Economic environment and market position

The world market for laundry and home care products was generally characterized in 2012 by continued intense price and sales competition. The global consumption climate was dampened by a high level of uncertainty surrounding the persisting debt and financial crisis. High levels of unemployment caused especially the markets in Southern Europe to decline strongly. Overall, the markets relevant for Laundry & Home Care picked up again in 2012 after experiencing slightly declining growth in the two previous years. This positive trend was primarily driven by double digit growth in emerging markets. Suppliers of private labels were again able to increase market share – quite considerably in some cases – in Southern Europe, especially in Spain and Italy. This was due to price sensitivity among consumers in light of the prevailing crisis.

Despite this challenging market environment, we again succeeded in outperforming our relevant markets. The increase in our market share spanned all regions. Although the markets in North America continued to be burdened by declining growth and consumer reticence in 2012, they did start trending upward in the second half of the year. In Western Europe, the markets in Germany, Italy and France grew, with France exhibiting the best market performance of all Western European countries. These countries made up for the strongly declining markets in Portugal, Spain and Greece. We were able to expand our market shares in both Western Europe and North America. The market development in Eastern Europe was positive, recording a doubledigit growth rate, due mainly to strong growth in the Russian and Turkish markets. In a highly competitive environment, we were able to sustain our position in the Eastern European market, and to defend our market share. Despite the ongoing political unrest, the Africa/Middle East region recorded very strong market growth, and we were able to expand our market shares. The Latin American market also grew, and we were able to significantly increase our market shares here and in South Korea, our only market in the Asia-Pacific region.