organic sales growth.
Sales and profits
The Beauty Care business unit recorded solid organic sales growthorganic sales growth
Growth in revenues after adjusting for effects arising from acquisitions, divestments and foreign exchange differences – i.e. “top line” growth generated from within.
in the reporting period and a strong increase in adjusted return on sales, thus continuing to build on the profitable growth of the previous years. Organically (i.e. adjusted for foreign exchange and acquisitions/divestments), sales increased by 3.0 percent. For the first time, the fullyear adjusted return on sales reached 15.0 percent in 2013, 0.5 percentage points above the figure of the previous year.Organic growth was again considerably higher than in our relevant markets, and was achieved through increases in both price and volume. This was all the more gratifying in light of the growing, intensive competition and continued strong promotional activity that again characterized our market environment in 2013. As in previous years, the foundation for this success was provided by our strong innovation program.
In the following, we comment on our organic sales performance in the regions.
From a regional perspective, business performance was particularly successful in the emerging markets, with Asia (excluding Japan) standing out through double-digit growth thanks to dynamic business expansion in China. Continuing the successful trend of recent years, the Africa/Middle East region posted a double-digit growth rate despite political instability. Sales growth in Latin America and Eastern Europe was solid.
In the mature markets, we were able to increase organic sales overall. The solid sales growth in North America is particularly noteworthy. In Western Europe, we managed to record a positive performance. Despite the weak economy – in Southern Europe in particular – we succeeded in increasing sales in a declining market. Sales in the mature markets of the Asia-Pacific region, however, fell short of the previous year's level due to developments in Japan.
Operating profit (EBIT) declined by 1.9 percent versus the previous year, to 474 million euros. However, adjusted operating profit increased in the reporting period by 2.1 percent versus the prior year, to 525 million euros, our highest earnings figure to date. Adjusted return on sales rose by 0.5 percentage points to 15.0 percent, likewise reaching a new high. Our innovation initiatives and ongoing measures to reduce costs and enhance production and supply chainsupply chain
Encompasses purchasing, production, storage, transport, customer services, requirements planning, production scheduling and supply chain management.
efficiency enabled us to offset the effects of increasingly intense promotional competition, and to maintain our gross margingross margin
Indicates the percentage by which a company’s sales exceed cost of sales, i.e. the ratio of gross profit to sales.
at the prior-year level. In addition, prices for direct materials stabilized at the level of the previous year. The continued optimization of our cost structures contributed to the increase in profitability.
At –0.5 percent of sales, we further reduced net working capitalnet working capital
Inventories plus payments on account, receivables from suppliers and trade accounts receivable, less trade accounts payable, liabilities to customers and current sales provisions.
and recorded an all-time low for the year. Return on capital employed (ROCE)Return on capital employed (ROCE)
Return on Capital Employed (ROCE) improved to 23.6 percent. Economic value added (EVA®)Economic value added (EVA®)
The EVA concept reflects the net wealth generated by a company over a certain period. A company achieves positive EVA when the operating result exceeds the weighted average cost of capital. The WACC corresponds to the yield on capital employed expected by the capital market. EVA is a registered trademark of Stern Stewart & Co.
reached 323 million euros, increasing by 38 million euros compared to the prior year.