Avon 2013 Annual Report Download - page 3

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Dear Shareholders:
Our vision for Avon is to restore the company to its rightful place
as an iconic beauty brand with products that consumers love and
demand, and to reinforce our global leadership in direct selling,
all while continuing to fulfill our mission to empower women.
I am confident that we have the building blocks we need to
succeed. We have an iconic, loved and resilient BRAND; a robust
CHANNEL built on personal connections; and, great PRODUCTS
in growing categories.
2013 was an important year in our turnaround journey. While performance remained
challenged, I’m pleased that we made headway toward Avon’s return to profitable
growth and our 2016 financial goals, which are:
• Mid-single digit constant dollar revenue growth
• Low-double digit adjusted operating margin
• At least $400 million net cost savings
• $100 million+ working capital reduction
In 2013, we improved our financial performance and capital structure. We continued to drive
to cost savings and have achieved approximately one-third of our three-year, $400 million
savings goal. We exited several small, underperforming markets. While we improved our
operating margin by 130 bps year-over-year and improved our cash position, we have work
to do in delivering profitable growth. 2013 total revenue of $10.0 billion decreased 6%, or
1% in constant dollars. Total Beauty sales declined 7%, or 2% in constant dollars. Active
Representatives were down 2% although average order increased 1%.
Also in 2013, we delivered year-over-year improvements in the performance of Brazil and
Russia, two of our largest markets. We rebuilt the Avon executive team and strengthened
the management bench in our top markets. And we are more disciplined at directing our
resources where they will deliver the best return on investment.