2022 Universal Registration Document

EXPLANATORY STATEMENT

It is proposed that the Annual General Meeting, as part of the nineteenth and twentieth resolutions, approves two partial contributions of the Company’s assets to its subsidiaries that are owned at more than 99%:

• 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 – Produits Grand Public France, Produits Professionnels France, Luxe France and 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 subsidiary owned at 100% by 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 Company 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 the Company’s operational activities in dedicated structures in order to give them their autonomy.

The Company’s Board of Directors has approved the two proposed partial contributions of assets, taking account of social and environmental issues in particular. These draft agreements have been filed with the commercial court at the registered office of the companies concerned and have been published according to the legal terms and timeframe.

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

Each contribution will be made at the carrying value of net assets contributed, based on the parent company financial statements as at 31 December 2022, prior to adjustment that will be made based on the financial statements as at 30 June 2023. All shares of the subsidiaries issued as remuneration for contributions paid will revert to the Company.