Sales: $27.9 billion
Key Personnel: Jean-Paul Agnon, chairman and chief executive officer; Laurent Attal, executive vice president, research and development; Nicolas Hieronimus, president, selective divisions; Barbara Lavernos, executive vice president, operations; Brigitte Liberman, president, active cosmetics division; Isabel Marey-Semper, executive vice president, communications and public affairs, general manager, L’Oréal Foundation; Marc Menesguen, president, consumer products division; Christian Mulliez, executive vice president, chief financial officer; Alexis Perakis-Valat, executive vice president, Asia Pacific zone; Alexandre Popoff, executive vice president, Eastern Europe and Africa, Middle East; Lubomira Rochet, chief digital officer; Nathalie Roos, president, professional products division; Frédéric Rozé, executive vice president, Americas zone; Jérome Tixier, executive vice president, human resources and advisor to the chairman; Jochen Zaumseil, executive vice president, Western Europe 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: Consumer—Macaron Lippies; La Vie Est Belle, Sí and Black Opium fragrances; Lancôme Miracle Cushion; Hydrafresh Genius Water; Men Expert Complete 5; Pretty & Healthy; Power Moisture. Professional—Salon E-motion; Aptyl hair treatments; Thérapiste by Kératase; Cleansing Conditioner by Biolage; Fusio-Dose by Kératase. Active—Neovadiol Substitute Complex by Vichy, Metacell Renewal B3 by Skinceuticals. The Body Shop—Spa of the World, Oils of Life. Acquisition—Atelier Cologne and IT Cosmetics.
Comments: Universal, digital, sustainable; three words that, in the words of chairman Jean-Paul Agnon, characterize the “new” L’Oréal. We didn’t know that there was anything wrong with the “old” L’Oréal that, after all these years, remains the biggest pure play beauty player on the planet. But when you’re No. 1, competitors are gunning for you and you have to keep moving forward.
In 2015, more than 5% of L’Oréal’s sales came from e-commerce, which represented a nearly 38% increase on a like-for-like basis.
Three major trends drove business for L’Oréal and the global cosmetics market in 2015:
- The swift expansion of makeup driven by digital communications;
- The dynamism of high-end channels; and
- The rise of the middle class in new markets.
By division, consumer product sales rose 10% and accounted for 48.7% of sales. Makeup performed best with a gain of 9.3%, well ahead of hair care’s 1.6% sales increase. In contrast, hair colorant sales fell 2.3% and skin care sales dropped 1.4% in 2015.
L’Oréal Luxe reported a 16.7% increase in sales, representing 29.8% of corporate sales. Makeup led the way, with a 28.8% increase, but skin care (+13.4%) and fragrances (+12.7%) both posted double-digit increases.
Similarly, Professional Products posted a 12.1% sales increase and accounted for 14.0% of sales. Shampoo and hair care sales were up 13.7%, hair colorant sales rose 10.9%, and styling sales increased 7.8%.
Active Cosmetics’ sales rose 9.4% to represent 7.5% of sales in 2015, but division results were a mixed bag. While skin care (+12.3%) and “other” (+5.6%) showed significant improvements, hair care (-6.2%) and makeup (-4.6%) results were disappointing.
The Body Shop’s sales rose 5.7% last year, even as the total number of stores fell 17% to 3,102.
At the close of 2015, L’Oréal was present in 140 countries on all five continents—all of which posted sales gains. By region, Western Europe accounted for 33.1% of sales. The group outperformed the market, especially in Southern Europe and gains were also recorded in the UK and Germany. Garnier provided a lift in an otherwise sluggish mass channel.
In North America, which represented 27.4% of sales, revenues were helped along by double-digit gains for Urban Decay, Kiehl’s and Yves Saint Laurent. Redken was the key reason for improving sales within the professional products division. Meanwhile, sales of NYX and Maybelline New York helped lift consumer product division sales.
L’Oréal said “new markets” represented 39.5% of sales. That broadly brushed category can be segmented as:
- Asia-Pacific, 22.5%,
- Latin America, 7.7%;
- Eastern Europe, 6.3%; and
- Africa, Middle East, 3.0%.
Brazil remained a drag on Latin American results. But if the biggest market in the region could somehow be excluded, Latin America posted double-digit gains, helped along by strong demand for products within the active cosmetics and luxe divisions, according to L’Oréal.
In Eastern Europe, sales in Russia, Turkey and Ukraine helped the consumer, professional and luxe divisions all post double-digit gains.
Double-digit gains in Africa, Middle East were due, in large part, to fast growth in Egypt, Pakistan and Saudi Arabia. This year, the company is opening a new research center in South Africa.
To keep the innovations coming around the world, L’Oréal spent €794 million on R&D in 2015, which helped the company register 497 patents.
For the first quarter of 2016, sales rose 1.8% to $6.5 billion. North America provided the biggest lift, as sales rose 5.8% in the quarter. Following closely was Africa, Middle East, which posted a 5.4% gain. In contrast, sales in Latin America fell 11.1% in Q1. By operating division, L’Oréal Luxe led the way, with a 4.4% gain. That was well ahead of the 0.9% increase generated by the consumer product division, but every unit reported an increase in sales.
On June 30, L’Oréal announced it would acquire Atelier Cologne, a niche fragrance manufacturer. A purchase price was not disclosed. Launched in 2009 by Sylvie Ganter and Christophe Cervasel, Atelier Cologne specializes in perfumery sold in selected retailers. Specifically, it creates and manufactures in France colognes absolues, genuine pure perfumes blending citrus notes natural raw materials. The company offers perfumed soaps, shower gels and body lotions as well as candles for the home. Atelier Cologne joins the L’Oréal Luxe Division.
Just last month, L’Oréal acquired IT Cosmetics for $1.2 billion. The company had sales of $182 million—up 56% from the previous year. Also in July, L’Oréal acquired the rights to the Saint-Gervais Mont-Blanc face and body care lines, which are said to contain 100% Mont-Blanc thermal spring water and natural extracts of Alpine plants. The Saint-Gervais thermal spa was created in 1807 and is today one of Europe’s most important thermal spa resorts, according to L’Oréal.