Graco 2010 Annual Report Download - page 20

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16 NEWELL RUBBERMAID 2010 Annual Report
4.7%
Core Sales Growth
100 bps
Gross Margin Expansion
16%
Normalized Earnings Per Share Growth
2010 FINANCIAL METRICS
In 2010, Newell Rubbermaid delivered core sales growth in all three
operating segments. Consumer-driven innovation and strategic brand-
building investments led to increases in market share and expanded
our reach into new geographies and new categories. Our core mission
remains to continue to build shareholder value by leveraging top-line
growth to achieve sustainable earnings growth. Realizing these objec-
tives requires an intense focus on cost at every level of the enterprise.
In 2010 we made continued progress in creating a leaner, more profi table
and more competitive organization. Three key strategic initiatives, in
particular, contributed meaningfully to these efforts and will continue
to generate future benefi ts.
Capital Structure Optimization Plan: This plan created a simpler, more
shareholder-friendly capital structure and allowed the Company to take
advantage of a historically low interest rate environment. The initiative
lowered Newell Rubbermaid’s interest expense and largely eliminated
potential future share dilution associated with our convertible notes.
European Transformation Plan: This targeted initiative is designed
to simplify our business and improve profi tability in our European
operations, with the goal of a 10 percent or higher operating margin
in Europe by the end of 2012. We are already reaping the benefi ts of
key productivity projects that helped push our normalized operating
margin in the region to 7 percent in 2010*. By centralizing decision
making in our new European headquarters in Geneva, Switzerland,
and streamlining our business structure, the European Transformation
Plan will result in a stronger, more profitable business model.
Continued improvements in key areas such as pricing architecture,
organizational structure and other profi t-enhancing initiatives will
drive further increases in operating margin in 2011 and again in 2012.
Once fully implemented in 2012, the plan is expected to generate
$55–$65 million in annual profi tability improvement.
Project Acceleration: Completed in 2010, this global, multi-year
restructuring program was designed to consolidate and streamline
our manufacturing and supply chain operations to achieve greater
effi ciency and best cost. Project Acceleration helped enable 700 basis
points of gross margin expansion over the past fi ve years and will deliver
in excess of $220 million in annualized savings by the end of 2011.
Looking ahead, we will continue to invest behind operating effi ciency
and best-in-class business processes to drive higher productivity,
increased earnings and enhanced shareholder value.
JUAN R. FIGUEREO
Executive Vice President and Chief Financial Offi cer
JUAN FIGUEREO
Executive Vice President and Chief Financial Offi cer
Enhancing the
Shareholder Value
Proposition
* Please refer to the Reconciliation of Non-GAAP Financial Measures
on page 84 for a reconciliation to the most directly comparable
GAAP fi nancial measure.