A very solid first quarter
Sales: 5.93 billion euros+6.5% excluding currency fluctuationsÂ
+5.1% based on reported figuresÂ
Strong growth in the Consumer Products, L'OrÃ©al Luxe and Active Cosmetics divisionsWeakness of the Professional Products marketNew records for market shares in Western Europe and North AmericaSustained dynamics in the New MarketsConfidence in another year of sales and profit growthÂ
Commenting on these figures, Mr Jean-Paul Agon, Chairman and CEO of L'OrÃ©al, said:Â
"L'OrÃ©al has made a solid start to the year, with good organic growth, along with really significant market share gains.
The Consumer Products, L'OrÃ©al Luxe and Active Cosmetics divisions are growing strongly, driven by major innovations such as Olia by Garnier, L'OrÃ©al Paris Advanced Haircare, La Vie est Belle by LancÃ´me, or IdÃ©alia by Vichy. All our brands are on the offensive, and this has enabled the group to post new records for market shares, especially in Western Europe and North America. Growth trends in the New Markets are homogeneous and sustained. The Professional Products Division meanwhile is still being held back by the very difficult market context, particularly in Southern Europe.Â
These strategic advances, together with the quality of initiatives across all divisions, both in developed countries and the New Markets, make us confident in our ability to outperform the market in 2013, and to achieve another year of growth in both sales and profits."
A â€“ First quarter 2013 sales
Like-for-like, i.e. based on a comparable structure and identical exchange rates, the sales growth of the L'OrÃ©al group was +5.5%.
The net impact of changes in consolidation was +1.0%.
Currency fluctuations had a negative impact of -1.4%.
Growth at constant exchange rates was +6.5%. If end of March current exchange rates (â‚¬1 at $1.2813) are extrapolated up to December 31, the impact of currency fluctuations would be -1.0% for the whole of 2013.
Based on reported figures, the group's sales at March 31, 2013 amounted to 5.932 billion euros, an increase of +5.1%.
Sales by operational division and geographic zone
|â‚¬ million||1st quarter 2012||1st quarter 2013||Like-for-like||Reported|
|By geographic zone||Â||Â||Â||Â|
|New Markets, of which:||2,091.7||2,231.1||9.4%||6.7%|
|- Asia, Pacific||1,124.3||1,188.4||7.7%||5.7%|
|- Latin America||433.5||458.7||11.8%||5.8%|
|- Eastern Europe||360.0||389.7||9.2%||8.2%|
|- Africa, Middle East||173.8||194.3||15.0%||11.8%|
|The Body Shop||180.4||181.9||1.8%||0.8%|
(1) Group share, i.e. 50%.
1) Cosmetics sales
At end-March, the Professional Products Division is stable in like-for-like terms, posting -0.4% based on reported figures. Markets in mature countries remain difficult, particularly in Southern Europe, and salon visits in the United States have contracted. The dynamic trend of the New Markets is continuing.
The luxury haircare segment remains buoyant, and is reflected by the growth at KÃ©rastase, bolstered by the launches of Densifique, the hair density activator with StemoxydineÂ®, and Initialiste hair beauty serum.
In the hair colourant category, the worldwide roll-out of ODS technology is continuing with INOA SuprÃªme by L'OrÃ©al Professionnel, ColorInsiderÂ by Matrix and Chromatics Beyond Cover by Redken. The accessibly priced hair colourant Socolor by Matrix is being rolled out in Asia.
The division, historically exposed to mature markets, is above all feeling the effects of economic sluggishness in Italy, Spain and Portugal, with a very sharp fall in salon visits. In the New Markets, the division is strengthening its positions in Russia, and is growing strongly in India, Indonesia and Africa-Middle East.
In the first quarter, the Consumer Products Division achieved growth of +6.5% like-for-like and +5.5% based on reported figures, driven by the success of its major product initiatives and significant market share gains in key countries.
The L'OrÃ©al Paris brand made a good start to the year, boosted by major launches such as PrÃ©fÃ©rence Mousse Absolue hair colourant, Age Perfect Renaissance Cellulaire skincare, and - in the United States - the L'OrÃ©al Advanced Haircare range. Garnier has made a real breakthrough thanks to Olia hair colourant with ODS, and its worldwide roll-out is under way. Maybelline meanwhile has launched Volume Express Rocket mascara.
All these innovations enabled the division to make historic breakthroughs in haircare, hair colourants and facial skincare, both in Western Europe and North America. In the New Markets, growth is improving, thanks especially to the new dynamism in Brazil and Russia.
At end-March, L'OrÃ©al Luxe has advanced by +7.2% like-for-like and +8.1% based on reported figures, including the first time consolidation of the Urban Decay brand. L'OrÃ©al Luxe is growing faster than the market, thanks to good growth trends for the major brands in the portfolio, and its performances in the New Markets and in North America.
The division's four top brands - LancÃ´me, Giorgio Armani, Yves Saint Laurent and Kiehl's - have been highly dynamic at the start of this year. In addition to the resounding success of La Vie est Belle, Manifesto, Rouge Pur Couture lipstick and Maestro foundation, the quarter was marked by new initiatives such as RÃ©nergie Multi-lift Reviva-Plasma and Teint Visionnaire by LancÃ´me, Eau pour Homme and Eau de Nuit by Giorgio Armani, along with Rouge VoluptÃ© Shine and Forever Light Creator by Yves Saint Laurent. Urban Decay and Clarisonic posted very good growth over the quarter.
While Western Europe remains lacklustre, the United States, China and the Gulf States are growing strongly.
In the first quarter, the sales of the Active Cosmetics Division clearly accelerated at +7.2% like-for-like (+6.2% based on reported figures), thanks to the recovery of Vichy and the continuing strong growth of La Roche-Posay.
Vichy started the year with very good performances, especially in haircare (NeogÃ©nic) and anti-ageing (LiftActiv Eyes and Lashes Serum, and NÃ©ovadiol Magistral). La Roche-Posay continues to record double-digit growth, even in Europe. In addition, SkinCeuticals is continuing its international roll-out with a strong focus on the bodycare segment.
The first part of the year has been marked by a very good start in Western Europe, where the division wins market share, even in Southern Europe. Trends in North America and South America remain robust.
Multi-division summary by geographic zone
The European context is still adversely affected by declining markets in the Southern countries, especially in hair salons and the selective market. Thanks to strong market share gains by the Consumer Products and Active Cosmetics divisions, good growth in Germany and France, and a turnaround in Spain, L'OrÃ©al recorded growth of +1.7% like-for-like and +1.9% based on reported figures.
L'OrÃ©al posted growth of +6.3% like-for-like and +8.5% based on reported figures. The good results are continuing in the Consumer Products Division, thanks to the launches of Advanced Haircare and Miracle Blur by L'OrÃ©al Paris, and Olia by Garnier. L'OrÃ©al Luxe also produced a solid performance, thanks to Clarisonic, Kiehl's, Yves Saint Laurent and Viktor&Rolf, together with Urban Decay, which was consolidated for the first time. Vichy and SkinCeuticals made a good start to the year in Active Cosmetics.
Asia-Pacific: L'OrÃ©al recorded growth of +7.7% like-for-like and +5.7% based on reported figures. If Japan is excluded, like-for-like growth came out at +8.9%.
The group is continuing to gain market share, thanks especially to L'OrÃ©al Luxe. There are contrasting trends in markets in this region: South Korea is strongly negative, but China, India and the ASEAN countries remain buoyant.
At L'OrÃ©al Luxe the first quarter reflected continuing strong growth in China. The Consumer Products Division posted, with L'OrÃ©al Paris, good performances in China and India, and proved dynamic in Indonesia and Thailand.
Eastern Europe: The zone posted growth of +9.2% like-for-like and +8.2% based on reported figures. Growth in this zone is driven by Russia and Ukraine, while the other countries, such as Poland, are still sluggish. The Consumer Products Division's turnaround is continuing, the Professional Products Division is actively pursuing its conquest of hair salons, and L'OrÃ©al Luxe has made a good start to the year.
Latin America: L'OrÃ©al has started the year with an increase in sales of +11.8% like-for-like and +5.8% based on reported figures. Brazil is accelerating, driven by market share gains in haircare, thanks to ElsÃ¨ve at L'OrÃ©al Paris, and in hair colourants, thanks to Mini Kit Nutrisse Cor Intensa by Garnier. Market share is also increasing in Mexico and Chile. The Active Cosmetics division is continuing to grow very strongly in this zone.
Africa-Middle East: This zone made a solid start to 2013 with growth of +15.0% like-for-like and +11.8% based on reported figures. Saudi Arabia and Egypt are growing strongly, and the same is true of Turkey. In Sub-Saharan Africa, the group is strengthening its positions with the acquisition of the Hygiene and Beauty business of Interconsumer Products Limited (ICP) in Kenya.
2) The Body Shop sales
At end-March, The Body Shop recorded sales growth of +1.8% like-for-like, and +0.8% based on reported figures. The Middle East and South-East Asia posted good growth while sales in mature markets are being affected by the depressed economic environment.
Internet sales are clearly proving to be a strategic channel for recruiting new consumers.
The Body Shop is launching Absinthe, a range of handcare products.
3) Galderma sales
Galderma sales decreased by -0.4% like-for-like, and +2.1% based on reported figures.
The first quarter was affected by a combination of negative factors, especially pressure from generics in Europe which, as announced, is impacting Tetralysal (acne). Loceryl (fungal nail infections) is also experiencing stiffer competition in Germany and Russia.
Sales of prescription products are increasing. Epiduo, the world's first prescription treatment in the topical acne market, and Clobex (psoriaris) are growing strongly, especially in North America. Medical solutions in aesthetic and corrective dermatology are continuing to advance, driven by the strong growth of Azzalure (muscle relaxant), particularly in Asia-Pacific.
Spirig has been consolidated since 1st March, 2013.
B - Important events during the period 01/01/13 to 03/31/13
- On January 10, L'OrÃ©al inaugurated its new Research and Innovation centre in India, in Mumbai and Bangalore,
- On January 31, L'OrÃ©al completed the acquisition of the Vogue brand in Colombia,
- On February 11, the Board of Directors decided to set up a share buyback program amounting to â‚¬500 million in the firstÂ half of 2013,
- On February 27, Galderma completed the acquisition of Spirig in Switzerland,
- And further, on April 15, L'OrÃ©al announced the acquisition of the Hygiene and Beauty business of Interconsumer Products Limited (ICP) in Kenya.Â
"This news release does not constitute an offer to sell, or a solicitation of an offer to buy L'OrÃ©al shares. If you wish to obtain more comprehensive information about L'OrÃ©al, please refer to the public documents registered in France with the AutoritÃ© des MarchÃ©s Financiers, also available in English on our Internet siteÂ 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."
Contacts at L'OrÃ©al
Individual shareholders and market authorities
Mr Jean RÃ©gis CAROF
Tel.: +33 1 47 56 83 02
Financial analysts and institutional investorsÂ
Mrs FranÃ§oise LAUVIN
Tel.: +33 1 47 56Â 86Â 82
Mrs Stephanie CARSON-PARKER
Tel.: +33 1 47 56 76 71
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,Â www.loreal-finance.com; alternatively, call +33 1 40 14 80 50.
C â€“ Appendix
L'OrÃ©al group sales 2011/2012 (â‚¬ millions)
|The Body Shop||180||182|
|First quarter total||5,643||5,932|
|The Body Shop||194||Â|
|Second quarter total||5,570||Â|
|The Body Shop||374||Â|
|First half total||11,213||Â|
|The Body Shop||191||Â|
|Third quarter total||5,519||Â|
|The Body Shop||565||Â|
|Nine months total||16,732||Â|
|The Body Shop||290||Â|
|Fourth quarter total||5,730||Â|
|The Body Shop||855||Â|
|Full year total||22,463||Â|