Lexmark 2011 Annual Report Download - page 3

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Paul Rooke
To My Fellow Shareholders,
2011 was a good year for Lexmark given a challenging global economy. We continued to execute our strategy,
grow our core business, and remained focused on delivering value to our shareholders. Our progress resulted
in record results in several key areas of our business and led to continued and prestigious recognition as an
innovative industry leader.
Good Financial Results in a Challenging Global Economy
While Lexmark’s overall revenue was about flat in 2011, our core revenue grew despite somewhat stagnant
markets in North America and Europe. Our core growth was led by our laser business with record laser
revenue including record laser supplies revenue. This performance helped to drive a record gross profit
margin, a solid operating income margin, and $391 million of cash from operations in 2011.
Lexmark’s Strategy Remains On Track
In 2011 we continued to execute our strategy to expand our presence in the higher usage segments of the
imaging market while strengthening our end-to-end solutions capability.
Lexmark a Recognized Leader in Smart MFPs
Since the fall of 2008, we have announced more than 100 products aimed squarely at supporting business cus-
tomers, with award-winning devices ranging from business inkjets to large workgroup color laser multifunction
products (MFPs). In 2011 we delivered a third consecutive year of unit and market share growth in workgroup
A4 (8.5 inch x 11 inch paper size) laser devices. We also were recognized as the number two provider world-
wide as measured by share of A4 pages printed. However, these smart devices are designed to bring far more
value than just efficient printing. They automatically collect key operational information for ongoing optimization
in a managed print services engagement. These smart MFPs integrate seamlessly into workflow processes to
capture and route paper-based content electronically, shortening process cycle times. Because of our thought
leadership here, a prestigious analyst firm positioned Lexmark as a leader in its MFP and printer report.
These are all strong indicators of our increasing success and presence in the higher usage segments of the market.
Lexmark a Recognized Leader in Managed Print Services
Lexmark’s managed print services (MPS) business continued to deliver in 2011 with revenue growth in excess
of 25 percent year to year, which is estimated to be two to three times the growth of the MPS market.
Additionally, our contract renewal rate with these large MPS customers was exceptional. In 2011, we retained
100 percent of the MPS contracts that were up for renewal. In fact, in each of the last five years, we’ve retained
more than 90 percent of our MPS contracts -- further proof of our ability to execute globally, and a wonderful
testament to our vision of Customers for Life.
In 2011, independent industry recognition further validated Lexmark’s leadership position in MPS. Two presti-
gious market analyst firms positioned Lexmark in the leader category in their respective MPS industry reports.
Chairman and CEO