France
www.loreal.com
Sales: $23.3 billion

Sales:

$23.3 billion.

Key Personnel:

Jean-Paul Agon, chief executive officer; Christian Mulliez, executive vice-president administration and finance; Jean-Philippe Blanpain, managing director operations; Marc Menesguen, president luxury division; Jean-Jacques Lebel, president consumer products division; Béatrice Dautresme, executive vice-president corporate communications and external affairs; Nicolas Hieronimus,president, professional products division; Geoff Skingsley, executive vice president, human resources; Jochen Zaumseil, managing director, Asia zone; Laurent Attal, managing director, North America zone, president, L’Oréal USA; Brigitte Liberman, managing director, active cosmetics division; Joseph Bitton, managing director, Latin America zone; and Jean-François Grollier, executive vice-president, research and development.

Major Products:

Hair care, skin care, sun care, color cosmetics, toiletries and fragrances sold under many brand names in different channels. Consumer—L’Oréal Paris, Garnier, Maybelline New York, SoftSheen Carson. Professional—L’Oréal Professionnel, Kérastase, Redken, Matrix, Mizani, Pureology Luxury—Lancôme, Biotherm, Helena Rubinstein, Kiehl’s, Shu Uemura, Giorgio Armani, Parfums Cacharel, Ralph Lauren Fragrances, Paloma Picasso, Parfums Guy Laroche, Diesel, Victor & Rolf, Yue-Sai. Active Cosmetics—Vichy, La Roche-Posay, Skinceuticals, Sanoflore. L’Oréal’s operations also include The Body Shop and Galderma, and 50% stakes in Le Club des Créateurs de Beauté and Laboratoires Innéov.

New Products:

L’Oréal Professionnel Color Supreme, L’Oréal Professionnel Homme Cover 5 grey hair cover,L’Oréal Paris Glam Shine, Derma Genesis/Skin Genesis, Lancôme Rénergie Morpholift Rare line, L’Oréal Professionnel Age Densiforce, La Roche-Posay Substiane anti-aging replenishing care, Maybelline Define-A-Lash, Lancôme Virtuose mascara, Shu Uemura Art of Hair, Mizani Butter Blend.

Comments:

In 2007, L’Oréal’s consolidated sales rose 8.1% to $23.3 billion and operating profit was up 11.3% to $3.8 billion, marking the 23rd consecutive year of double-digit profit growth for this cosmetic and fragrance giant based in Paris. According to Jean-Paul Agon, chief executive, L’Oréal’s performance in 2007 garnered it a worldwide market share of 15.3% fueled by 25 international brands sold in 130 countries.

By unit, L’Oréal’s cosmetics sales were $21.8 billion, The Body Shop tallied $1.1 billion and dermatology sales were $504 million. Skin care was its largest business segment, accounting for 26.2% of sales in 2007. Hair care was the second largest category, accounting for 23.8%, followed by makeup, hair colorants and perfume.

L’Oréal made several strategic acquisitions in 2007, including professional salon distributors Beauty Alliance and Maly’s West as well as PureOlogy, a highly regarded premium professional hair care brand in the U.S.

This year, the acquisitions continued, with the biggest being L’Oréal’s blockbuster deal to purchase YSL Beauté Holding from PPR. The European Commission in June approved the €1.15 billion deal, which includes some of the best known brands in luxury beauty as well as the Roger Gallet perfume soap unit. In the accord, L’Oréal gains exclusive, long-term licenses for the YSL and Bourcheron brands in fragrance and cosmetics, and it will take over licenses for Stella McCartney, Oscar de La Renta and Ermenegildo Zegna in cosmetics and fragrances. PPR will retain ownership of Yves Saint Laurent, Boucheron and Stella McCartney brands.

YSL will bolster L’Oréal’s own roster of established premium brands in its luxury products division, which recorded growth of 8.4% in 2007. In western Europe, L’Oréal said the recovery continued, with the luxury division recording very good scores in France, Italy, the UK, Belgium and Spain pushing sales higher by 6.7%. In North America, the division’s sales rose 5%. In ROW, sales rose 14.7% with substantial expansion in Asia, the Middle East, Australia, Latin America and Russia. Fragrance was the most dynamic category, up 14% or the year, according to L’Oréal.

For Lancôme, anti-aging Absolue Premium ßx with Pro-xylane achieved double-digit growth and Rénergie Morpholift r.a.r.e. was one of the best launches of the year in anti-aging skin care. Female fragrances were stable thanks to Trésor—and its new advertising campaign with Kate Winslet—generating double-digit growth in the fourth quarter. In Asia, the brand is advancing faster than the market in an extremely competitive environment. Sales also climbed sharply in the Russian market.

It was another year of double-digit growth in 2007 for Giorgio Armani in all the zones where the brand is strongly established. Specifically, Europe was up 12%, U.S. rose 13%, travel retail gained 19% with “spectacular” growth in newer markets such as Russia (+79%), Asia (+34%), and Latin America (+24%). L’Oréal is out to make Giorgio Armani a player in the cosmetics sector, and is looking for growth to come from an new ultra-premium skin care range Crema Nera.

In 2007, Kiehl’s, which now boasts more than 60 freestanding stores in 28 countries—continued very strong growth, posting a sales gain of 23.6%.Another success for L’Oréal was the Yue-sai brand, which achieved double-digit growth, the highest level since it was acquired by L’Oréal three years ago.

The Professional Products division—which includes Pureology, Matrix, Redken, Mizani, Shu Uemura Art of Hair, Kérastase, Redken and L’Oréal Professionnel—posted growth of 12.5%. In Western Europe sales rose 3.8%. In North America, sales rose 26.2% (6.2% like-for-like), benefiting from the acquisition of two distributors, by forging a strategic alliance with the hairdressers and the success of brands such as Redken and Kérastase. In addition, L’Oréal said Pureology is also growing strongly, and Mizani, an expert brand for Afro-American and mixed-race hair, is continuing to grow. Mizani’s sales were up 31% with a successful launch of Butter Blend, a straightening system. Sales in the rest of the world (ROW) rose 12.2%. In this sector, hair colorants accounted for 37.1% of sales, styling and textures 15.1% and shampoos and hair care 47.8%.

L’Oréal’s consumer products division recorded a 4.8% gain with like-for-like growth of 7.9%. Sales in western Europe rose 2.4%. North American sales fell 4.1%, but like-for-like growth was 3.9%, according to the company.ROW sales rose 17.6%. L’Oréal Paris’s growth of 8.1% exceeded targets in many countries. According to L’Oréal, Elsève continues to confirm its position as a market leader, and Préférence hair colorants delivered solid performances.Casting Crème Gloss proved extremely successful in its second year of existence, the company said.

In facial skin care, Revitalift, Age-Perfect and Collagen Filler recorded double-digit growth, according L’Oréal. In Western Europe, the brand outpaced its traditional rival at the end of 2007 with sell-through rising by 16%.

L’Oréal said its Men Expert facial skin care range has been growing since its launch at the end of 2005. Hydra-Energetic (with ambassadors Matthew Fox in Europe and Daniel Wu in Asia) and Vita-Lift (with Pierce Brosnan), are driving the line forward on a global basis.

In makeup, L’Oréal Paris recorded growth of 12%, fueled by new launches that include impulse products (Glam Shine 6H lipsticks), convenience products (Telescopic mascara)and loyalty building products (Bare Naturale foundation).

Garnier grew 8.9%, according to L’Oréal. The mass market brand’s playbook is concise:offer “well adapted effective and natural products of international quality in each region of the world” and build“close relationships with consumers by using well-known local personalities” in its advertising efforts. That strategy is producing very strong growth in emerging markets such as Russia, Ukraine, Romania, Thailand,Dubai and India.

In North America, Garnier is achieving double-digit growth and is now operating in hair care, hair colorants and skin care. The Fructis hair care and styling range grew 7%. Nutrisse Coloration/Color Naturals crème is the world’s number one hair colorant in volume and is growing strongly in western Europe, North America and theBRIMC countries. Garnier Skin Naturals facial skin care recorded growth of 24%, according to L’Oréal.

Maybelline New York had a particularly prosperous year, according to L’Oréal, with worldwide growth of 8.4%.The highlight was the brand’s balanced development across all regions of the world, including Western and Eastern Europe, Asia,Latin America and North America.

It was a more favorable year for Softsheen·Carson, with clear improvement in South Africa and the U.S., which together account for 90% of the brand’s sales.

It was another year of double-digit growth for L’Oréal’s active cosmetics division, with like-for-like sales up 10.8%.While growth was dynamic in North America and performance in Western Europe proved resilient, the ROW is the unit’s hottest sector. La Roche-Posay’s sales rise 18.4% in 2007, and Skinceuticals, which recorded a gain of 14.2%, is now available in five new European countries.

The Body Shop’s consolidated sales grew by 5.7% in 2007 with all regions recording strong performances, except for the U.S.Retail sales rose 7.9%. The Body Shop opened 161 stores in 2007, bringing its total to 2,426 in 59 countries.

Galderma’s sales rose 12.7%, according to L’Oréal, with balanced contributions across all geographic zones.