Graco 2015 Annual Report Download - page 6

Newell Rubbermaid 6 2015 Annual Report
focused portfolio in which 80 percent of the combined
revenue will be concentrated in just 30 brands — virtually
all of which are leaders in their respective categories.
Newell Brands will also be a profitable and cash-generative
portfolio, with 80 percent of the combined portfolio
enjoying a gross margin of more than 39 percent and
a normalized operating margin over 15 percent before
realizing any cost synergies.
The combination immediately scales the company in
key geographies, customers and channels, more than
doubling the business with our strategic customers and
in our top 12 geographic markets. It also oers a number
of intuitive combinations of brands and categories, such
as Graco® and NUK® in baby gear and Rubbermaid®
food storage and FoodSaver®, that will yield greater
consumer and customer impact for accelerated growth
and category development.
Beyond the opportunities for top-line growth synergies,
the combination oers substantial cost synergies. We
expect to realize at least $500 million in anticipated cost
savings within four years. Greater scale will provide greater
eciencies in areas such as corporate costs, procurement
and distribution and transportation.
The economics of this transaction are very attractive,
with high single-digit accretion expected in year 1,
increasing to mid- to high-teens in year 2 and strong
double digits in year 3. Over time, we expect to see
significant opportunity to drive even more value creation
beyond initial assumptions by establishing clear portfolio
priorities, increasing investment in the businesses with
the greatest right to win and strengthening the portfolio
through active portfolio management.
The transaction has been financed through a combination
of new and existing debt and the issuance of shares. We
are committed to maintaining an investment-grade credit
rating and to paying a dividend per share at or above our
current level.
The creation of Newell Brands will allow the talent at both
Jarden and Newell Rubbermaid to apply the best of what
is working at both companies across a broader, more
compelling and more diversified landscape of opportunities
and brands. We will build one of the most exciting companies
in our industry, a destination for talent, while simultaneously
unlocking a significant amount of value for our share-
holders. That is the Growth Game Plan in action. And that
is the future of Newell Brands.
Thank you for your continued support.
Michael B. Polk
President and Chief Executive Ocer
LEADERSHIP /
INTRODUCING NEWELL BRANDS
Our new mark acknowledges the combination
of two great companies, with the roof line
highlighting the house of brands we are creating,
the word “we” representing team and the
upward sloping l’s serving as recognition that
growth is the engine that powers us. As a
leading branded consumer goods company, we
will build our success by putting the consumer
first and through strong partnerships with our
customers, suppliers, employees, communities
and investors.
When completed, this transaction will
establish Newell Brands as one of the
leading consumer brand companies in
the world with pro forma revenues of
over $16 billion.