The power of Briggs & Stratton's is in its equipment. The company is one of the world's largest manufacturers of gasoline engines for lawn mowers. It designs, makes, markets, and services these engines primarily for lawn and garden OEMs worldwide, including Husqvarna, MTD Products, and Deere & Company. Subsidiary Briggs & Stratton Power Products is a top North American manufacturer of portable generators and pressure washers. It is also a leading maker of lawn mowers, garden tillers, and related service parts and accessories that are sold through retailers and independent dealers. Briggs & Stratton has offices and manufacturing facilities in North America, Europe, Asia, and Australia.
Briggs & Stratton designs, manufactures, markets, and services its products in more than 100 countries on six continents.
The company conducts its operations in two segments: engines and power products. Its engines are primarily used by the lawn and garden equipment industry, which accounted for 86% of the segment's fiscal 2012 engine sales to OEMs. The remaining engine sales to OEMs were used in products with industrial, construction, agricultural, or other consumer applications. More than a quarter of its engine sales were derived from international markets, primarily customers in Europe. Briggs & Stratton's engines are sold by its global sales force through direct calls to customers. The company's marketing staff and engineers in the US provide support and technical assistance to its sales force. Briggs & Stratton owns its main international distributors, while its US distributors are independently owned and operated.
The principal product lines in its power products segment includes portable and standby generators, pressure washers, snow throwers, and other lawn and garden powered equipment. This segment sells through multiple channels of retail distribution: consumer home centers, mass merchants, warehouse clubs, and independent dealers. Power products major customers are Lowe's, The Home Depot, and Sears. Other customers include Wal-Mart, Tractor Supply, and a network of independent dealers.
Net sales have remained fairly steady (if slightly declining) over the last few years, even as the company faced a global economic recession and lower average prices for its equipment. However, the company reported a 6.4% decline in sales in FY 2012 mainly due to a decrease in net revenues of 6.4% in the Engines segment and a marginal increase in Products segment revenues. This decrease in net sales of the Engines segment was primarily driven by an 11% reduction in shipment volumes of engines to OEMs for lawn and garden products in the North American and European markets due to drought conditions in North America and economic uncertainty in Europe leading to reduced consumer purchases of lawn and garden equipment. Unfavorable foreign exchange was also a factor.
However, Briggs & Stratton's net income jumped by 19% in FY 2012,thanks to savings from restructuring of its manufacturing facilities and the reduction of about 10% of the company's salaried employees.
The company is reining in manufacturing and commodity costs and streamlined productivity by closing plants and/or moving production to less expensive locations. In 2012 the company announced that it will move existing manufacturing from its Newbern, Tennessee facility to its McDonough, Georgia facility. It will also close its Ostrava, Czech Republic plant, shifting production to the company's Murray, Kentucky facility.
To meet demand from faster growing economies, in 2012 Briggs & Stratton Corporation opened a wholly owned subsidiary (Briggs & Stratton Malaysia) to serve as the regional center of sales, marketing, and technical support for the South-East Asian, Korean and Taiwan outdoor power equipment markets.
That year it also agreed to acquire Companhia Caetano Branco, of Brazil for approximately $60 million. Branco is a leading brand in the Brazilian light power equipment market with a broad range of outdoor power equipment.
The company is also softening the impact of economic ups and downs in part by growing its international footprint through joint ventures. The company manufactures engines in Japan with Daihatsu Motor Company. It produces rewind starters and punch press components in the US with Starting Industrial of Japan. And it manufactures two-cycle engines in China with The Toro Company (also a competitor in commercial and consumer lawn mowers). Additionally, Briggs & Stratton maintains a strategic relationship with Mitsubishi Heavy Industries (MHI) for the global distribution of air cooled gas engines manufactured by MHI in Japan under the Briggs & Stratton Vanguard brand. – less