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A Demand for Luxury Gets LOral Off to a Good Start

July 8, 2011

A Demand for Luxury Gets L’Oréal Off to a Good Start

Strong growth in consumer products and luxury products as well as good performance in North America led to a favorable first quarter for international beauty giant L’Oréal, as Q1 sales rose 9.3% to $7.37 billion. Continuing dynamism in new markets also assisted in the growth, according to the company.

Commenting on the figures, Jean-Paul Agon, chairman and CEO of L’Oréal, said, “The start to this year is encouraging, as it confirms the group’s good dynamics, to which all divisions are contributing, particularly consumer products and luxury products, driven by the vitality of their major brands: L’Oréal Paris and Maybelline on the one hand, and Lancôme, Giorgio Armani and Kiehl’s, on the other.

“In geographic terms, North America is accelerating strongly. Growth continues to be robust in the new markets, particularly in Latin America, in Asia excluding Japan, and in Africa, Middle East. However, the situation remains more contrasting across Europe. These performances reflect the quality of our innovations, the force and diversity of the brand portfolio, and the right balance in our geographic positions,” he said.

Sales Jump 9% at Henkel
Henkel’s sales in the first quarter of 2011 rose 9% to $5.6 million. According to the company, this positive development was supported by all Henkel business sectors. Due in particular to strong volume increases, laundry and home care generated growth of 1.6%, while the cosmetics/toiletries sector rose 5.7%.

“Despite the challenging market environment, Henkel reports a solid start to the financial year. We achieved very good organic sales growth, once again outperforming our relevant markets,” said Henkel CEO Kasper Rorsted. “All our business sectors contributed to this success and with continued double-digit growth rates we were able to further expand our position in the emerging markets. We are fully committed to our strategic priorities and remain confident of being able to achieve our 2012 targets.”

For the fiscal year 2011, Rorsted provided the following guidance: “With intense competition and rising raw material costs, the economic environment will remain challenging. We will need to continue reviewing our structures to ensure our long-term international competitiveness.”
Henkel has slightly raised its expectations for organic sales growth. “We are confident that we will again outperform our relevant markets in 2011 and now expect an increase in organic sales at the upper end of the 3-5% range,” noted Rorsted.

Sales Rise 7% at Unilever
Unilever PLC posted a 7% rise in sales on growing demand in emerging markets, but warned that its first-half profits will decline owing to sluggish demand in mature economies and rising commodity prices.

Unilever said total sales in the quarter rose to $16.13 billion compared with a year earlier.

In personal care, sales of deodorants continue to rise and Unilever is gaining share in the category. Performance was particularly strong for Dove, in both male and female variants, and especially in Latin America where growth was broad-based across brands and countries. The new Axe variant Excite has made a promising start, while the new Rexona for Women with MotionSense technology has been launched and, by the end of the year, will be in around 30 markets, according to the company.

Skin cleansing sales rose on gains posted by Dove Nutrium moisture and Dove Men+Care, which were extended to the Australasian and Nordic markets. Lifebuoy delivered another quarter of double-digit growth with new market entries, new communication materials and improved product quality. Vaseline has been launched in Turkey.Pond’s Gold Radiance in face care is performing well where it has been introduced in Asia.

In hair care, the company’s sales were resilient in the Americas and Asia, with strong progress in China. A new product range for dry and frizzy hair under the Dove Nourishing Oil brand showed early promise in the US. Dove Hair Damage Repair continues to make good progress with recent entries in Japan and Indonesia. The Sunsilk performance was more mixed but was notably strong in Italy and Greece.

Oral care made a good start to the year with White Now continuing to drive growth and Signal Sensitive Expert receiving a positive reception in France, according to Unilever. Laundry delivered strong growth in home care, driven by both volume and increased pricing. Household cleaners continued to grow as Unilever takes its power brands into new market.

Realignment On Track At Beiersdorf Group
The Beiersdorf Group recorded organic sales growth of 0.1% in the first quarter of 2011. At current exchange rates, group sales were up by 1.7% on the previous year, reaching approximately $2.08 billion, according to the company. The operating result (EBIT) excluding special factors amounted to $247.8 million. Group profit after tax rose to $185.5 million.

“The realignment of our business is on track. Our performance in the first quarter is in line with our planning. The sales trend in the consumer business segment reflects the ongoing streamlining of its product ranges,” said Executive Board Chairman Thomas-B. Quaas, commenting on the first quarter. “Sales were down slightly on the previous year. The tesa business segment continued its positive performance from the past year and again achieved double-digit growth.”