2022 Universal Registration Document

24.3. Contingent liabilities

In the ordinary course of its operations, L’Oréal is involved in legal actions and is subject to tax assessments, customs controls and administrative audits. The Company sets aside a provision when a risk is found to exist and the related cost can be reliably estimated.

No exceptional event or dispute is highly likely to have a material impact on the Company’s earnings, financial position, assets or operations.

NOTE 25. in working capital

Changes in working capital can be broken down as follows:

NOTE 26. Changes in other financial assets

This line primarily includes cash flows relating to financial instruments, classified as marketable securities.

NOTE 27. Net cash and cash equivalents at the end of the year

Cash and cash equivalents can be broken down as follows:

NOTE 28. Other information

Statutory audit fees are presented in note 16 to the Consolidated Financial Statements.

NOTE 29. Subsequent events

L’Oréal S.A. wishes to implement a simplification and streamlining of its organisation in order to provide a better operating method for its activities in France. This proposed reorganisation consists in particular of spinning off certain of L’Oréal S.A.’s operational activities, hosting them in dedicated structures in order to give them their autonomy.

L’Oréal S.A.’s Board of Directors meeting of 9 February 2023 approved two proposed partial asset contributions, taking account of social and environmental issues in particular.

These transactions consist of:

• a contribution to L’Oréal France of the complete and autonomous branches of activities (i) Affaires Marché France (marketing activity on the French market for products from the Group’s four Divisions – Products Grand Public France, Produits Professionnels France, Luxe Franceand Cosmétique Active France), (ii) Domaines d’Excellence (services activity for subsidiaries based in France, carried out by central services and support functions) and (iii) all shares comprising the capital of Luxury of Retail, a wholly owned subsidiary of the Company;
• a contribution to L’Oréal International Distribution of the complete and autonomous branch of the International Distribution activity (operating the brands of the four Divisions in countries where the brands are not marketed by the Company’s subsidiaries, as well as globally driving the distribution network).

The completion date of these contributions will be set at 1 July 2023, subject to extension until 31 December 2023 at the latest.