L’Oreal’s Net Profit Up 19.6%

Clichy, France-based L’Oreal reported consolidated net sales for 2001 grew 8.4% to $11.8 billion. Net profit before capital gains and losses and after minority interests reached $1 million, an increase of 19.6%.

“Numerous brand-related initiatives combined with the strong momentum of international growth have compensated for the impact of world events,” said Mr. Lindsay Owen-Jones, L’Oreal’s chairman and chief executive officer. “Robust internal growth, together with a further increase in profit margins, has enabled L’Oreal to enjoy a very good year in 2001 and to begin 2002 with confidence.”

In 2001, the company began many new initiatives to drive forward internal growth and rapid integration of acquisitions. Executives said key countries were responsible for accelerated progress. Sales in China grew 26% in 2001, representing total growth of 228% in this market since 1997. In Russia, following growth of 47% in 2000, sales rose 52%, exceeding the $86.5 million mark for the first time. L’Oreal also achieved significant advances in South Africa, Thailand, India and Mexico.

L’Oreal’s major strategic brands continued to improve their positions, gaining market share in the group’s core business segments, executives said. For instance, Plenitude Body Expertise by L’Oreal Paris established a presence in the mass body care market. Products were also developed to target local needs (Bi White by Vichy) and adapt their technologies to the needs of consumers in different countries (Age Fitness by Biotherm).

The companies acquired in 2000, mainly Matrix, Carson and Kiehl’s, were swiftly integrated into their respective divisions, the company said. Those brands represented sales of $452 million.

Adjusted operating profit for the year increased 12.7% to $1.4 million. Net profit (before capital gains and losses) of fully consolidated companies was $836 million, an increase of 15.9%. Sanofi-Synthelabo’s contribution to consolidated profit was 232 million, an increase of 43.7%.