“We have stepped up our metamorphosis to the New L’Oréal: more universal, more digital and more sustainable”

Despite a slowdown in worldwide growth, the group delivered a solid performance. Sales growth was strong, supported by a positive currency effect. Three out of four Divisions outperformed their market. And we delivered good quality results.

L’Oréal Luxe, Active Cosmetics and the Professional Products Division achieved sustained growth, further improving their worldwide positions in their respective markets. As for the Consumer Products Division, its growth picked up in the second half of 2015, enabling it to post an improvement on its 2014 performance. Importantly, we have taken all necessary steps to put the Division back on a market share gain track for 2016, by renewing the image of its brands, by seizing every opportunity in the fastest-growing consumer segments, such as make-up and natural haircare, by accelerating the pace of innovation and by stepping up digital investments.
In terms of regions, we continued to expand on all continents. Growth was solid in Western Europe. In North America our performance increased quarter after quarter. Growth trends in the New Markets were contrasted, ranging from difficulties in Brazil to very strong growth in countries like Turkey and India.

Operating profit grew strongly by +12.8%, with operating margin reaching a record 17.4%. The year was also marked by a strong increase of +15.7% in earnings per share, at 6.18 euros, and in the dividend proposed to the Annual General Meeting. Once again, these results demonstrate the quality and robustness of our business model.

In our sector, Beauty – and indeed in other industries – everything is changing at lightning speed: consumers, communications, distribution and competition. So we have stepped up our metamorphosis: the New L’Oréal is more universal, more digital and more sustainable.
These are profound transformations that require huge efforts from our teams, but this is quite simply essential to enable us to adapt and strengthen our leadership over the coming years. In fact, this is one of L’Oréal’s greatest strengths: we never stop challenging and reinventing ourselves. At the same time, we remain true to our fundamentals: a clear mission statement, Beauty for all; a distinctive strategy, Universalisation; a commitment to Research and Innovation; a diversified portfolio of brands; a unique corporate culture; and humanistic values.

It means offering innovations perfectly adapted to local aspirations and needs. All over the world there is a powerful appetite for beauty. At the same time, people want products that are suitable for their skin and hair type, products that fulfil their desires, and match their culture and beauty routines. Thanks to our regional Research and Marketing hubs, now at full speed, our brands can be both aspirational worldwide, and totally relevant at local level. We will continue on the same path in 2016, with the opening of a new Research Centre in South Africa.

We made swift and substantial progress in 2015. Our online sales totalled 1.3 billion euros, an increase of +38%. E-commerce is now equivalent to the group’s number five country. And in China e-commerce already accounts for more than 20% of our Consumer Products Division sales. And a quarter of our media spending now goes to digital communications.
Our digital presence reinforces our competitive edge and extends our leadership. It opens up thrilling new horizons for our industry in direct and personalised consumer relationships. Just look at the success of NYX Professional Makeup, our new digital native make-up brand, and how brands like REDKEN, LA ROCHE-POSAY and KIEHL’S have amplified their momentum through digital initiatives. It is up to us to surf as far and as fast as possible on the online and connection waves.

Yes, our social and environmental responsibility programme, “Sharing Beauty With All”, is making good progress. You can find the details in our Progress Report, but here is just one example: our target of cutting greenhouse gas emissions by 60%. In 2015, the reduction was already 56% compared with 2005, while over the same period our production increased by 26%. So we are demonstrating what we have always believed: commitment to protecting the environment and economic performance can go hand in hand. We have also set ourselves another ambition for 2020: to be “carbon balanced”, that is to offset our greenhouse gas emissions. We want to make our contribution to mitigating global warming by developing an innovative low-carbon business model.
And all our teams are fully focused on making these challenges their own. Furthermore, I decided that the Sustainable Development Department should report directly to me, because our commitment is transversal and strategic for all parts of the business, brands and countries.

Of course we will. First, because beauty is a dynamic market, which will continue to expand, driven by demographic, economic and social trends. Just look how the make-up category has skyrocketed over the last few years. In 2015, it grew almost twice as fast as the market. Clearly this is partly linked to the powerful upsurge in digital communications, selfies and social networks, prompting everyone to be visible and therefore to show themselves in their best light.
And future growth also lies in our own potential. In 2015, we celebrated 30 years of leadership. But we are a leader that still has huge potential. Our global market share is only 12.5%. In other words, we still have more than 87% of the market to aim for. I am sure that by offering products that are the best suited, the safest and the most effective, we will continue to attract more and more consumers. That is our ambition.

Definitely. As ever, our objective is to outperform the market and continue to deliver solid growth and profits. And all the cards are in our hands. For the reasons I have just mentioned, but also because we are confident in our balanced business model, which creates value, and in our ability to grow our market shares.
One thing more: we feel proud and privileged to be part of a wonderful industry, helping people to feel good and self-confident. In short, to make life more beautiful!