Avon 2010 Annual Report Download - page 49

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Western Europe, Middle East & Africa – 2009 Compared to 2008
%/Point Change
2009 2008 US$ Constant $
Total revenue $1,277.8 $1,351.7 (5)% 6%
Operating profit 84.2 121.0 (30)% (22)%
CTI Restructuring 31.0 24.3
Adjusted Non-GAAP operating profit 115.2 145.3 (21)% (10)%
Operating margin 6.6% 8.9% (2.3) (2.1)
CTI Restructuring 2.4 1.8
Adjusted Non-GAAP operating margin 9.0% 10.7% (1.7) (1.4)
Units sold 8%
Active Representatives 10%
Total revenue decreased for 2009 as compared to 2008 as a result of unfavorable foreign exchange. Constant $ revenue increased for 2009
as a result of growth in Active Representatives, offset by a lower average order reflecting recessionary pressure. Active Representatives
growth for 2009 benefited by one point due to the acquisition of a small distributor in Saudi Arabia during the second quarter of 2009. This
acquisition had minimal impact on the financial results. Revenue declined 16% in the United Kingdom during 2009, due to the negative
impact of foreign exchange. Constant $ revenue in the United Kingdom declined 1% during 2009, as strong merchandising of “smart
value” products countered the recessionary pressure. Revenue in Turkey increased 2% during 2009. Turkey’s Constant $ revenue increased
21% during 2009, reflecting an increase in Active Representatives, driven by investments in RVP and Sales Leadership.
During 2009, operating margin was negatively impacted by .6 points due to higher CTI restructuring compared to the prior year. On an
Adjusted Non-GAAP basis, excluding CTI restructuring, the decrease in operating margin for 2009 as compared to 2008 was primarily driven
by unfavorable foreign exchange, including the impacts of foreign exchange transactions as well as translation, which negatively impacted
operating margin by an estimated 3 points, partially offset by lower overhead expenses in 2009.
Asia Pacific – 2010 Compared to 2009
%/Point Change
2010 2009 US$ Constant $
Total revenue $752.4 $677.3 11% 3%
Operating profit 93.4 61.6 52% 34%
CTI Restructuring (.2) 18.5
Adjusted Non-GAAP operating profit 93.2 80.1 16% 4%
Operating margin 12.4% 9.1% 3.3 2.8
CTI Restructuring – 2.7
Adjusted Non-GAAP operating margin 12.4% 11.8% .6 .1
Units sold 3%
Active Representatives 5%
The region’s results for 2010 and 2009 exclude the results of Japan, which was classified as a discontinued operation beginning in the fourth
quarter of 2010.
Total revenue during 2010 increased due to favorable foreign exchange and growth in Active Representatives, partially offset by a lower
average order. Revenue grew 15% during 2010 in the Philippines, benefiting partially from favorable foreign exchange. Constant $ revenue
during 2010 in the Philippines increased by 10% driven by growth in Active Representatives, which was supported by RVP initiatives, offset
by a lower average order. The region’s results were negatively impacted by a decline in skincare sales during 2010.
A V O N 2010 37