Sales at September 30, 2013
L’Oréal continues to improve its worldwide positions
Sales: 17.21 billion euros +6.0% at constant exchange rates
+4.9% like-for-like
+2.9% based on reported figures
Dynamics maintained in the New Markets Solid growth in Western Europe North America impacted by market slowdown and inventory reduction in distribution Confidence in a further year of growth in sales, results and profitability
Commenting on these figures, Mr Jean-Paul Agon, Chairman and Chief Executive Officer of L’Oréal, said:
“Since the start of the year, L’Oréal has been winning market share across all divisions and geographic zones, thus strengthening its world number one position.
In the 3rd quarter, demand for the Group’s products remained strong, driven by major product initiatives and their global roll-out: Olia by Garnier and Elvive by L'Oréal Paris in the Consumer Products Division, Sì by Giorgio Armani and Dreamtone by Lancôme at L'Oréal Luxe, and Idealia by Vichy in the Active Cosmetics Division.
In Western Europe, the Group recorded solid growth, particularly in France and Germany. In North America, Consumer Products Division sales were affected by market slowdown and inventory reductions in distribution that exceeded our expectations. The Group is maintaining its good dynamics across all the New Markets, particularly in China, India, Brazil and Russia.
The economic context remains subject to some uncertainties about the market trend, and to the negative impact of currencies. But our growth prospects, supported by the innovations and the globalisation of our major brands, combined with a strategy of targeted and complementary acquisitions, enable us to look to the future with confidence.
We confirm our targets for 2013 and our ambition of achieving a further year of growth in sales, results and profitability.”
A – Sales at September 30, 2013
Like-for-like, i.e. based on a comparable structure and identical exchange rates, L’Oréal Group’s sales rose +4.9%.
Sales by operational division and geographic zone
| 3rd quarter 2013 | At September 30, 2013 | |||||
| Growth | Growth | |||||
| €m | Like-for-like | Reported | €m | Like-for-like | Reported | |
| By operational division | ||||||
| Professional Products | 715.8 | 2.9% | -2.9% | 2,247.7 | 1.8% | -0.6% |
| Consumer Products | 2,600.2 | 3.4% | -2.0% | 8,323.2 | 5.3% | 2.8% |
| L'Oréal Luxe | 1,438.2 | 5.9% | 2.7% | 4,265.0 | 6.2% | 5.3% |
| Active Cosmetics | 356.0 | 8.5% | 3.1% | 1,263.1 | 8.0% | 5.6% |
| Cosmetics total | 5,110.3 | 4.4% | -0.5% | 16,099.0 | 5.3% | 3.1% |
| By geographic zone | ||||||
| Western Europe | 1,781.2 | 2.6% | 1.4% | 5,680.1 | 2.0% | 1.5% |
| North America | 1,313.6 | 0.6% | -2.7% | 4,056.8 | 3.8% | 3.4% |
| New Markets, of which: | 2,015.5 | 8.6% | -0.7% | 6,362.1 | 9.4% | 4.4% |
| Asia, Pacific | 1,053.8 | 8.2% | -1.2% | 3,294.0 | 8.0% | 3.0% |
| Latin America | 455.6 | 8.5% | -3.1% | 1,421.9 | 11.8% | 5.2% |
| Eastern Europe(1) | 380.9 | 7.6% | 1.1% | 1,260.8 | 9.3% | 6.3% |
| Africa, Middle East(1) | 125.1 | 15.4% | 8.1% | 385.3 | 13.1% | 8.2% |
| Cosmetics total | 5,110.3 | 4.4% | -0.5% | 16,099.0 | 5.3% | 3.1% |
| The Body Shop | 179.9 | 0.1% | -5.8% | 548.7 | 0.4% | -2.9% |
| Dermatology(2) | 184.9 | 0.0% | -3.1% | 565.4 | 0.2% | 1.1% |
| Group total | 5,475.1 | 4.1% | -0.8% | 17,213.2 | 4.9% | 2.9% |
(1) As of July 1, 2013, Turkey and Israel, which had previously been recorded under the Africa, Middle East zone, were transferred to the Eastern Europe zone. All figures for earlier periods have been restated to allow for this change.
(2) Group share, i.e. 50%.
1) Cosmetics sales
PROFESSIONAL PRODUCTS
- In the luxury haircare segment, Kérastase recorded another quarter of growth. The new Couture Styling range is confirming its success.
The good development of the haircare category is continuing, thanks to the successful hair oils and the roll-out of the Biolage Advanced range by Matrix in the United States.
In hair colourants, ODS2 technology - used in three of the Division's brands (L’Oréal Professionnel, Matrix and Redken) - is continuing its development. Essie, which is growing strongly, is strengthening its professional nailcare expert positioning thanks to the launch of Essie Gel in the United States. - In geographic terms, the Division is consolidating its positions in Western Europe and in the United States, in markets still affected by the lower number of salon visits. In the New Markets excluding Japan, all zones are continuing to grow, with particularly good figures in Russia, Brazil, South Korea, India, Indonesia and Africa, Middle East.
CONSUMER PRODUCTS
- The trends of all the Division's brands are favourable. L’Oréal Paris is maintaining its dynamics with its successful globalisation of Elvive. In facial skincare, the brand is accelerating its growth thanks to Revitalift Laser, Revitalift Miracle Blur and Age Perfect Cell Renewal.
Garnier is significantly reinforcing its positions in hair colourants, thanks to the success of Olia, now in the global roll-out phase, while in facial skincare the BB creams are continuing to recruit new consumers.
Maybelline is posting strong performances in the lipstick and nail varnish segments. - In Western Europe, the 3rd quarter was good for the Division. In North America, activity was affected by inventory adjustments by distributors, but the Division is continuing to improve its market shares, thanks in particular to L’Oréal Paris Advanced Haircare.
Brazil, China, Turkey and the Middle East all performed well.
L’ORÉAL LUXE
- One year after its launch, Lancôme is continuing to enjoy worldwide success with La Vie est Belle, and is strengthening its skincare sales with the renewal of Advanced Génifique and the launch in September of a particularly innovative product: Dreamtone, a pigmentation corrector.
Giorgio Armani is maintaining its growth dynamics thanks to the launch of its new women's fragrance, Sì. Yves Saint Laurent is accelerating in Asia with Vernis à Lèvres Rebel Nudes, and its new mascara, Volume Effet Faux Cils Baby Doll.
The three American brands Kiehl’s, Clarisonic and Urban Decay are growing very strongly across all continents. Amongst the designer fragrance brands, Viktor&Rolf is performing strongly worldwide thanks to the success of Flowerbomb and Spicebomb. Diesel is launching Loverdose Tattoo, and Polo Red by Ralph Lauren is a success. - Business remains lively in North America, in the New Markets, and in the Travel Retail channel, where L’Oréal Luxe is gaining market share.
ACTIVE COSMETICS
- Trends for the major brands are favourable: La Roche-Posay is recording double-digit growth, with good performances across all continents. Vichy is continuing its recovery, with the further development of its Idéalia franchise, boosted by the launch of Idéalia Life Serum. SkinCeuticals is continuing its global roll-out.
- Overall, the Division is continuing to gain market shares worldwide. The dynamics are particularly strong in Western Europe and Latin America.
Multi-division summary by geographic zone
WESTERN EUROPE
NORTH AMERICA
The Consumer Products Division is continuing to grow faster than the market, thanks to the successful launch of Advanced Hair Care by L’Oréal Paris, Olia by Garnier and Big Eyes by Maybelline. Nevertheless, the Division's performances have been affected by the slowdown in the market and by the increase in inventory reductions by some distributors. At L’Oréal Luxe, the trends of Kiehl’s, Urban Decay and Clarisonic are favourable, and Red by Ralph Lauren has become one of the Top 3 men's fragrances. In the Active Cosmetics Division, SkinCeuticals is confirming its success.
NEW MARKETS
- Asia, Pacific: At end-September, L’Oréal posted growth of +8.0% like-for-like and 3.0% based on reported figures. Excluding Japan, like-for-like growth reached +9.2%. The market is still declining in South Korea and is slowing, although still dynamic, in China, India and South-East Asia.
The Group is strengthening its positions thanks to the performances in the Consumer Products Division of Maybelline and L’Oréal Paris, which is accelerating in the facial skincare and haircare categories, particularly in China. At L’Oréal Luxe, growth is being driven by Lancôme, Kiehl’s, Giorgio Armani and the roll-out of Yves Saint Laurent and Clarisonic. Amongst the countries, Indonesia, Hong Kong, India and China are contributing to the good performance in this zone.
- Latin America: This zone posted growth of +11.8% like-for-like and +5.2% based on reported figures. Brazil's good dynamics are continuing, thanks to all the Divisions and the Garnier, Vichy and La Roche-Posay brands in particular. The zone’s sales dynamics remain positive, despite the impact of a slowdown in Mexico.
- Eastern Europe: The zone recorded scores of +9.3% like-for-like and +6.3% based on reported figures. In the Consumer Products Division, the hair colourants category is growing, thanks to the launch of Olia, along with make-up, thanks to Volume Million Lashes Excess mascara by L'Oréal Paris. The Professional Products Division is continuing to grow thanks to the conquest of new salons, the innovations of L’Oréal Professionnel and the success of Matrix in more affordable salons. L’Oréal Luxe meanwhile is benefitting from the good performances of Lancôme, Yves Saint Laurent and Giorgio Armani. Turkey, Russia and Ukraine are major contributors to growth in this zone.
- Africa, Middle East: At end-September, sales in this zone grew by +13.1% like-for-like and +8.2% based on reported figures. This increase was achieved thanks to the good performances of the Consumer Products Division, of L’Oréal Luxe and to the acceleration of the Active Cosmetics Division. The countries of the Middle East (Egypt, Pakistan, the countries of the Levant and Saudi Arabia) recorded strong growth rates and market share gains. The acquisition of the hygiene-beauty business of Interconsumer Products in Kenya led to a good acceleration of sales in the markets of Eastern Africa.
2) The Body Shop sales
New launches will take place in the 4th quarter, with the new bodycare range Honeymania, featuring community fair trade honey from Ethiopia, and the fragrance White Musk Smoky Rose.
The brand is continuing the global roll-out of its new "Pulse" store concept, and the development of its digital offering. The brand now has 22 e-commerce websites.
At September 30, 2013, The Body Shop had a total of 2,849 stores.
3) Galderma sales
Growth remains particularly solid in the New Markets, especially in Asia, Pacific, Latin America and Russia. In the United States, where the market remains extremely competitive, sales of prescription products are still impacted by more intense competition from generics. Epiduo (acne) is however recording good growth figures, while the FDA has approved Mirvaso for the treatment of the erythema associated with rosacea. The product was immediately launched on the market.
The aesthetic and corrective medical solutions are also recording solid advances, driven by the strong growth of Azzalure (muscle relaxant) and Restylane (dermal filler).
B – Important events during the period 7/1/13 to 9/30/13
- On August 15, 2013, L’Oréal announced its intention to acquire all the shares of Magic Holdings Limited, a Chinese company listed on the Hong Kong Stock Exchange, specialising in cosmetic facial masks.*
- On September 20, 2013, L’Oréal India announced the acquisition of Cheryl’s Cosmeceuticals, a Mumbai-based company operating in professional skincare products for beauty salons.
C – Post-closing events
- On October 15, 2013, L’Oréal announced the acquisition by The Body Shop of a majority stake in Emporio Body Store in Brazil.
- On October 17, 2013, L’Oréal announced that the Japanese group Shiseido had granted it exclusive negotiation rights for the acquisition of the Decléor and Carita brands.
- On October 23, 2013, L’Oréal announced the sustainability commitments the Group has set itself for 2020: "Sharing Beauty with All".
"This news release does not constitute an offer to sell, or a solicitation of an offer to buy L'Oréal shares. If you wish to obtain more comprehensive information about L'Oréal, please refer to the public documents registered in France with the Autorité des Marchés Financiers, also available in English on our Internet site www.loreal-finance.com.
This news release may contain some forward-looking statements. Although the Company considers that these statements are based on reasonable hypotheses at the date of publication of this release, they are by their nature subject to risks and uncertainties which could cause actual results to differ materially from those indicated or projected in these statements."
This is a free translation into English of the press release of the Sales at September 30, 2013 issued in the French language and is provided solely for the convenience of English speaking readers. In case of discrepancy, the French version prevails.
Contacts at L'Oréal
Individual shareholders and market authorities
Mr Jean Régis CAROF
Tel.: +33 1 47 56 83 02
[email protected]
Financial analysts and institutional investors
Mrs Françoise LAUVIN
Tel.: +33 1 47 56 86 82
[email protected]
Journalists
Mrs Stephanie CARSON-PARKER
Tel.: +33 1 47 56 76 71
[email protected]
Switchboard
Tel.: +33 1 47 56 70 00
For more information, please contact your bank, broker or financial institution (I.S.I.N. code: FR0000120321), and consult your usual newspapers, and the Internet site for shareholders and investors, www.loreal-finance.com, or call +33 1 40 14 80 50.
D – Appendix
L'Oréal group sales 2012/2013 (€ millions)
| 2012 | 2013 | |
| First quarter: | ||
| Cosmetics | 5,309 | 5,593 |
| The Body Shop | 180 | 182 |
| Dermatology | 154 | 157 |
| First quarter total | 5,643 | 5,932 |
| Second quarter: | ||
| Cosmetics | 5,162 | 5,396 |
| The Body Shop | 194 | 187 |
| Dermatology | 215 | 224 |
| Second quarter total | 5,570 | 5,806 |
| First half: | ||
| Cosmetics | 10,471 | 10,989 |
| The Body Shop | 374 | 369 |
| Dermatology | 368 | 381 |
| First half total | 11,213 | 11,738 |
| Third quarter: | ||
| Cosmetics | 5,137 | 5,110 |
| The Body Shop | 191 | 180 |
| Dermatology | 191 | 185 |
| Third quarter total | 5,519 | 5,475 |
| Nine months: | ||
| Cosmetics | 15,608 | 16,099 |
| The Body Shop | 565 | 549 |
| Dermatology | 559 | 565 |
| Nine months total | 16,732 | 17,213 |
| Fourth quarter: | ||
| Cosmetics | 5,204 | |
| The Body Shop | 290 | |
| Dermatology | 236 | |
| Fourth quarter total | 5,730 | |
| Full year: | ||
| Cosmetics | 20,812 | |
| The Body Shop | 855 | |
| Dermatology | 796 | |
| Full year total | 22,463 |
