Sales: $24.3 billion
Jean-Paul Agon, chief executive officer; Laurent Attal, president and chief executive officer of L’Oréal USA; Jean-Philippe Blanpain, operations general manager; Beatrice Dautresme, executive vice-president corporate communications and external affairs; Nicolas Hieronimus, L’Oréal professional products division; Jean-Jacques Lebel, president, L’Oréal consumer products; Brigette Liberman, general manager, active cosmetics; Marc Menesguen, president, L’Oréal luxury products; Christian Mulliez, executive vice president, administration and finance; Alexandre Popoff, managing director, Latin America zone and Africa, Middle East zone; Frederic Rozé, managing director, North America zone; Geoff Skingsley, executive vice president, human resources; Jochen Zaumseil, general manager, Asia zone
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
Professional products—Inoa hair color; The Body Shop—Nutriganics skin care, Love Etc… fragrance; Consumer products—Renewal Lash Serum, Garnier Essentials and L’Oréal Triple Active Day, Maybelline New York Color Sensational lipstick, Dark and Lovely Colour Confidence hair color; Luxury products—Lancôme Génifique and Absolue Precious Cells skin care, Hypnôse Drama mascara, Yves Saint Laurent Nuit de L’Homme and Parisienne fragrances, Mascara Singulier, Gloss Volupté lip color, Temp Majeur and Top Secrets skin care, Giorgio Armani Idole fragrance, Eyes to Kill mascara, Cacharel Scarlet fragrance, Kiehl’s Açai Damage-Repairing and Rare Earth Pore Minimizing lotion, Diesel Only the Brave, Ralph Lauren Romance Always Yours; Active cosmetics—Vichy Neovadiol Gf skin care, Vichy LiftActiv Retinol HA, Galderma Azzalure
Desperate times call for desperate measures, right? Maybe. Faced with the specter of a prolonged economic slowdown, in late 2008 L’Oréal announced a hiring freeze and a “progressive but significant” round of job cuts that included 500 employees in the U.S. To get growing again, L’Oréal introduced three major strategic chances to prepare for the future: adding one billion new consumers worldwide, a “thorough transformation to make it stronger and more flexible” and a “determined” increase in R&D and marketing investments. By the time the dust settled on 2009, L’Oréal’s sales had fallen less than 1%, while net income dropped 3%.
Last year, consumer products represented 52.6% of sales, followed by luxury products, 25.1%; professional products, 14.7%; and active cosmetics, 7.6%. Taking a look at division results, professional product sales fell 3.4%; consumer product sales rose 1.5%; luxury product sales fell 2.2%; and active cosmetics sales fell 4.3%.
Bridget Moynahan is the newest spokesmodel for L’Oréal.
By product category, skin care represented 27.0% of sales; followed by hair care, 22.7%; makeup, 21.0%; hair colorants, 15%; perfumes, 10.5% and other, 3.8%. Finally, by region, Western Europe represented 43.3% of sales, followed by Rest of the World, 33.3%, and North America, 23.4%.
Every company, it seems, is targeting consumers in emerging markets. According to Jean-Paul Agon, chief executive officer, L’Oréal’s goal is to double its consumer base from 1.2 to 2.5 billion customers. To get there, the company is targeting the zone it calls New Markets, which includes China, India and Brazil. This zone’s share of the group’s sales has doubled every 10 years, reaching 33% in 2009 and will probably represent more than 50% of sales before the end of the next decade, according to Agon.
Likewise, every company likes to tout its commitment to the environment, and L’Oréal is no different. The company proudly notes in its 2009 annual report that, across the group, more than 400 raw materials are Ecocert certified, including 170 sourced from organic farming. This has led to the marketing of more than 70 certified products. For example, new Série Nature shampoo was Ecocert-certified organic and Deo Pure is sourced from raw materials of natural origin. Overall, 40% of the group’s raw materials are plant-based and derived from 300 species.
That commitment to innovative new products helped L’Oréal record gains in the first half of 2010. Sales rose 10.2% to $12.8 billion.
“The strong first-half sales growth reflects a return to a good like-for-like sales trend and a very positive exchange rate impact, which might increase in the course of this year,” said Agon. “All divisions are recording dynamic trends, thanks to major innovations, which are proving very successful: the rollout of the new Inoa hair colorant from L’Oréal Professionnel is continuing in salons all over the world, Yves Saint Laurent is experiencing a complete renaissance, with one of the highest growth rates among major luxury brands, and Maybelline is growing strongly across all continents.”