2022 Universal Registration Document

Chapter 2 : Corporate governance

Financial targets 2022 (60% of total annual variable remuneration)
Financial criteria Weighting 2022 Results

Payment rate

Target 100% of the fixed amount Maximum 120%

 Board appraisal
Like-for-like sales compared to budget(1) Like-for-like sales compared to budget(1)Weighting

15%

 Like-for-like sales compared to budget(1)2022 Results€38,260.6 m Like-for-like sales compared to budget(1)

Payment rate

Target 100% of the fixed amount Maximum 120%

120%		 Like-for-like sales compared to budget(1)Board appraisal

Maximum objective reached
Sales growth differential compared to main competitors(2) Sales growth differential compared to main competitors(2)Weighting

15%

 Sales growth differential compared to main competitors(2)2022 Results+7,3 points Sales growth differential compared to main competitors(2)

Payment rate

Target 100% of the fixed amount Maximum 120%

120%		 Sales growth differential compared to main competitors(2)Board appraisal

Maximum objective reached
Operating profit compared to budget(1) Operating profit compared to budget(1)Weighting

10%

 Operating profit compared to budget(1)2022 Results€7,456.9 m Operating profit compared to budget(1)

Payment rate

Target 100% of the fixed amount Maximum 120%

107.5%		 Operating profit compared to budget(1)Board appraisal

Performance above budget
Earnings per share(3) compared to budget(1) Earnings per share(3) compared to budget(1)Weighting

10%

 Earnings per share(3) compared to budget(1)2022 Results€11.26 Earnings per share(3) compared to budget(1)

Payment rate

Target 100% of the fixed amount Maximum 120%

120%		 Earnings per share(3) compared to budget(1)Board appraisal

Maximum objective reached
Cash flow(4) compared to budget(1) Cash flow(4) compared to budget(1)Weighting

10%

 Cash flow(4) compared to budget(1)2022 Results€4,935.1 m Cash flow(4) compared to budget(1)

Payment rate

Target 100% of the fixed amount Maximum 120%

95%		 Cash flow(4) compared to budget(1)Board appraisal

Performance below budget
RATE OF ACHIEVEMENT OF 2022 FINANCIAL TARGETS RATE OF ACHIEVEMENT OF 2022 FINANCIAL TARGETSWeighting

 

 RATE OF ACHIEVEMENT OF 2022 FINANCIAL TARGETS2022 Results

 

 RATE OF ACHIEVEMENT OF 2022 FINANCIAL TARGETS

Payment rate

Target 100% of the fixed amount Maximum 120%

113.7%		 RATE OF ACHIEVEMENT OF 2022 FINANCIAL TARGETSBoard appraisal

 

(1) Budget not provided for reasons of confidentiality.

(2) Panel of competitors: Unilever, Procter & Gamble, Estée Lauder, Shiseido, Beiersdorf, Johnson & Johnson, Henkel, LVMH, Kao and Coty.

(3) Diluted share attributable to owners of the company per share excluding non-recurring items.

(4) Cumulative operating cash flow = Cash flow generated by operating activities – purchases of tangible and intangible assets.

 

2022 non-financial and qualitative targets (40% of the total annual variable remuneration)
Non-financial and qualitative criteria Weighting 2022 performance indicators

Payment rate

Target 100% of the fixed amount Maximum 120%

 Board appraisal
CSR criteria: L’Oréal for the Future programme CSR criteria: L’Oréal for the Future programmeWeighting

10%

 CSR criteria: L’Oréal for the Future programme2022 performance indicators

See indicators below

 CSR criteria: L’Oréal for the Future programme

Payment rate

Target 100% of the fixed amount Maximum 120%

95%		 CSR criteria: L’Oréal for the Future programmeBoard appraisal

Performance in line with the programme’s trajectory.
Human Resources criteria Human Resources criteriaWeighting

7.5%

 Human Resources criteria2022 performance indicators

See indicators page 105

 Human Resources criteria

Payment rate

Target 100% of the fixed amount Maximum 120%

110%		 Human Resources criteriaBoard appraisal

Outperformance.
Digital development criteria Digital development criteriaWeighting

7.5%

 Digital development criteria2022 performance indicators

See indicators page 105

 Digital development criteria

Payment rate

Target 100% of the fixed amount Maximum 120%

120%		 Digital development criteriaBoard appraisal

Outperformance. Maximum reached.
Qualitative criteria: Management Qualitative criteria: ManagementWeighting

7.5%

 Qualitative criteria: Management2022 performance indicators

See evaluation page 106

 Qualitative criteria: Management

Payment rate

Target 100% of the fixed amount Maximum 120%

120%		 Qualitative criteria: ManagementBoard appraisal

Outperformance. Maximum reached.
Qualitative criteria: Image, Company reputation, Relations with stakeholders Qualitative criteria: Image, Company reputation, Relations with stakeholdersWeighting

7.5%

 Qualitative criteria: Image, Company reputation, Relations with stakeholders2022 performance indicators

See evaluation page 106

 Qualitative criteria: Image, Company reputation, Relations with stakeholders

Payment rate

Target 100% of the fixed amount Maximum 120%

120%		 Qualitative criteria: Image, Company reputation, Relations with stakeholdersBoard appraisal

Outperformance. Maximum reached.
RATE OF ACHIEVEMENT OF 2022 NON-FINANCIAL AND QUALITATIVE TARGETS RATE OF ACHIEVEMENT OF 2022 NON-FINANCIAL AND QUALITATIVE TARGETSWeighting111.9% RATE OF ACHIEVEMENT OF 2022 NON-FINANCIAL AND QUALITATIVE TARGETS2022 performance indicators

 
Table of non-financial and qualitative achievements in 2022

The Board of Directors, at its meeting of 9 February 2023, used the following indicators and achievements examined by the HumanResources and Remuneration Committee to determine the level of achievement of the non-financial and qualitative targets for 2022.

CSR criteria: The L’Oréal for the Future programme Weighting: 10%
CSR criteria: The L’Oréal for the Future programme

The L’Oréal for the Future programme sets out L’Oréal’s commitments to sustainable development for 2030, for which the 2022 achievements are set out in detail in chapter 4 of this document and summarized in the table in section 1.3.2.
CSR criteria: The L’Oréal for the Future programme   Weighting: 10%
CSR criteria: The L’Oréal for the Future programme

The L’Oréal for the Future programme sets out L’Oréal’s commitments to sustainable development for 2030, for which the 2022 achievements are set out in detail in chapter 4 of this document and summarized in the table in section 1.3.2.
 

 

 

2022 Results

 

Weighting: 10%2021 Results
TRANSFORMING OUR BUSINESS TRANSFORMING OUR BUSINESS

 

 

 TRANSFORMING OUR BUSINESSWeighting: 10%

 

Climate

  • By 2025, all our sites will have achieved “carbon neutral”(1) status by improving energy efficiency and using 100% renewable energy.

Climate

  • By 2025, all our sites will have achieved “carbon neutral”(1) status by improving energy efficiency and using 100% renewable energy.

 

65%

(= 110 sites)

Climate

  • By 2025, all our sites will have achieved “carbon neutral”(1) status by improving energy efficiency and using 100% renewable energy.
Weighting: 10%58%

(= 100 sites)
  • By 2030, on average we will have halved the greenhouse gas emissions per finished product linked to the transport of our products compared to 2016.
  • By 2030, on average we will have halved the greenhouse gas emissions per finished product linked to the transport of our products compared to 2016.

 

+ 6.7%
  • By 2030, on average we will have halved the greenhouse gas emissions per finished product linked to the transport of our products compared to 2016.
Weighting: 10%+ 12%

Water

  • By 2030, 100% of the water used in our industrial processes will be recycled and reused in a loop.

Water

  • By 2030, 100% of the water used in our industrial processes will be recycled and reused in a loop.

 

13%

Water

  • By 2030, 100% of the water used in our industrial processes will be recycled and reused in a loop.
Weighting: 10%

15%
 

 

 

5 Waterloop Factories

 

Weighting: 10%

6 Waterloop Factories

Biodiversity

  • By 2030, 100% of ingredients in our formulas and biobased packaging materials will be traceable and come from sustainable sources.

Biodiversity

  • By 2030, 100% of ingredients in our formulas and biobased packaging materials will be traceable and come from sustainable sources.

 

92% (2)

Biodiversity

  • By 2030, 100% of ingredients in our formulas and biobased packaging materials will be traceable and come from sustainable sources.
Weighting: 10%94% (2)

Resources

  • By 2030, 95% of our ingredients in formulas will be biobased, derived from abundant minerals or from circular processes.

Resources

  • By 2030, 95% of our ingredients in formulas will be biobased, derived from abundant minerals or from circular processes.

 

61%

Resources

  • By 2030, 95% of our ingredients in formulas will be biobased, derived from abundant minerals or from circular processes.
Weighting: 10%

60%
  • By 2030, 100% of the plastic used in our packaging will be either from recycled or bio-based sources (achieving 50% by 2025).
  • By 2030, 100% of the plastic used in our packaging will be either from recycled or bio-based sources (achieving 50% by 2025).

 

26%
  • By 2030, 100% of the plastic used in our packaging will be either from recycled or bio-based sources (achieving 50% by 2025).
Weighting: 10%

21%

(1 )A site can claim “carbon neutral” status if it meets the following requirements:

  • Direct CO2 (Scope 1) = 0, with the exception of: the gas used for catering, the fuel oil used for sprinkler tests, fossil energy consumptions during maintenance of on-site renewable facilities, cooling gas leaks if they are lower than 130 tonnes CO2eq./year; and
  • Indirect CO2 Market Based (Scope 2) = 0. The renewable energy sources must be located on site or less than 500 kilometres from the site, and be connected to the same distribution network. The “carbon neutral” status, as defined above, is achieved without carbon offsetting. See section 4.3.1.1.3. B/.

(2) Scope: bio-based ingredients in formulas, excluding packaging.