Mattel 2010 Annual Report Download - page 4

To O u r S h a r e h o l d e r s :
During the last 10 years, Mattel
has built a global toy company,
boasting the most diverse and
strongest portfolio of brands in
the toy business, with the largest
and most robust international
footprint. Through disciplined
and consistent management, we
have stabilized and expanded
the business, repaired the
balance sheet and generated
very significant cash flow.
At the same time, we have
created the best play for our
consumers, fostered a company
and culture where the best want
to work, and built a great place
for our shareholders to invest.
Together, we have created the
largest and most profi table toy
company, with shareholder returns
outpacing the industry and the
S&P 500®1 over the last 10 years.
I’d like to share with you our vision
for Mattel’s sustainable future
success. I underscore the term
“sustainable,” as we are in this
for the long-term by being
conservative in how we approach
managing the business, by taking
sensible risk and by delivering
sound, fundamental improvement.
We know brands. In fact, Mattel
boasts two-thirds of the top
12 properties in the U.S. toy
industry for the 2010 holiday
season2, including Barbie®, Hot
Wheels® and American Girl®. We
are bringing our expertise in play
to new and unexpected spaces,
reaching kids and adults where
they are and where they play
today – like only Mattel can.
Our portfolio approach to brand
management is key to making
Mattel the destination for top
entertainment brands. As you
know, we recently added Toy
Story®3, Thomas & Friends® and
WWE® to our ever-expanding
entertainment portfolio.
One of our greatest strengths
is our ability to bring play to
children around the world,
with our International business
representing more than
50 percent of gross revenues for
many key brands, validating the
progress we have made and the
opportunity to move our overall
contribution from International
beyond 50 percent of sales.
Over the decade, we have
demonstrated that we can grow
not only in established markets, but
also in emerging and developing
markets. How do we do it? We take
a long-term view of our investment
in those markets. We invest in
the infrastructure and building
brand awareness, and establishing
our brands as the aspirational
brands in the market. This strategy
will serve us well as the middle
class continues to grow in Latin
America, Eastern Europe and Asia.
This global success is based
on our ability to hire and retain
the best talent in the industry
by creating a company where
employees want to work. We
have just been recognized by
FORTUNE Magazine for the fourth
year in a row as one of the “100
Best Companies to Work For.”
And for the third consecutive
year, we have been recognized
as a leading corporate citizen
by
CRO Magazine .
And as important as any other
accolade we receive, we are
proud of the recognition of our
unparalleled commitment to
bringing play to children in need.
We make a commitment every
year to contribute 2 percent
of pre-tax profit to support
philanthropic activities, whether
it’s through our philanthropic
partnerships with organizations
such as Special Olympics or the
Mattel’s Children’s Hospital UCLA,
or through one-on-one volunteer
engagement by our employees.
As the decade closed in 2010,
Mattel had a very good year.
First, we delivered strong
financial results,
with robust
revenue growth across our
portfolio of brands and markets.
We sustained gross margins
of about 50 percent. We also
successfully completed the
fi rst phase of our Global Cost
Leadership program, all of which
resulted in an operating margin of
15.4 percent, putting us, for the
fi rst time in several years, within
our long-term goal of between
1 Information provided by STANDARD & POOR’S
2 The NPD Group/Consumer Tracking Services (Q4 2010)