L'Oréal Finance : First-half 2016 results Aller au contenu principal

Access the audio webcast replay and slideshow of the conference call held on Friday, July 29, 2016.


SALES: 12.89 billion euros, i.e. +4.2% like-for-like,
+4.5% at constant exchange rates and +0.6% based on reported figures

OPERATING MARGIN: 18.3%, +20 basis points

EARNINGS PER SHARE(1): 3.59 euros 

  • Sales growth in all Divisions and geographic Zones
  • Consumer Products Division acceleration confirmed
  • Good resilient growth at L'Oréal Luxe and Active Cosmetics
  • Growth accelerates in North America and in the New Markets


Commenting on the figures, Mr Jean-Paul Agon, Chairman and Chief Executive Officer of L'Oréal, said:


"At the end of June, the Group is confirming its growth momentum, with an increase in sales across all Divisions and all geographic Zones.

As announced, the Consumer Products Division is accelerating and outperforming its market, driven by its conquest initiatives in make-up and haircare.
L'Oréal Luxe, in a market that remains solid, is continuing to deliver sustained growth by capitalising on its unique brand portfolio and by maintaining its innovation drive. The Active Cosmetics Division, in a dermocosmetics market that has slowed due to an unfavourable season, is developing its major product ranges and continues to increase its market share. The Professional Products Division is pursuing its initiatives to actively promote all professional beauty segments, in a sector that is gradually improving.


As for the geographic Zones, North America is accelerating as expected and robust growth in the New Markets is enabling us to strengthen our positions. Western Europe is being held back by a very difficult market in France.


In the first half, e-commerce sales(2) rose by +33%, accounting for some 6% of total sales. The Group is at the cutting edge of online beauty, and is accentuating its digital leadership, particularly in make-up, a category that is accelerating strongly, driven worldwide by the "Millennials" generation.


Our results are of good quality, with a significant improvement in gross profit and sustained investments in both Research and Innovation and business drivers, supporting the Universalisation of our brands.
The outstanding performances of our recent acquisitions, NYX Professional Makeup, Urban Decay and Niely, are making a very positive contribution to the Group's growth. On the other hand, the results of Magic and Clarisonic were below our expectations, and have led us to record a goodwill impairment of 213 million and 234 million euros respectively on June 30, 2016. The impairment is a non-recurring charge and has no impact on the cash situation. The strategic relevance of these two brands remains unchanged.


In an environment that is still volatile and uncertain, particularly on the monetary front, L'Oréal's strength, today more than ever, lies in its balanced business model. The first half reinforces our confidence in the Group's ability to outperform its market, and to achieve another year of sales and profit growth in 2016."

(1) Diluted earnings per share, after non-controlling interests, excluding non-recurring items.
(2) Sales achieved on our brands' own websites + estimated sales achieved by our brands corresponding to sales through our retailers' websites (non-audited data); like-for-like growth.

A – First-half 2016 sales

Like-for-like, i.e. based on a comparable structure and identical exchange rates, sales growth was +4.2%.
The net impact of changes in the scope of consolidation was +0.3%.
Growth at constant exchange rates was +4.5%.
Currency fluctuations had a negative impact of -3.9%. If the exchange rates at June 30, 2016, i.e. €1 = $1.1102, are extrapolated until December 31, 2016 the impact of currency fluctuations on sales would be approximately -2.9% for the whole of 2016.
Based on reported figures, the Group's sales at June 30, 2016 amounted to 12.89 billion euros, up by +0.6%. 

Sales by operational Division and geographic Zone

  2nd quarter 2016   1st half 2016
  Growth   Growth
  €m Like-for-like Reported €m Like-for-like Reported
By operational Division            
Professional Products 870.1 1.8% -2.0% 1,724.4 2.2% -0.9%
Consumer Products 3,048.9 4.7% -1.1% 6,154.9 4.3% -0.1%
L'Oréal Luxe 1,763.9 5.6% 1.8% 3,595.3 5.6% 3.1%
Active Cosmetics 460.7 5.7% 0.3% 1,021.4 5.0% 0.3%
Cosmetics Divisions total 6,143.6 4.6% -0.3% 12,496.0 4.4% 0.7%
By geographic zone            
Western Europe 2,056.9 1.4% -0.2% 4,184.4 1.7% 0.6%
North America 1,744.1 4.9% 2.3% 3,460.0 4.6% 4.0%
New Markets, of which: 2,342.6 7.4% -2.3% 4,851.6 6.8% -1.4%
Asia, Pacific 1,305.3 4.8% -0.5% 2,815.8 4.6% 1.0%
Latin America 454.3 13.3% -7.3% 863.3 10.8% -9.1%
Eastern Europe 383.0 8.1% -5.8% 773.7 8.9% -3.7%
Africa, Middle East 199.9 11.4% 5.2% 398.8 9.7% 5.3%
Cosmetics Divisions total 6,143.6 4.6% -0.3% 12,496.0 4.4% 0.7%
The Body Shop 198.5 -3.2% -9.6% 398.6 -0.6% -3.2%
Group total 6,342.2 4.3% -0.6% 12,894.6 4.2% 0.6%


At the end of June, the Professional Products Division posted growth of +2.2% like-for-like and
-0.9% based on reported figures.

  • The professional products market is continuing to show signs of gradual recovery observed since the end of 2015.
    In geographic terms, sales are resilient in Western Europe, Eastern Europe and the Africa, Middle East Zone. India, Russia and the United Kingdom are the top contributors to growth. In North America, SalonCentric is experiencing a temporary slowdown.
  • Hair colour, the number one contributor to growth, is maintaining its momentum driven, on the one hand, by the solid core franchises Shades Eq at Redken, SoColor Beauty at Matrix, Inoa and Dia at L'Oréal Professionnel and, on the other hand, the success of the Blond Studio and Hair Touch Up launches at L'Oréal Professionnel. Haircare is continuing to benefit from the resilience of Redken and Matrix. In professional skincare, Decléor is growing strongly in Western Europe.


In the second quarter, the Division is continuing to accelerate with sales at +4.7% like-for-like after a first quarter at +3.9%. In the first half, the Consumer Products Division recorded growth of +4.3% like-for-like and -0.1% based on reported figures.  

  • The Division's sales are growing in all Zones, with strong expansion in North America and the New Markets. In Western Europe, although the situation in France remains very difficult, the Division is benefitting from dynamic trends in the United Kingdom and Spain.
  • The Division is successfully implementing its key strategic choices:
    Make-up, driven by the impressive start made in internationalising NYX Professional Makeup, the growth of Maybelline and L'Oréal Makeup Designer Paris, and the very good momentum of Essie.
    Haircare, with the worldwide roll-out of Ultra Doux, positioned on the natural products trend, and the launch of Elvive Extraordinary Clay in Western Europe.

    Skincare is boosted by the success of Micellar Cleansing Waters by Garnier and the innovative Age Perfect Golden Age by L'Oréal Paris.


L'Oréal Luxe posted growth of +5.6% like-for-like and +3.1% based on reported figures. The Division is continuing to expand, thanks in particular to dynamic trends in make-up. 

  • L'Oréal Luxe is advancing across all Zones, despite growth edging down in Western Europe, affected by the difficulties in Travel Retail and in France. The Division is continuing to deliver good performances in China, Japan, North America and Eastern Europe.
  • Yves Saint Laurent is continuing its strong expansion, fuelled by the very strong performances in make-up especially in Asia, and in fragrances, by the success of Black Opium and the launch of Mon Paris.
    Urban Decay is at the forefront of the make-up boom with the launch Vice Lipstick.
    Giorgio Armani is posting double-digit growth thanks to the sharp rise in make-up, with products such as Lip Maestro and the men's fragrance Code Profumo.
    Lancôme is performing well and benefitting from the excellent start made by Juicy Shaker, the growing success of « La vie est belle » and the launch of Énergie de Vie, which targets "Millennials".
    Kiehl's is continuing its international expansion.
    L'Oréal Luxe is extending its alternative perfume range through the acquisition of the perfume house Atelier Cologne.


The Active Cosmetics Division reinforced its position in the second quarter of 2016. At the end of June, sales were up by +5.0% like-for-like and by +0.3% based on reported figures.

  • All the Zones are contributing to the Division's good sales performance, except in Western Europe, where the market was held back by an unfavourable season.
  • La Roche-Posay is maintaining its excellent momentum, supported by its franchises Cicaplast with the launch of Cicaplast Baume B5 SPF50, and Toleriane with the launch of Toleriane Ultra Nuit.
    Vichy is benefitting from its Neovadiol franchise and its spa waters.
    SkinCeuticals is posting outstanding performances, particularly in Asia and Eastern Europe, and the success of its Triple Lipid Restore launch is continuing.

Multi-division summary by geographic Zone


At the end of June, the Zone posted growth of +1.7% like-for-like and +0.6% based on reported figures.
Business showed mixed momentum, both in terms of the markets and sales figures: performance is good in all markets except France, which remains difficult in all distribution channels.
In the highly dynamic make-up category, NYX Professional Makeup is making a very promising start.
E-commerce sales are continuing to grow very quickly. 


L'Oréal recorded growth of +4.6% like-for-like and +4.0% based on reported figures. The Consumer Products Division is outperforming the market with strong increases for NYX Professional Makeup, Maybelline and Garnier, whose Whole Blends (Ultra Doux) launch is making a good start. Despite difficulties at Clarisonic, L'Oréal Luxe is posting good performances, driven by the quality of its brand portfolio: Urban Decay, Yves Saint Laurent and Kiehl's are invigorating their respective categories.


  • Asia, Pacific: L'Oréal's growth amounted to +4.6% like-for-like and +1.0% based on reported figures. Thanks to growth, which remains strong, particularly in China, L'Oréal Luxe is maintaining its momentum, supported by the good performances of the Yves Saint Laurent and Giorgio Armani brands. The Consumer Products Division is being driven by the launch of Ultra Doux in China and India, and by the roll-out of the Garnier brand in Southern Asia. Growth is being fuelled by the vitality of Southern Asia; Northern Asia however is still being held back by a less dynamic market, particularly in Hong Kong, and by the difficulties of the Magic brand in China. The Active Cosmetics Division is growing strongly thanks to the expansion of La Roche-Posay.
  • Latin America: The Zone recorded double-digit growth at +10.8% like-for-like and -9.1% based on reported figures. Growth was double-digit in Spanish-speaking America, boosted by good performances from all the Consumer Products Division brands, especially Maybelline, L'Oréal Paris and Vogue. Brazil is overcoming the effects of the IPI fiscal reform in 2015, and is returning to growth with accelerating sales for the Niely and La Roche-Posay brands. 
  • Eastern Europe: The Zone posted growth of +8.9% like-for-like and -3.7% based on reported figures. The Professional Products and L'Oréal Luxe Divisions are continuing to record strong growth, while the Consumer Products Division is continuing to grow, particularly in Russia, but is slowing in Turkey. Overall, these three Divisions are gaining market share across the whole Zone. Russia, Ukraine and Kazakhstan are the growth drivers. Business is also sustained in Poland, the Czech Republic and Hungary. 
  • Africa, Middle East: Growth amounted to +9.7% like-for-like and +5.3% based on reported figures. In a slowing market, the Middle East is posting solid growth, driven by Egypt, Pakistan and to a lesser extent the Gulf states. All the Divisions are winning market share.
    Meanwhile in South Africa, the launch of Ultimate Blends (Ultra Doux) by Garnier has led to promising initial results. 



At the end of June 2016, The Body Shop recorded sales growth of -0.6% like-for-like and -3.2% based on reported figures. Expansion is continuing in the main markets, such as the United Kingdom, Australia and Canada, while the economic slowdown in Hong Kong and Saudi Arabia is having an impact on business. At June 30, 2016, the brand is available in 3,047 sales outlets.

B - Important events during the period 04/01/16 to 06/30/16

  • On April 18, 2016, L'Oréal announced the appointment of Mr Alexis Perakis-Valat as President Consumer Products Division, to replace Mr Marc Menesguen who is to retire at the start of 2017. Mr Jochen Zaumseil will replace Mr Perakis-Valat as Executive Vice-President Asia, Pacific Zone. Mr Vianney Derville will replace Mr Zaumseil as Executive Vice-President Western Europe Zone. The appointments are effective from September 1, 2016.
  • On April 20, 2016, the Annual General Meeting of L'Oréal shareholders appointed two new Directors: Mrs Béatrice Guillaume-Grabisch and Mrs Eileen Naughton; and renewed the tenure as Director of Mr Jean-Pierre Meyers, Mr Jean-Victor Meyers and Mr Bernard Kasriel.
  • On April 20, 2016, the Board of Directors' meeting, held at the close of the Annual General Meeting, decided, pursuant to the authorisation voted by the Annual General Meeting on the same day, on the cancellation of 3,202,500 shares acquired within the scope of the share buyback programme decided by the Board of Directors on February 11, 2016. The shares were cancelled on June 30, 2016. The share capital of L'Oréal as of June 30, 2016, amounted to 112,182,708 euros, divided into 560,913,540 shares with a par value of 0.2 euro each.
  • On June 30, 2016, L'Oréal announced the signing of an agreement to acquire Atelier Cologne, which specialises in niche perfumery and is sold in selected retailers. This brand will complement the L'Oréal Luxe brand portfolio. This acquisition was completed on July 25, 2016.

C - Events that have occurred since 06/30/16

  • On July 13, 2016, L'Oréal made a firm offer to the Rivadis group for the acquisition of Société des Thermes de Saint-Gervais-les-Bains and the licence of the Saint-Gervais Mont Blanc brand. Saint-Gervais Mont Blanc products, with Mont Blanc spa water, cover a wide range of face and body care and protection needs.


  • On July 22, 2016, L'Oréal announced the signing of a definitive agreement to acquire IT Cosmetics, one of the fastest growing prestige beauty brands in the United States.


D – First-half 2016 results

The half-year consolidated accounts have undergone a limited examination by the Statutory Auditors.

1) Operating profitability at 18.3% of sales

Consolidated profit and loss account: from sales to operating profit.

In € million 06/30/15 As % of sales 12/31/15 As % of sales 06/30/16 As % of sales Change H1-2016 vs. H1-2015
Sales  12,818.9 100.0%  25,257.4 100.0%  12,894.6 100.0% +0.6%
Cost of sales  -3,630.3 28.3%  -7,277.4 28.8%  -3,561.2 27.6%  
Gross Profit  9,188.6 71.7%  17,980.0 71.2%  9,333.4 72.4% +1.6%
R&D expenses  -379.7 3.0%  -794,1 3.1%  -414.2 3.2%  
Advertising and promotion expenses  -3,753.3 29.3%  -7,359.6 29.1%  -3,790.9 29.4%  
Selling, general and administrative expenses  -2,732.6 21.3%  -5,438.6 21.5%  -2,764.7 21.4%  
Operating profit  2,323.0 18.1%  4,387.7 17.4%  2,363.6 18.3% +1.7%


Gross profit, at 9,333 million euros, has come out at 72.4% of sales, representing an improvement of 70 basis points compared with the first half of 2015. 

Research and Development expenses, at 414 million euros, have risen by +9.1%, representing 3.2% of sales. 

Advertising and promotion expenses have come out at 29.4% of sales, a level slightly above the first half of 2015. 

Selling, general and administrative expenses are at a slightly higher level, by 10 basis points, compared with the first half of 2015. 

Overall, operating profit, at 2,364 million euros, increased by 20 basis points and amounted to 18.3% of sales. 

2) Operating profit by operational Division


  06/30/15 12/31/15     06/30/16
  €m % of sales €m % of sales €m % of sales
By operational Division            
Professional Products  332.0 19.1%  678.5 20.0%  338.2 19.6%
Consumer Products  1,313.1 21.3%  2,385.8 20.1%  1,306.8 21.2%
L'Oréal Luxe  716.0 20.5%  1,497.5 20.7%  767.3 21.3%
Active Cosmetics 280.2 27.5%  414.7 22.8%  283.3 27.7%
Total Divisions before non-allocated  2,641.3 21.3%  4,976.4 20.5%  2,695.5 21.6%
Non-allocated(1)  -311.1 -2.5%  -643.6 -2.6%  -309.8 -2.5%
Total Divisions after non-allocated  2,330.2 18.8%  4,332.8 17.8%  2,385.7 19.1%
The Body Shop  -7.2 -1.8%  +54.8 5.7%  -22.2 -5.6%
Group  2,323.0 18.1%  4,387.7 17.4%  2,363.6 18.3%
(1) Non-allocated expenses = Central Group expenses, fundamental research expenses, stock option and free grant of shares expenses and miscellaneous items. As a % of total Divisions sales.

The profitability of the Professional Products Division has improved by 50 basis points, from 19.1% to 19.6%. 

The Consumer Products Division's profitability slipped from 21.3% to 21.2%.

L'Oréal Luxe was the Division with the strongest profitability improvement, with an increase of 80 basis points to 21.3%. 

The Active Cosmetics Division, with a profitability of 27.7%, achieved an improvement of 20 basis points. 

As for The Body Shop, the first half is never significant in profitability terms. The negative figure in the first half reflects difficulties in certain major markets, such as Hong Kong and Saudi Arabia, along with the investment efforts made to reaccelerate the brand. 

3) Net profit 

Consolidated profit and loss account: from operating profit to net profit excluding non-recurring items.

In € million 06/30/15 12/31/15 06/30/16 Change H1-2016 vs. H1-2015
Operating profit  2,323.0  4,387.7  2,363.6 +1.7%
Financial revenues and expenses excluding dividends received  -9.8  -13.8  1.8  
Sanofi dividends  336.9  336.9  346.5  
Profit before tax and associates excluding non-recurring items  2,650.1  4,710.8  2,711.9  +2.3%
Income tax excluding non-recurring items  -692.1  -1,219.7  -684.1  
Net profit excluding non-recurring items of equity consolidated companies  -  -  -0.1  
Non-controlling interests  -0.6  -1.3  -2.4  
Net profit excluding non-recurring items, after non-controlling interests(1)  1,957.3  3,489.8  2,025.4  +3.5%
Net EPS(2) (€)  3.47  6.18  3.59 +3.4%
Net profit after non-controlling interests  1,882.6  3,297.4  1,497.5  
Diluted earnings per share after non-controlling interests (€)  3.34  5.84  2.62  
Diluted average number of shares  564,094,688  564,891,388  564,258,226  
(1) Net profit excluding non-recurring items after non-controlling interests does not include capital gains and losses on disposals of long-term assets, impairment of assets, restructuring costs, as well as competition litigation and tax effects.
(2) Diluted earnings per share, attributable to owners of the company, excluding non-recurring items.

Overall finance costs were close to zero. 

Sanofi dividends amounted to 346 million euros. 

Income tax excluding non-recurring items amounted to 684 million euros, i.e. a tax rate of 25.2%, slightly below that of the first half of 2015, which was 26.1%. 

Net profit excluding non-recurring items, after non-controlling interests, amounted to 2,025 million euros, up by +3.5% compared with June 30, 2015. The non-recurring items consist primarily of the goodwill impairment for the Clarisonic and Magic brands, with respective amounts of 234 million and 213 million euros. The recent performances of these two brands have been below expectations, resulting in these accounting entries which have no impact on the cash situation. The strategic relevance of these two brands remains unchanged. 

Net EPS, at 3.59 euros, has risen by +3.4% compared with the first half of 2015. 

Net profit after non-controlling interests amounted to 1,479 million euros.

4) Operating cash flow and balance sheet

Gross cash flow amounted to 2,467 million euros, up by +4.1% compared with the first half of 2015. 

The change in working capital amounted to 545 million euros. As is the case in the first half every year, it increased markedly, particularly because of the impact of the seasonality of part of our business on trade receivables. 

Investments, at 596 million euros, represented 4.6% of sales. 

Operating cash flow, at 1,325 million euros, was up by +27.2%. 

After payment of the dividend and share buybacks, the residual cash flow has come out at -923 million euros. 

At June 30, 2016, net debt amounted to 344 million euros, compared with a debt of 1,394 million at June 30, 2015 and net cash of 618 million euros at December 31, 2015. 

Shareholders' equity amounted to 22 billion euros.


"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 a free translation into English of the First-half 2016 results news release 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] 
Tel.: +33 1 47 56 76 71
[email protected]

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.

E – Appendix

L'Oréal group sales 2015/2016 (€ millions)


  2015 2016
First quarter:    
Cosmetics Divisions 6,243.9 6,352.4
The Body Shop 192.4 200.1
First quarter total 6,436.3 6,552.4
Second quarter:    
Cosmetics Divisions 6,163.1 6,143.6
The Body Shop 219.5 198.5
Second quarter total 6,382.6 6,342.2
First half:    
Cosmetics Divisions 12,407.0 12,496.0 
The Body Shop 411.9 398.6 
First half total 12,818.9 12,894.6 
Third quarter:    
Cosmetics Divisions 5,725.1  
The Body Shop 212.5  
Third quarter total 5,937.5  
Nine months:    
Cosmetics Divisions 18,132.1  
The Body Shop 624.3  
Nine months total 18,756.4  
Fourth quarter:    
Cosmetics Divisions 6,158.1  
The Body Shop 342.9  
Fourth quarter total 6,501.0  
Full year:    
Cosmetics Divisions 24,290.2  
The Body Shop 967.2  
Full year total 25,257.4