Black & Decker 2012 Annual Report Download - page 8

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06
deals in the emerging markets and —
more importantly — does not change
our strategy of continuous evolution
into a diversified industrial company,
but reflects our desire to be in position
to realize more opportunities from our
transformation in the near term, including
an improving construction market.
We remain committed to ensuring we
have a balanced and flexible capital
allocation plan over the long term, in
which roughly two-thirds of our free cash
flow will be deployed to acquisitions,
with a minimum of one-third returned to
shareholders in the form of dividends
and share repurchases. As has been the
case for years, our portfolio strategy
centers around a steady and methodical
reallocation of capital to activities where
superior returns are sustainable and
above-portfolio-average organic growth
is achievable, and to maintaining a strong
investment grade credit rating to allow us
that flexibility.
Importantly, we remain committed to our
mid-decade goals:
• $ Billion in Revenue
• Greater than % Operating Margin Rate
• Return on Capital Employed of %
•  Working Capital Turns
• %+ of Revenues from Emerging Markets
Stanley Fulfillment System
Our ability to increase our free cash flow to
almost $. billion in  — as well as our
consistent success in providing world-class
products and services to our customers,
increasing our internal eciencies,
eectively integrating acquisitions, and
creating a culture of operational excellence —
is directly attributable to the Stanley
Fulfillment System, or SFS. Our results
in  drove an approximate % free
cash flow conversion rate excluding
charges and payments and this continues
our track record of free cash flow
C
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Operational
Lean
Complexity
Reduction
Sales &
Operations
Planning
Global
Supply
Management
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Order-to-Cash
Excellence
Breakthrough
Customer Value
THE STANLEY FULFILLMENT SYSTEM
emerging markets, and brings a diverse and
growing revenue base, strong margins,
and solid financial track record to our
portfolio. We expect this transaction to
close during the first quarter of .
As a result of the Infastech acquisition,
total company revenues from the emerging
markets will increase to approximately %,
an important step towards the Company’s
mid-decade goal of %+. In addition,
with the acquisition of Infastech, the
engineered fastening platform will be
the first of the Company’s identified new
growth platforms to achieve its mid-
decade goal of $–$ billion in revenue.
With the Infastech integration ahead of us,
the Niscayah integration approximately
fifty percent complete and the Black &
Decker integration in the final innings,
we made the decision in late  to take
a brief, tactical pause from significant
M&A activity while we focus on organic
growth initiatives for the next –
months. This will not preclude smaller
 GLOBAL PRESENCE
(% of  revenues)
C: Emerging Markets %
B: Europe %
D: R.O.W. %
A: U.S. %
B
C
D
A