Hasbro CEO discusses why the company can grow double digits in 2021, content creation, and more

Yeah, our plan, good morning Brian, is to spend between 675 and 750 million dollars a year on content. Recognize that we risk mitigate that investment by pre-selling or licensing rights, so really only about a third of that is at risk in any period of time. But it gives us a great opportunity to develop, and we are developing a range of Hasbro IP. We have more than 30 active Hasbro IP projects up right now. We've talked about the Dungeons & Dragons movie and the My Little Pony animated feature coming, Dungeons & Dragons live-action television coming, new Transformers iterations as well as Power Rangers. So over time we'll continue to develop. We expect that we get a few motion pictures in the market between '22 and '23, and three to four of our live-action stream television series and other series into the marketplace, and then we'll scale from there.

Well, first, you know, we do believe the movie business will come back. If you look at other territories around the world where COVID had been mitigated earlier, whether it's Japan or in China, we're seeing the movie business, the box office, really come back. So we expect people want to get back out to theaters, people want to travel and go do things with their friends and see one another. So the movie business will come back. Having said that, we've also seen an inflection point where the stream content is being watched by enough viewers at any period of time where we're able to eventize that and work with our global retailers to bring it to life. So whether it's been The Mandalorian, it's been an incredible success certainly on Disney+ and for us here at Hasbro, or whether it's the Transformers: War for Cybertron anime series that's on Netflix that really activated that brand for the fan economy, and we're seeing great merchandising success there with our global retailers. You know, we see this moment where we've gone past a point, people are watching a lot of stream content and it gives us the opportunity to engage in collectibility and across the fan community and in play patterns.

Yeah, and I wouldn't view it as a restructuring, more as a transparency and some clarification to allow for our business to be run and to show people how our business is being run and just where the drivers are of growth and revenues and earnings power, our operating margin and how that becomes more creative as we activate more Hasbro brands. So Wizards and digital has been a key area of growth for us and a key area of investment, and we've seen that kind of growth where Wizards is on a path to double in size over the five-year period through 2023. We wanted to show people just what Wizards was doing, and so by shining a light there, people now understand that digital gaming and fantasy gaming for lifetime gamers is a really important area for us and how we're investing and activating a whole host of new games to sit alongside of our analog games at Wizards of the Coast. In consumer products, we wanted to make sure we could show how innovation and creativity would continue to have our consumer products business, including traditional toys and games, to run ahead of the industry growth rate, and that we believe we can grow in that manner. And then of course, you know, for eOne, it's our first year past COVID where we're going to be able to really show people we're back in business. The business grew in the fourth quarter, TV and film grew by 20% in the fourth quarter, so we're back in productions. And we wanted to really give people a sense that we believe Wizards can grow double digits, eOne will grow significant double digits, and with the toy growth, we expect that Hasbro can grow double digits in 2021 and maintain margins and grow margins beyond that. We've set an objective for operating margins to be beyond 16% over the next few years and we absolutely believe we can achieve that. So we view it as real clarity around how we run our business and so that our shareholders and stakeholders understand that as well.

Yeah, we've been engaged with investors around ESG and clearly there are key criteria and metrics, and we're publishing our objectives around CSR to ensure that people understand what sustainability should look like and how we're running a great company through great corporate governance. But we really believed that we could embed purpose, our mission of making the world a better place for children and their families, all children, fans, and families, as part of the mantra of everything that we do. And so we've elevated Catherine Baveux, who's now our Chief Purpose Officer, and she's got a full practice here at the company where we're bringing together all the elements, engagement, ESG, how we look at our communications, to ensure that all stakeholders, internal and external, really can see Hasbro through the same lens that we see that responsibility that we take to ensure that we are a company that's on the move, that has a real mission in mind, and that we can achieve that through a great purpose.

Sure. Well, Mr. and Mrs. Potato Head have been around since the early '50s. In fact, the first toy commercial is credited to the Potato Heads back in the early '50s, and clearly kids were playing with it then. It's been a part of Hasbro and a part of childhood around the world. The Potato Heads, Mr. and Mrs. Potato Head, will continue to be offered, but the opportunity is to introduce the entire Potato Head family. And so the team is actively busy getting ready for a family kind of a play pattern launch where you'll have children and other family members that kids can also play with. And it really comes from great consumer insight that consumer was saying, and parents and kids were both equally saying, that more creative play from Potato Head would be a good thing. And so we're expanding the brand. The Potato Heads are a big family and we need to share that with the world.

You know, we look all the time to see how we continue to learn every day from consumers, and we look at consumer insight and audience insights and gamer insights literally every day. We're trying to learn something in a proprietary way to ensure that we're making our product as innovative and as connected to the experiences that our audiences want from our brand. So nothing to share today, but clearly we're always on the lookout.