Avon 2015 Annual Report Download - page 65

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Operating margin was negatively impacted by .3 points as compared to the prior-year period from higher CTI restructuring. Adjusted
operating margin decreased 2.6 points, or 2.4 points on a Constant $ basis, primarily as a result of a decline of 2.2 points due to lower gross
margin caused primarily by an estimated 3 points from the unfavorable impact of foreign currency transaction losses, partially offset by 1.0
point from lower supply chain costs.
Asia Pacific – 2015 Compared to 2014
%/Point Change
2015 2014 US$ Constant $
Total revenue $627.8 $702.7 (11)% (5)%
Operating profit 35.3 20.9 69% *
CTI restructuring 10.6 9.3
Adjusted operating profit $ 45.9 $ 30.2 52% 74%
Operating margin 5.6% 3.0% 2.6 3.1
CTI restructuring 1.7 1.3
Adjusted operating margin 7.3% 4.3% 3.0 3.3
Change in Active Representatives (2)%
Change in units sold (7)%
* Calculation not meaningful
Amounts in the table above may not necessarily sum due to rounding.
Total revenue decreased 11% compared to the prior-year period, primarily due to the unfavorable impact from foreign exchange. On a
Constant $ basis, revenue decreased 5%, as growth in the Philippines was more than offset by declines in other Asia Pacific markets, led by
China which declined 29%, or 28% on a Constant $ basis. The region’s Constant $ revenue decline was due to lower average order,
primarily driven by declines in China, and a decrease in Active Representatives. Revenue in the Philippines increased 3%, or 5% on a
Constant $ basis, primarily due to higher average order, as a result of strength in Fashion & Home, and an increase in Active Representatives.
Operating margin was negatively impacted by .4 points as compared to the prior-year period from higher CTI restructuring. Adjusted
operating margin increased 3.0 points, or 3.3 points on a Constant $ basis, primarily as a result of:
• a net benefit of 2.5 points primarily due to lower fixed expenses, which primarily resulted from our cost savings initiatives, mainly
reductions in headcount, and to a lesser extent, a reduction of corporate expenses, which are allocated from Global. Partially offsetting
the lower fixed expenses was the unfavorable impact of declining revenue with respect to our fixed expenses; and
• a benefit of .9 points due to lower advertising spend.
A V O N 2015 53
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