Graco 2007 Annual Report Download - page 14

results we have seen over the past two
years. We recognize that an uncertain
macroeconomic outlook in the United
States will create additional headwinds
for us in 2008. Despite these additional
challenges, we remain condent that the
diversity of our portfolio and the many
growth levers in our control will enable
us to continue driving top-line growth,
expanding gross margins and growing
operating income and earnings per share.
Our continued investment in building
Brands That Matter and developing
long-term capabilities will be key.
One important lever is our healthy
pipeline of new products. In 2008, we
expect to have notable new product
launches across all of our operating
segments, some of which are featured in
this annual report. We have attractive
opportunities to grow share by offering
differentiated products and great value.
In most of our categories, market shares
are not concentrated and competition is
fragmented. During 2007, we achieved
market share gains on several of our
important brands including Dymo, Expo,
Goody, Calphalon, Levolor, Lenox and
Rubbermaid Commercial Products®.
In addition to consumer-meaningful inno-
vation, the opportunities for near-neighbor
category expansion are very robust. As a
case in point, our Rubbermaid Commercial
business delivered double-digit sales growth
in 2007, driven signicantly by creative
offerings in new product categories such
as microber cleaning systems and deco-
rative waste management. Finally, global
penetration by many of our brands is low,
which creates tremendous opportunities
to expand internationally. During the year
we experienced double-digit sales growth
outside of the United States, and we expect
this trend to continue in 2008.
Strategic acquisitions will also play
a role as we move forward. Our 2008
outlook anticipates healthy cash flow,
in line with our performance in recent
years. Over the years, successful major
acquisitions such as Dymo and Lenox,
as well as smaller additions to the port-
folio, have helped us spur innovation and
expand into new markets and product
categories. The objective for all of our
acquisitions is to enhance sustainable
growth and to reward shareholders. Our
portfolio screening criteria targets
companies with consumer-meaningful
brands that are responsive to innovation
and marketing, favorable customer and
channel dynamics, global categories with
strong margin and growth potential
and synergy with our core categories
and competencies. Looking across our
portfolio, the most attractive acquisition
targets today lie in Ofce Technology,
Rubbermaid Commercial Products,
Industrial Tools and all three categories
within the Home & Family segment.
We are proud of the accomplishments
of 2007 and the progress we have made
in our transformation into a top-tier,
consumer-branding and marketing orga-
nization. Our ultimate goal is to be best-
in-class, which we know will take several
years to achieve. The good news is that
we are reaping the benets of our trans-
formation at every step along the way. In
2008, we look forward to building upon
the solid foundations laid over the past
two years. It is an exciting time for Newell
Rubbermaid. We thank you for your
continued support and encourage you to
watch what happens next.
Sincerely,
Mark D. Ketchum
President & Chief Executive Ofcer
March 28, 2008
Our portfolio screening criteria targets companies with
consumer-meaningful brands that are responsive to innovation
and marketing, favorable customer and channel dynamics,
global categories with strong margin and growth potential
and synergy with our core categories and competencies.
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