McDonalds 2004 Annual Report Download - page 7

Dear fellow shareholders:
By any measure, 2004 was a year like no other for McDonald’s.
It was a year in which our global restaurant System performed remarkably well—
serving an additional 1.6 million customers a day, posting our highest comparable
sales increase in 17 years, generating a record $3.9 billion in cash from operations,
and leading the Dow in share-price gain.
It was a year that saw McDonald’s named “Marketer of the Year” by Ad Age
magazine, reflecting a new era in leadership marketing powered by our “i’m lovin’
it” strategy. This new global brand direction reflects our
resolve to be more relevant and more creative in the
minds of our customers.
It was a year in which our performance thoroughly
affirmed our strategic imperative—to grow by being
better, not just bigger.
But .. .if 2004 was a year of unparalleled achievement,
it was also a year of unprecedented tragedy.
This tragedy began in April, with the sudden and unexpected death of Jim
Cantalupo at our Worldwide Owner/Operator Convention. Jim had led our
Company for just 16 months, but in that time he created the foundation for the
remarkable turnaround that continues today. And the Convention, which should
have been one of Jim’s finest hours, instead became one of the McDonald’s
Family’s saddest moments.
Just weeks later, Charlie Bell, Jim’s talented successor as CEO, discovered he
was suffering from colon cancer. Throughout 2004, we watched this vibrant leader
wage a courageous battle against the disease, a battle that ended in January in his
hometown of Sydney, Australia. Both Jim and Charlie worked their way to the top
of our System through passion, incredible hard work and great instinct. They were
remarkable men.
Today, with 2004 behind us, I am often asked.. . how did McDonald’s do it? With
all the misfortune, how did your Company post one of its most successful years
ever?
My answer is always straightforward—there are clear and tangible reasons for our
success.
First, we have the McDonald’s “Plan to Win,” our strategic roadmap, announced
in April of 2003, that has provided our System the focus it needs to become our
customers’ favorite place and way to eat. Our Plan concentrates on the five key
drivers of our business—people, product, place, price and promotion. When we
truly align our considerable resources against “the five Ps,” as we call them, we
LETTER FROM THE CHIEF EXECUTIVE OFFICER
5 MCD 2004
Jim Skinner