Estee Lauder 2014 Annual Report Download - page 9

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7
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
FABRIZIO FREDA
Dear Fellow Stockholders,
Our Company achieved another record year in fiscal 2014. By executing our strategy,
we successfully captured opportunity around the world. Our strong business results
reflect our Company’s long history of identifying where the best growth opportunities
exist, creating desire and excitement through the power of our outstanding prestige
brands, and managing our resources with the focus and agility required to achieve
success in a dynamic global marketplace.
My trusted partner Executive Chairman William P. Lauder and I believe that our
Company must continually strive to outperform the benchmarks of excellence we
ourselves have set. By strategically focusing our efforts on the right opportunities,
we have accomplished this and more, including strengthening our diverse brand
portfolio, delivering strong financial results and gaining global share. In these
efforts, we are guided by our 10-year Compass, a high-level roadmap of expected
economic and consumer trends that helps us position our brands in the largest,
fastest-growing and most profitable categories, regions and channels.
I believe that we are uniquely equipped to capture opportunity and create
industry-defining beauty trends around the world. Our well-diversified portfolio
of more than 25 distinctive brands across four product categories (skin care,
makeup, fragrance and hair care), the breadth of channels and geographies in
which we operate, and our strategic and financial discipline allow us to navigate
changing local economies, allocate resources to the best opportunities, and
meet consumer desires for high-quality, aspirational products and experiences.
This balance and agility fueled our growth across virtually every part of our business
and drove our success in fiscal 2014. We reached records with $10.79 billion in net
sales, a 16.1 percent operating margin and net earnings of $1.16 billion.* We also saw
a record year-end stock price and market capitalization of over $28 billion.
*As a result of the Company’s July 2014 implementation of its Strategic Modernization Initiative, approximately
$178 million of accelerated orders were recorded as net sales, $127 million as operating income and $82 million
in net earnings in fiscal 2014 that would normally occur in the fiscal 2015 first quarter. Fiscal 2015 results will be
adversely impacted by the same amounts. Additionally, in fiscal 2014 the Company recorded a charge related to
the remeasurement of net monetary assets in Venezuela of $38 million. Including these two items, net sales were
$10.97 billion, operating margin was 16.7% and net earnings were $1.20 billion.