Graco 2012 Annual Report Download - page 4

2
A STRONG YEAR IN A TOUGH ENVIRONMENT
Our Company delivered sequential improvement in performance
in 2012 on every key performance metric, despite sluggish macro
environments in North America and Europe. Core sales grew
2.2 percent, 40 basis points faster than in 2011, normalized
earnings increased 6.9 percent to $1.70 per share, normalized
operating income margin increased 10 basis points, and operating
cash ow increased 10.2 percent to $618.5 million.
Our strong cash ow enabled us to further strengthen our balance
sheet and reduce leverage — exiting 2012 with the strongest credit
metrics in close to ve years. Equally as important, we returned
value to our shareholders through signicant dividend increases
and our repurchase of 4.9 million shares of NWL stock.
DELIVERING RESULTS WHILE SIMULTANEOUSLY
DRIVING CHANGE
During the year, our Company delivered a number of noteworthy
market successes. For the fourth consecutive year, our Tools busi-
ness grew core sales in excess of 5 percent, generating 7 percent
growth in 2012 (with almost half of the total growth in markets
outside of the United States). Our Writing segment launched
Paper Mate® InkJoy®, fueling both category and share growth
in markets across the globe and delivered core sales growth of
over 3 percent, with markets outside the United States delivering
almost half of the growth. In addition, our Baby & Parenting
segment began to reap the benets of new product innovation
and a more strategic approach to customer partnerships, growing
core sales nearly 10 percent with excellent margin improvement.
Core growth in emerging markets reached nearly 12 percent in
2012, with growth in Latin America of approximately 15 percent.
Growth in the developed world was mixed, with good growth
in the United States and Japan oset by declines in Western
Europe and Australia/New Zealand.
Beyond our solid market performance, we simultaneously drove
change. We launched the Growth Game Plan, our new strategy
that focuses on sharper portfolio choices and strengthening
capabilities with the ambition to make Newell Rubbermaid a
larger, faster-growing, more global, more protable company.
We successfully executed the rst phase of Project Renewal, taking
the steps to simplify our organizational structure. We are on track
to capture $90 million to $100 million of cumulative annualized
cost savings from this initiative by our mid-2013 target, on time
and in full.
We implemented a new SAP enterprise resource planning system
in Europe which will provide us better clarity into our cost structure
in that geography. We also deployed a new selling structure across
our U.S. business with the creation of our Customer Development
Organization, a new sales structure that better leverages our scale
with key customers and in key channels, elevating our selling
activities from merely transactional to strategic.
“NORMALIZED” EARNINGS PER SHARE
(in dollars)
NET SALES
(in billions)
2010 2011 2012
DIVIDENDS PAID PER SHARE
(in dollars)
2010 2011 2012 2010 2011 2012
$1.70
$1.59
$1.50
$5.90
$5.86
$5.66
$0.43
$0.29
$0.20
Please refer to the Reconciliation of Non-GAAP Financial Measures on page 110 for a reconciliation to the most directly comparable GAAP nancial measure.