Annual Report 2013

Fundamental principles of the Group

Financial targets 2016

By the end of 2016, we aim to generate net sales of 20 billion euros in order to further strengthen our position in the competitive global market environment. The setting of our target reflects the growing importance of emerging markets. We aim to continue achieving above-average growth in these markets and to generate net sales of 10 billion euros there by the end of 2016.

We intend to continue our outstanding financial performance through a balanced combination of growth and increasing profitability. Consequently, we aim to increase adjusted earnings per preferred share by an average of 10 percent per year (CAGR: compound annual growth ratecompound annual growth rate
Year-over-year rate of growth, e.g. of an investment, over a defined period.
) between 2013 and 2016.

The definition of our financial targets up to the end of 2016 assumes not only that we will constantly adapt our structures to market conditions, but also that we will strive to continuously optimize our portfolio. This will encompass both smaller and mid-sized acquisitions as well as divestments or the discontinuation of non-strategic activities (representing total sales of around 500 million euros in the period between 2013 and 2016). Potential major acquisitions or divestments are not accounted for in the financial targets.

In order to achieve our ambitious targets for 2016, we want to steadily improve both the operational capacity and earning power of the company, while at the same time taking advantage of the strong financial position of the company to further develop our portfolio.

We have defined clear selection criteria for possible acquisitions in respect of strategic fit, financial attractiveness, and implementability. The focus in Laundry & Home Care and Beauty Care will center on strengthening our categories in the respective regions, while the focus in Adhesive Technologies will primarily be on advancing technology leadership.

Progress in fiscal 2013:

     

  • Organically – i.e. after adjusting for foreign exchange and acquisitions/divestments – we increased sales by 3.5 percent. Sales in 2013 in absolute figures were slightly below the prior-year level, at 16.4 billion euros, due to negative foreign exchange effects amounting to 4.4 percent.
  •  

  • In the emerging markets, we achieved 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.
    of 8.3 percent. Nominally, sales were 7.2 million euros compared to 7.1 million euros in the previous year. The share of Group sales from emerging markets increased by one percentage point to 44 percent.
  •  

  • We increased adjusted earnings per preferred share in 2013 from 3.70 euros to 4.07 euros, a rise of 10.0 percent over 2012. After adjustment of the prior-year figure in application of IAS 19 revised, adjusted earnings per preferred share increased by 12.1 percent1.
  •  

*

Average annual growth in adjusted earnings per preferred share (compound annual growth ratecompound annual growth rate
Year-over-year rate of growth, e.g. of an investment, over a defined period.
/CAGR).
Including continuous portfolio optimization.

1

see  here.