Leggett & Platt announces new strategy including divestitures
26 Dec '07
3 min read
Fortune 500 diversified manufacturer Leggett & Platt announced significant changes to its strategy. The company is adopting a new strategic objective, implementing role-based portfolio management and more rigorous strategic planning, and narrowing its focus by eliminating over one-fifth of its portfolio. Leggett also intends to enhance returns on its remaining assets, return more cash to shareholders, and pursue disciplined growth.
CEO and President David S. Haffner commented, "We are making significant, necessary changes to the way we assess our portfolio of businesses, and to how we manage our asset base. We intend to be better stewards of shareholders' capital, generate significantly more free cash, and return a larger amount of that cash to our investors.
Our shareholder returns have suffered for the past few years, as part of our portfolio has dragged us down. We are correcting that by divesting several of our businesses. These are tough decisions we don't make lightly because they affect many of our employee-partners; however, these actions are required to bring about a stronger, better performing, and more focused Leggett & Platt."
Strategic Objective: The company's new, primary objective is to consistently achieve annual TSR ([Change in Stock Price + Dividends Received] / Beginning Stock Price) of 12%-15% over the long term, which should place Leggett in the top third among the S&P 500. Revenue growth, long held as a primary goal, will now be viewed as one of several means to improve TSR.
marketing@alchempro.com
