2023 universal registration document

The calculation will be based on the mean of the performance in the:

• • 2022, 2023 and 2024 financial years under the 2021 plan;
  • 2021, 2022 and 2023 financial years under the 2020 plan.

and will use a predefined allocation scale based on the performance percentage achieved. No performance condition applies below a block of 200 shares.

For the 12 October 2023 and 13 October 2022 plans, the performance conditions comprise the following:

• 80% based on financial performance criteria, split evenly between:
  • growth – compared with that of a panel of competitors – in comparable cosmetics sales:
    • 2024, 2025 and 2026 financial years under the 2023 plan,
    • 2023, 2024 and 2025 financial years under the 2022 plan,
  • the increase over the same period in the Group’s consolidated operating profit. The calculation will be made on the basis of the arithmetic average of the performances for:
    • 2024, 2025 and 2026 financial years under the 2023 plan,
    • 2023, 2024 and 2025 financial years under the 2022 plan;
• 20% based on non-financial performance criteria, of which:
  • 15% is associated with the fulfilment of environmental and social responsibility commitments made by the Group as part of the L’Oréal for the Future programme,
  • 5% is associated with the gender balance within strategic positions, including the Executive Committee.

No performance condition applies below a block of 100 shares.

The plans of 20 April 2017, 17 April 2018 and 18 April 2019 were finally granted by the allocation of, respectively, 742,276 shares on 21 April 2021, 868,225 shares on 19 April 2022 and 776,525 shares on 19 April 2023. The number of fully vested shares for 18 April 2019 plan took into account the performance percentage achieved at the end of the plan.

At 31 December 2023, the performance conditions for plans in progress were deemed achieved.

The fair value of free shares is determined using the following assumptions:

The expense recorded in 2023, 2022 and 2021 amounted to €164.5 million, €155.3 million and €152.3 million, respectively.

c) Capital increase reserved for employees

In June 2022, Group employees had the opportunity to join a Shareholding Plan based on a traditional format with discount and matching contribution.

The subscription price was set at €254.9, representing 80% of the average share price over the 20 trading sessions prior to the decision by the Chief Executive Officer setting the subscription period from 8 June to 22 June 2022 during which 410,943 shares were subscribed. This number does not include the subscription reserved for a Trustee under the laws of England and Wales, as part of a Share Incentive Plan established for Group employees in the UK, for which the number of shares was finalised in October 2023 and amounted to 3,376 shares.

For French employees, free shares were offered upon subscription in proportion to their personal contribution to the plan with a maximum of 4 shares offered for 10 shares subscribed.

For employees in other countries, shares were offered under a free share plan with a continued employment condition for the employee and proportionate to how much the employee contributes to the plan, with a maximum of 4 shares offered for 10 shares subscribed. The shares will be allocated to employees on 26 July 2027 provided they are still with the Group on that date.

The IFRS 2 expense measuring the benefit offered to employees is calculated with reference to the fair value of the discount offered on the non-transferable shares.

The capital was increased on 26 July 2022 by 448,267 shares and on 12 October 2023 by 4,643, including matching shares.

The total IFRS 2 expense for free shares granted for the 2022 plan amounted to: