Review of Operations
We are pleased to announce that TTI delivered exceptional results for the first half of 2020. We grew sales 12.8% to US$4.2 billion in reported currency or 14.0% in local currency. Our gross margin improved an additional 40 basis points to 38.0%. EBIT grew 15.6% to US$363 million. Net profit and earnings per share increased 16.3% and 16.2% respectively, to US$332 million and approximately US18.14 cents per share. In addition, we improved working capital percent of sales from 18.4% to 15.8%.
When the coronavirus emerged, we immediately implemented world-class safety protocols throughout all manufacturing operations, distribution centers, R&D centers, headquarter offices, and sales force networks. By complying carefully with local authorities around the world, we were able to quickly resume full scale production and supply chain capabilities. We identified an opportunity to support our customers and capture market share early in the second quarter, so we made the bold decision to increase production, accelerate new product development and expand sales coverage globally. Due to our efficient execution of coronavirus safety protocols and our aggressive initiatives, we were not only able to support our customers’ requirements for inventory and store level sales support, but we also outgrew the market and captured significant market share.
We are pleased to report that all our geographic regions delivered impressive local currency sales growth in the first half, in the face of challenging coronavirus headwinds. North America delivered outstanding growth of 14.5%. Europe grew 8.2%, despite being hard hit by the coronavirus. Rest-of-World, including Australia, New Zealand and Asia delivered exciting overall sales growth of 21.0%.
We worked closely with our retail partners to develop and fortify the e-commerce channel. We were highly successful not only in e-commerce but “Buy Online Pickup In Store”. Clearly, e-commerce is a growing and crucial part of our future, and we are now well positioned to further capitalize on this element of our business model in the second half and beyond.
TTI continued to successfully deploy our long-term strategic initiatives in the first half. We launched a wave of exciting new products, accelerated future product development, expanded our global sales network, improved manufacturing productivity and strengthened our supply chain. Throughout the past months, our management team rapidly pivoted to an environment of virtual management and training. Additionally, we hired hundreds of new college graduates, both in engineering and sales and marketing positions to fuel additional growth. The result of these investments was that we not only delivered a strong first half, but importantly, we have positioned our company for long-term success in our served markets.
Sales in Power Equipment
The core Power Equipment segment delivered 14.0% growth in local currency, reaching sales of over US$3.7 billion. All elements of Power Equipment delivered strong results.
Professional and Industrial Solutions
Our MILWAUKEE professional business grew 13.3%, driven by a growing stream of exciting breakthrough new products. In the first half, we successfully introduced our revolutionary MX FUEL Equipment System, a series of new M18 and M12 cordless products, an expanded line of PACKOUT, a new line of Personal Protective Equipment (PPE) safety products, and a series of high-performance power tool accessories. These new product introductions enabled us to offset global headwinds and perpetuate the growth momentum in this flagship business.
The launch of the MILWAUKEE MX FUEL Equipment System allows us to enter the multi-billion dollar light equipment segment. With disruptive cordless breakthrough technology that replaces traditional gas and corded power sources, the MX FUEL Equipment range has been well-received by industrial users all over the world.
We are focused on expanding our MILWAUKEE PPE lineup that currently offers over 225 products in the categories of hard hats, eye protection, hearing protection, high visibility vests, respirators, and work gloves. The latest additions are two new ranges of work gloves with innovative features that offer protection from cut, impact, abrasion, or other job site applications users may encounter.
We are expanding the revolutionary MILWAUKEE PACKOUT system to meet the professional’s growing tool storage needs. Now with 22 unique products, PACKOUT is the largest professional storage system in the world. New innovations to the system include the PACKOUT Compact Tool Box, the PACKOUT 16QT cooler, and the 106-piece Ratchet and Socket PACKOUT Organizer.
Consumer Power Tools & Outdoor Products
Today RYOBI is the number one brand of DIY cordless products in the world with over 175 items in the ONE+ platform. We are excited to announce the new generation of RYOBI ONE+ HP high-performance brushless power tools that will further strengthen our position in the growing global DIY arena. This initial launch of six subcompact high-performance tools will set a new standard of performance for the DIYer, with additional innovations to come. We also rolled out the new RYOBI ONE+ cleaning system featuring a series of innovative cordless cleaning products and accessories.
The RYOBI Outdoor business delivered impressive double-digit growth in the first half, led by our global leadership range of cordless mowers. With environmentally friendly products capable of replacing gas powered alternatives, the RYOBI 40V cordless platform continues to expand while pioneering innovations like the breakthrough WHISPER series blowers. These WHISPER series blowers deliver all the power without the noise of a gas-powered product.
A key strength of the RYOBI business is the overarching range of cordless products that span from power tools to outdoor, and many other categories.