EL SEGUNDO, Calif.,
June 14, 2017 /PRNewswire/
-- Mattel, Inc. (NASDAQ: MAT) today unveiled its
strategic growth plan during the company's Investor Day event in
New York City. Chief Executive
Officer Margo Georgiadis and members
of the management team presented the strategic plan, a roadmap for
achieving growth, as well as the company's medium-term financial
framework.
At the Investor Day, Mattel outlined its new strategic direction
underpinned by the company's investment thesis:
- The industry continues to grow, with shifting consumer and
market trends that are reshaping the future.
- Mattel possesses differentiated and market-leading assets that
position it to capitalize on future opportunity.
- Mattel's clear strategy for growth is focused on: building its
Power Brands (American Girl®, Barbie®, Fisher-Price®, Hot Wheels®
and Thomas & Friends™) into 360-degree connected systems of
play and experiences; accelerating growth in emerging markets; and
transforming its innovation pipeline.
- This strategic repositioning will enhance long-term growth and
profitability.
- Management anticipates that reshaping operations and
reallocating resources will unlock substantial reinvestment funds
for growth, and will improve speed to market.
- Mattel's large base of consistent revenue from core brands will
continue to produce robust ongoing cash flow; and the company will
maintain a strong balance sheet to support its growth
strategy.
"Our vision is to inspire the wonder of childhood as the global
leader in learning and development through play. As we shift our
business aggressively in a new strategic direction and transform
how we operate, I believe we have the assets to achieve this vision
and shape the future of the toy industry," said Margo Georgiadis, CEO of Mattel. "The strength
of the underlying Mattel franchise supported by important trends
such as a growing global toy market and an increasingly digital,
mobile-first world provides an opportunity for Mattel to create
significant long-term value for our investors."
A Future-Proofed Long-Term Strategic Framework
Mattel will focus on a five-pillar strategy:
- Build Mattel's Power Brands into connected 360-degree play
systems and experiences.
- Accelerate emerging markets growth with digital-first
solutions.
- Focus and strengthen its innovation pipeline.
- Reshape Mattel's operations to enable the strategy – leaner,
faster, smarter.
- Reignite Mattel's culture and team.
1) Build Mattel's Power Brands
into Connected 360-degree Play Systems and Experiences
Building Mattel's Power Brands into connected 360-degree play
systems and experiences starts with the consumer and creates
purposeful worlds of play. The company has created a brand
development framework to unlock the scale and profitability of its
brands.
- The framework is based on Mattel's beloved and purposeful
global brands, which are aligned to the skills that kids need to
succeed.
- Each one of these brands is uniquely founded on a globally
relevant and accessible play pattern – dolls, cars and trains –
which are sold at huge unit volumes, in the hundreds of
millions.
- The framework extends those brands into systems of play, both
physical and digital.
- Leveraging Mattel's scaled consumer base, the framework then
builds powerful communities of shared interest around the
brand.
- Further growth will be driven by meaningful adjacent
opportunities that extend Mattel's Power Brands and complete the
360-degree experience, including Consumer Products, Gaming, Content
and Live Experiences.
Mattel is already moving quickly on this path by continuing to
expand its brands' physical play systems. Mattel plans to bring new
scaled, digitally connected toy offerings to market starting in
fall 2018.
2) Accelerate Mattel's
Emerging Markets Growth with Digital-First Solutions
Mattel plans to accelerate growth in emerging markets, which is
expected to be the biggest driver of future industry growth. The
toy market in these regions is still emerging with spend per child
a fraction of the U.S.
Mattel's purposeful brands are well aligned with the needs of
Chinese parents, and Mattel has taken a solutions-based and
digital-first approach to localize products, which has enabled the
company to scale rapidly over the past five years. This success,
along with Mattel's rich learning and development curriculum, has
earned the company ground-breaking partnerships that will support
accelerated growth. Mattel predicts that its China business can be 3 to 4 times bigger by
2020 if well-executed. In addition, the company has plans to take a
similar approach to expand more rapidly in other priority emerging
markets, including India and
Indonesia.
3) Focus and Strengthen
Mattel's Product Innovation Pipeline
To focus and strengthen its product innovation pipeline, the
company is shifting to a company-wide approach to manage its
innovation portfolio – and eliminating siloes across brands,
categories and partners. This includes aligning metrics and
investment levels with the respective opportunities and encouraging
more aligned risk-taking across initiatives. As a result of this,
the company expects to speed up its innovation cycle time –
targeting 6 to 9 month cycles to develop new products, versus 18
months today.
The company will drive growth within its innovation pipeline in
three key areas:
- Further differentiating its offering for licensed partners,
which leverage Mattel's infrastructure and provide excitement at
retail.
- Pursuing co-production with partners that align on shared
interest.
- Driving innovation with Mattel's own brands and launching new
brands by leveraging the company's deep insights and expertise in
girls, vehicle play, games and STEAM.
4) Reshape Operations to
Enable Mattel's Strategy
To enable the company strategy, Mattel plans to reshape its
operations to be faster, leaner and smarter. As a part of this, the
goal expects to free up $150-$200
million to reinvest in rearchitecting the company. Changes
will focus on three areas:
- Commercial – simplifying the organization and better aligning
to market opportunities, as well as supporting a transformation to
the omnichannel world.
- Manufacturing and supply chain – improving speed to market,
deepening cost advantage and creating scalable digital product
platforms.
- IT transformation – optimizing critical business drivers with
shared data and an insights-driven approach across all areas of the
business.
5) Ignite Mattel's Culture and
Team
To reignite the culture, Mattel has launched a new purpose,
promise and values that will help to unleash the innovation,
collaboration and speed the company needs to succeed. In addition,
the company has hired and will continue to hire strategic talent to
seed change across the organization and accelerate its progress
forward.
Mattel has already added a suite of talent across the
organization in areas including brand management, commercial,
manufacturing, connected product development, ecommerce, content
and digital market. This will continue to be a priority going
forward.
Investment Strategy / Capital Allocation
To drive
growth and margin improvement, Mattel will be making incremental
investments. The company expects the cumulative incremental
investment to execute this strategy in both capital expenditures
and operating expenditures will be approximately $250 to $350 million.
The company will right-size its dividend to free-up resources
for reinvestment as well as strengthen its balance sheet and
provide added financial and strategic flexibility.
Medium-Term Financial Outlook
In the medium-term,
Mattel believes its future-state business model can achieve
mid-to-high single digit revenue growth and operating profits at,
or above, 15%.
Webcast
An archive of the Investor Day webcast is
available on Mattel's Investor Relations website,
http://investor.shareholder.com/mattel.
Forward-Looking Statements
This press release contains
forward-looking statements on a variety of matters. These
forward-looking statements are based on currently available
operating, financial, economic and other information, and are
subject to a number of significant risks and uncertainties. A
variety of factors, many of which are beyond our control, could
cause actual future results to differ materially from those
projected in the forward-looking statements. Some of these factors
are described in the Company's periodic filings with the Securities
and Exchange Commission, including the "Risk Factors" section of
Mattel's Annual Report on Form 10-K for the fiscal year
ended December 31, 2016 and Mattel's Quarterly Reports on
Form 10-Q for fiscal year 2017, as well as in Mattel's other public
statements. Mattel does not update forward-looking statements and
expressly disclaims any obligation to do so.
This press release and our Investor Day slide presentation are
available on Mattel's Investor Relations
website, http://investor.shareholder.com/mattel, under the
subheading "Events & Presentations."
About Mattel
Mattel is a creations company that
inspires the wonder of childhood. Our mission is to be the
recognized leader in play, learning and development worldwide.
Mattel's portfolio of global consumer brands includes American
Girl®, Barbie®, Fisher-Price®, Hot Wheels®, Monster High® and
Thomas & Friends™, among many others. Mattel also creates a
wealth of lines and products made in collaboration with leading
entertainment and technology companies. With a global workforce of
approximately 32,000 people, Mattel operates in 40 countries and
territories and sells products in more than 150 nations. Visit us
online at www.mattel.com.
Media
Contacts:
|
|
News
Media
Alex Clark
310-252-6397
alex.clark@mattel.com
|
Securities Analysts
David Zbojniewicz
310-252-2703
david.zbojniewicz@mattel.com
|
MAT-FIN MAT-CORP
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SOURCE Mattel, Inc.