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L'Oréal 2013 Sales Increase 5% to €22.98 Billion
Posted: February 26, 2014
L’Oréal announced its annual results for 2013, citing a further strengthening of its positions around the globe and a record operating margin. Sales for the year were €22.98 billion, a 5% like-for-like increase and a 2.3% increased based on reported figures. It was an increase of 6% based on constant exchange rates. Additionally, operating profit was €3.875 billion, representing 16.9% of sales, and net profit after non-controlling interests increased 3.2%.
Commenting on the 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,” Agon concluded.
The professional products division recorded growth of 2.1% like-for-like and -1% based on reported figures, for 2013 sales of €2.9 billion in a channel that was still affected by declining salon visits in the mature markets, but remains dynamic in the 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, as well as the ramp-up of ODS 2 technology, and Essie continues to grow. 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 among the largest contributors to growth.
The consumer products division posted 2013 sales of € 10.8 billion, marking 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, and the brand's growth in facial skin care is continuing with the BB creams. 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, and SoftSheen Carson is making progress thanks to the launch of Amla Legend. Also, 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, for 2013 sales of €5.8 billion. The division is significantly outperforming selective market growth. Lancôme delivered another solid year in fragrances with La Vie est Belle, which established itself as a top seller, and in skin care its sales were highly dynamic. 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, already in the European top 5, and to its Armani Beauty line, which made a real breakthrough this year. Yves Saint Laurent is extending its reach in Asia, particularly in China, and has a global success on its hands with Vernis à Lèvres Rebel Nudes. Kiehl's, Clarisonic and Urban Decay are recording very strong growth on all continents. 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, and over the full year, L'Oréal Luxe outperformed the market in all its major zones, and in travel retail.
In 2013, the active cosmetics division recorded strong sales of €1.6 billion, 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 (BB Cream, Life Serum) 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. SkinCeuticals is achieving good performances, and is continuing its rapid expansion. 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.
In Western Europe, in a context that remained difficult, particularly in Southern Europe, 2013 sales were €7.4 billion, and 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 the 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 number one position.
North America’s sales advanced by 3.8% like-for-like and by 2.8% based on reported figures, for sales of €5.3 billion for 2013. In a market that was less dynamic than in 2012, the company made market share gains. The consumer products division consolidated its market leader 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.
In Asia-Pacific, L'Oréal recorded sales of €4.3 billion, an annual growth of 8.4% like-for-like and 2.2% based on reported figures. 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.
L'Oréal recorded growth of 11.5% like-for-like and 3.7% based on reported figures in Latin America, with sales of €1.8 billion for 2013. 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 Europe saw sales increased by 8.2% like-for-like and 4.2% based on reported figures, for total 2013 sales of €1.6 billion, 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 skin care with Revitalift Laser. The professional products division and L'Oréal Luxe made market share gains, and the active cosmetics division is growing faster than the market in Russia, thanks to the dynamic sales of La Roche-Posay.
And for the Africa, Middle East region, sales were €505 million, marking an increase of 14.3% like-for-like and 9% 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 and Vichy, 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, for 2013 sales of €835 million. 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 also secured a good Christmas trading around its "Give Joy" program, and its 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.
For Galderma, 2013 sales were €826 million, an 3.9% like-for-like increase and 3.9% increase based on reported figures. 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, and Mirvaso, an innovation in the treatment of rosacea-associated erythema, was successfully launched in the U.S. 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.