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L'Oréal Sees Continued Growth in 2010 Financials

L’Oréal reported its 2010 annual financial results, which indicated strong growth in both sales and profits for the year. In 2010, the company saw sales of €19.5 billion, an increase of 11.6% based on reported figures.

“In the context of an upturn in the cosmetics market, L’Oréal achieved strong sales growth," said Jean-Paul Agon, CEO, L'Oréal. "The group advanced in all zones, all channels and all business segments; more dynamic than the market, it bolstered its position as the world number one in beauty. 2010 was a year of conquests for the group, with several of our brands achieving spectacular breakthroughs: L’Oréal Professionnel with its hair colorant Inoa; Maybelline in mass-market makeup; Yves Saint Laurent, which is experiencing a true renaissance; and La Roche-Posay, which is continuing its expansion.

"The group is growing in Western Europe, clearly improving its positions in North America, and continuing its conquest of the new strategic markets, particularly in Asia and Latin America. In 2010, L’Oréal China became the group’s No. 3 cosmetics subsidiary, with sales of more than €1 billion. Supported by an encouraging start to the year, we are confident in the group’s ability to achieve a new year of sales and profit growth in 2011.”

In a hairdressing market that picked up slightly, the professional products division achieved growth in 2010 of +4.1% like-for-like, and +13.8% based on reported figures. Its initiatives, rolled out through a portfolio of highly complementary brands, enabled the conversion of more than 35,000 new salons. More than ever before, the division is asserting its role as the unchallenged leader in this channel.

The new markets are dynamic, with strong growth rates in India, China and Indonesia, and also in the Middle East and Brazil, where L’Oréal Professionnel is helping to build the professional markets of the future by opening its first institute for the training of young hairdressers.

The consumer products division recorded growth of +5.5% like-for-like and +11.4% based on reported figures. It is winning market share in North America and the new markets. The dynamism of the makeup market, the No. 1 category in this division, stimulated growth across all zones.

All the brands are growing, notably Maybelline, which achieved growth of +13.3% like-for-like. L’Oréal Paris had a good year in hair care with strong growth in Latin America, the United States and Asia. In skin care, In makeup, Volume Million Lashes mascara proved to be a worldwide success. Garnier is strengthening its leadership in the facial skin cleanser segment for young people with the launch of Pure Active Exfo-Brusher. The brand is continuing its progress in the new category of deodorants: it is consolidating the positions it has won in Latin America and in Eastern Europe, and is moving into Western Europe. Maybelline is growing strongly in all regions.

In Western Europe, in a sluggish market, the division advanced thanks to makeup, hair care and deodorants, particularly in the United Kingdom, Germany and Scandinavia. In North America, in a market which was also stable, the division significantly improved its positions with market share gains in makeup, hair colorants, hair care and styling. The new markets are being galvanized by powerful regional initiatives: in Brazil and Argentina, thanks to L’Oréal Paris hair care and Garnier deodorants, and in China, India, Indonesia and the Philippines thanks to L’Oréal Paris hair care, makeup, and L’Oréal Paris and Garnier men’s skin care.

The luxury products division recorded growth of +7% like-for-like and +11.5% based on reported figures. In the context of an upturn in the selective market, the division posted sell-out growth in line with the market trend. It thus consolidated its worldwide positions, and particularly its leadership in travel retail. Its major core brands delivered good performances.

Lancôme returned to strong growth, bolstered by the success of its skin care lines, particularly Génifique. The fragrance Trésor by Lancôme is growing strongly, thanks to a new advertising campaign and the launch of Trésor in Love. Yves Saint Laurent is experiencing a renaissance, with double-digit growth: the brand has had a string of successes in fragrances—L’Homme Yves Saint Laurent, La Nuit de L’Homme, the relaunch of Opium and the arrival of Belle d’Opium.

In Western Europe, sales are in line with the market trend. Its momentum is boosted by France, Germany, the United Kingdom and the Scandinavian countries. The good performances of the Yves Saint Laurent, Kiehl’s and Ralph Lauren brands are also worth noting.

The annual sales of the active cosmetics division grew by +4.7% like-for-like and +8.9% based on reported figures. All the brands and all the zones achieved growth. Across the world, the division confirmed its position as No. 1 in dermocosmetics.

La Roche-Posay achieved double-digit growth, thanks in particular to Redermic[+], and is winning market share across markets.The Body Shop ended the year with like-for-like growth at –1.1%. Retail sales are at -2.6%. The Body Shop had a year of contrasting performances, with trends differing between the developed countries and the new markets.

More information on L’Oréal’s full year 2010 financial reports is available here.

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