Snap-On Inc at Oppenheimer Industrial Growth Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Christopher Glynn - Oppenheimer & Co. Inc. - Analyst : So I think wanted to kick off with sort of a high-level kind of frame up type question and get into some of the comings and goings of the business model and the market backdrops. But maybe if you could discuss Snap-on's market position, competitive distinction and challenges, and high-level management style and philosophy.

Question: Christopher Glynn - Oppenheimer & Co. Inc. - Analyst : Great, thanks for that, Nick. And you know right now, we got an environment where you have a, I think you call it, confidence poor, the condition for the techs presently with all the headlines and issues. So your response has been what it's been in the past, SOT assortment pivot work. We had some nice initial momentum. It looked like in the third quarter, effectiveness arguably ebbed into the first quarter as maybe that sort of sentiment fatigue got built more with the tech's condition. Are there other adjustments to make there? Is it more just kind of block and tackle, execute the --

Question: Christopher Glynn - Oppenheimer & Co. Inc. - Analyst : Great, helpful frame up, thank you. And how would you size the unmitigated tariff costs and timeline to neutralizing, is it primarily sourcing and production shifts relative to pricing?

Question: Christopher Glynn - Oppenheimer & Co. Inc. - Analyst : Thanks, appreciate that. And I wanted to discuss the resilience we've seen out of [RSNI's] OEM business. To what degree is that isolated from OEM production challenges and profitability on EVs? All the noise that they're facing on the production side, obviously, the service centers are a different business under that, but within the same you know entities. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Christopher Glynn - Oppenheimer & Co. Inc. - Analyst : Great. And going over to CNI. You had some military softness more than offset a decent trend at the balance of critical industries and just modest international softness. So you've talked about Ben here before with military change of administration. Sometimes people take a pause, but you know what's your base case for how the military demand phases, because it seems to be kind of steering directionally what CNI is going to do.

Question: Christopher Glynn - Oppenheimer & Co. Inc. - Analyst : Okay, great. I think I'll try to come back to that. I wanted to jump over to the liquidity that you have, the cash position. I'm going to pause to remind anyone listening in. We have the portal, I'll check it for Q&A's in a bit. Yeah, you have [$1 billion] foreign cash, $230 million net cash. Just wanted to revisit thoughts on carrying so much liquidity. Some would argue it's inefficient, with the dividend payout over 2 times covered. And historically, share repurchase and bolt-on activity has been fairly modest. So the cash position coupled with the capital allocation posture seems to beg -- it seems to leave a gap what the capital intentions are.

Question: Christopher Glynn - Oppenheimer & Co. Inc. - Analyst : Okay, great, appreciate the Buffett comparison, and he does like to have a lot of cash on, but he retired before you did.

Question: Christopher Glynn - Oppenheimer & Co. Inc. - Analyst : Yes, he is.

Question: Christopher Glynn - Oppenheimer & Co. Inc. - Analyst : While we are on the topic of bigger strategic prospects, and probabilities, and considerations here, the CNI strategic growth target is more into the heavier mid single digits. You've gotten that in spots. It's been tough to do that on a compound basis. Even though the backdrop of having less market share makes sense why that would be your leading growth business through the time. But you know we talked about one thing goes this way one thing goes that way. To what extent do you and the board review the idea of maybe slimming down? Do you need to be in European Tools, APAC? Can you better configure the portfolio composition at CNI at large to better enable, say a 5% or 6% compound truly through the cycle?

Question: Christopher Glynn - Oppenheimer & Co. Inc. - Analyst : Perfect, very clear answer. Thank you, Nick. And then I wanted to dive into the software business because the RSNI margin trends have been a nice steady story, and I think you just have a bit of a perpetual mixed tail in there. So just wanted to touch on the scope. I think you've called software a third of the RSNI's --

Question: Christopher Glynn - Oppenheimer & Co. Inc. - Analyst : Great, thank you for that. And then, SOT, the decremental margins were pretty steep. I know volume was down and you talk about continuing the investment spend because you have a long-term focus and you're thinking about two, three, five years out even as you're thinking about today. So I appreciate that. But just curious about the impacts across volume mix and pivot program investments, just any perspective on how --

Question: Christopher Glynn - Oppenheimer & Co. Inc. - Analyst : All right, we've got a pivot to the next blocks, both you and I. Awesome chatting with you, Nick. Have a great day. Appreciate the time. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Christopher Glynn - Oppenheimer & Co. Inc. - Analyst : See you later.