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How L'Oreal is Driving Growth

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L'Oreal Paris has opened a French boutique that integrates various omnichannel features, as well as exclusive products.

Following its acquisition of IT Cosmetics, L'Oreal reported nine-month 2016 sales of 19.05 billion euros, a gain of 4.9% at constant exchange rates, driven by the performance of L’Oréal Luxe and the Active Cosmetics Division, as well as a rise in e-commerce. Third quarter sales totaled 6.15 billion euros, a like-for-like rise of 5.6%.

Professional products sales rose 1.8% on a like-for-like basis, driven by hair color brands such as Shades Eq by Redken, SoColor Beauty by Matrix, Inoa and Dia by L'Oréal Professionnel, as well as the Blond Studio and Hair Touch Up launches by L'Oréal Professionnel, in addition to strong markets in Russia and India.

Consumer products sales rose 4.4% on a like-for-like basis, driven by NYX Professional Makeup, Maybelline (especially in the United States), Ultra Doux in hair care, skin care products such as Micellar Cleansing Waters by Garnier and L'Oréal Paris clay masks, and Magic Retouch hair color by L'Oréal Paris.

"The Group's digital edge and continuing targeted acquisitions, two strategic growth levers, have led to a sustained increase in e-commerce sales at +32%, and to the recent integration of IT Cosmetics, an American make-up brand that is expanding our global portfolio."

L'Oréal Luxe grew 6.8% like-for-like due to fragrances (La Vie est Belle, Mon Paris, Black Opium), Lancôme Absolu Rouge, Giorgio Armani skin care and makeup, Urban Decay's Vice lipstick and Kiehl's customized Apothecary Preparations. The division will benefit from the IT Cosmetics and Atelier Cologne purchases.

The Active Cosmetics Division grew 5.4% like-for-like, despite weakness in Europe and Asia. Growth was driven by La Roche-Posay's Effaclar, Vichy's Slow Âge and Dercos Aminexil Clinical 5, Roger&Gallet's Aura Mirabilis, and strong markets in North America and Latin America.

The Body Shop's sales rose 0.5% like-for-like, with improved growth in North America and weakness in Hong Kong and Saudi Arabia.

"L’Oréal delivered a dynamic third quarter with sales up by +5.6% like-for-like, reflecting the solidity of our growth," said Jean-Paul Agon, chairman and CEO of L'Oréal. "The Consumer Products Division is maintaining its momentum and outperforming its market, driven by the acceleration in make-up with the breakthrough of the NYX Professional Makeup brand, the global roll-out of Ultra Doux by Garnier, and an excellent performance in North America. L’Oréal Luxe posted a very good third quarter, thanks to its success in make-up, its fragrance initiatives, and is winning market share, especially in China and the United States. The Active Cosmetics Division's growth is rising in the context of a slowdown in the dermocosmetics market in Europe. In North America, L’Oréal is accelerating substantially and is outperforming its market more strongly. Western Europe is growing, faster than the market, except for France where the environment remains very sluggish. The New Markets are maintaining their pace of growth, with good performances in many countries in Southern Asia, Latin America and Eastern Europe.

He added, "The Group's digital edge and continuing targeted acquisitions, two strategic growth levers, have led to a sustained increase in e-commerce sales at +32%, and to the recent integration of IT Cosmetics, an American make-up brand that is expanding our global portfolio. These good performances confirm our ambition to post higher growth in the second half than in the first, and strengthen our confidence in our ability to deliver, in 2016, another year of growth in both sales and profits." 

 

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