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L’Oréal’s Sales Rise 10% in First Half

Strong organic growth in all categories, says CEO Agon.

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By: TOM BRANNA

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L’Oréal’s Group sales for the first half of 2010 were $12.2 billion, an increase of 10.2%, the company announced today in Paris.

“The strong organic growth of our four divisions, all geographic zones and all categories, is bearing out our major strategic choices—concentrating on high value-added innovations at accessible prices, opening up new product categories, accelerating international expansion and determined investment in advertising & promotion and in R&D,” said Jean-Paul Agon, chief executive officer of L’Oréal.

“The results have also increased strongly, although once again it is important to emphasize that half-year figures are not particularly representative,” he continued. “Operating profit has grown twice as fast as sales, enabling margin to reach a record level. The significant improvement in gross profit and the very strict control of selling, general and administrative expenses reflect the efforts made over the last two years to achieve a thorough transformation, and have enabled increased investments in R&D and in the advertising & promotion business drivers which are paving the way for the future.”

According to Agon, the results underpin the group’s “virtuous circle” of growth and confirm the vitality of L’Oréal’s business model.

“We are tackling the second half with confidence, and intend over the full year to keep on strengthening our worldwide positions and the profitability of our businesses,” he said.


The Professional Products Division’s first-half sales rose 5.3% like-for-like and 11.9% based on reported data. The hair colorant category is expanding strongly, driven by the spectacular success of Inoa, currently being rolled out worldwide, and of SoColor Beauty by Matrix with its highly accessible positioning. L’Oréal contends these products are enabling L’Oréal Professionnel and Matrix to win over large numbers of new salons.

The Consumer Products Division saw sales rise 5.6% on a like-for-like basis. All major brands have increased sales, particularly Maybelline, the company said.

First-half sales of the Luxury Products Division grew by 9.7% like-for-like and 12.0% based on reported figures. The strategy of concentrating on the division’s major brands and iconic products is paying off, according to the company. The division is achieving good sell-out in stores, particularly in the skin care category, in a selective market that L’Oréal says is showing a clear upturn.
Sales of the Active Cosmetics Division rose 4.7% like-for-like in the first half and 7.9% based on reported figures. There was a clear acceleration in the second quarter, particularly in Western Europe, the company said.
By region, sales in Western Europe rose 2.0% like-for-like and 2.6% based on reported figures over the first six months, thanks in particular to France, the United Kingdom and Northern Europe.

In North America sales were up 4.9% like-for-like and 8.8% based on reported figures. In Asia, Pacific sales jumped 12.8% like-for-like in the first half. Excluding Japan, the growth rate was 14.9%. Sales in India, South Korea and Indonesia are growing strongly and growth remains high in China, the company said.

In Eastern Europe, sales increased were up 11.4% like-for-like, with extremely contrasting situations in the different countries. Russia and Ukraine are still achieving strong growth, and Poland’s growth trend remains favourable. Market share gains are continuing.


In Latin America, sales were up 19.7% like-for-like, thanks to the sustained dynamism of Brazil, Argentina, Mexico and Colombia. The sales of the Consumer Products Division are increasing substantially, according to the firm.
In Africa, Middle East, sales posted a 3.5% gain like-for-like, with double-digit growth in North Africa and the Middle East.

In Africa, sales are declining, as South Africa is still feeling the impact of the economic crisis.

At the end of June, the like-for-like sales of The Body Shop increased by 0.2%. Retail sales fell 2.1%. According to L’Oréal, there are sharp contrasts in retail sales trends, with on one hand very dynamic countries such as India, Russia, Indonesia and Saudi Arabia, together with on-line sales which are growing strongly, and on the other a more difficult situation in the United Kingdom, North America and Japan.
According to L’Oréal, Galderma extended its leadership position in dermatology, with like-for-like sales increasing 14.1%.

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