Hasbro CEO Brian Goldner spoke to the gathered press and investors at UBS Global Consumer And Retail Conference earlier today to explain the company’s strategy in the coming years.
Some of the highlights:
- Success of Hasbro’s Franchise Brands.
- Partnership with Paramount Pictures.
- Boulder Media Studio animation initiatives.
- Toys’R’Us situation.
- China’s Nezha and the Transformers.
We’ve painstakingly transcripted every single word, for you to analyze and leave a comment on the thread associated with this news post. Relevant slides are also attached. Check it all out, after the jump.
Mr. Goldner is very happy with the success of Hasbro’s Franchise Brands:
“It begins with our franchise brands at the center of that strategy. There are seven brands. They represent about 50% of our revenues. Our franchise brands are owned and operated brands of our company. Brands like Transformers, Magic: The Gathering, Nerf and My Little Pony. These brands enjoy operating profit margins of 20% or better, which is ahead of our company’s average operating margin about 15.6%. These brands have grown considerably over time.”
Mr. Goldner talked briefly about their partnership with Paramount Pictures. The same slide which was on display at their Toy Fair Investor Day was featured here as well:
“More recently we announced a new arrangement with Paramount Pictures where we’re more involved in storytelling in the movie space. In fact over the next few years, you’ll see new movies come from us. Micronauts was a comic book brand. It was owned by neither Warners or Marvel. In fact we bought that brand a few years ago and we’re now developing that for the storytelling space that will become the future enterprise of the company. You know Dungeons & Dragons. We’re developing that for entertainment and it goes on into the future.” During the Q&A Session, Brian elaborated further: “We have brands that will benefit from storytelling and so we announce this relationship with Paramount where we will be able to fund up a minority of the production budgets of each of the films that we would produce, but at varying levels. We obviously have the right to lay off whatever investment to some strategic parties that we have.“
Boulder Media Studio and its animation initiatives were also mentioned:
“We have industry leading storytelling across a number of dimensions. We now own an Irish animation studio that is world class. We’re developing a raft of television [programs] anywhere from 4 to 6 shows a year on average. And from 2020 and beyond, I would expect to see one animated feature film per year. Having had a successful first My Little Pony feature film last fall, we’re in the home entertainment window just now and is performing quite well. Both of those windows are incredibly important, so you’ll see us spending cash in terms of $100 to $125 million a year.”
He also mentioned that when handling the situation at Toys’R’Us, it’ll take a year for Hasbro to ‘rightsize’ the inventory completely. Hasbro will be catering more to online and brick-and-mortar shops to minimize the impact.
Additionally, Brian mentioned their upcoming projects in China. He stated that the company is looking forward to Nezha and the Transformers series which they hope to be a hit on Chinese prime time. The project is co-produced with China Central Television (CCTV) network.
Near the very end, a question was asked whether Hasbro is planning for a Transformers Amusement Park. Though a direct answer was not given, it was implied that no such plans have been made.
There was something for the Power Rangers fans as well:
“Let’s start with the consumer and the child in them. First of all, 20% of Hasbro’s revenues are for people who are teenagers and older. So, while kids may be ‘getting older younger’, adults want to ‘stay younger longer’. And so both of those dynamics are important to us. People want to play at every age. The other important thing is: kids getting older younger just means they get to be more ‘decisional younger’. They’re actually expressing their own desires for the things they want to play with. It’s not to say they don’t play with play-things, it’s just instead of thinking about at a non-branded play-thing, they want a brand that’s associated with the character that’s most beloved. That’s why we recently brought on the Power Rangers. And the Power Rangers will now become part of our portfolio because it’s a very young-skewing brand and we know through our research that young children express a preference at a younger age. We want to be with characters and stories that are meaningful to them.”