The shift towards digital has accelerated further since the pandemic. How has L’Oréal addressed, or perhaps anticipated, this change?
At L’Oréal, one of our favourite mottos is “savoir saisir ce qui commence”, or “seize new opportunities”.
My predecessor, Jean-Paul Agon, declared 2010 the “year of digital” at L’Oréal. We hired experts and trained thousands of employees in e-commerce, the internet, etc. Agility is one of our greatest strengths. In 2018, we purchased the Canadian startup ModiFace, which developed augmented reality to try on different shades of lipstick and makeup virtually with a smartphone, which we have rolled out across all our brands. Since last year, this technology has also been able to perform skin analysis and make personalised product recommendations. Beauty is becoming more and more personalised, with increasing emphasis on custom products. The next step in L’Oréal’s digital development may well be the metaverse.
How do you see L’Oréal’s business evolving in an increasingly complex global context?
In the current context, it is my role and that of our teams to be vigilant and anticipate different scenarios. During the Covid-19 crisis, we demonstrated our ability to adapt very quickly. For the medium and long term, we remain confident in the prospects for the global beauty market, which has average annual growth of between 4% and 5% (apart from 2019, the only year it was negative). Consumers’ appetite for beauty remains intact; the “lipstick effect” shows that consumption of beauty products such as lipstick remains significant even in hard times because it’s an affordable product that brings pleasure and makes you feel good about yourself. This is something we are seeing at the moment with fragrances. Emerging countries also represent a tremendous source of growth. Virtual try-on and e-commerce enable us to win over new consumers.
How does L’Oréal successfully combine financial, social and environmental performance goals?
I am convinced that financial performance and environmental and social performance are now inextricably linked. Financial performance gives us the means to transform ourselves, to invest and innovate for a more sustainable approach to beauty. We have made commitments for 2030 as part of our L’Oréal for the Future programme. For example, 95% of the active ingredients we use in our products will be biosourced - derived from abundant minerals or from circular processes - by 2030. And 100% of our plastic packaging will come from recycled or bio-based sources. We have already achieved significant results: between 2005 and 2021, we reduced our carbon emissions by 87%, while the number of manufactured units increased by 37%. All our sites in the United States and in the North Asia Zone are now “carbon neutral”, ahead of our 2025 objective. L’Oréal for the Future is a companywide project to which all of our employees are actively committed. It also encompasses the variable remuneration of our executives, which is dependent on achieving social and environmental objectives.
L’Oréal’s Individual Shareholder Consultation Committee aims to strengthen relations with individual shareholders, better understand their expectations and improve communication with them. The Committee’s third meeting of 2022 was held at L’Oréal headquarters in Clichy (France) on 3 October.
On the agenda was the presentation of the 2022 half-year results and Group news, followed by a discussion with Nicolas Hieronimus, Chief Executive Officer of L’Oréal, and Christophe Babule,
Chief Financial Officer, who answered questions from Committee members. This was followed by a presentation on the history, strategy and commitments of Lancôme, one of the Group’s iconic brands, by its Global Brand President, Françoise Lehmann.
