Hasbro 2011 Annual Report Download - page 2

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To Our Fellow Shareholders:
Over the past several years, you joined us as we have
been transforming Hasbro into a global branded
play company. We are creating a company that
reaches farther than before, both geographically and
categorically. We have taken steps to further develop
our global teams, to establish a greater presence in
more global markets, and through our e orts and
those of our partners, we have expanded our business
beyond the traditional toy and game category.
Through the execution of our strategy, we are:
• Creating new teams to deploy our brands
around the world and the infrastructure to move
from global aspirations to global execution.
• Expanding our capabilities to deliver innovation
globally across our brands and our business.
• Developing new immersive experiences
through entertainment in television and feature
fi lms, in digital media and in licensing.
During 2011, we made signifi cant progress in
many aspects of our business. However, we did not
meet our expectations for growth in the U.S. and
Canada segment, including in the Games and Puzzles
category. We have acted swiftly and decisively in
both of these areas, putting in place new leadership
and plans to improve performance as we go forward.
We will address these e orts in more detail shortly,
but fi rst, let’s address the progress we have made
toward our strategy.
In 2011, we reported a record $4.29 billion in
revenue. This represented 7% revenue growth
over 2010, which is ahead of our 5% compound
annual growth rate target for revenue growth. We
grew earnings per diluted share for the eleventh
consecutive year, while returning $577 million
to shareholders through our stock buyback and
quarterly dividend programs. In early 2012, our
Board of Directors voted to increase our quarterly
dividend 20% to $0.36 per share, marking the third
consecutive year we have raised our quarterly
dividend by 20% or more.
Moving from Global Aspirations to Global Execution
Hasbro’s 2011 top-line growth was fueled by 19%
revenue gains in our International business, or 16%
growth without the benefi t of the positive foreign
exchange impact. Revenue grew in every major
region internationally, in both mature and emerging
markets, and we gained market share in nine of the 10
international countries for which we have third-party
market data. In 2011, European revenues increased
19%; Latin America & Mexico revenues grew 19%; and
in Asia Pacifi c, revenues increased 24%.
Over the past several years, we have invested in
the infrastructure to capitalize on our innovation all
around the world. Through new o ces in emerging
markets, strong execution in mature markets and
the build-out of our brand blueprint globally -
including digital gaming, entertainment and licensing
capabilities - Hasbro is rapidly establishing a branded-
play leadership position in markets around the world.
Delivering Innovation Globally
Through the successful implementation of our
branded play strategy which, at the core, focuses on
the innovation and invention of both existing and new
Hasbro brands worldwide, we are building bigger and
more global brands. In 2011, three brands exceeded
$400 million in annual revenues.
The TRANSFORMERS brand delivered $483
million in revenues during 2011, leveraging the global
box o ce success of Transformers: Dark of the Moon.
The third fi lm in the TRANSFORMERS movie franchise
grossed more than $1.1 billion at the box o ce
globally. TRANSFORMERS brand revenue for Hasbro
grew in the U.S. and international markets and we
successfully leveraged the TRANSFORMERS brand
into new categories, including KRE-O, our entirely
new construction brand, as well as TRANSFORMERS
RESCUE BOTS, part of Hasbro’s all new PLAYSKOOL
HEROES line designed specifi cally for younger kids.
The BEYBLADE brand was an incredible success
globally, delivering $477 million in revenues during
2011. We sold over 60 million tops in 40 countries
and online, we had deep digital engagements with
our consumers at beybladebattles.com. We now have
ten million registered users on beybladebattles.com
annual report 2011