DARMSTADT, Germany — Sales for the Wella Group rose 6.4 percent to $3.6 billion in 2002, according to preliminary figures released here Thursday. All dollar figures are converted from the euro at current exchange rates.
This story first appeared in the January 24, 2003 issue of WWD. Subscribe Today.
Adjusted for currency effects, sales grew roughly 11 percent, meeting company targets of 10 to 14 percent growth for the year. The company did not release profit figures, but said it expects operating profits (EBIT) to “improve disproportionately to sales growth.”
The professional division increased sales by 5.9 percent (9.8 percent adjusted). The acquisition of Graham Webb in the U.S. contributed 4.5 percent to this sales gain, Wella noted.
In local currencies, Wella’s consumer business grew by more than 6.1 percent in 2002. Currency fluctuations, however, resulted in a nominal decrease of 1.5 percent in consumer sales.
The cosmetics and fragrances business, under the Cosmopolitan Cosmetics umbrella, grew a nominal 20.2 percent in 2002. After currency adjustments, the sales gain was 21.8 percent. The acquisitions of Yardley of London (U.S.), Escada Beauté, Tony & Tina and Atkinsons contributed 14.4 percent of this growth.
Acquisitions were also the motor behind sales growth of more than 20 percent in North America. Wella’s Latin American business is the most burdened by foreign currency developments. In local currencies, business there, as in the Asian market, grew in the double digits, but nominally, showed a decline.
In the fourth quarter, group sales were up around 13 percent after currency adjustments. Nominal growth was set at more than 6 percent. Strong Christmas business particularly supported the cosmetics and fragrances division, but consumer business in Germany also showed double-digit growth in the fourth quarter.
Wella is projecting 10 to 13 percent sales growth for 2003, adjusted for currency effects, and a further improvement in operating profits. For the first time, the German hair care and cosmetics group said it is expecting a double-digit EBIT margin. Final figures for 2002 are scheduled to be released on April 8.