• Abstract and Figures
• Public Full-text

THE EST{E LAUDER COMPANIES INC. DEFINING prestige BEAUTY 2013 ANNUAL REPORT CONTENTS 3 Executive Chairman 7 President and Chief Executive Officer 11 Defining Prestige Beauty 17 The Power of Our Brands 21 Our Commitment to Quality 25 Evolving High-Touch Service 33 Telling Our Story 43 The Diversity of Our Distribution 51 Driving Growth Through Innovation 64 Bringing Prestige Beauty to Consumers Worldwide 72 Traveling With Our Consumer 81 Preserving Our Family Heritage and Values 89 Outlook 94 Portfolio of Brands 104 Board of Directors 106 Executive Officers 107 Financial Highlights 111 Financial Section 181 Management’s Report on Internal Control Over Financial Reporting 182 Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting 183 Report of Independent Registered Public Accounting Firm 184 Stockholder Information 2 EXECUTIVE CHAIRMAN WILLIAM P. LAUDER Dear Fellow Stockholders, The Estée Lauder Companies had another record year in fiscal 2013, reaching $10 billion in net sales and achieving a 15 percent operating margin. Nearly half a billion consumers around the world placed their trust in the quality of our products and our people, and we expect that number to grow in the future. Our Company’s ongoing strong performance proves that our founding principles — a dedication to quality, a passion for excellence and a deep respect for our diverse global consumers — resonate strongly in the more than 150 countries and territories where our products are sold. I want to express my deepest appreciation for the outstanding leadership of our President and Chief Executive Officer, Fabrizio Freda, the guidance of our Board, and the dedication of our incredibly talented global workforce, all of whom have made our success possible. 3 As our business continues to prosper, it is critical that we continue to understand and serve the needs of our consumers, engage with the communities where we live and work, and leverage our collective talents in every brand, region and function to ensure our sustainable, profitable future. In October 2012, we released our fourth Corporate Responsibility report. We have made meaningful strides in improving the energy efficiency of our operations and switching to renewable energy when economically feasible. Between fiscal 2008 and fiscal 2013, we increased the recycling rate at our manufacturing and distribution sites and we are closer than ever to our goal of Zero Waste by 2020. OUR COMPANY’S ONGOING STRONG PERFORMANCE PROVES THAT OUR FOUNDING PRINCIPLES — A DEDICATION TO QUALITY, A PASSION FOR EXCELLENCE AND A DEEP RESPECT FOR OUR DIVERSE GLOBAL CONSUMERS — RESONATE STRONGLY IN THE MORE THAN 150 COUNTRIES AND TERRITORIES WHERE OUR PRODUCTS ARE SOLD. In fiscal 2013, we implemented several global initiatives to enhance inclusion and diversity awareness. This culture of respect for our employees and our communities has fueled our long history of corporate philanthropy. 4 The Breast Cancer Awareness Campaign, founded by my mother, Mrs. Evelyn H. Lauder, celebrated its 20th anniversary in 2012, recognizing total contributions of more than $37 million and awareness programs in more than 70 countries and territories worldwide. Our brands also play a powerful role in our Corporate Responsibility efforts, and the far- reaching work of M.A.C AIDS Fund is one of the largest philanthropic programs in our history. Those efforts are reinforced by our thriving employee volunteerism. I am honored to carry the torch of our family’s heritage and values, and I believe that the power of our brands and people will continue to drive our strong momentum into 2014. Sincerely, William P. Lauder Executive Chairman 5 6 PRESIDENT AND CHIEF EXECUTIVE OFFICER FABRIZIO FREDA Dear Fellow Stockholders, As a high-growth company focused exclusively on Prestige Beauty, The Estée Lauder Companies is well-positioned for continued global success. Through our distinctive portfolio of 30 aspirational brands, we serve the world’s most discerning consumers and retailers, delivering breakthrough products and High-Touch services through carefully selected, diverse distribution channels. Our innovative products and services, combined with impactful, locally relevant marketing and advertising, drew consumers across the world to our brand counters, freestanding stores, Travel Retail locations and fast- growing digital platforms. We continued to focus on innovating and delivering breakthrough products and services to our consumers around the world. And thanks to the tremendous leadership and focus of our 40,000 employees, we have executed our strategy with excellence while staying true to our values. We have achieved remarkable growth in the four years since we implemented our transformative strategy. Last year was particularly exciting as we reached $10 billion in net sales — a historic milestone for our Company. At the same time, we achieved a 15 percent operating margin and established new records for net earnings, stock price and market capitalization, creating exceptional value for our stockholders. 7 Guided by the wise direction of our Board and the Lauder family, together with the energy of our talented management team, we believe we continued to gain share in Prestige Beauty. Our sales climbed five percent in fiscal 2013, driven by strong performance in local markets and Travel Retail. We grew sales in both of our heritage markets, the United States and the United Kingdom, as well as Southern Europe, despite economic challenges in the region. Our growth also continued to be strong in China and Latin America, and expansion in other emerging markets drew in new consumers. Our strong performance was based, in part, on our creativity-driven, consumer-inspired innovations such as Estée Lauder Advanced Night Repair Eye Serum Infusion, Clinique Even Better Eyes Dark Circle Corrector and La Mer The Moisturizing Soft Cream. We focused our creativity on bigger launches in all categories, re-energized select “best-sellers,” and leveraged new technologies and innovations across many of our brands. In addition, we continued to play to our strengths by evolving our High- Touch services and formats, and by engaging with consumers worldwide in new ways. In addition to our continued success in skin care and makeup, we trust we are ready to accelerate growth in fragrance. In fiscal 2013, our leading luxury fragrance brands, Jo Malone London, Tom Ford, as well as our new Ermenegildo Zegna brand, introduced exciting new products, contributing to their robust growth and our Company’s overall performance. I strongly believe that our success is a result of our commitment to product quality and to creativity and innovation, which is reflected in the quality of our people, our outstanding brands, and the unique High-Touch services and experiences we bring to our consumers around the world. We will continue to enhance and refine our select and diverse distribution 8 strategy, maximize our direct access to consumers through our e-commerce and m-commerce platforms and invest in new marketing strategies. Our integrated and disciplined approach to financial matters also enables us to eliminate non-value-added costs and reinvest in our growth. In this way, we are poised to continue our sustainable, profitable growth and set the pace for the industry as a whole. One of the many advantages to being a truly global company is the perspective and insight we gain from our international presence. Our 10-year Strategic Compass provides us with a roadmap to what we believe will be the biggest and fastest-growing opportunities in the evolving global Prestige Beauty landscape. We will continue to leverage the strengths of our exceptional brands and seek inspiration from the cultures and people we touch around the world, while pursuing growth opportunities in our heritage markets. We are reaching a larger and more diverse population by creating products for consumers of all races and cultures. As affluence increases in emerging markets, we will attract new consumers worldwide, particularly those in China, the Middle East, Brazil and Africa. We will continue to follow the words of our Chairman Emeritus, Leonard A. Lauder, who says, “Quality always wins.” As I reflect on our excellent performance in fiscal 2013, I am extremely grateful for the ongoing support of Leonard Lauder and William P. Lauder. All that we have achieved in the past four years is rooted in our Company’s rich heritage. Our values and our success gives me confidence in our future. Sincerely, Fabrizio Freda President and Chief Executive Officer 9 DEFINING prestige BEAUTY “EVERY WOMAN CAN BE BEAUTIFUL.” — MRS. EST{E LAUDER A visionary entrepreneur, Mrs. Estée Lauder knew that Prestige Beauty is an experience — a chance to enjoy precious moments of “me time,” the luxurious texture of a hydrating crème, the satisfying “snap” of a well-made compact as it closes, the elegance of a box tied with grosgrain ribbon. Estée Lauder The Metallics New Pure Color Collection. 11 Prestige Beauty today is the expert touch of a beauty advisor at an Estée Lauder brand counter, the energizing music at a M·A·C location, or the enchanting scents in the air at a Jo Malone London store. Every touch point is designed to inspire and delight our consumers. It is this total experience that sets our brands apart. SIMPLY PUT, PRESTIGE BEAUTY IS BRINGING THE BEST TO EVERYONE WE TOUCH AND BEING THE BEST AT EVERYTHING WE DO. BY DEFINING PRESTIGE BEAUTY, WE HAVE DEFINED OURSELVES. Today, we are a truly global company, serving the world’s most discerning consumers with quality products and services tailored to the needs of individuals in the more than 150 countries and territories in which we are sold. We provide consumers, across races and cultures, aspirational products, accompanied by outstanding High-Touch services, in some of the world’s most exciting retail settings, including the digital world. And, importantly, we hold our brands, our products and ourselves to high standards.

Load more

  192

Copy Link