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Newell Rubbermaid Inc. 2010 Annual Report
26 NEWELL RUBBERMAID 2010 Annual Report
>
Office Products
Net sales for 2010 were $1,708.9 million, an increase of $34.2 million, or 2.0%, from $1,674.7 million for 2009. Core sales increased
7.4%, which was primarily attributable to core sales growth across the entire segment with the Technology and Markers,
Highlighters, Art & Office Organization GBUs generating double-digit and high single-digit core sales growth, respectively.
Product line exits and rationalizations and foreign currency reduced net sales 3.0% and 2.4%, respectively.
Operating income for 2010 was $269.4 million, or 15.8% of net sales, an increase of $34.2 million, or 14.5%, from $235.2 million,
or 14.0% of net sales for 2009. The 180 basis point improvement in operating margin is attributable to productivity gains, improved
product mix partially offset by the impacts of input cost inflation and a 100 basis point increase in constant currency SG&A costs
as a percentage of net sales due to increased spend for strategic brand, volume building and other strategic SG&A activities.
Tools, Hardware & Commercial Products
Net sales for 2010 were $1,671.9 million, an increase of $146.2 million, or 9.6%, from $1,525.7 million for 2009. Core sales increases
accounted for 8.2% of the year-over-year increase, as geographic expansion and international core sales growth were significant
contributors to the core sales increase. From a GBU perspective, the Industrial Products & Services and Construction Tools &
Accessories GBUs generated mid to high single-digit core sales growth. Favorable foreign currency accounted for 1.4% of the net
sales increase.
Operating income for 2010 was $253.1 million, or 15.1% of net sales, an increase of $7.5 million, or 3.1%, from $245.6 million,
or 16.1% of net sales, for 2009. The 100 basis point decline in operating margin is primarily attributable to input cost inflation
combined with a 50 basis point increase in constant currency SG&A costs as a percentage of sales, as the segment’s businesses
continue to increase spend for brand building and other strategic SG&A activities.
2009 vs. 2008 Business Segment Operating Results
Net sales by segment were as follows for the year ended December 31, (in millions, except percentages):
2009 2008 % Change
Home & Family $ 2,377.2 $ 2,654.8 (10.5)%
Office Products 1,674.7 1,990.8 (15.9)
Tools, Hardware & Commercial Products 1,525.7 1,825.0 (16.4)
Total Net Sales $ 5,577.6 $ 6,470.6 (13.8)%
The following table sets forth an analysis of changes in net sales in each segment for 2009 as compared to 2008:
Tools, Hardware &
Home & Family Office Products Commercial Products
Core sales (2.1)% (6.5)% (15.8)%
Foreign currency (1.3) (3.4) (2.0)
Product line exits and rationalizations (8.1) (6.0) —
Acquisitions 1.0 — 1.4
Total change in net sales (10.5)% (15.9)% (16.4)%
Operating income (loss) by segment was as follows for the year ended December 31, (in millions, except percentages):
2009 2008 % Change
Home & Family $ 274.7 $ 218.3 25.8%
Office Products 235.2 212.4 10.7
Tools, Hardware & Commercial Products 245.6 271.7 (9.6)
Corporate (80.6) (81.9) 1.6
Impairment charges — (299.4) NMF
Restructuring costs (100.0) (120.3) 16.9%
Total Operating Income $ 574.9 $ 200.8 NMF
NMF-Not meaningful
Home & Family
Net sales for 2009 were $2,377.2 million, a decrease of $277.6 million, or 10.5%, from $2,654.8 million for 2008. Core sales declined
2.1% as low-single-digit core sales growth in the Culinary Lifestyle GBU was offset by a high-single-digit decline in the Décor GBU,
which continued to be impacted by softness in residential construction, as well as a mid-single-digit decline in the Baby & Parenting
GBU, which was adversely impacted by softness in the baby category worldwide. Net sales declined 8.1% due to product line exits
and rationalizations in the Rubbermaid Consumer GBU and 1.3% due to unfavorable foreign currency impacts. The Aprica acquisition
increased sales 1.0% compared to the prior year.