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Jean-Paul Agon: “2012 was a good year for L’Oréal on many fronts. The group achieved strong sales growth, and once again demonstrated its ability to outperform the beauty market, and to gain market share.” |
FRANCE. L’Oréal recorded sales of €22.46 billion for the year ended 31 December 2012, an increase of +10.4%. On a like-for-like basis, the rise was +5.5%. Operating profit grew +12.3% to €3.69 billion, while net profit after non-controlling interests rose +17.6%. Net earnings per share were up +13.6% at €4.91.
L’Oréal Chairman and CEO Jean-Paul Agon commented: “2012 was a good year for L’Oréal on many fronts. The group achieved strong sales growth, and once again demonstrated its ability to outperform the beauty market, and to gain market share, even in the more difficult markets of Western Europe and the US. 2012 was also a very good vintage in terms of innovations – amongst the most remarkable in the industry – in each of our Divisions and major business segments.”
He added: “2012 also marked a milestone in the acceleration of the Group’s internationalisation, as the “New Markets” became the number one geographic zone. Lastly, the profits and cash flow have grown very strongly, reaching record levels, and confirming the power of our business model.”
Agon concluded: “In view of these successes and improvements, we are facing the future with optimism and confidence. Confidence in the positive dynamics of our market. Confidence in the strength of our “Beauty for all” mission, in our “universalisation” strategy, and in our ambition to conquer one billion new consumers. And finally, confidence in the fundamentals of L’Oréal: its research, its ability to innovate and create high quality products, its outstanding portfolio of brands, its business model, which creates both value and cash flow, and lastly the unique strength of its teams.
“The Group is thus well prepared to outperform the market in 2013, and to achieve another year of sales and profit growth.”
In 2012, L’Oréal Luxe sales grew by +8.3% like-for-like and by +16% based on reported figures. In each of the four quarters, the Division significantly outperformed market growth, thanks especially to the dynamism of Lancôme, and good performances in Asia and North America, according to the group.
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The strategic facial skincare category is growing strongly, L’Oréal noted, with the success of Lancôme backed up by the powerful worldwide growth of Kiehl’s, and the growth of Clarisonic in the US. The Division outperformed the market in all the major zones and in travel retail, although in Asia Pacific the group acknowledged a second-half slowdown within the selective channel, particularly in South Korea and in travel retail.
Nonetheless, for the region L’Oréal achieved annual growth of +9.6% like-for-like and +18.4% based on reported figures, and strengthened its position thanks to initiatives by Lancôme, Kiehl’s and Yves Saint Laurent. In China, the Group grew faster than the market, especially with L’Oréal Luxe, Maybelline and L’Oréal Paris Men Expert.
In the fourth quarter, L’Oréal’s sales grew +9% to €5.73 billion (+5.3% on a like-for-like basis).
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Speaking in more depth about the group’s luxury division during an analysts call, President L’Oréal Luxe Nicolas Hiéronimus described 2012 as a “vintage year” for the selective market. “Geographically, we posted strong growth in revenue in North America, in the New Markets, and also reported gains in market share in Europe in a quieter business environment,” he confirmed. “L’Oréal Luxe experienced a year of double-digit growth in China, in the travel retail sector, where we strengthened our leadership, and also in e-commerce.”
Hiéronimus identified skincare and feminine fragrance as two key growth levers for the luxury division in 2012, and paid tribute to the development of the travel retail channel. “We’ve worked very hard on the theatricalisation of our brands and our product launches,” he explained. “This upturn in quality of sales outlets is also evident in our Travel Retail business, a privileged channel in selective retailing. Today, airports have become real luxury shopping malls and our brands have been showing what they do best to global shoppers from China, Russia, Brazil and the Emirates.”
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Hiéronimus was upbeat about prospects for 2013, predicting that fragrance would ride high on the momentum of last year’s launches, and enjoy a boost from a “new highlight moment” in the second half. “Skincare will once again be the powerhouse driving our growth,” he declared. “From the first quarter, we’re launching major initiatives across our brands.” Make-up, which enjoyed a “speed-up in revenue” in 2012, would continue to advance, Hiéronimus promised, boosted by the group’s latest Urban Decay acquisition, described as the “link that was missing in L’Oréal Luxe beauty”.
