Rayovac 2014 Annual Report Download - page 5

Our Company is well-balanced seasonally and geographically. Our diverse,
value-based and market-leading products compete in multiple, large
and stable categories with attractive growth prospects. Our brands are
widely trusted, enduring and provide better value. We have long-term
relationships with a diverse and loyal base of customers globally. This
gives us timely and clear insight into consumer trends and needs. We have
a very experienced and proven senior management team with a record
of achievement not only here at Spectrum Brands, but also in previous
executive roles at other leading consumer companies.
Acquisitions, both tuck-in and transformational in nature, have been and
will continue to be a powerful engine for accelerated sales, profi t and free
cash fl ow growth. We seek accretive, bolt-on acquisitions primarily in
our Pet, Home and Garden, and HHI divisions that bring quick and major
manufacturing and SG&A cost synergies, along with commercial benefi ts
such as new customer channels and geographies. Our acquisitions of
Liquid Fence and Tell Manufacturing in January and
October of 2014, respectively, are excellent
examples. We believe we buy businesses
at attractive multiples and are a proven
integrator. As this report goes to press,
we expect to complete an accretive
acquisition in our Pet division – the
IAMS® and Eukanuba® European pet
food business – in the fi rst quarter of
calendar 2015. With annual revenues
of about $200 million, this acquisition
will signifi cantly expand the product
breadth and geographic balance of our
global pet business.
Two key metrics drive our daily decision-making – growing adjusted
EBITDA and free cash fl ow. Our long-term and short-term management
incentive compensation programs are based largely on these metrics,
aligning us with investor priorities. We also have a mandatory stock
ownership program for senior management. During fi scal 2014, our
Board of Directors increased the quarterly common stock dividend by
20 percent. Our large and growing free cash fl ow gives us signifi cant,
uncommitted optionality for value creation activities, including debt
reduction, acquisitions, dividend increases and share repurchases. We have
signifi cant strength, liquidity and fl exibility to continue to execute against
our Spectrum Value Model.
Several major executive management changes occurred in fi scal 2014.
Andreas Rouvé, our President, International, was promoted to Chief
Operating Offi cer last February, and on September 1 we welcomed Doug
Martin as our new Chief Financial Offi cer. Doug joins us after a 27-year
career with consumer products company Newell Rubbermaid. Their
strong leadership skills, deep operating experience and extensive industry
knowledge are evident across the organization. The Spectrum Brands
family joins me in extending deep gratitude and appreciation to Tony
Genito for his seven years as our CFO. Tony has made innumerable and
lasting contributions to Spectrum Brands. We wish him much success and
happiness in his future endeavors.
In closing, I want to thank our Board of Directors for their valuable guidance
and steadfast commitment. We salute our talented and resourceful
13,500 employees around the world for their dedication, productivity and
enthusiasm in building an even stronger Spectrum Brands. They stay on
course, execute the plan, and deliver consistent, solid performance. Thank
you for your support as we continue to strive to grow our adjusted EBITDA
and maximize sustainable free cash fl ow for our stakeholders.
Sincerely,
David R. Lumley
Chief Executive Offi cer
December 19, 2014