We again grew market share by providing customers with superior lighting solutions from our broad and dynamic product portfolio, and we enhanced service, which included delivering new capabilities from our regional service facilities. We were again recognized by key customers, such as the IMARK Group, as Supplier of the Year for the third straight year for our outstanding products, service and support.
We continued to expand our addressable market and further penetrated key geographies, reducing our reliance on new construction activity. 2012 was the fourth consecutive year in which we expanded our industry-leading portfolio with the introduction of approximately 100 new products for indoor and outdoor applications. Additionally, we won multiple awards for innovation and ingenuity, further demonstrating our leadership in solid state as well as conventional lighting solutions. These are among the strategic accomplishments that allowed us to once again extend our market leadership position in 2012 while strengthening our platform for future growth.
Acuity Brands also delivered solid results, despite the continuing challenges of a weak economy:
- Net sales grew almost 8 percent, to more than $1.9 billion;
- Adjusted operating profit margin expanded 120 basis points to 11.7 percent;
- Adjusted diluted earnings per share from continuing operations increased 24 percent to $3.00 per share;
- Cash flow provided by operating activities rose to over $172 million;
- Return on stockholders’ equity climbed to nearly 15 percent; and
- Total shareholder return exceeded 40 percent.
This is an extraordinary time to be in the lighting industry, particularly for a company of the caliber of Acuity Brands. Rapid advancements in technology, along with the need for greater energy efficiency, changes in public policy, and demand for environmental sustainability, continue to drive profound changes in our industry creating an exciting opportunity. Acuity Brands is capitalizing on these profound changes to provide lighting solutions that are elegant, sophisticated, and efficient, while at the same time simple to install, maintain, and use. We are at the forefront of transforming the lighting industry. Our skill, knowledge and experience as lighting experts allow us to deliver superior lighting solutions for virtually any application, a promise best captured in our tag line: “Expanding the Boundaries of Lighting™.”
Our Future: Growth, Innovation, Excellence
As we enter 2013, our mission is to continue to build on our rich legacy of growth, innovation and excellence. Our passion and intense focus continue to be centered on creating lighting solutions that deliver superior quality, energy efficiency and performance. We know that superior quality of light enhances how we live and interact, whether it is increasing students’ learning ability in schools, improving worker productivity and comfort in offices and industrial facilities, enhancing the shopping experience in retail establishments, or accelerating patient healing in hospitals. The possibilities of what can be achieved by the use of intelligent lighting solutions are still being explored. Technology, coupled with our deep knowledge of lighting, is allowing us to create ever more effective and energy-efficient solutions that are “smart and simple,” a slogan we use in our sales and marketing campaigns to convey our value proposition for the many vertical markets we serve. Our associates are rapidly exploiting these new technologies and aggressively expanding our industry-leading portfolio by developing intelligent lighting solutions that represent significant advancements over traditional technologies and that easily network with other building systems, improving energy efficiency, performance and safety.
We believe the emphasis on energy efficiency and environmental concerns will continue to drive significant growth in our industry. As the market leader in North America, we believe that our deep expertise in technology, optics and thermal management, our understanding of the art and science of lighting, and our ability to provide tailored lighting solutions for numerous applications have positioned the company to excel. Our key strategies and tactical focus have remained consistent over the last few years. We expect to continue to execute our profitable growth strategy by focusing on the three mission-critical areas of operational excellence that we refer to as the 3 Cs:
- Providing unparalleled customer service;
- Pursuing world-class cost efficiency by eliminating non-value added activities and transaction costs; and
- Creating a culture that demands excellence in everything we do through continuous improvement.
On behalf of Acuity‘s management team and its Board of Directors, I want to thank our 6,000 associates for making possible the success we experienced in 2012 and for their continued contributions and dedication to our vision. I also want to thank our customers for their business, our suppliers for their support, and our stockholders for the partnership we share in our enterprise.
Sincerely,
