Sales: $29.4 billion
Key Personnel: Jéan-Paul Agon, chairman and chief executive officer; Laurent Attal, executive vice president, research and development; Vianney Derville, executive vice president, Western Europe zone; Lucia Dumas, executive vice president, communications and public affairs; Nicolas Hieronimus, deputy chief executive officer; Barbara Lavernos, executive vice president, operations; Jean-Claude Le Grand, human resources director; Brigitte Liberman, president, active cosmetics division; Christian Mulliez, executive vice president, chief financial officer; Alexis Perakis-Valat, president, consumer products division; Alexandre Popoff, executive vice president, Eastern Europe and Africa, Middle East; Stéphane Rinderknech, chief executive officer, China; Lubomira Rochet, chief digital officer; Nathalie Roos, president, professional products division; Frédéric Rozé, executive vice president, Americas; Jochen Zaumseil, executive vice president, Asia-Pacific.
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.
New Products: Skin Care—L’Oréal Paris clay masks, Vichy Neovadiol Rose Platinum; Hair Care—Magic Retouch, Colorista; Color—Monsieur Big mascara, l’Absolu Rouge and Teint Idole Ultra; Fragrance—YSL Y men’s fragrance. Acquisitions—Korean Stylenanda, Pulp Riot, ModiFace, CeraVe, AcneFree and Ambi.
Comments: Universalization; for L’Oréal that means globalization that respects differences. And it’s a strategy that helps L’Oréal remain the biggest pure play in beauty (rounding out the Top 10 are: Unilever, Procter & Gamble, Estée Lauder, Shiseido, Beiersdorf, AmorePacific, Kao, LVMH and Coty).
Last year, corporate sales rose less than 1% in local currency. Operating margin rose to a record 18%. By business segment, skin care accounted for 29.3% of sales, followed by makeup (27.9%), hair care (17.5%), hair color (11.8%), fragrance (9.2%) and other (4.3%)
By geographic region, Western Europe represented 31.2% of sales; followed by North America, 28.3%; Asia-Pacific, 23.6%; Latin America, 7.5%; Eastern Europe, 6.7% and Africa, Middle East, 2.7%. Sales in Western Europe rose 1.5% thanks to high demand for makeup and skin care in Great Britain, Germany and Spain. Sales in France declined slightly. Consumer Products and L’Oréal Luxe outperformed competitors and demand within the Active Cosmetics division accelerated in the second half.
Sales in North America rose 3.5% helped, in large part, by gains in makeup which were offset by declines in hair care. Active Cosmetics received a lift from the acquisition of CeraVe.
Sales in Asia-Pacific soared 9.2% as consumers drove growth for L’Oréal Luxe in China and Hong Kong. Elsewhere, India, Thailand and Malaysia are all growing very strongly, according to the company.
Latin American sales were up 6.2% as Mexico and Argentina posted double-digit gains, tempered by Brazil. L’Oréal Luxe and Active Cosmetics Divisions have achieved double-digit growth, thanks respectively to the Lancôme and La Roche-Posay brands. The Consumer Products Division is growing in the makeup category, reflecting the expansion of the NYX Professional Makeup brand and the continuing growth of Maybelline New York.
Eastern European sales increased 11.4%, driven by sales in Turkey and Central Europe. Finally, sales in Africa and Middle East declined 9.4%, but the company insists the situation is stabilizing in the Gulf states.
By division, professional product sales fell 1.4%, but after first half weakness, there was a strong recovery in the US and Asia-Pacific. Eastern Europe and Latin America maintained their momentum. Shades EQ continues to make gains and the revamped Série Expert ranges provided a sales lift, too. Demand for natural formulas helped propel Aura Botanica by Kérastase and Biolage R.A.W. Consumer product sales increased 1% on strong demand for makeup. NYX Professional continues its global expansion and L’Oréal Paris is “holding up well,” according to the company, thanks, in part to the success of Lash Paradise mascara, which is the No. 2 brand in the US (behind Maybelline). The division continues to expand throughout Europe and “Spanish-speaking America,” but demand slowed in North America. In contrast sales increased in Asia due to gains in China.
L’Oréal Luxe sales jumped 10.6% on the strength of makeup and facial skin care sales. Lancôme posted double-digit gains thanks to the success of makeup products such as Monsieur Big mascara, l’Absolu Rouge and Teint Idole Ultra and by the acceleration of the Génifique skin care range. Sales of Giorgio Armani and Kiehl’s both topped €1 billion. By region, L’Oréal posted double-digit gains in Asia-Pacific, and Western Europe remained strong.
Active Cosmetics’ sales surged 11.9%, as sales topped €2 billion for the first time, driven by gains in the US, which has become the division’s No. 1 country. L’Oréal calls La Roche-Posay the world’s No. 1 dermocosmetics brand, led by products such as Effaclar, Lipikar and Cicaplast. For the eighth year in a row, SkinCeuticals posted double-digit gains.
The company proudly notes that e-commerce sales rose more than 33% last year to €2 billion.
L’Oréal insists it will continue to succeed for seven reasons:
- The beauty market continues to grow;
- The company is a “pure play” in beauty;
- Sound fundamentals based on research and innovation;
- Superior digital prowess;
- A multipolar footprint in all categories, distribution channels and regions;
- Excellence in environmental and social commitments; and
- A decentralized, entrepreneurial organization filled with high quality teams.
For the first quarter of 2018, L’Oréal reported a 1% decline in sales to €6.78 billion, but noted that sales rose 6.8% on a like-for-like basis. Gains accelerated within the L’Oréal Luxe and Active Cosmetics division, while sales in new markets surged nearly 15%, helped along by results in Asia-Pacific, where, in China, consumers’ aspirations for iconic brands remain strong.