Rayovac 2015 Annual Report Download - page 8

CEO and, frankly, we forged a great partnership. The Spectrum Value
Model and shared services platform were developed in this era, and the
turnaround and rejuvenation of our Company took place. I honestly can say
we would not be the strong company we are today without the invaluable
contributions of Dave. It was a great privilege to work with him so closely
the past six years.
Andreas Rouvé was elected our new CEO last April and to the Board of
Directors on October 1. He provided outstanding leadership as Chief
Operating Officer, and previously served in key roles internationally and
as head of our European region. On my many trips to our European
operations, I noticed how closely our teams worked together. This cohesive
culture impressed me. The fact that our European region grew adjusted
EBITDA by 80 percent in constant currency in five years is a testament to
this teamwork and Andreas’ leadership. I am a big proponent of a strong
ownership and accountability culture. Spectrum Brands is now ready to
move from being a very good company to a great one under the Spectrum
First initiative Andreas has launched. I also am confident our organic sales
growth rate can be improved, and Andreas and his leadership team are
laser-focused on this objective.
I want to thank our management team and our 15,500 employees around
the world for their outstanding work in delivering record fiscal 2015 results.
I am most proud of what they have done to prepare Spectrum Brands for
another record year in fiscal 2016. Our Pet platform was reorganized and
integrated with our Home & Garden division. We also are making good
progress to return our North American battery business to growth.
In closing, what I have said before to our fellow shareholders bears repeating.
We will strive to continue to be effective and efficient allocators of capital.
The trust and capital from our investors and creditors, as key partners,
helps us achieve our goals for additional value creation. Thank you for your
confidence and support. As I am fond of saying, our Company’s best days
are still ahead.
Sincerely,
David M. Maura
Chairman of the Board
December 18, 2015
Spectrum Brands completed a busy and successful fiscal 2015. We
achieved our sixth consecutive year of record results and completed four
important acquisitions. My major focus as Chairman continues to be on
strategy, capital structure, and mergers and acquisitions. Fiscal 2015 was
especially busy in this regard and an excellent example of how disciplined
we are in our acquisition activity, showing patience to identify attractive
properties that meet our criteria, paying reasonable multiples, and then
quickly integrating the businesses, maximizing synergies and setting them
on a growth path.
We began fiscal 2015 on day one with the acquisition of Tell Manufacturing,
Inc., into our HHI division, providing entry into the $3 billion U.S. commercial
door hardware and lock market. During the fall of 2014, I led extensive due
diligence on Procter & Gamble’s European IAMS® and Eukanuba® pet food
business and Salix Animal Health, the world’s largest vertically integrated
producer and distributor of premium, natural rawhide dog chews, treats
and snacks. We closed on the IAMS® and Eukanuba® business on December
31, 2014, helping to meet our goal to allocate more resources to the
companion animal product portfolio and better balance it with our global
aquatics business. IAMS® and Eukanuba® are powerful brands. Over time,
with investment, we believe significant new equity value will be created in
our Pet division. In mid-January we completed the Salix acquisition which,
among many advantages, brings channel and brand differentiation for our
North American Dingo® business, along with revenue opportunities in Europe
and Latin America.
Spectrum Brands acquired Armored AutoGroup for $1.4 billion in cash and
assumed debt in May, a company we now operate as our Global Auto Care
segment. This acquisition fits our strategy to buy and build high brand
equity businesses, with strong margin structures, low capital requirements
and significant free cash flow generation. This highly accretive transaction
adds market-leading, iconic brands in the attractive auto care sector. While
helping with our pro forma margin profile, meaningfully increasing our free
cash flow generation and further improving our overall customer mix, the
Armor All®, STP® and A/C PRO® brands should offer substantial international
growth opportunities by leveraging our global infrastructure. Since this was
a large acquisition, we are committed to rapidly deleveraging our balance
sheet with our growing free cash flow stream.
Fiscal 2015 was highlighted by a planned and seamless CEO transition after
Dave Lumley announced his retirement plans last January. This was both
a rewarding and tough time for me as I nominated Dave for the CEO post
during our Company’s 2009 reorganization. In April 2010, Dave was named
TO OUR
SHAREHOLDERS
David M. Maura
Chairman of the Board, Spectrum Brands Holdings
Managing Director, Executive Vice President of Investments
and Director, HRG Group, Inc.