive, organized engagement of tools like AI, advanced analytics, IoT, MES systems, robotics, and others to create economic value.
Our team's excited by the potential of this program, particularly since we are so well-positioned for future revenue growth with all of the catalysts that I mentioned. Steve Broderick will review the Margin Resiliency program later this morning, and Don will dimension the impact when he talks. Let's talk about these growth catalysts, starting with Craftsman. The Craftsman rollout began in 2018 in a major home center and is now in the middle innings with great success so far. We also have an ongoing relationship with an important co-op customer, and we'll soon add coverage by bringing on a major e-commerce player. The revitalization of this iconic American brand is well underway. In fact, yesterday, we announced the construction of a new manufacturing facility in Fort Worth, Texas, to support Craftsman growth and reduce Chinese imports.
This facility, to be in production in 18 months, will be a showcase that leverages advanced manufacturing technologies to optimize productivity, quality, and sustainability. Made in the U.S.A. is a key attribute desired by Craftsman end users, and in addition, the advantages of local U.S. manufacturing at a competitive cost extend to quality levels, fill rates, lead times, cycle times, and inventory levels. It will be a shining example of the art of the possible enabled by Industry 4.0, and we're excited about the prospects of the overall Craftsman program. As previously announced, we believe this iconic brand will achieve $1 billion of revenue by 2021, six years ahead of our original expectations. You'll hear more about it from Jeff in a few minutes. FLEXVOLT and other core breakthrough innovations continue to support growth across our businesses.
Two and a half years into launch, FLEXVOLT represents the fastest new product adoption in DEWALT's history and continues to deliver strong mid-teens growth. We will continue to expand the FLEXVOLT system in the future with the ultimate goal of eliminating the needs for cords on job sites, thereby improving worker safety and efficiency. We're not stopping there. As another breakthrough innovation in power tools is being introduced to the market this year. Jeff will speak to this in more detail when he presents. We like acquisitions that create both organic and inorganic growth opportunities. In the case of LENOX and IRWIN, we moved aggressively to capture the cost and revenue synergies from these transactions. We are focused on leveraging those products across our global customer base and bringing more offerings to market, particularly in emerging markets.
We've already made significant progress in executing the total three-year revenue growth opportunity of $100 million-$150 million, but there's more to come. We recently closed on the purchase of the IES Attachments business, which almost triples the size of our infrastructure unit. We're currently in the process of integrating this leading provider of off-highway specialized attachments, and it's going very well. Additionally, we recently completed the acquisition of a 20% stake in MTD Products, a leading outdoor power equipment manufacturer. This is an exciting opportunity to increase our presence in the $20 billion lawn and garden market in a financially and operationally prudent way. Our respective teams are now working together on multiple opportunities to generate operational efficiency and revenue growth for SBD and MTD. Beginning in 2021, we have the option to acquire the remaining 80% of the business and take full ownership.
We negotiated a unique structure where we pay a low double-digit multiple for the business as it is sized today, a 5.5 times EBITDA multiple for any EBITDA growth between now and the exercise date. This has the potential to add approximately $3 billion in revenue at an all-in EBITDA multiple of what we think will be about 7-8 times, which would be an important step towards driving us towards our vision, with an excellent return on capital on that acquisition. E-commerce. Globally, e-commerce represents a key growth driver, with our 2018 online revenue at $1 billion and growing at high double-digit rates. With a strong complement of omni-channel and pure online content, our global retailers are well-positioned, and we are the industry leader in e-commerce and believe the opportunities will continue to grow in both emerging and developed markets.
In emerging markets, we continue to produce strong growth and share gains, growing at 2-3 times market rates. We're leveraging our unique business model and the strength of our brands, including STANLEY-branded mid-price point, corded and cordless power tools, and hand tool products. We've also been active in the past 2 years with regard to our acquisition strategy, as I said, and going forward, we will deploy a 2-part approach. First, we'll continue to strengthen our franchises with additional tool industry consolidation, and we'll also be seeking industrial bolt-on acquisitions. The second path is selectively pursuing portfolio-enhancing opportunities. Acquisition targets in this category must meet key criteria such as being compatible with our portfolio needs, having sound industrial logic, and fitting with our financial criteria. The MTD partnership is a great example of that.
With MTD, we gain the opportunity to enter a $20 billion market with what will be a $3 billion company that benefits from our scale, our channel access, our Craftsman brand, and our electrification technology. MTD has one of the best manufacturing platforms in the industry, some strong brands such as Cub Cadet and Troy-Bilt, as well as an excellent management team. We remain committed to our vision to be a diversified industrial focused on innovation-led growth and supplemented by acquisitions. Assuming the conversion of MTD, we see a path to grow our revenues in excess of $20 billion by 2022, which is consistent with our vision and will be further supplemented as the right acquisitions present themselves in future years. I do want to emphasize that 2222 is an aspirational revenue goal to rally the team and to think boldly while operating with discipline.
Although it sounds big and bold, it actually represents an 11% CAGR from the 2016 base, which is quite consistent with the nearly 10% revenue CAGR that we achieved from 2000 to 2018. In that spirit, we continue to target 4%-6% organic growth annually and 10%-12% total revenue growth, inclusive of acquisitions, and consistent with our long-term financial objectives. We believe that the portfolio composition will evolve to tools and storage making up about 50%-60%, lawn and garden and industrial each representing 15%-20%, and security, if retained, at about 10%. Of course, that is all subject to change given all the variables. However, consider it directional for now. We will continue to review and assess our current portfolio and future additions and potential divestitures with a focus on continuing to create long-term shareholder value.
I'll move to the security transformation, which is now in full execution mode. Some of you may remember it was a year ago, almost to the day when at the EPG conference, I mentioned that we had put commercial electronic security on a two -year clock for strategic review. The security business has many positive characteristics. It operates in a growing and fragmented global market. Security has an attractive recurring revenue model. It's relatively stable during recessionary periods, and it's CapEx-light, which results in strong free cash flow generation. Finally, the business offers a window into the digital revolution and capabilities that we do leverage across our enterprise.
Over the last decade or so, the business evolved from a high-growth, high-teens margin portfolio segment to a less attractive financial profile as the industry commoditized and became more competitive. Today, the security business operates at an 11% operating margin rate with relatively flat organic growth, which is inconsistent with our long-term financial objectives. As part of our strategic review, we completely revamped our strategy, simplifying it and making it higher value-added. We also infused significant talent from outside the industry to drive new capabilities and a new growth mindset for the business. We believe the strategy is sound, and the technology-centered innovation that is being commercialized is promising. We're encouraged by the first-year progress and believe the team has the necessary skills and resources to be successful in significantly improving growth and profitability metrics as we move through 2019 and beyond.
We will continue to evaluate the progress with a mid-2020 decision target. Regardless of the outcome, we expect that this transformation will create significant value for our shareholders. Robert Raff will update you on this story later in the session. A key part of our journey is the quest to become known as one of the world's great innovative companies, leaning into the age of disruption with rapid innovation and digital transformation. In this regard, we increased the R&D expenditures again in 2018 to $276 million, a 47% increase over the previous 3-year period. To foster rapid, pervasive innovation, we are building a vast ecosystem of partners to ensure we remain aware of and open to new technological opportunities around the globe.
The ecosystem includes external resources, partnerships with academia, startups, and well-established companies, as well as internal resources that are coordinated and aligned through the office of our Chief Technology Officer, Mark Maybury. As we apply innovation and digital disruption, we look to 3 key ways to harness these advances. First, there are the innovations that we can apply to our core processes in manufacturing and the back office and other places around the company, lowering the cost of operations, this is part of what the Margin Resiliency initiative will do. Next, there is product innovation, which we continue to aggressively pursue through our focus on core and breakthrough innovation within each business unit. Finally, we are pursuing new disruptive approaches, either to push into a new market or disrupt our existing business models before our competitors and/or new entrants do.
We're already seeing tangible progress in these areas, we've dedicated time to go into more detail later this morning. Last year, we launched our social responsibility strategy in alignment with our 22/22 Vision and purpose. Our 2030 program is built upon the Sustainable Development Goals, the United Nations blueprint to achieve a better and more sustainable future for all. Our strategy is based on three bold and transformative 2030 goals that Janet Link will share with you in more detail. Empower makers, enable 10 million creators and makers to thrive in a changing world. Innovate with purpose, innovate our products to enhance the lives of 500 million people and improve environmental impacts. Create a more sustainable world, positively impact the environment through our operations.
The way we see it, social responsibility extends to our efforts to develop and create a diverse and inclusive culture that welcomes and supports all employees and one that is aligned with our purpose. In this regard, we spent some time over the last two years working to excavate our company's purpose and aligning it with our values. Purpose sits at the intersection of who we are and why we exist, it gives us an opportunity to define our broader role in society. In conjunction with our purpose launch, we took the opportunity to revisit our company's values. We expect our people to be bold and agile, yet thoughtful and disciplined, as I've mentioned.
In our updated set of values, inspirational ones such as courage, innovation, and inclusivity stand side by side with the bedrock ones such as performance, integrity, and accountability, which in today's world are as important as ever. Research demonstrates that purpose-driven companies simply perform better than the others. At Stanley Black & Decker, high performance is important. In addition to being positive for our employees and our communities, for those who make the world also makes good business sense. With it, we have thrived for almost two centuries through all sorts of external disruption, dislocation, and volatility. It takes a very special company with a unique culture to do that. Powered by our purpose, values, and 22/22 Vision, we aim to enhance our culture in both evolutionary and disruptive ways to attract and retain the most innovative, purpose-driven, socially responsible talent.
We strongly believe that by promoting diversity and inclusion in the workplace, we create an attractive environment, a magnet for talent, where all employees are empowered, engaged, and motivated to do their best work. We're encouraged that we are headed in the right direction as we continue to see an energized workforce, great talent entering the organization, and have started to see multiple external recognitions of our efforts, including being named the 28th most reputable company in America on Forbes' 2019 list, among others. I do hope that after today, you share some of my team's excitement about the strength and future of this company. We are tackling the volatility of today's global environment with a common sense, workmanlike approach. We will not allow our great growth story to be overshadowed or preempted by geopolitical events.
Our vision is to be a great human-centered industrial company, one that is focused on delivering top quartile growth and profitability with a clear purpose and deep commitment to social responsibility. It's an honor to be at the helm of this great company with such a great team, a rich 176-year history, and such a bright future. Thanks for coming, and enjoy the rest of the morning.
Our next speaker is Jeff Ansell, Executive Vice President and President of Tools & Storage.
Good morning. Can you hear me out there? Good morning. I will open the day with an overview of growth amongst our flagship brands within Global Tools & Storage. We'll start with the most recent addition to the Global Tools & Storage network, Craftsman. In the just over two years we've owned the Craftsman brand, we've aligned it with partners that you see depicted here. The largest hardware distributor in the U.S., largest wholesaler in the U.S., and the largest e-commerce provider in the U.S. Those partnerships alone would take Craftsman to a larger place, more outlets, larger volume than it's ever been in history. In addition to this, Craftsman has also provided us a tremendous opportunity within the critically important and competitive home center channel in North America.
As you can see depicted here, use of that Craftsman brand has allowed us to partner with Lowe's so that we could utilize Craftsman and flank that brand with outstanding trade brands like IRWIN and LENOX, as well as augment their existing DEWALT program with exclusive 12-volt XTREME product to round out the home center exclusive programs we've built for them. Concurrent with that, we've been able to partner with The Home Depot utilizing the outstanding STANLEY and STANLEY FATMAX brands across hand tools and storage products. We've been able to continue our successful journey into FLEXVOLT, into core power tools, and now into battery-powered outdoor products. Finally augment that existing DEWALT franchise within The Home Depot with a proprietary 20-volt program called ATOMIC. I'll talk about both of those programs in a bit. You can see Craftsman has been a tremendous asset in addition to our portfolio.
When it's added to our other stable of iconic brands, it is a veritable share gain machine. Back to Craftsman. What we acquired 2 years ago looked like this. No products, no manufacturing, 2,000 outlets, and about $100 million. Some of you probably scratched your heads and said, "Why would you do this?" We said, "The future is far different and far brighter than what you see depicted here." In the next 10 years, we committed to 2,500 new products. 80% would be manufactured by us, 10,000 outlets, and $1 billion in revenues. We reiterate that commitment as we stand here today. The difference being, we're going to do that in 4 years instead of 10. If you haven't noticed, I work for a very impatient man. This is our commitment, and we're well on track.
In the last 12 months, we've launched 1,250 ground-up products under the Craftsman brand. You can see them depicted here. If it makes you tired looking at it, you should try doing it. Not just quantity. The quality of those products has been rated 4.6 out of a possible 5 stars by end users. We've gotten the quantity and the quality right to bring this tremendous asset back to life. The reason we were able to do so much so quickly is really our manufacturing footprint that you see depicted here. This manufacturing footprint allowed us to take on the Craftsman proposition, begin our journey towards 80% prime manufacturing, and repatriate many of these key categories to the U.S. that had moved to China under previous ownership.
Some examples include power tools being manufactured in North Carolina, storage products manufactured in Missouri, and tape rolls manufactured in Connecticut. In addition to those things, as Jim indicated here and he announced earlier this week, we have a ground-up manufacturing location coming in Fort Worth, Texas by the end of next year. Over 400,000 sq ft, 500 employees, and we'll make world's best mechanics tools in the U.S. once again. With the product well in hand, the next thing we had to turn our attention to was the brand. You could argue that over the last 2 decades, the only thing that sustained Craftsman's life was the brand itself. It was a wonderful brand with some rust on it. We decided that how would we make this brand stand out in a very noisy marketplace today?
We thought we would start with 2 things. We would offer the most complete system of things that work together under Craftsman, and we would target professional yet accessible products. Professional in nature, available to anyone. We then turned our attention to the brand attributes of brand purpose and character. We focused on empowering heartfelt pride. In addition to that, we looked at brand equity around quality, integrity, and innovation. Finally, we focused on the user, proud doers. With this approach to renovating and resuscitating that great brand, what happened? In a 12-month period, we evolved this brand from 10% positive sentiment with the user to 70% positive sentiment with the user. We reduced the number of negatives by 3x and increased the positives by 5x. 2 things come to mind. One is, I think we did a really good job.
2, it says that the user really wanted this to work. They really wanted to bring this brand back to life, and they helped us do it. When you bring these things together, great products, great manufacturing, great quality, quantity, and brand, what happens when you bring these things to market? Here's the initial depiction of what has happened. As we brought new Craftsman to market, we gained share in the magnitude of almost 200 basis points in mechanics tools, over 200 basis points in corded and cordless power tools and hand tools, and over 1,000 basis points of share in metal storage products. The user absolutely endorsed everything that we did to bring this brand back to life. We purchased a $100 million program. We've grown that sixfold in 2 years on our way to $1 billion.
If we did only that, I would be able to drop the mic, walk off the stage, and say we've had a really good go of it. Not enough. What else did we do concurrently with that? Well, we acquired IRWIN and LENOX, two terrific trades brands, in the same 24-hour period that we acquired Craftsman. That brand, while tremendous in its recognition, had been under siege for the prior 5 years prior to our acquisition. It had experienced low single-digit declines each and every year for those 5 years. In the 1st year of ownership, by innovation, we restored these brands to growth, growing this business at about 6%, again, in the 1st 12 months, focusing on innovation around things like vice grips and pliers, clamps, and band saw blades. That would be perhaps enough as well. Not yet.
The STANLEY brand could have been susceptible to a decline with those two things happening, Craftsman growth, IRWIN and LENOX growth. It has not. We renovated 15 categories across the STANLEY brand. We innovated via breakthrough innovation, the world's best tape. We've made tape rules for over 100 years. This is the best one we have ever manufactured. With that approach, STANLEY will achieve the highest, the biggest growth, the biggest size in its 176-year history this year. Finally, if that weren't enough, the DEWALT brand, where breakthrough innovation starts and ends. In this brand, we brought to life something called FLEXVOLT that we have depicted on stage here, and Jim referenced. The desire of our approach in FLEXVOLT was this, to make job sites cordless, to deliver output in cordless that had never been delivered before.
We developed what was called a FLEXVOLT 20/60 program, where these products would work with our 20-volt system but also could be used at 60 volts for higher power. In the 1st three years, a little less than three years, in the market with FLEXVOLT, we've grown this to over $300 million. Here's the critical thing. It is by far and away the pros' number 1 choice, far and away the number 1 power option for a cordless professional. We have now achieved in FLEXVOLT power outputs that are 3 times greater than an average professional cordless product and higher than any corded product ever manufactured. That's fantastic, right? That would be enough. We looked at it and said, okay, if we've captured the best possible option for the user at the pro end, the high power output, what other frustrations would they have?
It comes down to power and weight, the combination of power and weight. What we did is put a team together to focus on bringing to life the best power-to-weight ratio product in the history of cordless. We have done just that. Our next breakthrough innovation that Jim referenced that is launching as we speak is exactly what I described, the world's best power-to-weight ratio product. What we did is we focused on several things, motors, cells, transmission, software, everything that makes up a cordless product to make the world's strongest, smallest package. Our launch of 20-volt ATOMIC and 12-volt XTREME product will be the highest power-to-weight ratio products ever manufactured by anyone.
They are launching as we speak. If you think about that, we've now captured the smallest, most powerful footprint, the highest power output, and the rest of our 20-volt products fill in the gap in between, making our cordless system the biggest, best, and most defensible. In addition to that, we've innovated in DEWALT in compressors, pneumatics, storage products, hand tools, et cetera. The thing that's probably most impressive is when we acquired the wonderful DEWALT brand almost 10 years ago now, it was the number one power tool brand in the world at $1 billion. In the eight years that have passed since then, we've grown that to the world's largest tool brand at almost $5 billion. With that as a backdrop, I would say that our best days remain in front of us. We will continue to exploit opportunities for share gain in Craftsman.
We are at the leading edge of making our products where we sell those products to give the user absolutely the best possible option. We will expand into new channels and categories. Innovation will be our obsession. We will do these things by bringing to life the world's most foremost arsenal of brands. We stand here proud but never satisfied as the world's largest, fastest-growing, most innovative, most efficient, most profitable, and most global power tool company. Thank you.
Our next speaker is Allison Nicolaidis, President of Lawn and Garden and Chief Marketing Officer for Tools and Storage.
Good morning. It's my pleasure to speak to you today about our investment in MTD. I think we're going to start with a little bit about the collaboration in a moment. First, an overview of MTD. Coming through 2018, they are a $2.4 billion company, mid-single-digit operating margins, primarily selling inside of North America to consumers and prosumer end users with a growing professional business. The categories in which they compete: Lawnmowers, push mowers, riding lawnmowers, zero-turn mowers. They also sell snow throwers, and they have a handheld gas business, things like string trimmers, blowers, things of that nature. As you can see, there's no shortage of competition on the right-hand side of the slide. It is a very well-stocked, competitive landscape. However, Stanley Black & Decker and MTD, individually as well as combined, do a wonderful job addressing this competitive set.
MTD, primarily with Cub Cadet and Troy-Bilt, Stanley Black & Decker with the Black & Decker brand, more recently DEWALt, of course, Craftsman. I want to stop on Craftsman for a moment and follow up on what Jeff just told us about. When we purchased the Craftsman brand, many looked at that purchase and said, "Well, logically, Craftsman is a brand that's all about the automotive end user, therefore, the majority of that revenue, you would be led to think could be about things like sockets and wrenches, products you'd find in an automotive space." However, more than 40% of Craftsman's revenue at the time we bought that brand was in the Lawn and Garden category.
That brand has a tremendous legacy in the yard and in the garden. We will continue to drive that legacy ahead, both Stanley Black & Decker manufacturing Craftsman, as well as in our partnership with MTD. The market opportunity, Jim talked about over $20 billion. This is why we really love having MTD as an investment and as a partner. Today, Stanley Black & Decker addresses the side of the slide that you see called electric lawn care, $2 billion is what we can address. The combination of Stanley Black & Decker and MTD, of course, opens that up dramatically, 10x to a north of $20 billion opportunity, because we add all of the products that MTD markets today, as well as new categories like pressure washers. MTD also has a very nice parts and service business with great profitability.
We really like the size of this market opportunity. Why MTD? We enjoy a nice list of very complementary capabilities between our two organizations. MTD, of course, brings engineering expertise in gas products, gas engines, and large format Lawn and Garden products. They bring the manufacturing expertise to make those products. They also have acquisitions that they have made in the robotics and autonomy space that we're very interested in collaborating with them on. We believe it is part of the future of Lawn and Garden. Certainly the two companies are coming together at this point with our engineering teams to explore how we bring that to life in a very meaningful way at the right value for the market, which does not exist today. Stanley Black & Decker brings a proven operational model that we believe can benefit MTD.
Engineering for electrification to make large format products cordless in a way that, again, has the performance as well as the value proposition needed to create that category in a much larger fashion than it exists today. North American customer synergies are exceptional, and from a global perspective, Stanley Black & Decker operates with a larger international footprint, which customer to customer, we feel there are some great introductions that can occur, and certainly some excellent expansion on the back of our relationship. The partnership construct looks like this. As Jim said, 2021, July is the first call point for the option. Between now and that time, here's how we're going to work together. There is a team at the MTD side, as well as a team at the Stanley Black & Decker side. I lead it for Stanley Black & Decker.
There are a team of executives, as well as folks throughout our outdoor organizations that are collaborating on how we're going to bring the work streams that you see on this slide to life. The top three boxes there are very much commercially focused. The bottom three, of course, very much focused in the area of operations. In addition to that, we have two board seats at MTD. I occupy one of those. Our leader for M&A, who ultimately would help bring the deal to life in the event that we exercise that option out in 2021, is also there with me. We are both at the level of where everything is happening on the day-to-day with the two companies working together, also at the upper level with MTD's management team as they guide the organization to health.
Some detail about the conversations and the work that's going on. We're very much engaged in handheld, riders, parts business, everything that MTD currently has in their portfolio, and how we take that forward through the brand funnel and really create product lines that are exciting and have tremendous opportunity for organic growth. Opening price point, mid-price point, and high-price point products are all in play. Ultimately, the goal is for our teams to look at the product lines, the brands, and the commercial universe in which we serve and get to a place where we can serve all seasons, we can serve all end users, prosumer, consumer, and professional, and ultimately, we can handle nearly any application that lawn and garden can throw at us with our combined product lines. Additional focus initiatives outside of the nuts and bolts of making products.
On the left, technology and innovation. As I said earlier, we are very much engaged in what's happening in the autonomy space, and we'll continue to work on forwarding the robotics business with MTD. We have our battery teams that have a great legacy and experience, as well as a very nice supply base on the Stanley Black & Decker side, working together with MTD's engineering staff on electrification of riders and other large equipment. We will also do some things that are simpler, but a tremendous benefit to the end user in the feature space. Battery start. If anyone has ever started a lawnmower or a snow thrower and pulled the cord a zillion times, it's not a super fun experience. We can bring that forward with Stanley Black & Decker's batteries in MTD's products.
We can create the user experience that takes the cord out, and you walk up and press the button like you do in a modern automobile, and the engine comes on. In addition, QUICKWIND, if you've ever wound your own string trimmer, it's also not the most fun experience. QUICKWIND is a massively simple version of how to get your string wind wound up so you can get on with taking care of your lawn. Those are things that maybe exist just on the Stanley Black & Decker side today that can now be pervasive across both product lines and both companies. Cost reduction. No doubt, there's a lot going on in the product and commercial space, but inside of the four walls of MTD, Stanley Black & Decker and MTD are very hard at work together.
Best practices like design to value, complexity management, and should-cost analysis have been underway since the beginning of this year. We're making great progress. On the manufacturing front, certainly looking at footprint, relative to MTD, they have a tremendous amount of capability. They have a lot of plants. We think there are great manufacturing synergies, and places where MTD can continue to manufacture for Stanley Black & Decker. Starting later this year, we will have a mower in their Tupelo, Mississippi, facility. We will also have a blower that's going into their Nogales, Mexico, facility. Very quickly we got out of the gate and started to leverage their manufacturing footprint and their capability here in North America to further make where we sell, which, of course, is a Stanley Black & Decker Global Tools & Storage goal. Supply chain logistics and procurement.
Over 250 contracts in play where Stanley Black & Decker and MTD are at the table and really looking at best cost, best suppliers, best ability to bring value and profitability to MTD's P&L so that ultimately it can become a part of Stanley Black & Decker's thriving portfolio. The from two for us, $2.4 billion, mid-single digit margin, 20% ownership. If we do what I described, and we will, we will be $3 billion, double digit operating margin with upside to both organic growth and profitability that is significant into the future of these two companies as they come together. That partnership and that technology will enable Stanley Black & Decker to address that 10x $20 billion outdoor lawn and garden market.
We will do so in addition to bringing technology and partnership for world-class end user solutions with electrification, autonomy, and design efficiency shared by both organizations, and ultimately operational excellence from things like SFS, Industry 4.0, manufacturing optimization, make where we sell will set us up for margin expansion, feed the customer, and organic growth, put us in a great spot for Stanley Black & Decker to have a tremendous lawn and garden business in our future. Thank you very much.
Our next speaker is Jaime Ramirez, Senior Vice President and President, Global Emerging Markets.
Good morning. I'm very pleased to talk to you about our global emerging market business, what we call GEM. In GEM, we cover four regions of the world: Latin America; Asia, that includes Northeast Asia, China, Southeast Asia, and India; Russia and the CIS countries; Middle East, Turkey, and Africa, what we call META. In 2018, this business delivered almost $1.5 billion of revenue for the company, and we grew our business organically in the last three years, two times GDP, as Jim mentioned in his presentation. As you can see on this slide, we've been gaining market share in all the regions with a solid number 1 market share position in Latin America, number 3 in Asia and India, and number 4 in the CIS countries, Russia and META.
From the business perspective, in power tools, our market share is in the high teens, and hand tools, accessories, and accessories in the mid-single digits across all the markets. We see a substantial penetration opportunity across all the markets as part of the success we've been having so far. How are we doing that? By building a digital ecosystem to evolve our business, to evolve the way we do business with our clear vision to grow our business through an innovative end user and customer approach with renewed commitments to social responsibility. This ecosystem is powered by SFS 2.0 and brings three key pillars. Number 1, data, digital, and technology to offer the best customer experience and uncover new ways to monetize. The end user to create that connectivity, to deliver the best end user experience, and to generate demand, extremely critical for us in emerging markets.
Our customers, to create value for our customers, to offer operational efficiencies and margin excellence. Let me talk a little bit more about the strategic growth drivers of this ecosystem. Number 1 is business transformation. We want to be a data and technology and data and digital driven organization to make better decisions. Number 2, we're working on developing our omni-channel approach. We see this as the present and the future of the business. Number 2, our focus on the end user. We want to deliver the best end-to-end user experience across all the emerging markets, and want to have the right brand positioning and develop the right products for the users. Third, commercial excellence. We want to have, and we're having the best commercial execution across all the markets. We're working on a strategic pricing. Why is the strategic pricing so important for us in emerging markets?
We have to deal with a lot of currency volatility across the majority of our markets. E-commerce with a solid omni-channel strategy. We're leading the global marketplaces. Global marketplaces outside the U.S. are very important for the e-commerce business. I want to resource this initiative for exponential growth. Last but not least, accelerate localization. We want to be closer to the markets, closer to the customers, and closer to the end users. We have very good commercial execution and to make where we sell. We do all this as a market portfolio, combining all the different countries. In some countries, we have great revenue opportunities, in other countries, we have great margin opportunities, so we try to maximize those two. Because of the volatility and the uncertainty we have to deal with this in these regions, we have to do this with agility, resilience, and common sense.
Let me talk a little bit more about the strategic growth drivers. Business transformation. At the center of the business transformation, we have the end users. We want to be connected to the end user, we want to do micro-segmentation. Today, we're connected to millions of end users, because we want to offer that end-to-end user experience in all the markets. How are we doing this? By using data, by using digital, by using technology to create business innovation, to create new ways of connecting with the users and the customers, to develop the omni-channel approach. We've been building a transformational team and capabilities to create this transformation across all the different segments and all the different regions. Focus on the end user. The focus on the end users creates demand generation across our brands, products, and different price points.
As you can see, we have a clear segmentation, starting with our end users, our brands, the online and the offline channels, to be very specific and to go after the right end users. For consumer customers, we have our brands, Black & Decker. For tradesmen is the largest segment in emerging markets, tradesmen represent probably 60% of the potential market that we have. We have our Stanley brand, and we develop a full product range with the brand Stanley in power tools, hand tools, and accessories. Then they go sell end users. Commercial excellence. Embedding best-in-class commercial activities to deliver profitable and sustainable growth across the markets. We're working on innovation and portfolio management to offer the best products and solutions. Brand and marketing to be end user-centric. Pricing and promotion to create value for our customers and our company.
Sales force deployment to optimize resources, sales resources across all the markets. Channel and partner programs to drive value for our customers in all the different channels, the traditional channels, the home centers, the e-commerce, the marketplaces. Post-sale support as a real competitive advantage that can differentiate ourselves by using digital technology and connectivity with the end user from our competitors. E-commerce. E-commerce is the number one growth opportunity for us. Jim talked about this in his presentation. We have a clear vision. We want to be the number one in the tools segment for e-commerce by partnering with key customers and by deploying an omni-channel strategy. What are the key pillars of the omni-channel strategy? Brand maximization and omni-channel execution. Leading the global marketplaces. We have multiple marketplaces across all the markets. Resourcing for exponential growth.
We see e-commerce as the opportunity for exponential growth in emerging markets. We have developed a business model that covers the B2B normal initiative that everybody knows, B2B2C, and the B2C initiatives. Why is the B2C initiative so important? In some countries in the world, like China, for example, we don't have significant market share, and growing the business the traditional way is very difficult because our competitors have been in that market for many, many years. Going direct to the end users in countries like China and other countries in Asia isn't going to create a lot of disruption, but it's going to offer us the opportunity to sell direct to the users and potentially transform and balance the mix of our business. To do all this, we have hired more than 150 digital and e-commerce experts across all the markets.
E-commerce is a global strategy executed locally, market by market. We do e-commerce in every single market across GEM. Last but not least, accelerate localization. As I said before, we want to be closer to the markets, the customers, and the users. How are we doing this? Localizing commercial organizations. Today, we have more than 36 commercial organizations to be agile on commercial execution. Distribution centers. We have 23 distribution centers across emerging markets to be fast to our customers and end users. Local manufacturing footprint. We have 5 manufacturing facilities, 1 in India, 1 in China, and 3 in Latin America, to design and make the right product for the right user in emerging markets for emerging markets. Localization is giving us agility and speed in execution. Emerging markets remain as a great opportunity for strong growth for the company. We have large market share potential.
We can still grow a lot across all the markets. We continue building an ecosystem to evolve our business model and to generate demand by using the best end-to-end user experience. We have a clear pathway for growth with business transformation, commercial excellence, localization, and portfolio management. We continue building a diverse organization, extremely critical for us in emerging markets, linking talent to value. In general, we are very well positioned for continued revenue growth and market share expansion. Thank you very much.
Our next speaker is John Wyatt, President of Stanley Engineered Fastening.
Good morning. I wanted to start the presentation this morning with a very powerful image. This is the new nuclear powered aircraft carrier, the USS Gerald R. Ford. The reason I'm sharing with you on the first slide is simply because with the acquisition that we did last year and completed of Nelson Fastener Systems, we were able to get into a new shipbuilding vertical. In doing that, it's given us the opportunity to cross-sell $1 million of fasteners to complete this ship and fit it out. It's important because there's more defense spending going on in the world today, and there's more opportunity for us in the future. A very powerful slide just to start with.
Looking at our Stanley Engineered Fastening business in the round, you can see we have about a $1.8 billion revenue model, really targeted automotive and industrial brand leading products. High-teen operating margins, and a very good mix, geographic mix, with 60% of our business in Asia and Europe and 40% in North America. With the acquisition of Nelson, that's improved the segment in industrial to 40% of our business and 60% automotive. The five-year scorecard is quite powerful. You can see here we've grown 2x the market in both global and GEM segments, 4% and 9% respectively in terms of growth. In automotive, 3x light vehicle production, a 7% growth rate there. All that with a 9.5 working capital turns posted as well.
Good numbers from us in terms of that division, all driven by the seven core brands you can see here, which are respected and recognized by our industry partners. There's more. We really believe we have a unique competitive advantage to enable us, you can see the vision, to grow to be the worldwide leader in highly engineered products and solutions. Through organic growth, we're going to do that looking at these four pillars, namely looking at engineering capabilities. We have really close relationships with our OEMs. We have 350 engineers and application engineers, many of them embedded with our customers to help them develop solutions. We have leading industry systems and technologies. The three specifics are stud welding systems, where we have a very significant share globally, self-piercing riveting systems, likewise a growing market, and also assembly systems, assembly tools. We've got significant opportunity in multiple verticals.
Again, with the acquisition, that's given us opportunities in mining, agriculture, infrastructure, and defense. Finally, our global scale is a real advantage. We have 34 plants operating in over 15 countries around the world, so we can service local OEMs, but also the global companies as well. A real true capability there. Looking at our inorganic opportunity, we continue to believe and evaluate a number of areas, specifically core fastener opportunities around the world. Also, regional opportunities to build scale in specifically markets like India, China, and also Korea in the future to build out our businesses in those particular markets. We're looking at M&A adjacencies as well, but specifically adjacencies where there are businesses with a similar business model to us with high recurring revenue over the lifetime of a product.
Finally, with our venturing group, we're looking at disrupting the core technologies that we have today. You'll hear from Mark Maybury shortly about the ecosystem we're building. That's a real key part of what we see as success going forward, disruptive technologies that we can bring in in-house. Turning now to our real customer value proposition. We offer a complete assembly solution, so the fasteners and the systems to apply the fasteners. We work with our OEMs at a very early design stage, often years before they bring the product to market. We're doing that very competitively with them to look at costs, look at designs, to make sure they have the best product available. We also enable IoT within the systems that we build so that we're able to improve through analytics, obviously, and insights, improve productivity, take out warranty costs, and improve output.
The benefit for us is that recurring revenue model over the lifetime of the product they're building. It's this unique model that's enabled us to grow at three times light vehicle production in the automotive space, as I mentioned earlier. In fact, since 2014, if you look at the global number of vehicles on the market, we had about $5 per vehicle globally on average back in 2014. That's now $8.50 as of last year in that global average. A significant increase in what we call vehicle penetration from $5 to $8.50. One of the big dynamics going on in our marketplace, which we're well aware of and working with, is the electric mobility to drive to electrify automotive. You can see here that we believe that around 40% of global output by 2025 will be either electric vehicles or hybrid electric vehicles. A significant shift.
First question is that a threat or an opportunity? We believe it's a huge opportunity for us, and I'll explain to you why we believe that's the case. If you look at the vehicle in the center at the top, that's a traditional steel vehicle with a gasoline engine. Our opportunity of penetration with fasteners in that vehicle is around about $20. If you look at the vehicle below, that's a lightweight vehicle using mixed materials and an electric engine or electric battery system. There's a huge opportunity for us with this development. Namely, that electric vehicle needs four times the number of stud welds or earthing studs in the vehicle to support the electrical infrastructure that's going into that vehicle. Four times the number of studs we sell today.
What's more, the battery needs over 100 different blind nuts and rivets to secure it, actually to secure it inside the vehicle itself. A new opportunity for us. Finally, to lightweight the vehicle, when you're mixing materials like aluminum, carbon fiber, and thin steel, the only way you can do that is with a cold-forming, self-piercing rivet. You simply can't weld it. There's about 1,000 self-piercing rivets that are needed in these new vehicles to put those mixed materials together. All to lightweight the vehicle to enable it to run a lot longer before it has to be recharged. In that sense, we can see here that the ultimate opportunity is around $75 million per vehicle, up from the $20 today in a fully electric vehicle, to about $40 in a hybrid vehicle. A huge opportunity for us going forward.
Turning now to our industrial vertical. With the acquisition of Nelson, that put about a third incremental sales number into our business and gave us those vertical opportunities I mentioned earlier. Mining, transport, infrastructure, construction, these are new areas we can now go into and cross-sell. It's also enabled us to go direct. That's important because the application engineers that came to us with the Nelson acquisition have really enabled much deeper relationships with some of these industrial OEMs. An example I give you is the industrial welding systems that Nelson have. In the online warehouse fulfillment businesses that are being built around the globe to service that online dynamic, we have 1 million shear studs per warehouse that we're now putting into those particular facilities. In fact, this bridge behind me in Pennsylvania has got a half a million Nelson stud welds in it.
You can see the gentleman here, the end user, putting those studs in place. Another huge opportunity with those direct relationships with end users and OEMs. Finally, innovation, the core of what we do and have been doing for many, many years. Two examples here that we're bringing to market towards the end of this year. The first is a cordless lock bolt tool system, which is enabling our end users to get a 50% reduction in time in terms of placing the lock bolt. This example is the solar farm, and we have solar farms that we're servicing around the globe as we speak in terms of that new opportunity. The second one is the world's first stud weldable rebar. If you're welding rebar on a construction site today, you're MIG welding it. One individual end user MIG welding one piece of rebar.
What this video is showing you is in the time it takes to weld one piece of rebar, we can fire, with the Nelson system, nine studs in the same time. A dramatic improvement in terms of reduced labor costs and efficiency. A lot of opportunity in the innovation space as well. There'll be more to come over the coming years as we invest in breakthrough innovation. Finally, just as a summary for the engineered fastening business. It's a great, well-established business with really strong, highly engineered, deep customer-driven solutions, and I've explained that with the automotive electrification opportunity. It's a large market with strong underlying growth drivers. Vertical expansion I've talked about. The emerging markets, where we've been growing significantly in places like India, Korea, and China. Finally, leveraging SFS 2.0.
With IoT data and insight, the analytics we get, we can really improve our customers' productivity with the systems we're developing and also our own productivity. Significant improvement in terms of customer relationships with the direct opportunity, because any growth drivers with these large vertical expansions and improved productivity around our SFS 2.0 initiatives as well. A bright future. Thank you.
Our next speaker, we welcome Jeff Ansell back up to the stage, Executive Vice President and President of Tools and Storage.
This time, I'll be providing an overview of the Global Tools and Storage business. The Global Tools and Storage business is the world's largest and most profitable, at $10 billion in size and greater than 15% operating profit. We have a leading position across the U.S., North America, Europe, and the emerging markets. We also have a leading position from the consumer to the professional to the automotive through the industrial end user. Our value proposition is as straightforward as could be. It starts with 55,000 of the world's best, in terms of colleagues and employees, operating around 80 manufacturing and distribution sites globally, and conducting business in 185 countries. We make today about 75% of what we sell around the world. That's up from 60% eight years ago. That doesn't sound like a significant improvement.
It is, however, when you consider that as the percentage has increased from 60% to 75%, the business has grown two and a half fold. That is a beautiful thing, growing the size and the percentage. We are on the leading edge of making products where we sell those products around the globe. Turning to the bottom of the page, innovation. If you remember one thing from this presentation, it would be that innovation is the lifeblood of our business and our company. I'm pleased to say that we are 50% more innovative than the next closest tool company, no matter how much noise they might like to make. We're ranked number 8 of all companies in terms of innovation, not just tool companies. Our folks tend to be left-brained and right-brained. What do I mean by that?
Well, it means that we have a tremendous capability of taking what we own, making it bigger organically, and separately left-brained, looking at things that aren't part of our company, bringing them in, integrating them, and growing them simultaneously. We do all these things through three handfuls of the world's leading brands. Over the last three-year period, we've grown our business on an average of 9% in revenues, probably averaging two to three times market growth. We've expanded our profitability on an average annual basis by about 10%. About half of our growth has come from new product development, again, innovation, and that's led to about 100 basis points of share gain each and every year for the last three years, even as we've served a larger market as we've acquired new things. Again, the left-brain, right-brain thing, all those are left-brain activities, growth and innovation, profitability, et cetera.
At the same time, you can see we are the world's most efficient tool company, more than twice as efficient at eight working capital turns than the average of our competitors. We're able to do those things simultaneously. We've had growth in every one of our strategic business units over the last 10 years, 3 years, a year, pick it. We have a leading position in power tools at $6 billion and number one, and a leading position in hand tools, storage, and accessories at $4 billion and number one. We've grown every market around the world. Probably what has changed since our last time together, two nice advances here.
We have overtaken the number two position in Australia and New Zealand for the first time in our history. We have overtaken the number one position in Europe, the world's largest tool market, for the first time in history. We're very pleased with that growth in every market, but those in particular. All of these things have led us, as you can see on the right side of the chart, to share gain each and every year for the last decade, leading us to a position where we're about 50% larger in terms of share than the next closest tool company, and certainly the fastest. What has driven that growth? Well, our mission has remained unchanged. That doesn't mean we won't execute differently or we have not evolved or all the things that Jim indicated that have modernized our company.
We've done all those things. We've done that according to the same mission: to be a leader in everything we do through a focus on five things, innovation, supply chain excellence, globalization, brand building, all via the world's best people. This mission has guided us from a $600 million hand tool company 15 years ago to a $10 billion diversified global tools leader. Starting with innovation. Looking at the DEWALT business, we have absolutely changed the landscape in power tools in total, professional power tools in particular, with the advent of FLEXVOLT high power system that I outlined earlier, the advent of the best power-to-weight ratio platform of products in ATOMIC and XTREME, as I also indicated. Additionally, inside of STANLEY, 15 categories we've renovated and expanded in. Craftsman, bottom left, 50 categories.
We're now in 50 categories, up from zero two years ago, requiring a great deal of innovation and transformation. Finally, IRWIN, LENOX. I indicated some of those advances here, but also tremendous advancement in LENOX EDGE, an important part of power tool accessories and bandsaw business. I think that innovative spirit is alive and well and important. The thing that I'm most impressed with, this is one of the two most impressive slides I'll share with you today. The reason I say that is in the same time frame, all six of these brands, DEWALT, STANLEY FATMAX, Craftsman, IRWIN, LENOX, all six of these brands simultaneously will grow to the largest size in our history. That is impressive. That means that while we grew each of these things, we didn't cannibalize the other. I think that is a masterful execution. How did that occur?
By launching five new products every day and selling 100 products every second. We're busy, yes. From a supply chain perspective, we've gone from 30% localized manufacturing to 45% as we sit today. Again, that doesn't sound like a dramatic change in percentage. We've done that while growing the business two and a half fold. I think that's the most impressive part. On our way to 60% localized manufacturing, we will improve our position in terms of localized manufacturing in the U.S., North America, Europe, and the emerging markets. Third element is globalization. We're not only the world's largest tool company, we're also the world's most global tool company. The way we execute that strategy around the world varies greatly by market, but with the same level of success. Several examples I wanted to share with you.
Starting with Stanley FATMAX, traditionally known as a hand tool brand, specifically in tape measures. We've utilized that brand across the European continent as a portable professional tradesman power tool brand. We've now launched Stanley FATMAX power tools to the European marketplace in the last two years, and has become the fastest-growing power tool range in all of Europe. Additionally, we launched over 800 new IRWIN products to the Australian marketplace alone. Those things have led to tremendous share gain in both cases. How do you do that while remaining the world's most efficient tool company? We've done that by utilizing all the great work the team did around Craftsman, platforming from those Craftsman advances so that Stanley FATMAX power tools for Europe is built off the same exact product and platform as Craftsman for the domestic market.
IRWIN power tool accessories and hand tools for the Australian market are platformed off of Craftsman hand tools and power tool accessories, making us really successful globally, but also very efficient. Finally, we have the world's number one aided and unaided awareness brand in BLACK+DECKER through a lot of great work around the world. Jaime indicated or shared some of it with you, but on a global basis, BLACK+DECKER is the leading e-commerce brand in the world. We have done a fantastic job of globalizing our assets, leading to growth. The fourth part of the strategy is around brand building. This chart depicts the growth in these brands since they've joined Stanley Black & Decker.
IRWIN-LENOX up 6% in the last little more than a year, but also BLACK+DECKER up 10%, STANLEY almost 70%, DEWALT almost 200%, and Craftsman 300%. We have acquired fantastic brands, maintained what they stand for in the marketplace, accelerated growth in those brands by breakthrough innovation. All of those things made possible by the last piece of the puzzle, which is world-class organization. There is no doubt we have the world's best and most talented people. What this depicts is our journey over the last decade and a half from $600 million to the world's first $6 billion tool company, the world's first $7 billion tool company, first $8 billion tool company, first $9 billion tool company, and today the world's first $10 billion tool company.
I guess I would say while this is impressive, the way I would categorize it is our dreams remain bigger than our memories. Thank you very much.
We're going to transition into the first Q&A session, there are a few folks out there that weren't here when we started. Just to understand the focus, we're going to try to keep the questions focused on the morning's presentation, Don will kind of address the tariff topic when he comes on. Thank you. Julian, why don't you lead us off? Mark on the end.
Thank you very much. Over here. Maybe a first question for Jim around the status of the industrial business. We've heard a lot about tools. We'll hear about security later, but industrials, organic growth has been below that 4%-6% firm-wide target for a few years. We heard about fasteners this morning. Maybe give us any thoughts on the non-fasteners piece within it, and how satisfied you are with the performance in industrial overall.
We love the engineered fastening business. There's no doubt about that. You could see from John's presentation, it's really a compelling business model, and it generally outperforms the light vehicle production by 300 or 400 basis points of growth. When you have a good systems business, which we don't have this year, but we will probably have in years to come, it's a great business and it has great growth. At the core of it, the largest segment of industrial, I think we're very pleased with. The statement I think we made when we bought IES Attachments is that we think there is a market opportunity in the infrastructure part of the business. People talk about $2 trillion infrastructure programs.
I don't know if that'll ever come to fruition, certainly the world's infrastructure needs updating over time, that has great secular growth characteristics.
Oil and gas, we're very pleased with the innovation coming out of there. If you look in the marketplace, there's a breakthrough innovation being released in oil and gas right now. In addition, there's probably another one coming out within another 12 months or so. I think that portends quite well for the enhancement of growth in oil and gas. However, the problem with that business is it's subject to the vagaries of the oil and gas market, we can't really control those. We put our toe in the water a few years ago in oil and gas when everybody was kind of contemplating that. It's been an experiment. I would say it's ours for now, we constantly reevaluate our portfolio at different times to determine whether there's a fit or not.
Right now, we're kind of planning to enjoy the innovation that we have coming out in the marketplace. There's a, I'll call it, a long shot but a slight possibility that if prices stay at a certain level in the oil and gas market, that offshore could come back. If that came back, that would be a growth juggernaut for us for a while.
Yes. Why don't you pass it to Nigel?
Thanks. Jeff, you reiterated the 60% localization target by 2020 plus. I'm just wondering if there's a limitation on the ability to localize manufacturing for power tools given the supply chain for power electronics is primarily in Asia. That's the first part of the question. The second part would be, with the new Craftsman plants that you've announced yesterday, how do the unit costs for that production compare to the landed cost coming in from Asia? Thanks.
Well, I'll start with the first part of the question. We have a great deal of confidence in our ability to get to 60% localized manufacturing with the limitations of the supply chain that you referenced. Things like cells and chucks and so forth, from a power tool perspective, you just simply can't procure in the United States. If we're successful ultimately with MTD, that'll increase that number, by the way. That's probably another 10 or 15%, I think we talked about. We have the ability to get there as it sits today. If the supply base of some of those key components continues to mobilize towards the North American continent, it would accelerate that number. We're confident with those limitations of getting to at least the number we shared with you. The second point around mechanics tool manufacturing in the new facility in Fort Worth, Texas.
We run a series of models and so forth. It tells us that we can be competitive with a domestically manufactured product matching or meeting the landed price of an imported product. I think that's really, really positive. It will help that Craftsman brand. It also will help the Mac and Proto brand that'll be manufactured in that facility as well.
On the first part of that question as well, I'll just supplement it by saying the supply chain is the obstacle, right? The barrier. Our Industry 4.0 initiative today is focused on what we manufacture. Three years from now or two years from now, we're going to be able to pivot because we're going to have accomplished what we wanted to in terms of building the capability in our plant system from our Manufactory 4.0 in Hartford. That will pivot toward the supply base, then we will start to require our suppliers, our large suppliers anyway, to come into the United States and manufacture here as well. We will assist them with getting to the same kinds of cost levels that we were able to do using our Manufactory 4.0 and our capability and competence in advanced manufacturing.
Why don't you pass it to Jeff?
Thank you. Just two real quick. Just to further follow up on the supply chain, it still sounds like you're talking kind of more about growing away from the disadvantageous base as opposed to some kind of more structural change, specifically as it relates to China. I just wonder if you could address that in a little bit more detail. Secondly, on MTD, maybe a little bit of commentary on the visibility of getting to that 10%-12% margin in 2021. I would assume that's not the endpoint of your journey. I wonder if you could speak a little bit to what you view as kind of the margin entitlement of a business like that also.
I'll take the first half and then you take the second.
Deal.
Okay. Our journey to make where we sell has not been precipitated by any one geopolitical event. It really started with end user preferences that U.S. tradesmen like to buy U.S.-manufactured products, and U.K. like to buy U.K., et cetera. That was five, six years ago when we decided that we were going to start to try to migrate manufacturing back. We knew that advanced manufacturing was achieving new technological breakthroughs, and we felt that at some point, and we're at that point today, there would be the ability to manufacture at parity on a landed basis. We thought, in addition to that, we started to observe all these nationalistic trends that were going on.
The latest kind of fireworks on trade is just a natural culmination of the geopolitical nationalistic tendencies that we began to see a couple of years ago. It's been about 5 years where we've really put the groundwork in place to make this happen, and it's all integrated into our strategic thought process.
I don't know if that answers your question or not, but I tried.
As it relates to MTD, there are really four key work streams. The DTV piece, the procurement piece, manufacturing, and then just commercial growth. Those are the four primary verticals in which we're working. I think we've been at it since the beginning of this year. I think DTV procurement, we're very far ahead. I think commercial, we're really out of the gates nicely. Manufacturing, we're getting into that right now in great detail. The early math looks really positive in terms of our path to 10%. I think we certainly see upside beyond that. It's just a matter of those are a lot of really big spaces to go in and find all the data, the early math says that there is a path to 10 and beyond.
Mark, right behind you. Why don't you pass the mic to Ken Zane?
Thank you very much. Do appreciate the comments on MTD. Jeff, your comments about Europe taking number 1 share, I wonder if you could just express how brand segmentation, I know the Stanley brand kind of went in there on that mid-price point. What does that say about how your brands really give you leverage versus what was BOSCH, the higher price point, as well as the sourcing versus other mid-price point competitors? Thank you.
The brand portfolio that we depicted during the tools presentation is incredibly powerful and can go up for the world, but also for Europe. Think of it this way. Stanley brand is as strong across the European continent as anywhere in the world. That's a great thing. Brands like FACOM are fantastic inside of Europe, but France in particular. They don't even play in the U.S. Other brands, IRWIN, strong in Europe. LENOX, strong in Europe. Those are all great things. In addition to that, we have really made great progress in professional power tools across the European continent. We launched DEWALT in the U.S. several years, five years before we launched across Europe. We had a little bit of a delayed start there. In the last 10 years, our growth within DEWALT across Europe has been stronger than anywhere in the world.
All those things coming together across the European continent have led us to the number 1 position in hand tools, power tools, storage, et cetera, combined. We're quite pleased, and the progress perspective for those brands to continue to grow is quite positive. As it relates to the middle price points, which you referenced, Europe is a noisy place with a lot of different brands. The STANLEY FATMAX program really has grown based on innovation and value. It is a really great product for a really good price, and as a result, has been successful in mostly eliminating house brands. There are a lot of house brands across Europe in the MPP space. That and BOSCH probably occupy a leading position in MPP, and we've challenged both of those things with STANLEY FATMAX.
Mark, last question, get to Rob Wertheimer.
Question for Jeff, then maybe Jim on innovation. You mentioned the two breakthrough innovations, ATOMIC and XTREME. Could you flesh out the opportunity for that? Maybe explain the 12 volt sort of ideas. We've seen voltages march up in that sound. Jim, you referenced, I think, oil and gas breakthrough. I think the stud welding might be a breakthrough. Can you just give us a little bit of an overview, since FLEXVOLT, what you've seen come through that process and whether the pipeline remains robust?
I'll start. The detail on the new high power to weight ratio launches, ATOMIC is a 20 volt offering, and XTREME is a 12 volt offering. If you think of it this way, you'll always see that the ATOMIC 20 volt product is essentially the same size as a competitive 12 volt product in terms of its size, but about two and a half times the power output. The XTREME product that is a 12 volt package is the smallest 12 volt package and the most powerful 12 volt package ever offered. If you think of it that way, it really becomes a preference to the user is, do I want a 12 volt system or 20 volt system, depending on the application. The 12 volt system is smaller with a little less power.
The 20 volt system is a little bit larger with a little more power. They both occupy that space really well. In order of magnitude, in the first year of launch, we'll do more than $100 million with those products this year, and they are just launching as we speak. We're really excited. If you combine that with FLEXVOLT, that breakthrough innovation is really going to carry the growth across tools. Jim.
In pipelines, two innovations. One does welding inside the pipeline and outside the pipeline simultaneously. Only piece of equipment in the world to ever be able to do that. The other one is a system which uses the cloud and other technologies to enable pretty significant efficiency gains along pipeline for pipeline construction. Engineered Fastening has some really interesting ones.
Stud welding.
Yes. Talk about those and then talk about maybe conceptually some of the things that are in the pipeline that are still to come, without getting into too much detail.
Three years ago, we invested in breakthrough innovation team. We put them in Germany. They're working on some disruptors that are going to disrupt us before someone else can. If you think about the stud welding environment in an automotive plant, one of the downsides of stud welding is the carbon that comes off. You think about the flying of material once the stud's being welded. We're looking at ways to reduce or eliminate that. That's one of the big areas that we're working on, and we think that's a huge opportunity for us. On the stud weldable rebar, which I talked about a little bit earlier, we're just beginning to roll it out here in North America.
It's specifically for seismic areas, and you're basically rolling the rebar before you pour the concrete, so it's a stud that you pour the concrete around to give it rigidity. It's very high value in those seismic areas around the world, so obviously in the West Coast, some of the Asian markets. We also see it going beyond that. That's where we're starting, given the margin opportunity there. As you saw, it's a huge improvement in end-user productivity. You get nine studs versus one. Big welding is one.
Yeah.
You get nine studs from our gun.
I think the other credit to what John has done in breakthrough innovation with STANLEY Engineered Fastening is our center is headquartered in Germany, right in the heart of the automotive industry there. We have consistent collaboration now with the large German automakers who really have become partners with us in innovating. I think that brings a relevancy to our business and a halo effect to our business that is very helpful just in general in terms of revenue generation.
Okay, we're going to take a 10-minute break. We'll get started just before 9:50, okay? Thank you.
Robert Raff, President of STANLEY Security. Good morning. Robert Raff, President of STANLEY Security. 17 years with Stanley, the last 15 months running the security business. To give a brief overview of the STANLEY Security business, we're a $2 billion business. 50% of our business is based here in the U.S., and the other 50% is in the rest of the world, primarily in Western Europe. We're industry diversified and have three business segments. One is the electronic security, which is the largest, the automatic doors, and the healthcare facility. Within our healthcare division, we're a leader in tracking assets and people to keep them safe and secure. Our technologies make the lives of caregivers, whether they're at home, in a hospital, or senior living facility, easier because we give them actionable insights on an iPad.
The new leadership team is driving connectivity between our new health at home, our senior living, and our hospital channels, along with connectivity back to the caregivers. Since we've adopted this new strategy, we're up double-digit growth in the last two quarters with this new leadership team in driving this strategy, and we have a good growth rate to go in this division. Within our automatic door group, it's going through a digital transformation as well. The iQ Connect module allowed us to create the industry's first IoT automatic door. It's like having a technician, a data scientist, a financial analyst embedded into every door. We can remotely change the speed of a door. We can alter the distance depicting a person coming through the door.
By adding sensors now to the door, we can predict mechanical failures within it, allowing us to repair doors prior to them actually breaking. Predictive maintenance will save ourselves service costs and provide a better customer experience with zero downtime. The technology is being placed in every one of our doors coming off of our factory floor, and we have plans to retrofit more than the 275,000 doors that are currently out in operation, continuing to set us apart inside of this space. By executing this strategy within the automatic door group, we actually have won 100% of service work from two major U.S. retailers. I'm going to pivot now to the remaining portion of my presentation on commercial electronic security business. It's a $130 billion global market that's fragmented, has new competition and offerings.
We all know that the traditional offerings are being commoditized, but those that are differentiating are winning in the market, and they're actually expanding their margins. We've begun this journey over the last 12 months inside of Stanley Security, and I'm going to take you through what we've done, where we are today, and where we're going. As Jim mentioned earlier, within this transformation, we're focused on areas that can most benefit Stanley Black & Decker and our customers. It's a large, growing, fragmented market with high cash conversion, light on CapEx, which is different than most of the other businesses within Stanley Black & Decker. Over the past year, we focused on onboarding teams of digital talent so that we can take advantage of a quickly changing industry. The new teams are going to bridge the days of pulling wire to solution sellings and bundling remote services.
With all that, we'll have a path of growth and profitability rates consistent with the rest of Stanley Black & Decker. Therefore, whichever decision we make on this business within Stanley Black & Decker, we will create significant value. My first year in the business, 2018, running, was a year of stabilization. We developed a global strategy, we focused on innovation and differentiation, and we brought new leadership across all of our businesses, and also brought in digital talent. 2019, as we're going to go through now, is about executing the plan in which we developed and gaining the muscle needed to transform this business. Ultimately, 2020 and beyond, it's about acceleration to our commitment of low to mid-single digit revenue and mid-teens operating margin. What was our strategy?
The global strategy focused on three major pillars: customer diversification within our small and medium businesses, simplifying our sales, our install, and service processes, along with differentiating our technologies. Within our large national accounts and system integration jobs, we had to create immediate proprietary value outside of the security space by utilizing our advanced data analytic teams. Finally, we will continue to lower our traditional cost-to-serve model. Let me take you through these one at a time so we can get a better understanding of them. The small and medium businesses around the globe are the core of the commercial electronic security business. We have taken a value proposition from the grudge security intrusion purchase to an immediate return on investment for our customers, and we're executing this with speed around the globe.
The global BOC has overwhelmingly asked a vendor to provide more than just an intrusion alarm, which we all know 98% of them are false alarms. They're requesting professionally installed simplicity that not only provides a patented world-class intrusion system, but also analytics about their business when they're not there. We now have an anchor digital engine that can consolidate data from the camera, from POS, from payroll, and other external data providers to provide valuable outcomes for our business owners. With partnerships, like we announced a couple of weeks ago with Alarm.com, we can actually present this on a world-class front end. We already have 10,000 locations on this service, and it's growing very quickly. We're now taking partnerships to the next level, and we're doing this in two different ways. One, our strategic corporate relationships, like the one we formed with Cisco Systems.
Now we can be the security provider to the small and medium business, the single owner of that business, and give them world-class cyber protection along with physical and electronic protection. The second method is taking advantage of new entries and technologies by using our ventures team within Stanley Black & Decker. We're making minority investments within startups to differentiate our offerings to our customer base. IntelAssure is one of those partnerships that began in the second quarter of last year. We are already monitoring 17,000 devices, and that's just in the first nine months. Let me show you a little bit more about IntelAssure and what we're doing to create that sticky relationship between ourselves and our customers. At the beginning of 2018, our value proposition was very simple.
We sold fire and intrusion, and we had one of our operators call the customer when the alarm was detected. As I mentioned earlier, we've invested heavily in data analytics and machine learning, making us much more than a security company to our customers. Our customers now see that return, and it's immediate. We have the right to play, and most importantly, we have the right to win inside of this area because we can now take these multiple data sources, and just one of them is security, and run them through our AI platform and deliver multiple business cases and insights. We're winning. We're winning in places we've never won before, and we're winning in growing markets. These advanced data analytics solutions are why.
For example, we have a major financial services provider that we're currently in beta with about 70 of their locations and providing IntelAssure and BI reporting, ensuring all their devices are fully operational. We have a few major restaurant chains that total about 12,000 locations and 160,000 cameras that we pull a variety of data sources in every location through our AI engine, we can detect and notify management with video evidence of a specific occurrence. For example, an associate has issued a refund, but there's no one present on the other side of the counter. This transaction type typically holds a high probability of fraud. The same platform is also being used to help our retail customers enforce age verification, like selling tobacco and alcohol, and even employee retention by identifying training needs specific to an individual.
We are also utilizing our solution to differentiate our global data center vertical, which is growing very strong right now, by providing remote analysis and service, real-time reporting on all the devices, and total end-to-end design. Shifting our business intelligence is one of the most significant moves over the past year, by doing so, we're now meeting with the C-suite, solving complex business problems, versus security directors that discuss basic security solutions, which are almost always centered around price. All of our RMR that I've talked about today is within the last 11 months. The value proposition has been driving new scalable RMR within our business above today's margin rates. Finally, along with the frontline value propositions, we must continue to be focused on transforming our back-office and legacy infrastructure that drives tremendous inefficiencies within today's environment. The security division is still very labor and skill set dependent.
Within our monitoring centers, these are very stressful environments and are not customer service. When an emergency phone call comes in, we must have well-trained individuals that know the correct plan of action. In the field, as stable Wi-Fi and 5G become the norm, the days of having technicians pulling wire will quickly come to an end. We are preparing inside of STANLEY Security for those days. The transformation needed as these skill sets are our number one priority in both of these use cases. By utilizing AI, we've already consolidated three of our monitoring centers in the last six months. We're now continuing to refine our automation to even take in more false signals. We're scaling our remote services teams to be able to fix problems immediately as we're now tied into our customer systems. Therefore, electronic security is globally focused on a simplified, scalable solution.
That means targeting the small and medium businesses with innovation of data analytics teams and driving partnerships and lowering our cost to serve. We're continuing to go outside the security industry to attract new people and skill sets to help differentiate STANLEY Security from our competition. If I'm sitting in your shoes and you're sitting in mine, I'm saying, "Is this really going to work?" I've been in this chair for 15 months. Are we going to be able to drive this all the way through? Well, we've hired an outside organization, outside consultants that are sit side by side with me, they've been with me for the past year. They work on a variable cost basis to get the desired results. They're also bringing in industry experts to help us with speed of execution.
We have a full program management office in place driving accountability and execution that no decision waits longer than one week inside of our business. Our new management team has a variable comp based on the results of our transformation. Total company engagement. Jim and Don and Jo have invested heavily so we can go to anybody inside of Stanley Black & Decker that is a subject matter expert in any of the fields and bring them into security to help us out. Finally, in regard to investment, we're investing heavily in sales, technicians, and digital talent across the globe. We've seen sequential improvement for the last three quarters, and this team has every opportunity to continue to be successful. In summary, we've seen the stabilization. We will see the load of single-digit growth and consistent margin expansion.
All the businesses are investing heavily in innovative digital solutions to differentiate, the growth in which we're seeing inside of healthcare and automatic doors will continue. This leadership team is new, we're building muscle and we're building execution muscle. We have brought very talented individuals into this company over the past year that do not lose. I am confident that we are focused in the right areas and that we will be successful in this transformation of Stanley Security. Thank you.
Our next speaker is Mike Simpson, Chief Marketing Officer.
Good morning, ladies and gentlemen. Today, I'm going to talk to you about our digital brands. We're going to talk about three things. We're going to talk about relevance, sustainable, long-term growth brands. Growth brands that have seen 5% organic growth since 2017 by nurturing our brands through a sheer digital vision. Brands that are awake in this fourth industrial revolution. Transformation. Using our digital vision, our diverse upskilled teams, embracing absorptive leadership inside and outside of the company to set a new vision. Impact. Impact. More than just products and solutions, brands with a social conscience. Let's keep moving. Let's see some of the passion and energy and excitement behind our great brands. We will continue to invest in the value of our brands. Around the globe in our sector, 97% of people are aware of at least one of our brands.
In 2018, we saw over 308,000 minutes of TV brand exposure and a 63% increase in digital exposure. It was a truly great year in 2018. What makes relevant growth brands here at Stanley Black & Decker? Well, it starts with a clear vision, a vision that is customer, consumer-centric, to engage our customers, our consumers, our employees, now and tomorrow, and our investors in a personalized one-to-one relationship wherever and whenever they wish for the right message at the right time in the right channel. Our value creation model, our brand bullseye. Brands that are advocated for, brands that are global, brands that are societal, and brands that are transformative. This ecosystem will ensure our success for the future and beyond so that we are known as one of the world's most innovative companies and seeing best-in-class activation, as Jeff talked to, with our recent CRAFTSMAN launch.
In 2018, we brought this iconic American brand back. We revitalized and the team used advocacy and influencers to do this. Influencers like Richard. You got to love the confidence. The team did a phenomenal job, driving over 2,500 user-generated stories around My CRAFTSMAN Story. A launch event with bloggers and vloggers seeing over 94 million online brand impressions, 260,000 additional subscribers to the all-new CRAFTSMAN Club, and as Jeff said earlier on, an average advocacy rating of 4.6 out of five. Truly a revitalization to be proud of. With commercialization comes speed to market. Speed to market and our digital transformation, our journey to the future. We're fueling organic growth with our upskilled, diverse teams, an utter focus on increasing our customer lifetime value through one-to-one product and brand journeys because our world is changing, and we will be ready for the next industrial revolution.
Let's take a look at this journey. Along our journey since 2016, we've learnt three things and implemented three things. We've accelerated our foundational marketing capability at Stanley Black & Decker. We've invested and deployed against the biggest, most transformative opportunities, and we deploy our resources on demand across our organization when it comes to our digital marketing and our consumer-centric journey. Our capabilities around rapid commercialization have also progressed in new market verticals, customer experience. Customer experience that drives advocacy and customer syndication, and taking difficult innovation to market. Our special power, the thing that has truly made us different, it's our people. Our people, a diverse group of 36 people that we identified in our organization. The best and brightest marketing talent we have working cross-functionally. I won't do it justice to talk about them. Let's hear from them. Let's close with this, our impact.
We're a company that's more than just products and services. There's a great quote from Maya Angelou that says, "People will forget what you did, people will forget what you said, but people will never forget how you made them feel." This is the modern brand journey for any organization, and it certainly evokes what we believe. Brands have a role in the world. 81% of people globally believe that brands can make the world a better place. The best brands understand their role in the world. Our goal is to be a platform for others, our trailblazers and the next generation. Supporting those who expect nothing less than a legacy to be a positive thing. Our future engineers and world makers. Innovating new technology to make the world a more sustainable place, because we are for those who make the world.
Today, I've talked to you about relevance, brands that are awake and powering our organic growth. Transformative brands that are digital, powered by upskilled talent throughout our diverse organization, impactful brands that are purposeful and empowering our social conscience. Thank you so much.
Our next speaker is Steve Broderick, Vice President, Corporate FP&A.
Good morning. Let's face it's never easy to follow marketing and brand, I have no racing videos today or sports highlights, I do have a lot of excitement to share. Again, I'm Steve Broderick. I head up the company's FP&A organization, as well as Finance, Shared Services, and Transformation. Recently, late last year, I was appointed to lead the company's Margin Resiliency Initiative. I've seen the company evolve over the last 18 years, I've held leadership roles in several large-scale efforts. A few of those would be the SFS rollout back in the early 2000s, the integration of Stanley and Black & Decker from 2010 and beyond, more recently in 2016, in co-leading functional transformation with our CIO, Rhonda Gass.
You're going to see today that Margin Resiliency is a large-scale, company-wide transformation that is the most impactful one I've worked on, with $hundreds of millions of value to unlock for the company, we're leveraging technology to drive that change. I like to think of this initiative as the intersection between a few things, innovation, technology, and top quartile performance. Let's start with a framework to help you understand how we're approaching Margin Resiliency inside Stanley Black & Decker. Many of you are familiar with the SFS operating model. It's been a driver of our success since the mid-2000s. We focus on innovation to help us drive commercial excellence for our customers. At the same time, we've invested in innovating the back office, which helps us get after the inherent complexity in our operations as the company has experienced some pretty significant growth.
At the core of all of this is digital excellence. We stood up our digital accelerator team in Atlanta in 2015, and since, we've made a lot of good strides in that space. Now is our opportunity to leverage the SFS 2.0 framework and augment that with technology that help us enhance and provide scale as we continue to execute on our growth platforms. Some of them you've already heard about today, like Craftsman, MTD, Nelson Fasteners, et cetera. Given the amount of external headwinds we've faced in recent years, we see Margin Resiliency as critical to give us confidence in performing to our financial goals in a quite challenging and dynamic external environment. Let's take a look back at that financial performance for a minute. We do take pride in our ability to deliver a track record of top-line expansion with also bottom-line expansion.
If you take a five-year lens leading up to last year, and you can see it here, that we've not only executed the synergies associated with Black & Decker, but we created a stronger enterprise leveraging SFS 2.0 across the company, leading to over 14 points of profit in 2017. Last year, the headwinds just never abated. We absorbed over $200 million in excess of our operating plan related to tariffs, inflation, foreign currency. We offset a majority of those headwinds last year, but we saw our operating margin take a step back, our rate step back. To respond and also prepare for future volatility, we focused the organization on margins. We got to work and evaluated the top areas that we could influence to drive value creation.
Now here in May, we are in full execution mode, driving significant transformation across our top value pools in the four areas that you see on the right side of the page here. These are all advancing at various levels of maturity inside the company. I'm going to cover each in some detail now. What I want to start with is price margin. Frankly, this is something we have to be good at because we live in such a dynamic operating environment, and we have to be prepared to respond as cost inputs change. We do consider this a core competency, but we also see the opportunity to standardize our pricing processes globally. We've assigned a leader over this who has a track record of success in pricing and margin excellence within our emerging markets business. We are already seeing some strong results.
Next-generation procurement is about digitally enabling our buyers and planners. We are eliminating manual work and giving them tools to adapt quicker to changing dynamics. I'll cover this in more detail later, but there's some really good momentum going on in this space. We've been actively working on supply chain optimization for years in line with SFS and our make where we sell strategy. You heard Jeff talk about localization strategy earlier. The recent trade tensions obviously accelerated the work that we're doing in the supply chain space, as you'd expect, and we ramped up the intensity given this week's news. We stood up a team last year to actively work on tariffs mitigation, and we're pursuing footprint actions that continue to rebalance our manufacturing base to be more in line with our revenue base.
The team is moving quickly to qualify new suppliers to shift China production. We have been pursuing tariff exclusions where they're available. We've also operationalized Industry 4.0 in a big way since early last year. I won't steal Sudhi's thunder on that, he's up after me, but I can tell you it's good news. In the last category, we're leveraging technology to enable our functions to be more efficient while also becoming more effective at the same time. This is near and dear to me, given the increasing demands placed on both finance and IT, but it does reduce our complexity and helps us operate more efficiently. Ultimately, this provides a better customer experience for the company, and also better ways of working that drive better collaboration across teams internally. Underpinning all of this, you can see on the page, is advanced analytics.
This enables us to get data and insights necessary to make quick but also sound decisions and operate with agility. When you look at our approach and our guiding principles, not only are we recovering our margins, but we're also strengthening our processes and creating the scale to support future growth that you heard a lot about earlier today. We're already accelerating execution in some areas that we had a head start on last year. I think these are a good indication that we're always looking ahead and balancing short-term and midterm expectations. We've been quite active in mitigating tariff impacts since last year. We've been investing in automation, IoT, and in the price CoE. These investments were already underway as we entered this year. In other areas, we're evolving. Most notably, I'll say that in the areas of digital and technology.
As an example, we're midstream on building a procurement data lake, which serves as a central data repository for all of our purchasing activity. We are leveraging this to provide an integrated fact set that helps us drive better purchasing decisions. This type of momentum in critical areas has driven a high level of engagement across the company. That is what you look for at this early stage of the initiative as a barometer of our future success. We're putting a good deal of work into educating our associates on the potential, not only for the company here, but also for our employees as they're better able to utilize technology to perform the work they do now more efficiently. Let's take a deeper dive into some of the initiatives.
One thing I think we can all say is data's never been more ubiquitous, but also more important in driving business decisions. Analytics are at the core of price margin excellence, for sure. Simply put, we're leveraging new tools and technologies on top of a richer data set to drive more informed business decisions. One example of this is the work we're doing to apply analytics and algorithms to our historical promotional data. This provides us insights into what drives demand and helps us gain a perspective on our price elasticity as well. For example, we can develop a more informed view of what we anticipate the sales lift to be, given certain promotional strategies. The more information we run through this process, the smarter we get, because then we can apply machine learning to then sharpen our focus even better.
This is a really good example of how we can not only sharpen our internal lens as we develop those plans, but also enhance our own profitability while also providing better service to our customers and helping them optimize revenue lift. This data-driven approach also helps us and our promotional planners gain key insights and become more effective in what they do to drive the revenue expansion. Taking this one example, in my view, this is as close as it gets to a win-win for our employees, our shareholders, and our customers alike. I'd like to expand a little bit on next-generation procurement. I'm really excited about the prospects here, albeit at the early stages. We've been at this for about three months. What is it and what stands out? First, we're setting a stronger foundation. We're reducing our complexity by pulling purchasing information into one common data store.
We tap into the data set with new tools, looking for value creation opportunities. For example, we now have the ability to perform should costing across the entire enterprise by comparing our actual purchasing activity to benchmarks and data from the outside by those same product categories. These types of advancements in our processes allow our teams to make better decisions and also with greater speed. Currency, tariff, and inflation shifts, they naturally cause a lot of stress to our system, but we now have the ability to dynamically link cost changes to our clean sheeting processes. This unlocks value and improves our planning agility in a pretty meaningful way. Like many companies, we've been investing in standardizing our ERPs and our planning and reporting systems.
We've been driving towards standard global process across businesses to reduce the complexity that is associated with over 100 acquisitions in the last decade or so. With better data, we can automate redundant back-office tasks and drive advanced analytics projects that previously just weren't possible based on our fragmented systems landscape. One point I'll make is where we win is when technology drives different decisions. This is where we capture value. We leverage the investments we're making in planning and reporting tools to drive accountability to our goals. In summary, our approach to indirect costs have shifted from what I'll call a previously manual process with local accountability to a data-driven process with reach across the entire enterprise, across the whole company. This represents an opportunity for us to drive a more sustained approach here to cost management going forward.
This is really a definition of transformation. As with any company-wide initiative, we have to prioritize around value. We are a performance-driven culture, which means we focus on value creation, but we also remain disciplined and invest the capital in the highest impact areas. We've been hard at work this year on the funnel of ideas. We have a standard business case format to rack and stack ideas based on effort versus impact. This informs a few things, what projects we pursue, what the timetable is, importantly here, what is the sequencing of all those activities. We spend a lot of time connecting transformation resources along the resources in our business units and functions to identify where can we unlock value. Our goal is simple.
It's align the right technology solutions to the highest impact projects. When we do that, drive really strong collaboration across the whole company. You may ask, "How do we drive that collaboration across the company as efficiently and effectively as possible?" That's what I'll cover next. One of the great things about Stanley Black & Decker is the teamwork that occurs to really drive change. I've been a part of several transformational aspects, as I mentioned in my opening comments, I can say that the collaboration now in a company that's over $14 billion in revenues is actually better than when I joined in early 2000s, and it was $2 billion. That's amazing. That's amazing. That speaks to our culture. We have a time-tested model for integration, planning, and deployment, which we've adopted to govern around this program.
In the last several months, we aligned our resources around data, technology, and process. In simple terms, these are the critical links in the value chain for us. This connectivity helps us create a holistic approach while minimizing overlaps and gaps that could impede how quickly we can execute. We evaluate process with the leadership team once a month, including value progress, as well as some other health factors that I think are important on organizational capacity, change management considerations, and also communications. This is a communication channel, but also a place where we can drive quick decisions as well. To wrap up, we can begin to see the value roadmap unfold for sure. The high engagement across the company is impressive, related to Margin Resiliency. I'll leave you with three things.
One is this is a major transformation margin program that will generate hundreds of millions of dollars of value over a multi-year period. That's exciting. This will be utilized to recover then expand on our margins and deliver operating leverage in the face of external volatility. This program is technology-enabled, the key point here that you've seen in several spaces, allowing us to better align our workforce around value creation. It's days like today where you can see what an outstanding company Stanley Black & Decker really is. We're proud, we're also evolving with technology, and we are transforming to create an even better future for the company. Thank you for your time and attention this morning.
Our next speaker is Sudhi Bangalore, Vice President, Industry 4.0.
Good morning. I have the opportunity and privilege to talk about a really important program of Industry 4.0, which you have heard about a few times this morning. Before I get into the details of how we have stood up this program, I want to talk a little bit about my passion and expertise in this business of Industry 4.0. One thing that has been a critical need for Industry 4.0 has been speed and scale. This is a problem for many reasons, but I've had the opportunity and the privilege to work on this problem in my past life, heading Industry 4.0 transformation type of activities in Wipro. I've been able to help conceptualize and drive similar large-scale transformation programs with large companies such as GE Connectivity, Corning, Philips, and so on.
I've been able to bring that passion and expertise along with the excellent leadership we have in our factories and other parts of Stanley Black & Decker to bear. With that, I'm going to give you a little bit of how we have approached this whole program. As you have heard all morning, SFS for us has been an engine of consistent and expanding value for us. While that is an amazing, good thing, what we wanted to do was now inject digital technologies to do two things. One is to make sure that we drive a step change impact, like Jim already mentioned this morning. Also equally important is how do we run this engine more efficiently?
Specifically, I'm talking about taking manual content out of all of the lean Kaizen activities that's critical to SFS 2.0, as well as the ability to bring digital technologies to do problem-solving much faster and more smartly. How did we approach this program? The first thing, obviously, is to set a vision that makes sense for the organization and also has the stretch that we need given our culture. Our vision for this program is to push the frontiers of productivity and differentiation. Once we determined that as our vision, what we then did was to understand the top five processes that drive that value to begin with, and we started digitizing that while keeping people at the center of that transformation.
What I mean by that is we've elevated work, we've created content that helps upskilling and retraining programs that will be deployed in sync with technology, right? When we do this at scale, which is what this whole program is all about, that's going to drive plant excellence. We're not satisfied with that. We see there an opportunity to drive enterprise excellence with the center that Jim talked about in Hartford, and we're going to use that along with all of the data that Steve talked about to seek out best practices, apply across the enterprise in real time. That's where we get enterprise excellence. When we do these two things, guess what?
Our supply chain is going to be a lot nimbler, a lot more attractive for all the things that you heard this morning with all of the acquisitions and the growth activities that you saw. The thing about Industry 4.0 technologies is there's several technologies, roughly about 15 or so, depending on how you count and who's counting it. I'm going to talk about some of the foundational things we're doing, and I won't cover all of that, just a few. Foundational to everything is Connected Factory, also called the Connected Enterprise. What it essentially does is to deploy an always-on industrial internet connection, if you will, between our assets, process, and people. When you do that at scale and you put in other applications on top of that, it does a couple of things. One is it brings speed. It injects speed into how we respond.
It gets rid of a lot of manual paper-based operations. Really important, drives collaboration, and which is a huge opportunity with Industry 4.0. That's what we do. When we, of course, connect things, it opens up this trove of data that we then use for analytics. That's Connected Factory. Similarly, another important technology for us is Digital Twin. Here in this case, what we're doing is creating replicates of our assets, especially large, lazy, rusty assets that we have quite a few of, and we use these Digital Twins to optimize and to troubleshoot. We started this whole program from scratch, so we had to assemble a team that could do things at scale.
What we did was to make sure that we addressed the first problem I started out with, we basically de-layered this program into these individual streams, starting with Connected Factory automation and so on. Each one of these individual streams, they have a leader. That leader has the technical expertise, functional expertise, and the accountability to drive value capture results, right? Then we created an integrated team that's made up of IT and other experts, that's how we've been able to create one program management structure, get rid of risk, cost, and time that happens when you have multiple layers of program management. That's the unique part of our deployment team. Then very important is our ecosystem.
We have actually stood up a team of about 13 partners right now, both big, such as Cisco, Rockwell, who we are partnering with very actively, and also smaller startup companies like FogHorn, et cetera, and iGear. That really is how we have brought all of these three things together. We've been functional as a full-fledged team starting January. With the confidence we have established in that time period, we believe we can get to 65%-70% of plant coverage by 2021. This is global deployment, by the way. Pulling it all together is this really amazing and unique Advanced Manufacturing Center that we've set up. We believe nobody else has done in the industry, especially in the industrial sector. Oil and gas has done that, but nobody in industrial.
This is a 23,000 square foot facility, and this will house about 120 experts, as I said, both our own people and that of our partners, here is how it looks. The idea here is we can do everything from conceptualization, ideation, build solutions, test solutions, deploy solutions, train, and support. That's how extensive we're thinking. With that, this is the video that quickly kind of walks through that. Centered around process people technology. This is our Connected Enterprise view. Here is a focus on machining. It's a critical part of Stanley Engineered Fastening and also GTS to a certain extent, getting rid of dirty, dangerous type of tasks with cobots. Assembly, of course, very critical to our GTS business. We have come up with a smart way to do a migration between manual and automated operations. Here is a view of our Connected Factory dashboard.
One dashboard, actually. Everything from HR to EHS to quality to engineering. Here is predictive analytics that tell us before a robot can go down. Obviously, there's a lot of robots, we need to make sure of that. Here's our enterprise excellence center pulling in data from all over the world. In this case, you see Warrington, U.K. Digital twins, as I said. Here's a digital twin of the setup in Hartford, and it's telling you how we can optimize performance and also troubleshoot. As I said, we've been in operation for about four months, we've had good success. All of those three tracks that I talked about, we've deployed apps that gives you full view of our factories as well as our lines, again, across the enterprise. Analytics has been a great story for us.
We've been able to drive yield improvement of 12% in our GTS business. We can use it in others as well. The third one is robots. This is especially interesting for two reasons. The cost of robots are going down, our ability to deploy that is much faster than the other tracks. That's what we have with robots. One last point, you'll see that what we have is clear categorization of, for example, how much time it takes to deploy, what's the payback, and we have created standards to get to that level of confidence. As a point of reflection, this program started somewhere about mid-2017 before I was here, we've gone from those exploratory modes of activities in our lighthouse factories to a full-fledged program with all of these streams that I talked about.
As I said, when we execute at this level, we will be able to drive about 65%-70% coverage. In summary, we have the clarity of purpose, we have the targets that we're going after, full consensus with the operational leadership, and we have an amazing advanced manufacturing setup that sets us apart from our competition, with the kind of data that Steve talked about that is stitching across these different streams. As I said, our differentiation to drive speed and agility with our customers and suppliers is going to be absolutely top-notch, best in the industry. Thank you.
Our next presenter is Mark Maybury, Chief Technology Officer.
Hopefully I'm on. Good morning. It's really an honor to serve as Stanley Black & Decker's first ever Chief Technology Officer. Jim mentioned we have a number of new folks. Sudhi and I actually started the first day together. Janet is well new to the company. It is just a real pleasure to work with this world-class leadership team. As Jim said, I spent 3 decades in the public sector, in public service, serving as the 33rd Chief Scientist of the Air Force, where I oversaw $5 billion every year of R&D investment, bringing our nation and our national security to technological superiority.
I also spent 27 years in The MITRE Corporation, which manages seven federally funded research and development centers, including serving as Chief Technology Officer, Chief Security Officer, and Director of our nation's first National Cybersecurity Center of Excellence. Along the way, I had the great pleasure of commercializing five companies in one year in 2015, one of which actually turns out to be the digital engine of one of our cybersecurity unicorns. I've had a great pleasure working with Robert's team in security and many others across, my most exciting thing today is to introduce to you our innovation ecosystem. The more you learn about this company, its past, its present, its future, you can't help but get excited about it. I'm excited to talk about what we're going to be doing for the next 10 years.
Our first intention is to become leaders in multiple ecosystems, specifically in areas such as battery technology, as you've heard today, in additive manufacturing, in construction technology, and others. We aim to innovate. Over the next 10 years, we will introduce 10,000 or more new products. We will actually introduce hundreds of first-of-a-kind that the world's never seen. We will protect those through 1,000 or more patents, many trade secrets, and other mechanisms. Importantly, we won't only do this alone. We will do this in partnership with others. Importantly, we'll do this with a purpose and a mission. As Sudhi was mentioning, we will upskill 30,000 of our employees, and we will empower them with advanced analytics, with artificial intelligence and machine learning, and with cobots and robots through autonomous support.
In addition, we will change the lives, just alone in the next few years through the use of our advanced motors together with photovoltaics. We will change the lives of 10,000 people in India. This really is an exciting opportunity for us to leverage this global innovation ecosystem as we go forward. Speaking of going forward, one of the great things is not only does the company have a legacy of great innovations, but four years ago, under the leadership of Jim and Don, we had significant investment in launching an innovation journey that started with our Technology Council, which specifically brings together all of our leadership in technology and commercial excellence across the company, as well as our Digital Accelerator, which you've heard of in Atlanta.
Importantly, in Jeff's business, the special forces, our first Breakthrough Group was launched, which, as you know well, the FLEXVOLT result just a year later. Of course, accelerating beyond that to ATOMIC and XTREME. Importantly, not only did that generate new revenue and new value for that business, but it spawned the creation within a year of Breakthrough Groups across all of our businesses, which are revolutionizing, as you've heard some examples before. You've heard about what we're doing in Industry 4.0, but also Jaime Ramirez leads our exponential learning unit situated in the heart of Silicon Valley in San Jose. Already, only a year old, we're at first revenue with three innovative startups that are digitally enabling many of our construction workers in the field.
This innovation ecosystem is expanding at an impressive rate, but with a clear focus on core innovation, on 22 by 22, on ensuring that we can maintain leadership or gain leadership in markets across the world. The Breakthrough Innovation Groups, which are physically separate with experts, but nonetheless focused in reporting into the businesses, are intended to disrupt the core to make that core much more successful. In addition, they're accelerated through a variety of elements, such as the ELU, the Digital Accelerator, as well as our ventures investments and our external partners. Our technology capability across the company in terms of our talent base is connected through the Technology Council, as well as our technology connectors, which live with venture capitalists and connect to universities and national laboratories, as well as very focused expert groups, such as a digital product security team.
In addition, we actually believe that innovation has to happen with everyone. It's a cultural change. Already, through our innovative crowdsourcing drawing board activity, we've been enabled to create $30 million worth of value. Our Innovation Everywhere, we just launched a few months ago, already has thousands of employees engaged, producing hundreds of new innovations to improve efficiencies or improve new top-line capabilities. They're all connected globally via Workplace. Over 130 real-time translation languages allowing us to connect our 60,000-plus employees, plus the many other additional folks in our ecosystem right together with our mothership. Innovation, the talent, the treasure, and the technology is global. Our strategy is global, as you've heard. Our Breakthrough Groups appear across the globe. The sun never sets on our Breakthrough Groups. We're innovating continuously seven by 24, with a pipeline of innovative products to be introduced in 2019 and beyond.
Our Technology Council, which I am privileged to lead, consists of leaders across the company, specifically focused on identifying the knowledge and the disruptive capabilities that will help propel us into the future, from academics, from national laboratories, as well as other industrial experts. Indeed, that group has created our very first, in the history of Stanley Black & Decker, Innovation Horizons, our strategy for technology innovation, which identifies our top 12 focused technologies where we believe we can generate the most revenue. Just as an example, IoT and AI generating $3 trillion to $4 trillion worth of value over the next five to 10 years. We are very focused, and importantly, we are leveraging all the talents in the company. You heard Mike Simpson talk about digital marketing.
Those teams are integrated into these technology strategies so we can maximize the opportunity, both for protecting ourselves against threats, but also for taking maximum advantage of opportunities. Just to give you a couple of examples, we are very excited to be able to report our first. Our partnership with Techstars has already resulted in 10 new accelerated companies in additive manufacturing, and Stanley Black & Decker now has a name as a leader in additive manufacturing. As you can see here, these companies came from all around the world to come to Hartford to be improved. From Canada, from Israel, from Eastern Europe, from across the globe, coming to Hartford so that they could actually improve the additive manufacturing capability. I do not have time to go through all of these, but just let me give you one small example. MetalMaker 3D , a 25,000-year-old metal casting process.
Right in Hartford, this company has translated by using 3D printing technology, plastic printing, an arbitrarily complex mold, and then covering it with metal, and then burning that mold out, basically allowing us with essentially a kind of a negative process like you would have in photography, to create an impressive capability for metal molding, specifically for prototyping. A process that would take months at times, now we can do in one day. We actually have an eye on doing this within a few hours. Exciting technologies that will really revolutionize the additive manufacturing business. Our way, however, is to do this in partnership with others. As you can see here, whether it be in battery technology, additive security, our objective is to use all of the tools, all of our weapons, to advance our profitability as well as our growth.
We invest in companies where we want to have a strategic role. We accelerate companies where we want to benefit from others' investments in those, or we invent, via our breakthrough groups, brand-new technologies internally that we can bring to market. Just as two very quick examples here, Volo3D. This is a new 100-nanometer material that allows us to print very quickly an arbitrarily complex metal article that actually has the properties of steel at two to five times less weight. Revolutionary material. It was just actually approved for use in Desktop Metal, which is actually another billion-dollar company, started just outside of Boston, which allows us to actually rapidly innovate in metals. It is not just there. If we look at plastics, in John's business, Evolve, is an innovative new company that we are also investing in.
This company gives us a 50x ability to improve the speed of plastics printing, and we're already beginning to explore in SEF some automotive parts that we can add. There are many other additive manufacturers. There are many other examples here we could give you. The point here is that we're connected directly to these ecosystems. We're taking advantage specifically for the benefit of our shareholders as well as our businesses. Don't just take my enthusiasm and my excitement for this technology innovation. Listen to the experts. An independent study of the 1,000 leading technology innovation companies in the world, we were honored recently to be among those. More importantly, 88 of those 1,000 were identified as high-leverage innovators. Stanley Black & Decker was not only in those 88, Stanley Black & Decker was one of only two that over a 15-year period had sustained higher-level performance.
You can see the 3x market cap growth, the 2.6 revenue growth rate, driven by our innovation investments that you've heard about throughout the entire morning. We intend to further accelerate both our internal as well as our external ecosystem so that we can produce better products faster for all of those in the world. In summary, I'm reminded of a great African quote, which is, "If you want to go fast, go alone. If you want to go far, go together." Our innovation ecosystem allows us to go fast and far for those who make the world innovative. Thank you.
Our next speaker is Janet Link, Senior Vice President, General Counsel, and Secretary.
Good morning. As Jim highlighted in his remarks earlier this morning, our company's purpose, For Those Who Make the World, drives our success as a business and connects us to our broader role in society. I'm sure that there are a lot of you out there thinking the same thing that I was thinking when I interviewed with the company a year and a half ago. Is your purpose statement really anything more than a cool tagline on your pretty brochures? What I found when I arrived was that the purpose statement really describes the essence of what the company's been doing for the last 175 years. Because of that, it really is something that's embraced by our employees as a rallying cry, and it really is a framework for everything that we do.
The social responsibility and governance that are at the heart of our purpose help us to create long-term value for all of our stakeholders through a virtuous circle. As Mike Simpson was talking about earlier this morning, our social responsibility really burnishes our brand. In turn, that increases their value, it allows us to attract more customers, we're able to recruit and retain really talented employees. Those talented employees innovate new products that address unmet societal needs, helping our communities link to incremental revenues. We make new sustainable packaging for those products, leading to less waste, lower shipping costs, and more profits. It goes and goes. The 2030 global corporate social responsibility strategy that we rolled out last year is designed to bring our purpose to life by inspiring makers and innovators to create a more sustainable world.
I think that everybody in the ESG world right now is looking for metrics that tie sustainability to performance. We've based our strategy on the United Nations sustainability goals, which, as Jim said, are a blueprint for creating a better, more sustainable world for everyone. We've also put a lot of thought into the key three pillars that support our strategy, working hard to make sure that each of these pillars leads to the creation of long-term value. The pillars are empower makers by enabling 10 million creators and makers to thrive in a changing world, innovate with purpose by innovating our products to enhance the lives of 500 million people and improve environmental impact, create a more sustainable world by positively impacting the environment through our operations. We're working to enable 10 million creators and makers to thrive in a changing world.
Industrial and technological innovation are rapidly changing the nature of work, we're helping our employees, students, and others to gain the skills and expertise that they need to create new jobs, revitalize communities, and make a better world. We're taking a number of actions to meet our 2030 goal. We're upskilling employees to prepare them for Industry 4.0 and for technological disruption. We're providing access to STEAM education and vocational training and building maker spaces around the world. These actions lead to long-term value by building the workforce that we need in order to keep innovating new products. It also is training tradesmen, DIYers, and others to use the tools that we're making, enhancing our relationships with existing customers and creating new customers.
By 2030, we intend to innovate our products to enhance the lives of 500 million people through addressing unmet societal needs and reducing the lifecycle impact on the environment of our sourcing and our products. For example, we are working to source our products, finished goods, raw materials, and services from suppliers who meet our evolving sustainability criteria. By enhancing the sustainability of our supply chain, we help the environment and our communities. We also build a supply chain that can endure despite resource constraints and a changing climate. We have a longstanding commitment to creating a more sustainable world by reducing the environmental impact of our operations on things like greenhouse gases, water use, and waste generation.
Our commitment to these areas is even stronger than ever, our 2030 targets of achieving carbon positive emissions, sustainable water use across our operations, and zero waste to landfill are our way of making a lasting positive impact on our communities. We have many examples of renewable energy in action around the company. Because I'm a Texas girl, I'm going to tell you about our new global tools and storage facility in Mission, Texas. It's our first manufacturing plant that is operated 100% by renewable energy. Our board is directly involved in our corporate social responsibility initiatives, it recently amended the charter of our corporate governance committee to add responsibility for overseeing our environmental management, sustainability, and corporate social responsibility initiatives. We know from experience that diverse ideas, perspectives, and backgrounds make a stronger work environment where we make better decisions and innovate more.
Over recent years, we've launched a number of initiatives to foster the diversity and inclusion that lead to long-term value. One of these initiatives is a leadership training program for young talent that has an industry-leading retention rate. Another initiative are our employee resource groups, which are a great pipeline for talent. We now have nine employee resource groups with more than 30 chapters and 13,000 members around the world. These groups support a variety of employee needs from the women's, LGBTQ, and African ancestry communities to special abilities, veterans, and working parents. We asked our employees what we could do to help them bring their best selves to work, in response to requests and suggestions, we've instituted things like flexible work opportunities, paid parental leave, and transition guidelines. Our employee resource groups have developed a diversity and inclusion strategy that supports our 22 by 22 goals.
They articulate the strategy in terms of four C's: community, culture, career, and commerce. They're building relationships in the community to support our corporate social responsibility strategy. They're working to ensure that inclusiveness is woven into our culture as opposed to just being a one-time initiative, building career paths for talented employees, supporting and promoting the commercial initiatives that drive our 22 by 22 goals. Let's take a minute to see diversity and inclusion in action around the company. Now let me turn to corporate governance. We have instituted corporate governance policies that align the interests of management with shareholders. Our compensation programs are designed to incentivize employees to meet or exceed financial goals and create long-term value. 79%-89% of our senior executives' target compensation is based on the achievement of specified financial goals and share price performance.
Our board strives to make our governance shareholder-friendly to make changes in our governance consistent with evolving best practices. Last year, the board amended our bylaws to add a proxy access provision that we believe is consistent with guidelines issued by the Council of Institutional Investors. We've also engaged with our shareholders on issues like corporate governance, the board has incorporated valuable insights from that engagement into its deliberations. Just as we recognize the power of diversity in our employee population, we recognize its power in the boardroom. Over the last three years, the board has added three new independent directors who are leaders in their field. Their fresh perspectives balance the institutional knowledge of our more tenured directors. 30% of our directors are women or are ethnically diverse.
The board also engages in a robust annual self-evaluation process where it determines whether it has the skills, experience, and expertise that it needs to continue overseeing the very rapidly changing business dynamic in which we operate. The strong governance and social responsibility at the heart of our purpose enable us to continue bringing in the talent that we need to drive performance, show that we're leaning into the rapidly changing external environment, and embracing the corporate citizenship necessary to keep creating the financial and social value that lead to long-term success. That's what purpose-driven performance means to us. Thank you.
We're going to play a brief video as Don Allan, Executive Vice President and CFO, takes the stage.
Good morning, everybody. Gravity is not going to hold us down. All the great things that you saw this morning are perfect examples of that. But I know one of the questions you have is, will tariffs hold us down? And my answer to that is no, they will not hold us down. We have been in a mode for quite some time now, and you're going to see that through this presentation, especially the back end of the presentation, in particular, that Stanley Black & Decker and this leadership team has dealt with significant headwinds for over five years at this stage. And tariffs is the latest and greatest. And we continue to grow our earnings at a very acceptable, if not outstanding pace, which is what you will see. What does tariffs mean to us today?
As we all know, there was a tweet about a week and a half ago, Sunday night while I was eating pizza. And the world just changed quite a bit in the last 10 days as a result of that. As a refresher, when we gave April guidance, we told you that the impact from tariffs would be $100 million in 2019. And that was with List Three at 10% at that stage. With that tweet occurring about a week and a half ago, and then the subsequent events that occurred in that time frame that I mentioned, we now know that List Three is being escalated to 25% and will be effective June 1st. What that means for us in 2019 is an incremental impact of $50 million-$60 million.
On a cumulative annualized tariff basis, when you add all this together now, it's going to be $250 million-$275 million. When I look at that, I say, "Okay, it's another headwind. It's something we've got to deal with." We've dealt with currency, we've dealt with commodity inflation, and we started dealing with tariffs last year. We're going to do what we've been doing. Now we have some more things in our playbook that you've heard about today. The first thing we're going to do is we're going to initiate some price actions. There's always delays in the timing of that. We all know that. It takes time to get those into the market. All of them don't stick over time, and we never get a full recovery from price actions, especially when it relates to these type of topics.
We know we'll get a reasonable percentage, probably somewhere between 30%-50%. Time will tell. We're also moving quickly on things that we can do in the supply chain to adjust where we manufacture, where we get our components and parts from, to try to really mitigate as much of this as possible. You heard about some of that from Steve this morning, and we'll continue to provide more clarity on that as the months go forward and we really see how this plays out over time. The third area is the Margin Resiliency initiative in general. One of the reasons, among many, but probably the biggest reason that we really went after this is that we saw our margins were under attack, as Jim mentioned. Significant impact last year as a result of these headwinds, and we want them heading in the right direction.
We want accretion on a regular basis of at least 50 basis points per year. These initiatives allow us to really do that even when we have headwinds. This is an opportunity to offset. We believe we can offset these escalated List Three tariffs by these three different areas and make sure that we do grow our earnings per share 6% in 2019. What that means is we are reiterating our guidance for 2019 with 4% organic growth for our company, EPS range of $8.50-$8.70, and free cash flow conversion rate of net income of 85%-90%. This obviously assumes that escalation, as you see on the chart, of List Three. When I go back a page, there was also some noise over the last 10 days about a List Four and whether that becomes a reality or not.
Currently, that's not something that's been enacted. It's just a discussion and a conversation that's happening. For transparency, we've provided these numbers in the past. The incremental impact to us from a List Four, which means everything from China has a tariff of 25% on it across many industries, would be another $125 million-$150 million. If that occurs later this year or in the coming months, we'll see how things play out. We will pull out the same playbook that I just went through, initiate price actions, more supply chain adjustments, and Margin Resiliency initiatives will help us offset part of that as well. That being said, I'm not sure all three of those things could fully offset the full impact of that. We would likely evaluate other cost reduction ideas, which would include certain surgical restructuring actions.
We are determined to work through this period of time where these headwinds are significant, yet our earnings per share continues to grow at a reasonable basis. We did that last year, where earnings per share grew 9%. Our expectation is growth 6% this year. In 2020, by taking these various actions with these headwinds still in place, we will take enough mitigating actions to make sure that we grow earnings at a reasonable basis next year as well. I hope that's clear, if it's not, we can certainly clear it up in the Q&A. What I'd like to do now is spend a little bit of time talking through three different areas.
One is kind of an overall summary of our strategy that you've heard today, put into some of the standardized pages that many of you see on a regular basis, and give a little color on a couple topics. The second area is to look at how strong the financial performance of Stanley Black & Decker has been in the last five years, ending in 2018, as well as three years ending 2018. We've put many expectations out there, including long-term financial objectives, a three-year vision. How did we do related to all those things? I'll spend a little time walking through that. The third area is looking at, well, where do we go from here?
We will lay out a new three-year vision financially of where we would like to go financially, and with all the momentum that you saw this morning, why we feel strongly that we can achieve that. Starting with this page, we've been a global leader with world-class franchises for quite some time. Three very powerful segments, all with many different attributes that you heard about this morning. The power of the tools and storage business of $10 billion in revenue. Jeff did an outstanding job as usual, explaining where we've been and where we're going. John Wyatt touched on STANLEY Engineered Fastening and industrial, and Robert Raff talked about our transformation in STANLEY Security and the great opportunity that's ahead.
The vision underlying all this is be known as a world-class innovator. Make sure we continue our top quartile performance as it relates to TSR, and then, of course, continuing to enhance our social responsibility. I'd like to spend a little bit of time, Julian asked this question in the Q&A, so I can give a little more color right now, as to our industrial portfolio, because you didn't see that entire picture this morning. You just saw STANLEY Engineered Fastening. One of the things that we have always said about our industrial business, because of STANLEY Engineered Fastening's amazing automotive platforms that they have, it's very heavily weighted to that industry. With the acquisitions of Nelson, which is an industrial fastener, and the IES brands of Paladin and Pengo, we are really broadening the diversification.
Now when you look at the overall segment, automotive is about 40%, where it was over 50% before these acquisitions. It helps with the diversification strategy. It helps with some of the growth profile aspects as well, because we do see times like this in automotive where we go through cycles, and it affects our top-line growth. When you look at the overall growth of that industry and our business and how we outperform, as Jim mentioned, we demonstrate very powerful growth within our 4%-6% organic growth profile for Engineered Fastening. We think attachment tools can do the same thing, grow in that type of performance level as well. We touched on oil and gas and some of the things in the industry that are affecting us.
What I like about this particular situation is that we're making modest investments in the breakthrough area, so we're prepared when the industry turns in the future, and that will drive revenue opportunities for us. Overall, we feel very good about this particular part of our company. Different pieces, continue to diversify it and make it very similar to a growth profile to what we see in our Tools and Storage business as we go forward. Our strategic framework and our long-term financial objectives have not changed. We've always been focused on organic growth momentum, and I think you saw this morning the amazing growth momentum we have as a company. What's great about it is you can see the future that it's going to continue for some time in the future, at least 3-5 years. We're very selective in where we operate.
Our brands are powerful. The innovation that we bring is sustainable and truly is a differentiation in all the markets that we play in. Obviously, we're focused on being a global cost leader in all our businesses. We pursue acquisitive growth as well in addition to all those organic activities to build upon the amazing tools platform that we have. This industrial platform I just described and building upon that. Then maybe somewhere down the road, Stanley Security, but it has to finish what it's doing right now. That's not even something we're even considering. The long-term financial objectives have not changed. 4%-6% organic growth, 10%-12% overall. EPS growth 10%-12%. Remember that range, 10%-12% EPS growth? I'll show you some data later in that particular category and a few others.
Strong free cash flow has been part of our story. Been impacted the last couple of years because of some of these transitions and other items. As I mentioned in April, we get to 2020, we want to get back to 100% or better free cash flow conversion as we drive more working capital benefit across the company. Dividend is a great story. We continue to grow our dividend as the company grows, and our payout ratio is somewhere between 30%-35%. Obviously, we're disciplined to make sure we maintain a healthy balance sheet and have strong investment credit grade ratings. In that regard, we mentioned that we ended the year last year, as you can see on the left side of this particular page, with a debt-to-EBITDA ratio of about 2.3x. Our target is to be around two.
We're going to do a little bit of delevering this year in 2019 to get back to that, which is actually perfect timing because we've done various acquisitions across the company, in our industrial businesses in particular recently. You saw from Jeff the amount of work that we have going on around these brand transitions and all the activities there. The timing is perfect for us to digest these capital allocation decisions we've made and really focus on getting our leverage back to our target leverage ratio, as I mentioned. The capital allocation strategy is not changing. 50% of capital goes back to M&A, and 50% goes to our shareholders through a dividend for the opportunistic share repurchase that we do, like we did last year in 2018.
We think this strategy allows us to be disciplined in our M&A decisions, but also return value to shareholders in another form through dividends and share repurchases. I mentioned the dividend policy in the page before. This is a hybrid model that has worked well for us at least for 20 years, and probably was in place even before that. All these things allow us to do the value creation model that Jim touched on earlier today, which is we have franchises that have all those traits in the upper left, which means they're strong, innovation-driven businesses that play in diverse and global markets. Then we apply the principles of our operating system or operating model, the Stanley Fulfillment System 2.0. All those things and all those traits allow us to drive the type of financial performance that achieves our long-term financial objectives.
Then we reallocate the money, 50% of our free cash flow back to the businesses through M&A, and the other half, obviously, back to our shareholders. World-class branded franchises that have sustainable strategic characteristics that create exceptional shareholder value and have for many, many years. Let's talk a little bit about acquisitions. We've done acquisitions, as you know, quite a few. Let's talk about how they're doing financially now that we're in year two or three for a couple of them. Before I do that, just as a reminder, the acquisition criteria that we go through, it's not overly complex. It's fairly straightforward. Obviously, the first thing is an acquisition target a strategic fit? Does it make sense in our existing platforms and businesses and segments? The second question is: do we have the organizational capacity to absorb it?
If it doesn't pass that test, we usually move on. Then we get into various financial aspects. The first of which is when you look at the business, does it have the type of organic growth and profitability that would be consistent with our long-term financial objectives that I just showed you? If it doesn't, it's probably not a perfect fit. It may strategically make sense in some ways, but if it can't perform in a market that doesn't have that profile, it may not be the best fit. We have to have accretion, EPS accretion in year one before or excluding M&A charges. Our SFS ROI within three to five years after closing the transaction should be somewhere between 12%-15%, which of course is in line with our long-term financial objectives.
We also look at, is this a value creation opportunity that's more significant than just using the capital to buy back our shares? Usually, if it's gotten all through the test of all those things I just mentioned, it's probably something that's creating a lot of value for us over a three to five year-plus timeframe. I mentioned the acquisitive growth areas. We've already touched on those. Let's look at a couple recent acquisitions and how they're progressing financially. The LENOX and IRWIN brands, you saw the great things they were doing this morning. If you look at it financially, the EPS accretion was supposed to be $0.60 in year three, which is we're in year three right now.
We will achieve that objective, which means we're getting cost synergies of $85 million, and we're achieving the revenue synergies, as Jim mentioned earlier, of greater than $100 million in year three. This has been an outstanding acquisition for us, and it fit perfectly into our portfolio of brands and products within the tools and storage segment. Of course, CRAFTSMAN's been outstanding. You heard the billion-dollar opportunity is now going to be achieved by 2021, six years ahead of schedule, and revenue is at $600 million here in 2019. The SFS ROI target will be achieved by 2021 as well, which means it will be in excess of 12%. The way that thing's going, I'm sure it will be even better than 12% by the time we're done, because it's a fantastic acquisition.
These are great examples of recent acquisitions, how they went through the filter, and they've achieved the type of financial objectives that we want to achieve with these particular investments. As we think about a couple of years down the road, we'll do the same thing with Nelson and the IES assets to make sure that they do the same type of performance in that regard. I thought it would be helpful because sometimes people ask the question, "What is the vision for industrial for M&A?" Because they certainly understand what we're in today. We ideally would like to find a way to create a $3 billion-$4 billion global platform that is made up of highly engineered application-based solutions. You're probably wondering what the heck that means because it's a lot of interesting words.
If you think about our Engineered Fastening business and the value they bring to our customers, with being involved in the design process and the use of our fasteners and the uses of the fastening machines as well in their manufacturing process, that creates productivity. We get paid appropriate levels of profitability based on that. We're looking for businesses in that regard, which have a lot of the traits here on the left. They have that engineering capability with leading industrial technologies. They likely have some type of customer-trusted brand, like our Engineered Fastening business, like the Paladin and Pengo businesses. They're known very well in those industries and are very trusted by the customers. Is there a recurring revenue or just as importantly, some type of aftermarket opportunity within the business? Is it global multi-vertical?
Does it have the ability to differentiate through some type of innovation or unique service it provides? Then, of course, is it in a market that's attractive? All these things are consistent with our strategic framework and what we try to achieve across the entire company. That means the acquisition focus would be, first of all, looking at bolt-ons to the existing platforms we have in that space, but maybe some portfolio-enhancing assets. Businesses that have very similar traits, but they may not be exactly the same products that we have today. Is there customer market diversification we create? We talked about We love our automotive business, but can we make that a third of the industrial segment versus the 40% it's at today through some of these types of transactions? Obviously, product line expansion is an opportunity. New technologies.
Now, here's an area where maybe we want to make some investments in the automotive side because we see automotive changing. John talked about electrification. And the opportunity there and the penetration that we can achieve, maybe with some small acquisitions that will allow us to build that out at a more rapid pace as that continues to accelerate. We think there's a lot of opportunities in this business. We do think it is a business that has a strong organic growth profile, even though in the last 18 months or so, it's been impacted by what's happened in automotive. We don't see that as a long-term detriment to this particular segment. Obviously, we see it as an opportunity to grow through acquisition.
Here's the part I was alluding to, actually probably wasn't alluding to, it was very obvious, that we're very proud as a company of our financial performance. Although sometimes we all get focused on the shorter-term headwinds that we're experiencing, like I touched on at the beginning of this presentation, the overall performance when you look at it over a 5-year timeframe first, our organic revenue CAGR over 5 years was 5%. Our adjusted EPS CAGR, that's before M&A charges, was 10% over that 5-year period. Our free cash flow CAGR growth was 8% over that timeframe as well. Cash was pretty close to earnings in that regard. A very strong performance and in line with those long-term financial objectives I just mentioned. We have to look at what types of returns are we getting. Are we getting the right returns as a company?
You can see our SIFROI, which is a key measurement that we look at for returns, which is cash from operations and then adjusted for after-tax interest expense, divided into our capital investment base. We've been somewhere between 12%-15% the last 5 years, and you'll see the average SIFROI over the 5-year timeframe is pretty much right in the middle or a little bit above the middle of the range over that 5-year time horizon. This validates the sales performance, the P&L performance, and now this performance validates that we're creating value as a company and for our shareholders. Another way to look at it is to look at a return on operating assets versus your industrial peers. This is a bit of a modified Holt.
It's not exactly a Holt model, but if you looked at Holt, it would get you the same answer. Really, it's taking your operating cash flow performance and dividing it into the original investment you made in your operating assets. We're top quartile. The reason we're top quartile is because we're very efficient with our assets, both on the working capital side and how we invest in capital expenditures as well. Then, of course, we're managing our cash balances very effectively across the globe. We don't have a great deal of cash just sitting overseas that we can't utilize and haven't for quite some time. What I think is really impressive about this page is not so much the historical performance, but the opportunity going forward is still there to perform at this level or better.
We still want to get above 10 times working capital turns. Now we're in the eights, and we see an opportunity to get above 10 in the next couple of years. We'll continue to be disciplined in capital expenditures. Then the bigger opportunities actually may be in our operating margin rate and the accretion we can get out of the three different areas that you see here on the page. Driving operating leverage as we grow organically. Improving our Security margins dramatically from 11%, where they are today, to somewhere in the mid-teens is a significant impact to our company. Then the Margin Resiliency initiatives, you'll see a number in a minute on that. That's quite significant for the next four years that we believe we can achieve that will also help us improve our margin rates.
I only see this return on operating assets getting better on a go-forward basis because of that. There's lots of opportunity for strong performance in this area. Over the five years, how did we do versus our long-term targets? You can see we hit everything except for one thing, and that was total revenue growth, which as we've told you many times, we're not obsessed about total revenue growth. We want to get 4%-6% organic growth, and we want to get 10%-12% EPS growth. Total revenue was impacted by things like currency, some small divestitures. If you exclude that, it would be closer to 8%. Not far from the range we're trying to get to. The free cash flow conversion average was strong, over 100%. Then you saw I mentioned the SFS ROI being at 14% on average over that timeframe.
Check the box on every single one of these things related to our long-term financial objectives. When we dealt with roughly in this five-year timeframe, almost $850 million of headwinds. Back in 2015, we laid out a vision for three years financially, which the world was a little bit of a different place back then, as we all know. Changed quite a bit. However, we've achieved all these objectives we've laid out. We said 4%-6% organic growth. We got 5%. We wanted to enhance that growth with acquisitions, which we did. We got 8% CAGR in total revenue growth over the three years. We wanted 50-75 basis points of operating margin rate improvement, which this was like a hot topic, if you remember back in 2015. Folks thought this was too low, that it should be bigger.
Probably were right if everything went perfect, everything didn't go perfect. We dealt with $500 million of headwinds in that timeframe, with obviously the biggest coming in 2018. If that hadn't occurred, we would've had that type of rate accretion, actually, it would've been better. Even with those headwinds, we got to 11% EPS growth CAGR in that three-year timeframe. I think that's an outstanding performance by the leadership team at Stanley Black & Decker. Our free cash flow conversion greater than 100%, SFS ROI averaged 14%, and working capital turns on average were very close to 10 over that time horizon. We did, obviously, grew our dividend and maintained a disciplined, healthy balance sheet along the way. We said we'd be approaching $8 of EPS in 2018 back in 2015.
We ended up at $8.15, we dealt with the type of headwinds I just described. That's why we don't sit here and get overly worried, freaked out, panicked that things like tariffs are coming our way. We recognize them as real issues, we recognize that sometimes, in a short window, the financial performance might be impacted a little bit as a result of that. Over a period of time, like two or three years, we feel like we can mitigate those types of headwinds through the playbook that we've created, and now we've added things to it with our Margin Resiliency Initiative program. We can't forget, it all starts with this. Without this type of momentum on the top line that you heard from Jeff, Jim, John, Jaime, et cetera, it's hard to do all the other things.
This is where you start, this is why we feel really good about where we're going for the next three to four years, because we have all these opportunities. Of course, we have MTD, as you heard from Allison, as something that we could potentially bring into our family of brands and businesses sometime 2021 or later. The growth is there. Steve talked us through all this around margin expansion, our Margin Resiliency Initiative, the four different categories, how this is different by using technology to drive this. This is not about brute force. This is process change, organization change, in some cases, business model changes. It allows us to make better decisions with better information at a faster pace. We believe this will create $300 million to $500 million of value by 2022. We're creating value here in 2019 with this program.
As it ramps up, as we get momentum going into 2020, we will have some value that occurs in 2019 as well. This is why we feel like we can expand our margins by 50-plus basis points on an annual basis going forward because of this type of set of initiatives, even though we know we're probably going to be continuing to deal with some headwinds. Summarizing the three-year financial outlook over that time. This is from 2020 to 2022, with 2019 as the base year. Very similar to the last time we gave a three-year financial objective. Very consistent with our long-term financial objective. You're still probably scratching your head looking at that 50 basis points plus saying, "Does that really make sense?
Shouldn't it be much bigger if you have $300 million-$500 million of margin resiliency actions?" Well, frankly, it could be. Operating leverage should give us, alone, 40-50 basis points. Margin resiliency is going to be on top of that. We also know we'll be dealing with some headwinds that we'll have to offset. If the headwinds aren't as big as they have been, that's an opportunity for us to outperform that metric. Time will tell. We will see where that goes. EPS growth is very similar. We're giving you both an organic one and a total one. 7%-9% without acquisitions, 10%-12% with acquisitions. The biggest acquisition assumed in these numbers today would be completing the MTD transaction. If for some reason that didn't happen, we would probably invest that capital in other parts of the company.
10 working capital turns, achieve that as well. Get back to 100% free cash flow conversion or better, and make sure we maintain our SFS ROI in 12%-15% as we move forward. The dividend and obviously the credit rating, we will continue to maintain our philosophy and approach there. We will create $3 of EPS accretion over this three-year time horizon. This management team is determined to do that. We really believe there's a compelling story to invest in our company. We understand the short-term situation of trade wars and geopolitical events. When you step back from that for a few minutes, and you think about what you've heard for the last three hours or so, we have world-class franchises with amazing brands that are number one or number two in the marketplace. They're scalable and defensible franchises.
We have an outstanding track record of growth that you just saw, both in not only just in organic growth, but total revenue growth, and of course, EPS growth. The one area that we've been set back in the last 12 months is margin. We have a margin expansion focus to get that back heading in the right direction, and make sure that attack we experienced is not something that lingers. That we go forward, and we continue to drive accretion in our margin rates. You see the three areas that I mentioned earlier that are going to do that. That will allow us to have strong free cash flow generation as we get our working capital turns above 10 times, and we can continue our very shareholder-friendly capital allocation, all of this being driven by the SFS 2.0 operating system.
Encompassing that is our vision, as Jim started the morning out with. A company that will be known for innovation, but also will be a top quartile performer and ensure that it enhances its social responsibility along the way. Thank you very much. We're now going to move to Q&A.
Hey, Mark. Right next to you. Why don't you give it to Justin? Justin Speer.
First question from me is just with regard. Steve, if you don't mind breaking down the programs that support margin expansion. I think that's one of the elements that I think is going to be really important for value creation. Just breaking down those buckets, you talked about price margin, procurement, supply chain. If you can help us understand some context on maybe an order of magnitude, easiest to hardest, and how we think about that going forward.
Sure. I'll give you the color on that. I think what I like about this program is there's some things that are a little more complicated than others. Steve talked about the supply chain changes in response to tariffs that, frankly, we've been doing for a period of time, we haven't been overly aggressive in that space, thinking that maybe a trade deal would emerge. We'll see what happens over the next few months, whether we want to get more aggressive over time. That one's probably a little bit longer cycle. When you think about the other ones, Industry 4.0 has actually been underway for almost two years.
Sudhi came in a little more than a year ago, he's just thrown like a ton of gas on that situation, just working with our operations leaders and tools and Engineered Fastening and making that go faster. That has got momentum, that's creating value already here in 2019 and will create more value in 2020. I look at that one as kind of a leading particular area just because we started sooner. The price and margin one is ramping up very quickly, though. The good thing about price is when you get the right data, the tools and information, and some of the technology that Steve was referring to around artificial intelligence, those decisions can be made fairly quickly and implemented very quickly. We see price benefit here in 2019 as a result of many of those things occurring as well.
The last area was indirect and functional efficiency or transformation. That one is generating benefit as well here in the current year. When I look at these four different categories, and you talk about the $300 million-$500 million, I actually think they're all just going to divide them by four. You're going to get within $25 million or so of each one because they're all big buckets and value pools of opportunities for us that we can drive over the next four years.
Let's do Cliff, okay?
Yeah.
He's been with us for so long.
Yeah. Okay.
20 years.
Absolutely.
What, are you ignoring him?
No.
He's almost like a front-row student. He is.
It's actually a lot worse than that. This is my 74th cumulative year following Black & Decker and Stanley. I know that's a meaningless number, but it's fun to talk about. I've got a couple of just kind of big questions. First of all, is there anything structurally in your businesses today that we should not expect that working capital turns could be significantly higher than 10 times than they are in many other comparable industries? Just a question of time in my book, but am I missing something?
Yeah. I would say, Cliff, that the Tools and Storage business has already been over 10 times in the past, so they can get there. Engineered Fastening has been over 10, I think last year. They can get there. Security's been over 10 in the past as well. The three big franchises have already done it. The only business which is small that has a little bit of difficulty is oil and gas because of some of the dynamics in that industry, but it's a relatively modest impact on the company.
The other thing that you've taught me is that one of the great challenges in your business across all these business lines is channel conflict. I always get a little nervous when you start talking about omni-channel solutions because I don't know what in the world has changed. The big boxes are still as rapacious meat-eating animals as they ever have. The internet is inexorable. The co-ops have been surprisingly strong over the last couple of decades. How are you making sure you're not going to run into that problem on the omni-directional side?
I'll take the question because it probably is more relevant to tools than any other place in the company at the moment. Cliff, I would say we've done a particularly good job of managing absolute value and price point in the marketplace, meaning everybody's playing in a fair and even way. 10 years ago, when we really started to expand beyond pure brick and mortar, there were large deltas in value and price point of our products, depending on channel. In the last decade, we've spent really making that much more transparent and cleaner, to the point where the user selects how they choose to purchase, it's not going to be based on the absolute price point. It'll be based on their preference and their absolute value.
Now that's never easily done, we've done a very effective job of doing it and allowing us to be number one in the biggest, most competitive markets in the world, U.S., North America, Europe. Number one in retail, number one in construction, number one in e-commerce. We're doing it quite well. It is a situation where you never put the pencil down, however. It is a daily exercise.
One last question, if I may. One of the disadvantages of having been around since the glaciers covered the Earth is that MTD in the past was a somewhat flawed business model. It was the lowest price points retail, not a very high-quality standard. I understand there's been some changes in the family management, but maybe you can talk about how my old impression of MTD is not necessarily today's MTD, even before you begin to influence it.
Yeah. MTD is anything but what you just described. MTD today, it is an incredibly well-run manufacturing company, which has presence in the pro, prosumer, and consumer channels. They have a broad product line. When we looked at the companies that we could have transacted with in this space, it was the company of choice for us, because we felt we could do more with them with a running start than we could with any other of the companies. We're very pleased that we were able to come to terms, and we really like the transaction that we struck with them because I think it's a win-win transaction for both the family and for the company. We're very pleased with it. I don't know. I couldn't tell you what changed because we only started looking at it probably two years ago.
Mark, why don't you pass it to Josh over there?
Thanks. Two questions. I guess first, both a near-term and a medium-term question around price, particularly in tools. I know 2018, it's kind of hard to get ahead of some of the inflation that keeps rolling in, and tariffs. When you think about the new product introductions and the categories that you're building out in, do those naturally have a better opportunity to recapture price than the base, or are we still kind of feeding into categories where you get pushback, just based on the competitive landscape or who the customers are?
A good question. I would say a couple of things. One is no price is ever higher than your first price, right? A new product is the absolute most likely way to command the highest possible price. You saw the stat from my presentation. About half our growth is based on new products introduced in the last three years. That is a big part of our margin story, and it will continue to be as such going forward. That's absolutely true. Beyond that, other long-surviving products are more challenging to get price on. We have exited the vast majority of categories where brand and innovation don't matter. You think of historically, we've been in businesses like nails and doors and home decor and things that were not defensible businesses.
We've elected to eliminate those things to the point where now our value and our innovation and our quality matter significantly, which improves the price dynamic for sure. New product is absolutely the ideal way to capture price.
Follow that up on tariffs for List Four. It becomes a little bit of an academic exercise because I think at some level you probably have more demand issues than you would margin issues at that point and kind of the knock-on effect of global growth. Relative to the cost actions you've already taken, what more could be done if this turned into a growth issue or a more recessionary scenario? You've taken out the $250, but the group business is still growing. Is there a lot left? Maybe help us to dimensionalize that.
Yeah. What I would say is that there's not a lot left. There is an opportunity. We're talking about List Four that is, if it occurred, and it is still a big if. If it occurs, it's $125 million to $150 million on an annualized basis. We know we could pass some of that on as price. We also know we're probably not going to get 50%-60% price recovery on it. It'll probably be a smaller number. We also know that we're working a lot of different things in the Margin Resiliency, but we'll still have a gap to try to cover that completely. What that gap is maybe a third of the total number. That's kind of the magnitude we're talking about, where we would do very surgical restructuring actions. There's not a lot of fat sitting around. Absolutely not.
It would be looking at different areas and really trying to be more surgical about some of those decisions and not impact our growth and our investments that we're making in engineering and R&D, et cetera. So I'm not saying it'll be simple, but we feel like given the magnitude of the dollar amounts, it's something we can manage through. On the second part of the question, more is there a recession that evolves out of this if we go to a list 4? Recession changes everything because your volume is being dramatically impacted, company's shrinking, and to be honest with you can find a way to work with less employees as a result of that. Never an easy decision to make. Very difficult to go through as a leadership team and an organization.
We also recognize that if that occurred, we would have to take those types of steps.
I think it would also depend on the nature of the recession. I mean, 2008, 2009 was the mother of all kind of dislocations. If you go back to 2000, 2001 or even in the 1990s, 1990, 1991, those much more mild recessions really didn't have a massive impact on the volume. They brought it down maybe three to five to a little bit more perhaps in points. That kind of a recession with the kind of growth momentum that we have, I think puts us in a position where we would not have to take out massive amounts of costs. We'd have to take out some, but it wouldn't be debilitating, I don't think. It was hard in 2008, 2009. I mean, revenues were down 15%-20%, more in some of the businesses.
A big difference in the nature of the types of recessions that we might have.
Kristen, why don't you pass the microphone to Mike? Thank you.
Thanks very much. I appreciate all the comments. Just to drill down a little bit more on the $300 million-$500 million from the Margin Resiliency. If you look at the 50 basis points, that actually, off of the $14 billion base, that gives you a little over $200 million, just as a starting point. When you talk about $300 million-$500 million, and appreciate, Don, that you kind of said roughly a quarter across each of the four major buckets. What would drive it towards the higher end of that range, number one? Number two, would you expect the realization to be kind of ratable over the next three years, or would there be a ramping and a weighting towards the back half of that period?
Yeah, I would actually expect a reasonable performance this year in 2019. It's not going to be, you look at a four-year time horizon, it's probably not going to represent 25% of the program. It'll be a solid performance to start the program. It's really only six to eight months of performance for the most part, except for Industry 4.0, which has been up and running since the beginning of the year. Then you'll get up to a point where for the remainder of the program, you'll probably be getting, for those three out years, whatever's left over at that stage, about a third a year.
We think these are things that you'll get some of them quicker, as I mentioned, in the next couple of years, then there'll be longer tails more around the supply chain, which will take longer, which will be at the back end of the program, more like 2021 and 2022. I think that's the way to think about it as far as staging and how it rolls out. The margin rate comment of 50-plus basis points, operating leverage will get you anywhere from 30 to 50 basis points alone, just growing organically. Then this program is going to be another 70 to 80 points per year on top of that, depending on what number you use per year. It gets you to a much higher number. No one's denying that.
We already know that there's some headwinds that we're going to be dealing with in tariffs likely in 2020 and this year. It'll have to help us with that for a period of time. If the headwinds subside after we get to a tariff regime and we don't have a major recession or any type of recession for that matter, then you're in a situation where you could actually see a much better performance than 50 basis points per year. We'd love to see that. We're also preparing the company in case we have an environment that's more difficult.
I know I'm not supposed to say this, what if the headwinds actually turn into tailwinds someday?
Jim likes to talk about currency going the other way.
I'm supposed to be the optimist.
Yeah.
That's why we have him around.
Yeah.
Mark, why don't you pass it to Nicole right there?
Thanks. It's good to hear that you guys can offset the tariff impact completely, but maybe if you could talk a little bit about the quarterly cadence of that. Do you still expect 2Q to represent 29.5% of the full year, given that there's probably a little bit of lag between when the tariffs come in and when you can actually offset them? Secondly, similar to the last question around the $300 million-$500 million, are there any costs to achieve that that would keep that $300 million-$500 million from dropping fully to the bottom line?
Yeah. At this stage, we feel like the second quarter is in line with what we previously communicated. The back half of the year could change slightly as we get deeper into this and if the tariffs do become a reality on June 1st, as they appear they will be. I don't expect that to be a major impact, frankly. It could be very modest, but I don't think it's going to change the quarterly profile very much at all. As far as the question was on the $300 million, $500 million and what was it, Dennis? The second part of the question?
Cost to achieve.
Cost to achieve. Thank you. We think that we can manage, a lot of the costs will, frankly, probably be in capital expenditures, and we think we can manage that within our 3%-3.5% of revenue that we'd like to achieve over the long term. That was in one of the charts I presented. Now, that doesn't mean we might not have a year where it's a little bit higher than 3.5% as we work through this, but we think the cost to achieve is at a reasonable level
Would not result in anything that would be outside the bounds of what we're trying to do overall as a company financially.
Yeah. We always have $50 million built into the base as well.
For restructuring
restructuring every year.
Martin?
Martin Sankey, Neuberger Berman. I'd like to ask two questions today. I'll ask one then the other, which will be unrelated to the first. I'd like to ask the bigger picture question with respect to security, in the sense that your predecessor was quite fond of saying that without security in the portfolio at Stanley Works would not have been able to make the Black & Decker deal, which was transformative to the company. Now it's 10 years later, Tools and Storage is a much bigger percentage of the revenue base. Security is now 15%, plus or minus. The question becomes, has security now lacked the mass within the Stanley or Black & Decker portfolio to provide the cyclical resiliency that it provided in the past? How does the board think about that?
Okay. Well, your math is generally correct in terms of the portfolio weighting, and my predecessor was correct in the sense that in 2007, 2008, 2009, it provided a very valuable buffer. Obviously, with a weighting change, and as a matter of fact, it was greater than 50% of the operating margin, I believe, in 2008.
It was.
With a weighting change, of course it's less significant. We still think it could play a role in buffering, but it would be far less significant. I don't think that's the primary reason for owning STANLEY Security right now. I think right now we own STANLEY Security because no matter whether we divest it or keep it's going to enhance shareholder value, in our opinion, if this transformation is successful, and we have every reason, I think the optimism around that was conveyed. We have every reason to believe that there will be some sort of accretion associated with that major program, that major transformational program. The board thinks about it the same way I think about it, and I'm on the board. It's got a year to go before we make a decision, and when we get to 2020, we will communicate a decision.
The one thing that we appreciate about that business, there were several things that we talked about as positives, but it is a very unique asset in the sense that we have installation resources, we have field monitoring, we have service resources in the field. In the old days, when technicians were pulling wire, it was relatively simple. Today, there are not that many assets in the world out there that can take so much of this technology that exists and apply it, and also install it, service it, monitor it, et cetera. We think it's a much more valuable asset in a transformed capacity than it is in its old capacity. We'll just have to see where it goes. I would not conclude that we intend to sell it, and I would not conclude that we intend to keep it.
We are open-minded, we will be that judge in 12 months from now.
My second question has more to do with the role of Stanley Black & Decker in the world. Tools can be a very macho place. How do you think about marketing to women and getting them to be participatory in the business? Because I'm thinking of a recent The Wall Street Journal article in which they said most companies think about marketing to women by coloring the product pink. How do you do that without
We tried that 15 years ago. It didn't work.
Go ahead, Jeff, you finish up on that one.
Well, if you think of the brands in our portfolio, some of them prevalent with the trades, which can be male dominant. It depends on what it is. There are other brands that are lifestyle brands that are attractive to everyone and anyone. I think we've made our products both accessible and achievable to a very broad audience. If you look at the DEWALT shopper as an example, it's probably 97%-3%. That's kind of the way that breaks out. When you get to a Craftsman demographic, it's closer to 70-30, something like that, because of the high level of outdoor included and so forth. You get to Black & Decker, very much closer to 50-50. We serve a really important purpose, even in a, you said macho category like tools. I appreciate that, but we don't think of it that way.
We think of it as something that attracts all people to a way to improve their life and improve their situation, and add value. So I think that's kind of our look at the market.
All right. Well, we're going to turn it over to Jim now to close the session.
I'll do this very quickly. We're four hours into this immersion into what is Stanley Black & Decker, and where are we going. I hope you can sense both the passion that we share for this company, as well as the passion and the quality of the team. We highlighted that, I think, today, and I have always believed, and I continue to believe even more strongly as time goes on, that this is a very special company. Right now, our forward progress is tangible. Our positioning for future growth and success is excellent. We have a clear vision backed by a strong and meaningful purpose that is driving our momentum, and we're focused on strong cash flow generation, growth, and operating margin expansion. We're prepared, as Don indicated, to tackle whatever external realities come our way.
In addition, we have the best set of franchises and growth catalysts in the history of our organization, a strong operating system in SFS 2.0, an integrated innovation ecosystem, and a culture of values based on performance, innovation, and social responsibility. As we look to the future, we are well-positioned to achieve our vision, as well as navigate this new age of industrial disruption that we're in. Thanks again, everyone, for your attention today and your support of this company.