Our results also reflect the strength of our diverse geographic portfolio, which is highly advantaged particularly in developing and emerging economies where we enjoy leading market positions."
Fourth-quarter operating profit of $225 million decreased 21% from 2006's level of $282 million, while operating margin was 7.3%, versus 10.8% in the prior-year quarter. As previously announced, fourth-quarter 2007 operating profit included costs associated with the company's restructuring and PLS programs of $205 million, versus $85 million in the prior-year period.
The 2007 fourth-quarter costs included $101 million of costs to implement restructuring and $104 million of costs associated with PLS. The 2006 fourth- quarter costs included $44 million of costs to implement restructuring and $42 million of costs associated with PLS.
On January 8, 2008, Avon announced the final initiatives of the restructuring program under its turnaround plan, begun in late 2005. Avon expects to achieve annualized savings of approximately $430 million once all initiatives are fully implemented by 2011 - 2012, with these savings projected to reach $300 million in 2009, compared to the original objective of $300 million.
Additionally, Avon reiterated that it expects to achieve annualized benefits in excess of $200 million each from its PLS program and Strategic Sourcing Initiative for a total of benefits in excess of $400 million from those two programs.
Avon reiterated that it anticipates total costs to implement the restructuring initiatives to be approximately $530 million. The company has recorded approximately $444 million of those costs through the fourth quarter of 2007 and will record the remainder by the end of 2009.
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.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "UBM China (Shanghai)")
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
