Staples 2004 Annual Report Download - page 6

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International:
Our International business made good progress in improving execution and driving
strategic initiatives in 2004, and represents our biggest opportunity for profit
improvement. Sales grew 21% to $1.9 billion and operating profit rose to $68 million,
or 3.5% of sales. On the Retail side, we acquired 59 Office World stores in the United
Kingdom, significantly strengthening our market position. In our Delivery business, we
acquired Pressel and Malling Beck, two mail order businesses that provide growth
platforms in six new countries in Europe. We also entered South America with the
acquisition of Officenet, serving customers in Argentina and Brazil. We also improved
our infrastructure with a new warehouse to serve our businesses in the UK. These
investments weighed on profitability in 2004, but position us well to grow our
international business profitably in the future. Focusing on execution, we’ll continue to
make the appropriate tradeoffs to balance rapid market share gains with continued
improvement in profitability.
Looking Ahead
After delivering outstanding financial performance over the past few years, what gives us
the confidence that we can continue to improve our business and achieve our aggressive
targets for sales and profit growth? First and perhaps most important, we’ve got a strong,
tenured team with a solid track record of driving results. Second, we’re working hard to
differentiate our business and our brand, and our customers are beginning to notice the
difference. Third, we’ve got a great portfolio of promising growth and margin opportunities.
Some we will capitalize on in the near term, and others provide opportunities that have the
potential to be important contributors to our business several years down the road, like
China and South America. This portfolio approach to growth will allow us to sustain
our performance over the long run. Fourth, we’re focused on capital discipline and will
continue to invest the significant cash flows our businesses generate to grow profitably and
create shareholder value in the years ahead. Finally, we’re committed to becoming better
corporate citizens every year, and are making good progress on preserving the environment,
ensuring we practice good governance and strong business ethics, making Staples a great
place to work, and playing a more meaningful role in the communities where we do
business. I invite you to learn more about these efforts to develop our corporate “soul” in
the following pages of this annual report.
In closing, I’d like to recognize Staples associates around the globe for delivering record
results in 2004 and for their enthusiasm and commitment for the journey ahead. Now
65,000 strong, our team remains focused on execution and improving customer service and
profitability in every part of our business. I would also like to thank our customers, our
vendor partners, and our shareholders for their continued support.