Economic environment and market position

The world cosmetics market of relevance to us was characterized in 2012 by intense displacement competition and predominantly declining demand. Despite the persistently difficult and highly competitive environment, we were able to globally expand our market shares and therefore further strengthen our leading positions in our relevant markets across the world.

In our Branded Consumer Goods business, the core markets in Western Europe and North America remained weak as the result of the increasingly difficult economic conditions. We also witnessed a strong increase in promotional activities and growing price pressure. In some areas, volume expansion failed to compensate for these developments. Despite this challenging market environment, we nonetheless succeeded in maintaining our growth trend of recent years, again outstripping the market in overall terms. We were able to increase our market shares in Western Europe and further extend our strong market position in the hair cosmetics business. We also expanded our position in our core segments in North America. The emerging markets continued to develop positively, and we were able to further expand our business in these markets overall. Continued growth was recorded in the strongly growing regions of Asia, Africa/Middle East and Latin America in particular. It was, above all, the successful introduction of our international product innovations that allowed us to achieve above-average growth, leading to considerable gains in market share.

The hair salon market was characterized by persisting customer reticence, and recorded declining growth. The negative economic conditions in Southern Europe were a particularly contributing factor. We were, however, able to counter this market trend in our Schwarzkopf Professional hair salon business and further consolidate our position as the world number three in the hair salon market.