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L'Oréal Sales Climb to $11.7 Billion for First Half of 2013

Posted: July 16, 2013

L'Oréal announced its sales results for the first half of 2013, reflecting a continuation of the company's good growth dynamics. Sales for the time period came in at €11.7 billion, a 6.4% increase excluding currency fluctuations and a 5.4% like-for-like increase (4.7% based on reported figures).

Commenting on the figures, Jean-Paul Agon, chairman and CEO of L'Oréal, said, "Although market growth has been slightly slowing down, L'Oréal continued to demonstrate its good dynamics and recorded a solid first half. Each division and zone is growing and outperforming its market. The consumer products division and L'Oréal Luxe are growing strongly, driven by L'Oréal Paris, Garnier, Lancôme, Giorgio Armani and Kiehl's. The professional products division, still held back by a difficult market, is picking up slightly. The active cosmetics division is performing very well, particularly in Western Europe, while accelerating its international roll-out. "The trends of the group's flagship brands are favorable, and more than ever before, our major product initiatives are really making a difference. They are enabling significant breakthroughs in Western Europe and North America. And in the new markets, the four regions are achieving strong growth and are contributing to improve our positions. In view of these dynamics, we remain confident in our ability to achieve another year of growth in both sales and profits," Agon concluded.

For the company's professional products division, the company recorded growth of 1.4% like-for-like and 0.6% based on reported figures. The mature markets are still proving difficult, particularly in southern Europe, while the division continues to be dynamic in the new markets and is actively pursuing its policy of recruiting new salons. Additionally, the division, which remains strongly exposed to mature markets, did improve its positions in the second quarter. In the new markets excluding Japan, all the zones are continuing to grow strongly, particularly in Russia, Brazil, India, Indonesia and Africa, Middle East.

Sales in the second half of 2013 for L'Oréal's consumer products division posted growth of 6.3% like-for-like and 5.1% based on reported figures. The division is continuing to gain market share thanks to the substantial progress achieved by its major brands and major product initiatives, and it is well oriented and records particularly significant market share gains in Western Europe, North America, and Latin America.

At the end of June 2013, L'Oréal Luxe sales increased by 6.4% like-for-like and 6.6% based on reported figures. The division is growing significantly faster than the market, thanks to the advances of all its core brands, the success of its recent acquisitions, and a remarkable performance in women's fragrances. In Western Europe, a stagnant market, the division is improving its positions, and in North America it is achieving solid growth. Although the South Korean market remains depressed, dynamic sales trends are continuing in China, Russia, the Middle East and travel retail.

The active cosmetics division continued to build momentum in the first half of 2013, with sales increasing by 7.8% like-for-like (6.6% based on reported figures), driven by the recovery of Vichy and the strong and sustained growth of La Roche-Posay. In Western Europe, the division is growing significantly faster than the market. All the geographic zones are growing, with an outstanding performance in Latin America, driven by Brazil in particular.

Geographically for L'Oréal, while the European market is declining slightly with a negative southern Europe and the rest of Europe remaining more or less stable, the company recorded growth of 1.7% like-for-like, and 1.6% based on reported figures, thanks to substantial market share gains by the consumer products and active cosmetics divisions. Germany, France and the countries of northern Europe are all contributing to growth; Spain and Portugal are gradually recovering.

North America achieved growth of 5.4% like-for-like and 6.7% based on reported figures. Group sales are increasing nearly twice as fast as the market. In an American market that is growing slightly slower than in 2012, the consumer products division is making strategic breakthroughs with L'Oréal Paris Advanced Haircare, Olia hair colourant by Garnier, and the ramp-up of Essie. At L'Oréal Luxe, Urban Decay and Kiehl's are expanding strongly, and the new men's fragrance Red by Ralph Lauren is making a good start. The active cosmetics division is continuing to expand, thanks to the opening of new sales outlets and the continuing success of SkinCeuticals.

In regard to new markets, L'Oréal's Asia Pacific sales recorded growth of 8% like-for-like and 5.1% based on reported figures. If Japan is excluded, like-for-like growth reached 9.2%, and amongst the countries, Indonesia, India and China in particular are contributing to the strong performance in this zone. L'Oréal in Latin America recorded growth of 13.5% like-for-like and 9.6% based on reported figures. Each division is performing well and gaining market shares. Brazil is returning to strong growth, thanks to the solid performance of the consumer products division. For Eastern Europe, the zone recorded growth of 8.4% like-for-like and 6.7% based on reported figures in a market that has slowed down slightly. Growth in this zone is being driven by Russia and Ukraine, while Poland is now recovering. L'Oréal Luxe performed well in Russia thanks to Lancôme and Giorgio Armani, and the trends of all the consumer product division brands are favorable. The Africa, Middle East zone continued its solid growth at 15.1% like-for-like and 12.3% based on reported figures, with strong performances from all the divisions. By country, sales are particularly dynamic in Saudi Arabia, the United Arab Emirates and Turkey. Egypt is posting solid growth despite the difficult context. The acquisition of Interconsumer Products Limited (ICP) is strengthening the Group's presence in the markets of Eastern Africa.

For the first half of 2013, The Body Shop recorded like-for-like growth of 0.5% and -1.4% based on reported figures. Dynamic sales trends are continuing in Southern Asia, the Middle East and Eastern Europe, while Western countries are facing a more difficult environment. In the first half, The Body Shop was impacted by the phasing of launches, which will occur in the second half. The brand is continuing the international roll-out of Pulse, its innovative store concept, and the expansion of its development in e-commerce, now with 21 online sales sites. At June 30, 2013, The Body Shop has a total of 2,840 stores.

And Galderma's sales trends were 0.3% like-for-like, and 3.3% based on reported figures, with strongly contrasting performances in the geographic zones. Growth remains solid in the new markets, particularly in Asia, Pacific, in Latin America and in Russia.

Complete financial results for L'Oréal in the first half of 2013 are available here.