THE LETTER TO SHAREHOLDERS - N°83 WINTER 2022/2023

PERFORMANCE

Dear Shareholders,

On 20 October, your Group published its sales at 30 September 2022. In a context of unprecedented volatility, marked by the public health restrictions in China and inflation in the Western world, L’Oréal achieved a very solid third quarter, continuing at a steady pace of growth compared to 2019. Benefiting from its rebalancing strategy, particularly in terms of geographic footprint, at the end of September 2022 the Group reported strong growth of +20.5%, with a significant positive impact of foreign exchange, and +12.0% like-for-like.

The global beauty market remained dynamic, and consumers’ appetite for beauty products is intact. The combination of a robust business model, agility and the commitment of its teams across the world allowed L’Oréal to again significantly outperform the market and strengthen its position as the world’s No.1 beauty company.

The figures show a rebalance in the Group’s geographic footprint. All Zones made progress, including North Asia, despite the turbulence in the Chinese ecosystem. The other Zones achieved double-digit growth, with a significant leap in emerging markets (SAPMENA-SSA⁽¹⁾, Latin America) and remarkable performance in Europe. Growth is also balanced across Divisions, each of which outperformed its market. The Consumer Products Division has continued to accelerate since the beginning of the year and our three selective Divisions recorded double-digit growth over the first nine months. The performance of L’Oréal Luxe was temporarily impacted by a number of factors in the third quarter (repeated lockdowns in mainland China and Hainan, and anticipated Travel Retail invoicing in the second quarter). Nevertheless, the Division reaccelerated in September and reached record market share in mainland China in the third quarter.

The Group is benefiting from its valorisation strategy, rolled out at the start of the year, the effects of which are accelerating particularly in Europe and North America.

In line with our dual ambition of achieving economic and societal excellence, we are proud to have been awarded the Platinum medal by EcoVadis, which ranked L’Oréal in the world’s top 1% of best companies in terms of environmental and social performance. Our efforts were also recognised by Refinitiv, with L’Oréal again included in its global Diversity & Inclusion Top 100.

Despite the current uncertainties, we remain confident in the outlook for the global beauty market, which has again confirmed its resilience; confident in our power to innovate; and confident in our ability to outperform the market and achieve another year of growth in sales and profits in 2022.