Annual Report 2013

Beauty Care

Economic environment and market position

In 2013, growth in the relevant world cosmetics market continued to slow. Our markets again declined and were characterized by intensified crowding-out competition. Despite this difficult and intensely competitive market, the Beauty Care business unit was able to secure further market share gains and continued to strengthen its leadership position in its relevant markets.

In our Branded Consumer Goods business, the mature markets proved to be weak.In Western Europe and North America in particular, persistently difficult economic conditions led to an environment that was marked by sustained, intense promotional activity, increased price pressure, and lower average prices. Despite this challenging market environment, we nonetheless succeeded in outstripping the market in overall terms and thus in gaining market share. In Western Europe we continued to strengthen and expand our leading positions. We also managed to strengthen our position in our core segments in North America. The emerging markets continued to grow, particularly in Africa/Middle East, Latin America and Asia (excluding Japan). The markets of Eastern Europe stagnated at the level of the previous year and experienced intensified crowding-out competition. Nevertheless, we succeeded in expanding our business in all regions. Thanks to the successful international launch of several product innovations, we were able to generate above-average growth in the emerging markets and achieved significant gains in market share.

In the Hair Salon business, continuing customer restraint caused the market to decline further. The negative economic conditions in Southern Europe were a significant contributory factor here. In this difficult environment, we outperformed the markets relevant to us, and strengthened our position as the world number three in the hair salon market.