Vistaprint 2014 Annual Report Download - page 3

Dear Fellow Investor:
In January 2015, just a few months from now, we will celebrate the 20th anniversary of our company’s founding. As
we prepare to enter our third decade, I am pleased to provide you this update on our progress toward our long-held
objective of building an enduring and transformational business that serves the mutual interests of our customers,
our team members, and our shareholders.
This annual report and its associated proxy statement are important documents: they provide extensive detail and
information about our company. But if you are considering investing your capital with us I encourage you to also
study the documents from our annual investor day. We design those annual presentations to explain and to
illustrate, qualitatively, how we think about our business. We held this year’s meeting on August 6, 2014: a copy of
the presentation and a transcript of our accompanying remarks are available on our IR website. Copies of prior
years’ events are also available there.
This year’s investor day presentation was especially important because it took place in the context of us not having
achieved some important objectives we had set for the strategy which we announced three years prior, in July 2011.
Revenue growth rates in our core Vistaprint brand continued to decline into fiscal year 2014. Our laying of
foundations for future growth has not yet achieved all of our objectives for higher value customers, new geographic
markets, digital small business marketing, or photo books for home and family customers. Our anticipated rebound
in free cash flow per share and earnings per share did not arrive as robustly as we had forecast three years ago,
though both moved in a positive direction in fiscal 2014.
Please rest assured: our strategic picture is far from bleak. Several of the initiatives to which we publicly committed
ourselves in July 2011 have proven very successful. We have experienced the powerful competitive advantages of
larger scale as we grew our revenues by 55% from fiscal year 2011 to fiscal year 2014 through a combination of
growth in our organic business and acquisitions. We have greatly improved the cost, quality and reliability of our
manufacturing and supply chain. The first wave of proprietary technology we have developed as part of our
accelerated R&D spending is now coming to market. Improvements to and investments in the value proposition of
our critical “Vistaprint” brand are moving customer loyalty scores steadily upward. We sought to increase per-share
value by repurchasing shares when our share price fell below what we believed to be a conservative estimate of
intrinsic value.
Yet, despite those significant successes, any honest appraiser of our results relative to the aspirations we laid out for
our shareholders in July 2011 would reach the same conclusion as we have: we need to do better if we are to extend
our proud history of wealth creation for our investors, career opportunity for our team members, and value delivery for
our customers. For the first decade of this century we delivered extraordinary levels of growth and value creation for
each of those stakeholders. We aspire to continue to do so in the future.
Our presentation at our investor day this past August laid out in specific detail how we intend to do better. How we
plan to extend our extraordinary history of value creation in light of our past results, our strengths, our weaknesses,
and our aspirations. Why we are optimistic about our future.
As you consider investing your capital with us, please understand that extending our history of success into the next
decade, and beyond, is important to us. To that end we ask our team members to work intensely to optimize every
aspect of the business according to three priorities:
1. Leadership: being the world’s leader in mass customization, a discipline that lies at the intersection of what
we are passionate about, where we can be the best in the world, and what drives our economic engine.
2. Long-termism: multi-decade mutual success for customers, team members, investors and our contribution
to society.
3. Intrinsic value: maximizing discounted cash flow (DCF) per share. When we say DCF, we mean the free
cash flow (FCF) that, in our best judgment, will occur between now and the long-term future, appropriately
discounted to reflect our cost of capital.
Our 2014 investor day presentation addressed each of the above priorities. As a publicly traded company we
endure significant pressure to dilute our priorities with others that we consider less sound. For the long-term good of
our stakeholders, we actively resist such pressure.