Vistaprint 2013 Annual Report Download - page 35

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Executive Overview
For the fiscal year ended June 30, 2013, we reported revenue of $1,167.5 million representing 14%
revenue growth over the prior year. Constant-currency revenue growth was 16% for this period. Constant-currency
organic revenue growth, which excludes the impact of acquisitions, was 12% for the fiscal year ended June 30,
2013. Our organic constant-currency revenue growth in fiscal 2013 continues to be lower than our historical growth,
and reflects a contrast of regional executional performance.
Despite our revenue growth and continued share purchase activity, EPS for the year ended June 30, 2013
declined 25% to $0.85 as compared to the prior period. This decline was primarily due to planned investments we
made in support of our long-term growth strategy, including increased investment levels in our organic business
such as advertising and other marketing expenditures in support of new and repeat customer growth, technology
and development resources in support of our customer value proposition, and manufacturing and supply chain
efficiency efforts. In addition, we have invested in our employee base and expanded in key departments, including
additional resources in our Most of World business unit to develop and implement our long-term strategy for
emerging markets. The combined effect of our fiscal 2012 acquisitions and fiscal 2013 indirect equity investment in
Namex continued to be dilutive to our earnings.
On July 28, 2011, we introduced a long-term strategy and investment approach aimed to drive shareholder
value through improving our customer value proposition, penetrating new parts of our core markets, driving
significant efficiencies and competitive advantage through world-class manufacturing, and building foundations for
future growth. Two years into this strategy, we have achieved progress in each area of this plan, but at different
paces by region. In North America we are experiencing the benefits of the cultural shift towards a more customer-
centric organization that we started two years ago, as evidenced by our strong organic revenue growth in the
region. Meanwhile our marketing execution challenges in Europe have significantly contributed to our slowed
overall revenue growth rates and reinforce the need for continued focus on improving the delivery of our customer
value proposition in that region. Our mixed success has resulted in a re-evaluation of our long-term stated financial
objectives. We believe that our investments over the past two years will enable us to scale and strengthen our
competitive position, and will lead to longer-term value for our shareholders through margin expansion, regardless
of our revenue growth trajectory. For fiscal 2014, we expect our constant-currency revenue growth rate to decline
as compared to fiscal 2013, but we expect to deliver increased net income margin as a percentage of revenue and
EPS, even as we continue to make important investments in our business.
Although we currently face some execution challenges in part of our business, our historical investment
approach and strong execution has supported our ability to become a leader in the large and fragmented market for
small business marketing solutions. We have built significant competitive advantages via our marketing approach,
proprietary technology, and manufacturing expertise. We have developed substantial scale advantage by executing
on our core strengths in mass customization technologies and by introducing a wide breadth of small business
marketing products. We plan to continue to capitalize on our past success, as well as our recent investments, in
order to further scale our business and drive significant long-term shareholder returns.
Our long-term goal is to be the leading online provider of micro business marketing solutions for
businesses or organizations with fewer than 10 employees. Additionally, we plan to continue to focus on key market
adjacencies where we believe we can drive additional long-term growth by employing our unique business model
and customer value proposition. These adjacencies include digital marketing services, new geographic markets,
and personalized products for home and family usage.
The strategy for growth in our core micro business marketing opportunity is to make investments and drive
success in the following areas:
• Customer Value Proposition. We believe our average customer currently spends only a small portion of
their annual budget for marketing products and services with us. By shifting our success metrics from
transactionally focused profit measures to longer-term customer satisfaction and economic measures, we
believe we can deliver improvements to our customer experience and value proposition that will
significantly increase customer loyalty and lifetime value. Examples of these programs include improving
the customer experience on our site, such as ease of use, less cross selling before customers reach the
checkout, expanded customer service, and pricing transparency. While we serve customers across the
spectrum of micro businesses with fewer than 10 employees, our strength has traditionally been in the
smallest and most price sensitive of these customers rather than those with more sophisticated marketing