L’Oréal: strong growth in sales and profits in 2010

Jean-Paul Agon, Chief Executive Officer of L'Oréal, said: “In the context of an upturn in the cosmetics market, L’Oréal achieved strong sales growth. The group advanced in all zones, all channels and all business segments; more dynamic than the market, it bolstered its position as the world number one in beauty.

2010 was a year of conquests for the group, with several of our brands achieving spectacular breakthroughs: L’Oréal Professionnel with its hair colourant Inoa, Maybelline in mass-market make-up, Yves Saint Laurent which is experiencing a true renaissance, and La Roche-Posay which is continuing its expansion. The group is growing in Western Europe, clearly improving its positions in North America, and continuing its conquest of the new strategic markets, particularly in Asia and Latin America. In 2010, L’Oréal China became the group’s number three cosmetics subsidiary, with sales of more than one billion euros. These performances confirm the relevance of the strategic thrusts adopted at the end of 2008: accessible innovation, new product categories, accelerated globalisation of our brands, and strengthening of our R&D and advertising & promotional investments. 2010 was also a year of strong profit growth; the actions taken over the last two years to improve operating efficiency are continuing to pay off. Well prepared to seize all strategic opportunities, and driven by the ambition of winning a further one billion new consumers, L’Oréal is turning a new page in its history: the page of universalisation and beauty for everyone. Supported by an encouraging start to the year, we are confident in the group’s ability to achieve a new year of sales and profit growth in 2011.”

Like-for-like, i.e. based on a comparable structure and identical exchange rates, the sales trend of the L’Oréal group was +5.6%. The net impact of changes in consolidation amounted to +0.4%. Currency fluctuations had a positive impact of +5.6%. Growth at constant exchange rates was +6.0%. Based on reported figures, the group’s sales, at December 31st, 2010, amounted to 19.496 billion euros, an increase of +11.6%.

1) Cosmetics sales

PROFESSIONAL PRODUCTS In a hairdressing market which picked up slightly, the Professional Products Division achieved growth in 2010 of +4.1% like-for-like, and +13.8% based on reported figures. Its initiatives, rolled out through a portfolio of highly complementary brands, enabled the conversion of more than 35,000 new salons. More than ever before, the division is asserting its role as the unchallenged leader in this channel. In 2010, the initiatives introduced in technical products brought decisive success. In hair colourants, Inoa by L’Oréal Professionnel is a worldwide success, both in recruiting consumers and hairdressers and winning their loyalty. Repositioned at a more accessible price per application, SoColor by Matrix is conquering many salons in Europe, while Wonderbrown, a colourant for dark hair, is expanding in the United States. In textures, Optistraight by Matrix and Dulcia Advanced perm by L’Oréal Professionnel are winning over Asia. In the West, X-Tenso Moisturist by L’Oréal Professionnel is driving the worldwide development of “Brazilian straightening”. Haircare is growing, supported by innovative launches: Kérastase Chronologiste, a luxury haircare line with caviar, L’Oréal Professionnel Fiberceutic with intracylane and Colourist Solutions by Pureology. L’Oréal Professionnel and Matrix are driving the division’s growth; Kérastase is gradually accelerating, while Redken is strengthening its leadership in the United States.

In Western Europe, the division is winning market share, with significant growth in Germany, the United Kingdom, Sweden and France. In North America, 2010 saw a return to growth for Matrix, and dynamic growth for Mizani and Pureology. The acquisition of two distributors, CB Sullivan and Peel’s, has completed the SalonCentric network. The New Markets are dynamic, with strong growth rates in India, China, Indonesia, and also in the Middle East and Brazil, where L’Oréal Professionnel is helping to build the professional markets of the future by opening its first institute for the training of young hairdressers.

CONSUMER PRODUCTS

The Consumer Products Division recorded growth of +5.5% like-for-like and +11.4% based on reported figures. It is winning market share in North America and the New Markets. The dynamism of the make-up market, the number one category in this division, stimulated growth across all zones. All the brands are growing, and above all Maybelline which achieved growth of +13.3% likefor- like.

L’Oréal Paris had a good year in haircare with strong growth in Latin America, the United States and Asia. In skincare, Youth Code achieved good scores. In make-up, Volume Million Lashes mascara proved to be a worldwide success. Garnier is strengthening its leadership in the facial skin cleanser segment for young people with the launch of Pure Active Exfo-Brusher. The brand is continuing its progress in the new category of deodorants: it is consolidating the positions it has won in Latin America and in Eastern Europe, and is moving into Western Europe. Maybelline is growing strongly in all regions. It became the make-up market leader in the United States thanks to the success of Falsies mascara and Instant Age Rewind The Eraser foundation. In Asia, the tinted skincare line BB Cream is proving highly successful. Finally, the division is making considerable progress in the men’s skincare category, particularly in Western Europe where Men Expert is now number 1 in the market, and in Asia where the Garnier Men launch complements the L’Oréal Paris Men Expert range.

In Western Europe, in a sluggish market, the division advanced thanks to make-up, haircare and deodorants, particularly in the United Kingdom, Germany and Scandinavia. In North America, in a market which was also stable, the division significantly improved its positions with market share gains in make-up, hair colourants, haircare and styling. The New Markets are being galvanised by powerful regional initiatives: in Brazil and Argentina, thanks to L’Oréal Paris haircare and Garnier deodorants, and in China, India, Indonesia and the Philippines thanks to L’Oréal Paris haircare, make-up, and L’Oréal Paris and Garnier men’s skincare.

LUXURY PRODUCTS

The Luxury Products Division recorded growth of +7% like-for-like and +11.5% based on reported figures. In the context of an upturn in the selective market, the division posted sell-out growth in line with the market trend. It thus consolidated its worldwide positions, and particularly its leadership in Travel Retail. Its major core brands delivered good performances.