Annual Report 2021

"We focused on keeping our purpose and the consumer always front and center, making decisions to drive shareholder value creation over the long term, and on delivering an excellent year."

CHRIS COCKS
Chief Executive Officer

ANNUAL REPORT 2021

2021 Year in Review

Operating profit of
$763.3M

or 11.9% of revenue, up from 9.2% of revenue in 2020


Adjusted operating profit* up 20% to $995.2 million, or 15.5% of revenue, an expansion of 40 basis points year-over-year

EBITDA up
32%  to  $1.04B

Adjusted EBITDA* up 23% to $1.31 billion

Year-end cash of
$1.02B

Generated $817.9 million in operating cash flow for the full-year 2021 and paid down $1.08 billion in long-term debt


Paid $374.5 million in dividends to shareholders during the year; Board of Directors increased quarterly dividend 3%, payable in May 2022

*The As Adjusted figures are non-GAAP financial measures. A reconciliation of non-GAAP financial measures can be found in Hasbro’s Q4 & FY 2021 press release

Net revenues increased 17% to

$6.42 billion

Wizards of the Coast & Digital Gaming
Wizards of the Coast & Digital Gaming
segment revenues up
42%
Entertainment
Entertainment
segment revenues up
27%
Consumer Products
Consumer Products
segment revenues up
9%

Building on Our Strengths:

Brands, Fans & Gaming

We are operating at the intersection of timeless consumer motivations: the transportive power of great storytelling and the human energy and connection generated from play. The blueprint allows us to unlock that potential and, with the consumer at the center of all we do, we can and will supercharge our business guided by insight and a can-do growth mindset.

Building on our Strengths

Gaming Expertise & Growth

Total Gaming Portfolio

Hasbro Total Gaming Portfolio

$2.1B

2021 revenue up 19%; 9% 5-year revenue CAGR

Hasbro Total Gaming Portfolio
in Magic: the Gathering over past five years to drive 150% revenue growth

Invested Nearly

$1B

in Magic: the Gathering over past five years to drive 150% revenue growth

Building Bigger, More Profitable Brands

through the Brand Blueprint

We have invested and continue to invest significant capital around the Blueprint – expanding and growing our powerful gaming portfolio, including in MAGIC: THE GATHERING and DUNGEONS & DRAGONS; building and developing deeper and more valuable brands like PEPPA PIG, MY LITTLE PONY, PLAY-DOH and POWER RANGERS; telling compelling stories to global audiences; and in developing our talented teams.

2021 marked the successful relaunch of an iconic Hasbro Franchise Brand: MY LITTLE PONY. Led by the expertise of the eOne team, My Little Pony: A New Generation animated feature and global campaign drove the brand. The film fueled greater than 100% growth in toy and game point of sale in the fourth quarter 2021 and double-digit growth in licensed consumer products for the year. With a significant multi-year content road map led by eOne – including 500 minutes of animation this year alone – and a deep and innovative merchandise program, we believe MY LITTLE PONY is positioned to reclaim its place as a leading global lifestyle brand through expansive Blueprint activation. We are actively building similar executions with TRANSFORMERS starting in 2022 and DUNGEONS & DRAGONS in 2023.

Building Bigger, More Profitable Brands through the Brand Blueprint

Advancing Our Commitment to Planet and People

2021 Key ESG Achievements

CLIMATE & SUSTAINABILITY

  • On track to eliminate plastic in new Hasbro product packaging by end of 2022.
  • Set goal to make Potato Head brand with plant-based or renewable materials by end of 2024. Transitioning all other existing toys and games to recycled or renewable materials by 2033.
  • Continued Global Expansion of industry-leading Toy Recycling program, now in 12 countries.
  • Achieved 100% Renewable Energy Goal for Owned & Operated facilities.
  • Achieved 99% Supplier Participation in Higg Index environmental assessment tool.

HUMAN RIGHTS & ETHICAL SOURCING

  • Audited 100% of third-party vendors and major subcontractors for social compliance globally.
  • Achieved 100% third-party factory compliance with mandatory Hasbro Ethical Sourcing Academy online training.
  • Advanced Female Empowerment Program in third-party factories.
2021 Key ESG Achievements

PHILANTHROPY

  • Provided more than $17 million through in-kind and financial support including the donation of more than 750,000 toys and games.
  • Engaged 92% of our employees worldwide at more than 300 volunteer projects through our Team Hasbro Employee Volunteer program.

HUMAN RIGHTS & ETHICAL SOURCING

  • On track with our 2025 goals to increase the percentage of women in leadership roles globally to 50% and to expand ethnically and racially diverse employee representation in the US to 25%.
  • Continued to foster a culture of inclusion through initiatives such as providing unconscious bias workshops for a majority of our employees globally.

In October, our beloved leader and longtime Chairman & CEO Brian Goldner passed away.

Brian joined Hasbro in 2000 and was quickly recognized as a visionary in the industry. He was appointed CEO in 2008 and became Chairman of the Board in 2015. He was instrumental in transforming the Company into a global play and entertainment leader, architecting a strategic Brand Blueprint to create the world’s best play and storytelling experiences. Through his tireless work ethic and unwavering focus, he invested to grow Hasbro’s reach, expanding Hasbro’s capabilities beyond toys and games into television, movies, digital gaming and more, to ensure Hasbro’s iconic brands reached every consumer. Brian is remembered for not only his visionary leadership but the impact he made on the people he interacted with and the communities he served. Thank you, Brian. We miss you.

In October, our beloved leader and longtime Chairman & CEO Brian Goldner passed away.

New Leadership

CHRIS COCKS

CHRIS COCKS

Chief Executive Officer

For the past six years, Chris has been President of Hasbro’s Wizards of the Coast (Wizards) business. During that time, we more than doubled Wizards’ revenue to greater than $1 billion, invested in new capabilities, built an industry-leading team and set the stage for continued growth in tabletop and digital gaming.

Vision

As I begin my work as CEO, I along with our teams will be focused on three long-term priorities:

Driving Growth with the Brand Blueprint

This strategy is at the heart of Hasbro. It enables us to expand the value of our brands and capabilities as we engage our fans across all aspects of play and entertainment – from consumer products to games to streaming TV shows; executing through our owned and operated assets and the best partners in the industry.

Multigenerational Play and Entertainment

Play isn’t just for kids anymore. It’s a lifelong pursuit. Gen Z’s favorite brands are the ones they play with, that surround them with engaging experiences, and Millennials and Gen X aren’t far off. We are creating omni-media play and entertainment that spans age ranges, connects people together and is passed along generation to generation.

Growth Opportunities

Games

At $2.1 billion and 19% year-over-year growth, Hasbro is one of the biggest and fastest growing games publishers in the world. Games are the beating heart of Hasbro and we will invest accordingly. We are category leaders in Trading Card Games, Role Playing Games and Board Games with beloved brands ranging from MAGIC: THE GATHERING to DUNGEONS & DRAGONS to MONOPOLY.

Direct to Consumer:

Our investments in digital and direct to consumer give us an amazing opportunity to forge tighter relationships with our most valued customers, to learn from them in real time via cutting edge data analytics and to reinvent how we bring product to market and customize it for our most passionate fans. While the whole Blueprint generates immense value for Hasbro, look for us to put particular focus on these fast-growing businesses as we take our portfolio to the next level.

Underlying these priorities will be a laser focus on capital allocation, how we invest in the business, prioritize our brands, and drive total shareholder return, while continuing to pay down debt, maintaining an investment grade rating and returning cash to shareholders.

ERIC NYMAN

ERIC NYMAN

President and Chief Operating Officer

Eric Nyman was named President and Chief Operating Officer for Hasbro. He will continue to lead our Consumer Products team, as he has for the past several years. Eric is a valued member of the Hasbro team with more than 18 years of inspiring our people and driving consumer-focused innovation across our iconic brand portfolio.

CYNTHIA WILLIAMS

CYNTHIA WILLIAMS

President, Wizards of the Coast and Digital Gaming

Cynthia Williams joins us from Microsoft to serve as President of Wizards of the Coast and Digital Gaming. Gaming talent is in high demand, and the ability to attract such strong leaders to Hasbro reflects the strength of our brands and the tremendous opportunity ahead of us.