Mattel 2009 Annual Report Download - page 4

I’ve heard that question quite a few times as our company has
worked to weather uncertain economic times and strengthen
operations while also creating toys that are relevant to the way
today’s children play. Last year, I said companies that deliver
improved execution during the tough times will be the ones best
positioned to capitalize on the economic turnaround, which
will most certainly occur. I also made some commitments to
you, the shareholders of Mattel: to run the business well and
responsibly, reward investors and make kids’ lives fun.
Looking back, I am proud of how well Mattel’s employees
delivered on our promises. As expected, sales were down
due to retailer inventory management, our lack of toys tied to
movie properties compared to prior years and the effect of
foreign exchange rates. That said, we succeeded in improving
execution across the supply chain and throughout the company
by realigning our structure; controlling costs and expenses;
tightly managing working capital, especially inventories; and
reducing capital spending by doing only business-critical
projects and doing them exceptionally well.
The result was improved profi tability, a stronger balance sheet
and improved cash fl ow, which we used to lower debt,
increase cash balances and continue to reward shareholders
through our strong annual dividend.
We also were successful in bringing magic to the lives of
children through innovative new toys, including the continued
revitalization of some of our classic and time-honored brands,
such as Barbie® and Hot Wheels.
®
Last year, we celebrated the 50th anniversary of the world’s
most iconic doll – and the world celebrated with us. This
incredible milestone for the Barbie® brand allowed us a unique
platform to reconnect girls of all ages with the legacy of
the brand: fashion, aspiration and cultural relevance.
In our Wheels business, both Hot Wheels® and Matchbox®
experienced strong global performance, and we saw growth
in core games brands like UNO® and Apples to Apples.
®
We also introduced an exciting new game, Mindfl ex,
™
which
was an early sell-out and ultimately one of the hottest toys
of the year. Our Fisher-Price®BabyGear™ line experienced
double-digit growth for the holiday season. And unlike many
premium-priced products facing the current economic
environment, American Girl® held its own through continued
exemplary brand development.
We also experienced success with our partners and another
year of outstanding performance in our Disney Princess™ line.
The Disney®/Pixar® relaunch of the Toy Story® franchise in
Fall 2009 drove performance with our Toy Story® line of toys
and Disney/Pixar’s Cars® had another strong year further
establishing it as an evergreen brand.
And even though 2009 was a year of sacrifi ce and hard work
for Mattel employees, I am extremely proud that, for the third
consecutive year, FORTUNE Magazine named Mattel to its
“100 Best Companies to Work For” list.
We published our third Global Citizenship Report, which
focused on our efforts to create safe, high-quality products
and to manufacture them in a responsible and ethical manner
while managing our environmental impact. I am also pleased to
share that Mattel was again named to the “100 Best Corporate
Citizens” list by Corporate Responsibility Magazine.
The year 2010 is a personal milestone for me – May 17 marks
my 10-year anniversary with Mattel. I joined the company during
some tough times and in the midst of change. On my fi rst day,
I told Mattel employees gathered in the company’s cafeteria that
we were going to do three things: build brands, cut costs and
develop people. We’ve made good progress on all three fronts.
What’s Next for Mattel?