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L'Oréal Sees Growth for Nine-Month 2011 Financial Report
Posted: November 8, 2011
L'Oréal posted nine-month sales of €15,087 billion, an increase of 3.9% based on reported figures and up 5.1% like-for-like based on very strong growth in Asian markets and a solid representation from Latin America and North America with the luxury division also showing dynamic promise.
Commenting on the figures, Jean-Paul Agon, chairman and CEO of L'Oréal, said, "With a solid third quarter, the group is confirming its good dynamics in a market that again reflected contrasting trends in geographic zones and distribution channels. Across the divisions, L'Oréal luxury produced an outstanding performance, bolstered by the dynamism of Kiehl's, Giorgio Armani, Diesel, and also Lancôme, which is making the headlines with Visionnaire. The consumer products division trend is positive, thanks in particular to Maybelline. The professional products and active cosmetics divisions are improving their performances in markets that have once again shown modest growth. In geographic terms, L'Oréal is confirming its dynamism in Asia, reflecting high performances not only in China, but also in India and Southeast Asia. Growth remains strong in Latin America, despite a deceleration in Brazil. In North America, L'Oréal is continuing to increase faster than the market. In Western Europe, the group is in line with a market trend reflecting highly contrasting situations. With a favorable cosmetics market trend despite the uncertainties facing the worldwide economy, we are tackling the last quarter with confidence. We confirm our aim of outperforming the market in 2011, and achieving another year of growth in both sales and profitability."
The professional products division recorded 9-month sales growth of +2.3% like-for-like and +3.0% based on reported figures, after taking into account the impact of currency fluctuations and of changes in consolidation due to the acquisition of distributors in the U.S. In Europe and the U.S, in sluggish markets, the division is continuing to improve its positions by conquering new salons. In new markets, the division is making progress, particularly in Latin America, India and the countries of Southeast Asia.
The consumer products division achieved sales growth of +4.6% like-for-like and +3.0% based on reported figures. In Western Europe, the contrasting national situations are continuing, with a relatively positive trend in France and Northern Europe, but a more difficult context in Southern Europe. In North America, the division is continuing to win market share, and in Eastern Europe, the situation is gradually returning to normal, while in Latin America, the growth rate remains high, although there has been a slowdown in Brazil and in Mexico. In Asia, and in China in particular, growth remains strong, with large market share gains.
L'Oréal luxury sales grew at end-September by +8.6% like-for-like, and by +6.2% based on reported figures. The division produced particularly strong performances in new markets, the U.S and travel retail. This achievement reflects a dynamic retail sales trend, and the introduction of major year-end launches in the third quarter. Sales in Western Europe are being boosted by new product launches, and in North America, the division's sales trend is favorable. In new markets, the division's growth is being bolstered by Asia, and particularly by South Korea, China and Hong Kong. Sell-out is increasing strongly in the Middle East.
The sales of the active cosmetics division grew by +3.8% like-for-like and +3.3% based on reported figures, with a good third quarter, reflecting a good sun products season and the introduction of year-end launches. In Western Europe, the situation still reflects contrasting trends, but improved in the third quarter. In North America, SkinCeuticals sales are growing strongly, and new markets are continuing to generate strong growth, particularly in Latin America, with Vichy and Innéov, and the Middle East. However, difficulties continue in the pharmacy channel in Eastern Europe.
In Western Europe, L'Oréal recorded a growth rate of +0.9% like-for-like and +1.3% based on reported figures, with satisfactory performances in France, the U.K., Northern Europe and travel retail. The situation remains more difficult in Southern Europe, particularly in Greece and Portugal.
In North America, L'Oréal achieved growth at end-September of +5.4% like-for-like, outperforming a market trend that remained buoyant. L'Oréal luxury achieved significant growth, and the consumer products division gaining market share in hair care, skin care and makeup. New markets recorded growth of +9.7% like-for-like. Excluding Japan, new markets achieved growth of +10.8%, with the Asia-Pacific zone proving particularly dynamic. L'Oréal recorded a growth rate of +13.1% like-for-like, and is thus continuing to make significant market share gains across the whole Asia-Pacific zone. Excluding Japan, growth in this zone amounted to +16.3% like-for-like.
The group is being driven by the good performances of L'Oréal luxury in China, South Korea, Taiwan and Hong Kong, and by the consumer products division, which is posting good results in China, India and Southeast Asia, where it is continuing to extend its distribution.
In Eastern Europe, group sales trend at end-September was -2.8% like-for-like, after an improvement in the third quarter. In the dismal economic context that has left no country unscathed, consumer confidence is weak and markets are proving difficult. The group is taking action with a specially adapted launch program, particularly in the consumer products division.
Latin America’s growth stood at +14.0% like-for-like. There is strong momentum in all divisions and across all countries, particularly in Argentina, Mexico and Colombia. In Brazil, growth remains high; however a deceleration has been observed over the last few months, and in the Africa and Middle East zone, the company recorded growth of +8.9% like-for-like at end-September. Turkey and the countries of the Levant are the main growth drivers, alongside the Gulf states, which have now returned to growth. The new subsidiaries in Egypt and Pakistan are expanding, and the group has just opened new subsidiaries in Kenya and Nigeria.
At end-September, The Body Shop achieved like-for-like sales growth of +2.6%. Retail sales also increased by +2.6%. The brand continues to perform well in new markets, such as the Middle East and Eastern Europe, with particularly good performances in Saudi Arabia and Russia. In Western Europe growth remains overall sluggish, hampered by the economies of Greece, Italy and Portugal. The Body Shop also continued to accelerate its expansion of e-commerce. Its global travel retail reach now extends to more than 40 countries.
Galderma's sales increased by +6.3% like-for-like and +13.7% based on reported figures. During the third quarter, Galderma completed the operational integration of Q-Med, makers of the filler Restylane, allowing for market optimization of the company's fast-growing medical aesthetic business. Asia-Pacific and Latin America drove global performance by boasting strong double-digit growth. Particularly strong performance in Germany and Russia partly offset the erosion of nail lacquer market by in France, and North America generated moderate growth.
For more details on this report, visit L'Oréal’s website.