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L'Oréal announced its annual results for 2013, with sales of €22.98 billion, a 5% increase like-for-like, 6% increase at constant exchange rates and a 2.3% increase based on reported figures. Operating profit was €3.875 billion, representing 16.9% of sales, and net profit after non-controlling interests rose 3.2% while net earnings rose 4.4% per share.
Commenting on the annual results, Jean-Paul Agon, chairman and CEO, of L'Oréal, said, “2013 was another year of robust growth for L’Oréal. The group achieved sustained sales growth and, in a market whose expansion was more moderate in 2013, accelerated its outperformance versus the market. L’Oréal is strengthening its worldwide positions across all divisions and all geographic zones. The consumer products division, L’Oréal Luxe and the active cosmetics division are maintaining a good momentum, thanks to the performances of their major brands. The professional products division is gradually improving. In terms of geographic zones, the group’s growth is well balanced: Western Europe remains very solid, North America recorded another year of growth and market share gains in a less buoyant market context, and the new markets, excluding Japan, posted double-digit growth. Lastly, profitability reached a record level in 2013, confirming the relevance of our business model. The quality of these results illustrates the group’s ability to continue to deliver sustainable and profitable growth. We are starting 2014 with confidence, driven by our mission of ‘Beauty for All,’ the power of our research and innovations, the strength of our portfolio of complementary brands and the globalization of our major brands. In an economic context that is still marked by uncertainties, particularly on the monetary front, L’Oréal is confident in its ability to outperform the market once again in 2014, and to achieve another year of sales and profit growth.”
In reporting results by division, L’Oreal’s professional products division recorded growth of 2.1% like-for-like and -1% based on reported figures in a channel that was still affected by declining salon visits in the mature markets, but remains dynamic in the company’s new markets. In the very buoyant luxury hair care segment, Kérastase, the division's number one brand in terms of growth contribution, had a very good year, and hair care is continuing to grow strongly, thanks to the success of the hair oils and the launch of Biolage Advanced by Matrix. Hair colorants have been driven by Hairchalk from L'Oréal Professionnel and the ramp-up of ODS 2 technology. Essie continues to grow, with its recent launch, Essie Gel, is a resounding success. In geographic terms, the division's brands are maintaining their positions in mature markets, which remain lackluster. The Division is growing strongly across all the new markets excluding Japan. Brazil, Russia and India were amongst the largest contributors to growth.
The consumer products division posted growth of 4.9% like-for-like and 1.5% based on reported figures. The division is outperforming the global market and winning market share. The trends of all the division's brands were favorable, and all grew faster than the market. Growth at L'Oréal Paris is accelerating, and the brand is strengthening its worldwide leadership, thanks to a very strong performance in hair care. The brand is also growing strongly in facial skin care with Age Perfect Cell Renew and has chalked up successes in hair colorants with Préférence Wild Ombrés and in makeup with Butterfly mascara. Garnier recorded double-digit growth in hair colorants, thanks to Olia. The brand's growth in facial skincare is continuing with the BB creams. And Maybelline posted strong growth in the lipstick category with the launch of Rouge Elixir and in more accessible categories such as nail varnishes and eyeliners, while SoftSheenCarson is making progress thanks to the launch of Amla Legend. The division had a very good year in Western Europe, where it continues to improve its leadership position. In North America, business was affected by the market slowdown and the adjustment in distributors' inventories, but sell-out increased two and a half times faster than the market. Brazil, India, Indonesia, Turkey and the Gulf states all performed very well.
After a strong end to the year, L'Oréal Luxe grew by 6.8% like-for-like and 5.3% based on reported figures. The division is significantly outperforming selective market growth. Lancôme delivered another solid year in fragrances with La Vie est Belle, and in skin care its sales were dynamic, with Advanced Génifique and Dreamtone. Asserting its status as a major luxury brand, Giorgio Armani posted a very strong year thanks to the success of its women's fragrance Sì, and to its Armani Beauty line. Yves Saint Laurent is extending its reach in Asia, particularly in China, and has global success with Vernis à Lèvres Rebel Nudes. Kiehl's, Clarisonic and Urban Decay are recording very strong growth on all continents. Their latest launches—respectively, the Super Multicorrective Cream, Pedi Sonic Foot Transformation System and the Naked 3 maeup palette—have all been successes. As for the designer fragrance brands, Ralph Lauren is proving extremely successful in North America and Latin America with the launch of Polo Red. Viktor&Rolf continued its strong growth. Over the full year, L'Oréal Luxe outperformed the market in all its major zones, and in travel retail.
For active cosmetics, in 2013, the division recorded strong sales growth of 7.8% like-for-like and 4.9% based on reported figures, clearly strengthening its position as the world leader in the dermocosmetics market. The Vichy brand is going from strength to strength in skin care with the continuing development of its Idealia franchise and the launch of Néovadiol Magistral. In the hair care segment, Dercos Neogenic is proving successful. La Roche-Posay posted another year of double-digit growth, with a series of successes in all regions of the world. The brand's growth is being driven by the solid roll-out of benchmark franchises prescribed by dermatologists, such as Effaclar and Lipikar, and the more recent launches of Redermic R, Substiane Serum and Iso Urea MD. SkinCeuticals also is achieving good performances, and is continuing its rapid expansion. The brand is launching a body care range to be used in association with aesthetic procedures, and is thus beginning the conquest of a new segment. Across the regions, the division's trends remain favorable in Western Europe, growing twice as fast as the market. The new markets are proving highly dynamic, particularly in Brazil and China.
For results based on geography, Western Europe had a context that remained difficult, particularly in Southern Europe, but growth came out at 1.9% like-for-like and 1.1% based on reported figures. All the divisions are making market share gains, particularly in France, Germany and the U.K. L'Oréal Luxe sales are being driven by Lancôme, Giorgio Armani and Kiehl's, and consumer products division sales by Garnier and L'Oréal Paris. The success of La Roche-Posay and Vichy is enabling the active cosmetics Division to reinforce its position.
In North America, sales advanced by 3.8% like-for-like and by 2.8% based on reported figures. In a market that was less dynamic than in 2012, L’Oreal made market share gains. The consumer products division consolidated its position thanks to strong growth at L'Oréal Paris with the success of Advanced Hair Care. L'Oréal Luxe outperformed its market, thanks in particular to the very good results of its American brands Urban Decay, Clarisonic and Kiehl's. In the professional products division, the launches of Diamond Oil by Redken and Essie Gel are very promising.
For its new markets, L'Oréal recorded annual growth of 8.4% like-for-like and 2.2% based on reported figures in the Asia Pacific region. Excluding Japan, like-for-like growth reached 9.5%. Except for South Korea, the markets remain dynamic, despite slower growth in China and India. Market share is increasing in this zone, reflecting in particular the good performance of L'Oréal Paris in China in the facial skin care and hair care categories, and of Garnier in the same categories in Southeast Asia. L'Oréal is also performing very well in luxury products, thanks to the strong growth of Lancôme and Kiehl's and the roll-out of Yves Saint Laurent and Clarisonic.
For Latin America, L'Oréal recorded growth of 11.5% like-for-like and 3.7% based on reported figures. The consumer products division is driven by Bi-O deodorants by Garnier, Maybelline makeup, the success of the BB creams at L'Oréal Paris and hair care, with the renewal of Elvive and Fructis. The active cosmetics division very clearly outperformed its market. In Brazil, all the divisions made market share gains.
Eastern European sales for L’Oreal increased by 8.2% like-for-like and 4.2% based on reported figures, significantly outperforming the market trend. The consumer products division is winning market share once again, thanks to Olia hair colorants by Garnier and Dermo-Expertise skincare with Revitalift Laser. The professional products division and L'Oréal Luxe made market share gains. The active cosmetics division is growing faster than the market in Russia, thanks to the dynamic sales of La Roche-Posay.
And for Africa and the Middle East, sales increased by 14.3% like-for-like and 9.0% based on reported figures, reflecting the good performances of the new subsidiary in Saudi Arabia, strong growth in the Gulf states, Egypt and Pakistan and the recent acquisition of Interbeauty in Kenya. All the divisions recorded double-digit growth in 2013. Performances were particularly encouraging for Lancôme, Giorgio Armani, Kérastase, Garnier, Maybelline andVichy, all of which posted growth significantly higher than the market.
The Body Shop recorded 1.2% like-for-like sales and -2.3% based on reported figures. The strategic body, skin care and makeup categories grew driven by iconic ranges and innovations such as Honeymania body care with organic Community Fair Trade honey from Ethiopia. The Body Shop multi-channel strategy delivered sustained growth in e-commerce, particularly in the U.K. and the U.S. Geographically, the main markets which contributed to the brand's development were South Asia and Northern Europe.
And Galderma sales increased by 3.9% like-for-like and 3.9% based on reported figures, confirming the success of its innovative medical solutions in its three fields of activity. In the prescription drug market, where competition from generics is having an impact on the performance of Galderma in Europe and the U.S., Epiduo posted strong growth, confirming its position. Mirvaso, an innovation in the treatment of rosacea-associated erythema, was successfully launched in the U.S., and the portfolio of self-medication products continues to grow strongly, thanks in particular to Cetaphil and Loceryl. The good performances of the aesthetic and corrective medical solutions are being driven by the strong growth of Azzalure and the growth of Restylane. The particularly solid growth recorded in the new markets, notably in Asia-Pacific, Russia and Latin America, is bolstering the global expansion of Galderma.