Breaking News

L'Oréal Records 5% Sales Gain in First Half

August 31, 2011

R&D expenses increased by 12.2%, gross profit up 5.4%.

Paris-based beauty giant L’Oréal said group sales for the first half ended June 30, 2011 rose 5% to approximately $14.6 billion. Like-for-like—based on a comparable structure and identical exchange rates—the sales growth of the L'Oréal group was 5.2%, the company said.

“Organic growth in the first half of 2011 has confirmed the good dynamics of the group, which is further strengthening its worldwide positions, particularly in North America, in Latin America and in Asia Pacific,” said Jean-Paul Agon, chairman and CEO. “The first-half results are up, solid and of good quality. Gross profit is improving, despite the higher cost of raw materials. Operating margin is at a high level, and net profit is growing strongly. At the same time we are continuing to pave the way for the future with our ongoing policy of sustained investments in R&D and advertising & promotion business drivers. Finally, the group’s debt is particularly low.”

Gross profit increased by 5.4%, and came out at 71.5% of sales, compared with 71.3% in the first half of 2010. Despite the unfavorable impact of higher raw materials prices, the improved efficiency and productivity of the factories, good stock management and finally the positive conversion effect, resulting from the strengthening of the euro, have contributed to this further improvement, the company said.

Operating profit, at 16.8% of sales, amounted to $2.4 billion. This compares with the record level achieved in the first half of 2010 of 17.3%. The difference compared with the first half of 2010, that is 50 basis points, is the result of increased investments in R&D and advertising and promotion business drivers, the company reported.

Research and development expenses have increased by 12.2%, reflecting the group's “determination to step up its investments in research and innovation and, to a lesser extent, the integration of Q-Med.”

According to L’Oréal, the Professional Products Division’s profitability has edged down from 21.2% to 19.8%.
The profitability of the consumer Products Division, 20.1%, is slightly down on the first half of 2010, but is considerably higher than the full-year 2010 figure of 18.5%.The profitability of the Luxury Products Division, at 18.9%, has grown strongly.
The Active Cosmetics Division has again recorded very high profitability at 26.3%, the company said.
  • Skin of Color Society Connects Experts

    Skin of Color Society Connects Experts

    Melissa Meisel, Associate Editor||January 16, 2017
    Dermatologists from across the nation share information and ideas.

  • Erasa

    Erasa's New Evangelist(a)

    January 9, 2017
    Impressed by the performance of its hero SKU, supermodel Linda Evangelista joins the company in a hand's on role.

  • Discourse on Disclosure

    Discourse on Disclosure

    Tom Branna, Editorial Director||January 6, 2017
    Transparency impacts the cleaning industry.

  • Hitting the Right Notes

    Hitting the Right Notes

    January 6, 2017
    Agilex Fragrances is the leader in the middle market fragrance category.

  • The Smell of Clean in 2017

    The Smell of Clean in 2017

    January 6, 2017
    Changing consumer lifestyles and demographics are impacting the scents found in the household cleaning category.

  • On the Edge

    On the Edge

    January 6, 2017
    Expanding beauty brands to watch in 2017