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Textron to Outline New Growth Strategy

30 November 2000

Textron to Outline New Growth Strategy; CEO Confirms Earnings Estimates for 2000 and 2001

    PROVIDENCE, R.I.--Nov. 29, 2000--Textron Inc. today announced that it will detail its new strategic direction at meetings with analysts and investors over the next two days. It will also reaffirm its expectations for continued strong financial results.
    Under the new strategy, the company will focus on leveraging the entire enterprise to create value beyond the sum of its individual business units. Major initiatives underway include supply chain management, e-business, shared services, and a value-adding corporate center to drive common processes.
    Moreover, Textron will highlight return on invested capital (ROIC) as its central strategic financial target to drive continued strong earnings growth.
    Finally, to achieve growth that continuously outpaces the market, Textron will focus on further building brand equity within its businesses, which already include such market-leading brands as Bell Helicopter, Cessna Aircraft and E-Z-GO (golf cars).
    Textron will also refine its capital allocation process to focus on technology and product innovation as well as selective acquisition opportunities in high growth, high return areas. Such acquisitions could complement Textron's Greenlee business, a leader in electrical installation tools and cable/fiber optic test instruments.
    "Consistent growth has been the hallmark of Textron's strategy over the past decade," said Textron Chairman and Chief Executive Officer Lewis B. Campbell. "We are now adding compelling to consistent as we drive value creation throughout our business. Our strategy is to deliver compelling underlying growth that outpaces GDP growth by further strengthening our brands and core competencies to gain market share.
    "With ROIC as our compass for achieving compelling growth and returns, we will improve operating efficiency, drive costs out of our business and improve our overall capital allocation process. We will be intensely focused on basic blocking and tackling to achieve the operating efficiencies we are targeting," Campbell added.
    Commenting on 2000 and 2001 earnings expectations, Campbell said, "Our financial outlook remains attractive. We expect to be able to deliver full-year 2000 earnings per share in the range of $4.65 to $4.68, before restructuring charges. Given the current North American automotive weakness, we expect to deliver at the lower-end of that range. We also continue to estimate that 2001 earnings per share will be up 13-15% before restructuring charges that may be taken in 2001."

    The company also said it expects to achieve the following results through 2004:

    --Low double-digit annual earnings per share growth before restructuring charges,
    --10-15% compounded annual growth rate for revenues, including organic growth of 5-8% per year,
    --Operating margin improvement to above 13% by 2004, and
    --Improvement in return on invested capital from 12.6% at year-end 1999 to over 15% by 2004.