Economic Value Generated & Distributed
Our investment decisions and growth strategy are guided by an emphasis on sustainable business practices and full compliance with laws, regulations and internal standards.
Strong financial performance is key to the sustainable growth of our business and our future success. Our stakeholders around the world expect us to deliver on our financial commitments by generating and distributing economic value. To that end, we are focused on growing our earnings by 7% to 10% over time while returning 50% of our discretionary free cash flow to shareholders. We believe this approach in combination with investing for growth in our businesses will allow us to maintain our reputation as a leader in our markets and position us to respond to the evolving needs of our customers. Through our global operations, we create value for a wide variety of stakeholders, including our local communities, shareholders, investors, suppliers, contractors and employees. Our compensation programs are designed to provide a competitive package that rewards both individual and Company performance and that reflects job complexity, strategic value of the individual’s position, experience and location.
We were pleased to report a very strong financial performance in fiscal year 2018. We generated adjusted earnings per share* of $4.03, which was a 14% increase compared with fiscal 2017. Furthermore, we achieved cash flow from operating activities of $298 million and generated $253 million of discretionary free cash flow (DFCF).* We continued to deliver on our commitment to return cash to our shareholders, returning more than 50% of DFCF through dividends and share repurchases.
We made several long-term strategic investments to extend our leadership positions and to drive sustained growth of earnings and free cash flow. Our investments for growth in our core businesses included furthering the integration of Tech Blend, a leading North American producer of black masterbatches, which extends our global footprint in black masterbatch and compounds. We also acquired a carbon black plant in Pizhou, China, and announced our intention to modify the manufacturing facility to produce specialty carbons. Moreover, we announced investments for additional capacity in our global carbon black network through capital-efficient debottlenecks and an expansion at our facility in Cilegon, Indonesia. In addition, we continued to make progress on our new fumed silica manufacturing facilities in Carrollton, Kentucky, USA, and in Wuhai, China. These two facilities will add nearly 100 total jobs in those communities. In 2018, we also recommissioned our aerogel manufacturing facility in Frankfurt, Germany, which increased the number of employees from 14 to more than 50.
Our business success enables us to further our contributions to society and the communities where we operate, by generating jobs, providing fair wages, adopting the latest technology and materials to reduce our environmental impact, and participating in charitable giving and community events.
* Non-GAAP financial measure. Refer to non-GAAP reconciliations on page 10 of our 2018 Annual Report.
Celebrating 75 years of operations at our Ville Platte facility
2018 marked the 75th anniversary of our carbon black manufacturing facility in Ville Platte, Louisiana, USA. In honor of this milestone, the site hosted a week’s worth of events for our customers, employees, family members and retirees.
Throughout the facility’s history, we have been proud to expand our production capabilities and employ local residents who have contributed to its long-term success. Today, we utilize four units to manufacture more than 10 different grades of carbon black, amounting to approximately 145,000 metric tons of product sold throughout North America annually.
Our 2018 Annual Report