L’Oréal reported its first quarter 2014 financial results, citing an “encouraging and contrasted first quarter.” The company recorded sales of €5.64 billion for the quarter, a 3.5% like-for-like increase compared to first quarter 2013, as well as 2.8% increase at constant exchange rates. However, the figures represented a 2.2% decrease based on reported figures.
Commenting on the figures, Jean-Paul Agon, chairman and CEO for L'Oréal, said, “L’Oréal has made an encouraging start to the year. The divisions have posted contrasted performances: L’Oréal Luxe and the active cosmetics division are maintaining their very good momentum. The professional products division is confirming its recovery and has returned to growth in Western Europe and the United States. Lastly, the consumer products division is, as we had forecast and announced, being held back by North America, because of a high comparison base in the first quarter of 2013, linked to two major launches, and a sluggish trend in the mass market channel over the first few months of the year. In geographic terms, Western Europe, L’Oréal’s historic foothold, is confirming its renewed vitality, particularly in the countries of Southern Europe, which are in growth for the first time in six years, but also in countries such as Germany, where the Group has posted a good performance. In the new markets, L’Oréal is recording good growth, particularly in Africa, Middle East and in Latin America. In an economic context that is still marked by uncertainties, particularly on the monetary front, the start of this year confirms our confidence in our ability to outperform the market once again in 2014 and to achieve another year of sales and profit growth.”
At the end of March, the company's professional products division posted growth of 3.7% like-for-like and -2.3% based on reported figures, with sales as €735 million. The division has returned to growth in Western Europe and the U.S. In the luxury hair care segment, which remains dynamic, Kérastase is maintaining its growth momentum thanks to the relaunch of Nutritive which is confirming its global success. Hair care also is growing thanks to the promising start made by the new Biolage from Matrix. Growth in the pillar lines Inoa and Majirel at L'Oréal Professionnel is contributing to the solid performance of hair colorants and styling sales are growing strongly, driven by Tecni Art from L'Oréal Professionnel and the styling products of Redken. Geographically, the division is growing in all zones. In the mature markets, the countries of Southern Europe have returned to growth. In the new markets, the division remains very dynamic. The main contributors to growth are the U.S., Brazil, Russia and India.
For the consumer products division, sales were €2.758 billion, growth of 1.2% like-for-like and -5.5% based on reported figures, held back in North America by a high launch-related comparison base and a slowing market. The division is reinforcing its hair care growth with L'Oréal Paris, thanks to Elvive Fibrology in Europe, Volume Filler in the U.S., and a strong increase in China. Meanwhile, Olia hair colorant by Garnier is continuing its rollout, posting a record market share in Europe, and gaining ground in the new markets. In facial skin care, the very good start made by Garnier Miracle Skin Cream is complementing the continuing global success of Revitalift Laser by L'Oréal Paris. And in makeup, L'Oréal Paris is launching its Mega Volume Miss Manga mascara and Maybelline is innovating in foundations with SuperStay Better Skin.
L'Oréal Luxe increased by 7.2% like-for-like and 2.7% based on reported figures in the first quarter of 2014, with sales of €1.46 billion, and the division is continuing to make worldwide market share gains. Its five top brands—Lancôme, Yves Saint Laurent, Biotherm and particularly Giorgio Armani and Kiehl's—are growing. L'Oréal Luxe is accelerating in makeup, in face makeup with Lancôme and Shu Uemura, with the lip makeup of Yves Saint Laurent and Giorgio Armani, and thanks to Urban Decay, which has performed exceptionally well with its Naked 3 palette. Skin care is being driven by Kiehl's, Blue Therapy by Biotherm and the worldwide expansion of Clarisonic. And the fragrances Sì by Giorgio Armani and La vie est belle by Lancôme are continuing to prove highly successful. Also, L'Oréal Luxe is winning market share in a more dynamic Western Europe and in its traditional growth areas: China, the U.S. and travel retail.
At the end of March, the active cosmetics division is maintaining its momentum with sales at 8.7% like-for-like and 3.9% based on reported figures, with sales of €507.4 million for the quarter. Vichy is confirming its renewal, with significant growth, particularly in Western Europe, thanks to the launch of Neovadiol Elixir, and is moving on to the offensive in the face makeup segment with Teint Idéal. La Roche-Posay has made a very good start to the year with strong growth in Asia and in Europe. The same is true of SkinCeuticals, with a major antioxidant segment innovation: Revesratrol BE, antioxidant night concentrate. Across the zones, results are very positive in Europe, while Asia, and China in particular, are maintaining the momentum generated in the second half of 2013.
In Western Europe, L’Oréal ended the first quarter with sales of €2.019 billion for growth of 2.8% like-for-like and 1.8% based on reported figures. L'Oréal Luxe and the active cosmetics division are outperforming the European markets with good sell-out figures over recent months, and the company is returning to growth in Southern Europe, with a strong market share gain in Spain. In Northern Europe, Germany and the U.K. are maintaining their good momentum.
L'Oréal posted like-for-like sales of -0.6% and -5.6% based on reported figures in North America, where first quarter sales were €1.295 billion. The professional products division, active cosmetics and L'Oréal Luxe have started the year well and are winning market shares. Urban Decay, with double-digit growth, is confirming its strong dynamism. As anticipated, the consumer products division contracted in the first quarter, because of the high comparison base in the first quarter of 2013 and the flat mass-market trend at the start of this year. Advanced Hair Care by L'Oréal Paris and Fructis by Garnier are growing strongly and winning market share in hair, while L'Oréal Paris makeup is reinforcing its position thanks to the new Butterfly mascara.
For Asia-Pacific, L'Oréal has posted growth of 6.8% like-for-like and -1.9% based on reported figures, with sales of €1.166 billion. Market trends in this zone, except in South Korea and Thailand, remain favorable, and the company is continuing to make market share gains. The first quarter was marked by the very good performance of L'Oréal Luxe, particularly in Greater China, driven by Kiehl's, Clarisonic and Giorgio Armani in particular. The consumer products division is expanding in China, thanks to the strong growth in hair and the rapid development of e-commerce, as well as in India and Australia where it started the year well.
With sales of €410.9 million for the quarter, L’Oréal in Latin America recorded figures of +8.2% like-for-like and -10% based on reported figures. The consumer products division is recording good growth, driven by Elsève from L'Oréal Paris and Fructis by Garnier, along with L'Oréal Paris skin care. L'Oréal Luxe has posted a good first quarter thanks to the success of its launches. And the active cosmetics division has made a strong start in Brazil.
The Eastern European zone has posted sales of €426.8 million, with growth of 6.3% like-for-like and -6% based on reported figures, with a strong momentum in Turkey. L'Oréal Luxe is continuing to win market share, thanks to the success of the women's fragrances, particularly Sì by Giorgio Armani and La vie est belle by Lancôme. The professional products division is posting strong growth thanks to Matrix and winning over new salons, and the consumer products division, although feeling the impact of a slowdown in Russia and the situation in Ukraine, is advancing in hair colorants, with Olia by Garnier, and in deodorants thanks to the launch of Neo by Garnier.
And for Africa and the Middle East, sales were €143.1 million for the quarter, with the zone recording growth of +14.9% like-for-like and +10.8% based on reported figures, thanks in particular to strong growth in Saudi Arabia and in the Gulf states. L'Oréal Luxe is making market share gains in the Middle East with a good performance in fragrances, and the active cosmetics division's brands are growing strongly. In the consumer products division, Maybelline is accelerating in this region with its accessible and aspirational offering.
Also at end-March, The Body Shop recorded sales of €176.4 million, -3.4% like-for-like and -3% based on reported figures. Business in North America, Eastern Europe and the Nordic countries has made a good start, but in Asia and the U.K. the beginning of the year has been difficult. The greater priority given to facial skin care, along with the success of the Serum-in-Oil launch in the Vitamin E range, have accelerated growth in this key category in all the countries where the product has already been launched. At March 31, 2014, The Body Shop has 3,031 points of sale, including those of Emporio Body Store.