Annual Report 2013

Economic report

Expense items

The following explanations relate to our operating expenses adjusted for one-time charges/gains and restructuring charges. The reconciliation statement and the allocation of the restructuring charges between the various items of the statement of income can be found here.

Compared to the previous year, the cost of sales declined by 2.8 percent to 8,497 million euros. Gross profitGross profit
Difference between sales and cost of sales.
rose by 1.1 percent to 7,858 million euros. We were able to improve 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.
by 0.9 percentage points to 48.0 percent, supported by selective price increases, savings from cost reduction measures, and improvements in production and supply chainsupply chain
Encompasses purchasing, production, storage, transport, customer services, requirements planning, production scheduling and supply chain management.
efficiency.

At 4,199 million euros, marketing, selling and distribution expenses were below the prior-year figure of 4,278 million euros. Their proportion of sales declined by 0.2 percentage points to 25.7 percent. We spent a total of 414 million euros on research and development, thus keeping the ratio to sales on a par with the previous year at 2.6 percent. At 749 million euros, administrative expenses accounted for 4.5 percent of sales, slightly above the level of the previous year.