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L'Oréal Reports Record Operating Profit for First Half 2013
Posted: August 29, 2013
L'Oréal announced its first half sales results for 2013, featuring a record operating profit of €2.043 billion at 17.4% of sales, which represents and increase of 7.7%. Additionally, sales grew 5.4% on a like-for-like basis.
Commenting on the figures, Jean-Paul Agon, chairman and CEO of L'Oréal, said, "In the first half, in a market whose growth slowed down slightly, L'Oréal has continued to record good sales dynamics, and achieved further growth in profits. The group's competitiveness has improved once again, and is reflected in market share gains across all divisions and zones. Operating profit has reached a historically high level, with a good quality gross profit and an ongoing policy of sustained investments in Research & Innovation and in advertising and promotional growth drivers. These performances demonstrate the relevance of our business model and the quality of our fundamentals: the ability of our research to create major innovations and stimulate the market, and the vitality and quality of our brand portfolio. We are thus ambitious and optimistic as we continue to implement our strategy of the 'universalization of beauty' and conquer the next billion consumers. We are confirming our targets for 2013 and remain confident in the group's ability to once again outperform the market, and to achieve a further year of growth in sales, results and profitability."
Based on reported figures, L'Oréal's sales at June 30, 2013 amounted to €11.738 billion, an increase of 4.7%. Like-for-like, i.e. based on a comparable structure and identical exchange rates, the L’Oréal sales growth was 5.4%. The net impact of changes in consolidation was 1%, and currency fluctuations had a negative impact of -1.7%. Growth at constant exchange rates was 6.4%.
For the second quarter of 2013, the professional products division of L'Oréal recorded sales of €779.3 million, a 2.7% like-for-like increase and a 1.5% reported increase. For the first half of 2013, professional product sales were €1.531 billion, a 1.4% like-for-like increase and 0.6% reported increase. For L'Oréal's consumer products division, for the second quarter 2013, sales were €2.802 billion, a 6.1% like-for-like increase and a 4.7% reported basis increase. Sales were €5.723 billion for the first half of 2013 for the division, which represents a like-for-like increase of 6.3% and a reported increase of 5.1%. The L'Oréal Luxe division's sales were €1.404 billion for the second quarter 2013, rising 5.5% like-for-like and 5.1% reported. For the first half of 2013, the division recorded sales of €2.826 billion, a 6.4% like-for-like increase and a 6.6% reported increase. Sales for the active cosmetics division for the second quarter 2013 were €409.5 million, an 8.6% increase in like-for-like and 7.2% reported. Sales of €907.1 million were what the division recorded for the first half of 2013, which represents a like-for-like rise of 7.8% and a reported rise of 6.6%.
Geographically, Western Europe brought in sales of €1.908 billion for the quarter and €3.899 billion for the first half of 2013, which represents like-for-like increases of 1.7% and 1.7%, respectively. For North America, second quarter sales were €1.371 billion (+4.5% like-for-like) and €2.743 billion (+5.4% like-for-like) for the first half of 2013. For the new markets geographic regions for L'Oréal, the total second quarter sales were €2.115 billion (Asia-Pacific: €1.051 billion; Latin America: €507.7 million; Eastern Europe: €355.4 million; and Africa and the Middle East: €200.6 million), which, overall, represents a like-for-like increase of 10.3%. First half 2013 sales for new markets were €4.346 billion, a 9.9% like-for-like increase (Asia-Pacific: €2.240 billion; Latin America: €966.3 million; Eastern Europe: €745.1 million; and Africa and the Middle East: €394.9 million).
Additionally, The Body Shop reported sales of €186.9 million for the second quarter 2013, and first half 2013 sales of €368.8 million, representing like-for-like comparisons of -0.8% and 0.5%, respectively. Also, the dermatology division recorded €223.9 million for second quarter 2013 sales, a like-for-like increase of 0.8%, and first half 2013 sales of €380.6 million, a 0.3% like-for-like increase.