Top Companies Report

2. L’Oréal

August 6, 2012

France
www.loreal.com

Sales: $28.2 billion

Key Personnel: Jean-Paul Agon, chairman and chief executive officer; Laurent Attal, executive vice president, research and innovation; Jean-Philippe Blanpain, managing director, operations; Nicolas Hieronimus, managing director, L’Oréal Luxe; Jean-Jacques Lebel, president, L’Oréal Consumer Products Division Worldwide; Brigitte Liberman, worldwide president, L’Oréal Active Cosmetics Division; Marc Menesguen, managing director, strategic marketing department; Christian Mulliez, executive vice president, administration and finance; Alexandre Popoff, managing director, Latin America Zone; Sara Ravella, managing director, corporate communications, sustainable development and public affairs; Frederic Rozé, managing director, North America Zone; Geoff Skingsly, managing director, Africa, Middle East Zone; An Verhulst-Santos, general manager, L’Oréal Professional Products Division; Jerome Tixier, managing director, human resources; Jochen Zaumseil, managing director, Asia Pacific Zone.

Major Products: Hair care, skin care, sun care, color cosmetics, toiletries and fragrances sold under many brand names in different channels. Consumer—Garnier, L’Oréal Paris, Le Club des Créateurs, Maybelline, SoftSheen-Carson. Professional—L’Oréal Professional, Kerastase, Redken, Matrix, Mizano, Shu Uemura Art of Hair, Keraskin Esthetics. Luxury—Lancôme, Biotherm, Helena Rubenstein, Kiehl’s, Shu Uemura, Giorgio Armani, Ralph Lauren, Cacharel, Viktor & Rolf, Diesel, YSL Beauté. Active Cosmetics—Vichy, LaRoche-Posay, Innerve, SkinCeuticals, Sanoflore. Personal care—The Body Shop.

New Products: Luxury—Lancôme Visionaire, Biotherm Skin-Ergetic, Kiehl’s Rosa Arctica, Giorgio Armani Regenessence skin care; Tresor Midnight Rose, Armani Code Sport, Acqua Di Gioia Essenza, L’Homme Libre fragrances; Lancôme Color Design and Yves Saint Laurent Pure Chromatics eyeshadows, Yves Saint Laurent Rouge Pur Couture lipstick; Consumer—Maybelline New York Fit Me foundation and Cat Eyes mascara, L’Oréal Paris Color Riche lipstick, Essie nail color (acquisition); Triple Resist shampoo, Ever Pure hair care, Power Water skin care, Vita Lift 5 hair care; Garnier BB Cream Miracle Skin Protector; Colossal Kajal eyeliner, Baby Lips lip balm; L’Oréal Professional—Kérastase Elixir Ultime, Redken All Soft Argan-6 Oil, Mythic Oil, Shu Uemura Cleansing Oil Shampoo, Matrix Total Results Silk Wonder; Active Cosmetics—La Roche-Posay Toleriane Ultra and Cicaplast Baume B5, Vichy Liftactiv Serum 10, Skinceuticals Blemish + Age Defense.

Comments: Sales rose more than 5% and net income increased nearly 9% to $3.3 billion. This year, emerging markets are expected to surpass Western Europe as L’Oréal’s No. 1 market. Last year, Western Europe accounted for 38.4% of sales, followed by New Markets (Asia/Pacific, Eastern Europe, Latin America and Africa/Middle East), 38.3% and North America, 23.3%.

The company singled out several outstanding country performances: China’s sales rose 18%, driven by Maybelline New York, Garnier and Lancôme; sales in Mexico were up 11.6% due to gains posted by Maybelline New York, L’Oréal Paris and Garnier; L’Oréal’s sales in the US (+5.6%) grew faster than the market, with growth coming from Maybelline New York, L’Oréal Paris and Garnier and the successful launch of Essie in mass markets; and sales in France were up 2.6%, due to growth in all divisions.


Here’s the summer color lineup from Essie, one of L’Oréal’s newest acquisitions.
By business segment, consumer products represented 52.1% of sales, followed by luxury products (25.5%), professional products (14.9%) and active cosmetics (7.5%).

By product category, skin care accounted for 27.9% of sales, followed by hair care (21.5%), makeup (21.3%), hair colorants (14.6%), perfumes (9.8%) and other (4.9%).

Like most multinationals, L’Oréal is quick to point out its efforts to save the planet. But the company goes a step further by noting that 45% of its new raw materials comply with the principles of green chemistry and 55% of them are plant based. One of these is LR 2412 molecule, a derivative of jasmonic acid produced by an environmentally friendly synthesis process. According to L’Oréal, this anti-aging ingredient has excellent bioavailability, which enables it to seep through the epidermis and target all layers of the skin. Throughout the diffusion process, it sets off a series of reactions: at the surface, it promotes the natural peeling of the skin and at deeper levels, the synthesis of several molecules which are fundamental for maintaining the skin’s structure over time. L’Oréal teams have demonstrated that it is capable of specifically correcting 12 biological skin aging markers. LR 2412 is formulated (at 4% use levels) into Visionnaire, the new anti-aging skin care formula from Lancôme.


The Charming Cockatoo is a limited edition eye color collection from L’Oréal.
But L’Oréal is about much more than skin. That’s why earlier this year the company dedicated its Global Hair Research Center in Paris Saint-Ouen. The Center’s research and innovation program is exclusively dedicated to the hair care profession, which includes coloring, care (shampoos, conditioners), styling, (sprays, gels, waxes) and perms, smoothing or straightening. L’Oréal said it spent €100 million to build it and the network of six regional centers around the world.

For the first quarter of 2012, L’Oreal’s sales rose 9.4% to nearly $7.4 billion. The company reported gains in all branches and divisions, but noted solid gains in North America as well as continuing fast growth in new markets, especially Asia. Results within the luxury division were particularly strong.

“These first months augur well for the year, as all divisions and all geographic zones are expanding,” said Jean-Paul Agon, chairman and chief executive officer. “The worldwide cosmetics market remains strong, and trends are favorable for all brands. L’Oréal Luxe is achieving remarkable growth, bolstered in particular by the dynamism of Lancôme, the success of the designer fragrances, and the vitality of Kiehl’s.”


 
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