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L'Oréal Posts Healthy 2011 Financials, €20 Billion in Sales

The board of directors of L'Oréal met on February 13, 2012, under the chairmanship of Jean-Paul Agon and in the presence of its statutory auditors. At this meeting, the board disclosed consolidated financial statements and the financial statements for 2011 in which the company sustained growth in sales and saw solid increases in profits. For annual sales, the company reported €20.34 billion, a 5.1% like-for-like increase over 2010.

Commenting on the results, Jean-Paul Agon, chairman and CEO of L'Oréal, said, "2011 was a solid year of development, which has made the group even stronger. In a cosmetics market whose global trend was favorable, L'Oréal achieved sustained sales growth and confirmed its position as the world leader in beauty. All divisions are expanding. L'Oréal Luxury in particular posted a very good year, especially thanks to Lancôme, Giorgio Armani and Kiehl's. Internationalization is continuing across all divisions. The group is pursuing its conquest of the new markets, with Asia and Latin America leading the way, and is making clear progress in North America. 2012 will be a symbolic year, as the new markets are set to become the group's number one geographic zone. These performances demonstrate the relevance of our strategic thrusts and provide further confirmation of the key role played by research, innovation and creativity in our industry.2011 was also another year of solid construction for our operating profit. The strong growth in results reflects the virtuous dynamics set in motion: operational efficiency has advanced in all fields of activity, enabling us to prepare well for the future, and the profitability of the new markets zone increased substantially. The good quality of these results means that we are more confident than ever in the group's ability to achieve sustainable and profitable growth. We are well equipped to succeed in our strategy of universalizing beauty and to achieve another year of sales and profit growth in 2012."

In a generally sluggish market, the professional products division achieved 2011 growth of 2.5% like-for-like and 3.6% based on reported figures. Growth based on constant exchange rates, including the impact of acquisitions, came out at 5.1%. Initiatives in hair colorants and hair care enabled the division to win market share in all zones.

The division is continuing to improve its positions in the developed markets, with significant market share gains in Germany and the United Kingdom. The conquest of the luxury hair care segment is continuing with Kérastase and Shu Uemura Art of Hair. In the United States, the division posted positive growth, bolstered by the SalonCentric network. In the new markets, the division is growing fast, particularly in Asia, Latin America and the Middle East. It is increasing its presence in all zones by investing in hairdresser training and rolling out innovations attuned to local beauty rituals and expectations, as exemplified by the launches of Oilthérapie in India and X-Tenso Care in Brazil.

The consumer products division achieved growth of 4.5% like-for-like and 3.2% based on reported figures at end-2011. Maybelline posted another year of strong growth and L'Oréal Paris is accelerating. In Western Europe, the division is winning market share in France, Germany and the Nordic countries. The situation is more difficult in the countries of Southern Europe. In North America, the division is improving its positions thanks to hair care, makeup and skin care, and in the new markets, the division is performing well in all zones, with the exception of Eastern Europe. In Asia, the division is continuing to grow strongly, particularly in facial skin care for both women and men. In Latin America, the division had a good year, particularly in Mexico, Argentina and Chile, thanks to the success of its deodorants and hair colorants.

Bolstered by a lively market trend and the dynamism of its major brands, L'Oréal Luxury recorded 2011 sales up by 8.2% like-for-like and 6.5% based on reported figures. In all regions, the division has major stand-out innovations, with Visionnaire from Lancôme taking pride of place. Also, the Clarisonic brand, acquired in December, has joined the L'Oréal Luxury brand portfolio; it is the market leader in sonic technology skin care applications. In Western Europe, L'Oréal Luxury ended the year well, particularly in France, driven by the dynamism of Lancôme, Kiehl's and Diesel. In North America, the division recorded strong growth with its brands Lancôme, Yves Saint Laurent, Kiehl's, Giorgio Armani and Viktor & Rolf. In the new markets, L'Oréal Luxury is growing fast. Thanks to Lancôme, Kiehl's and Shu Uemura, the division is making substantial market share gains in Asia; it is also continuing to grow in Latin America, the Middle East and Eastern Europe.

In 2011, the active cosmetics division grew by 3.2% like-for-like and 2.6% based on reported figures. With strong dynamism in Latin America, the United States and Africa, Middle East, the division is strengthening its position as number one in the worldwide dermocosmetics market. The division's growth is being boosted by good performances in North America and in the new markets, particularly Latin America and the Africa, Middle East zone. The very good scores of Innéov in Brazil, now the brand's number one market worldwide, are worth noting. In Europe, the division's growth continues to reflect contrasting trends in different countries: positive in France, but more difficult in Southern Europe and in Eastern Europe, where difficulties in the pharmacies channel are continuing. The broadening of distribution and the conquest of new health channels, such as drugstores and medispas, are an important element in the division's worldwide strategy.

By geographic zone, L'Oréal has also clocked in good growth. In a very slightly positive market, the company recorded a growth rate of 0.6% like-for-like in Western Europe, with good growth rates in France, Germany and the United Kingdom, and in travel retail. Sales have been galvanized in this zone by Maybelline makeup and by L'Oréal Luxury. The situation remains more difficult in Southern Europe, and particularly in Greece and Portugal.

In North America, L'Oréal grew faster than the market, and recorded 2011 growth of 5.5% like-for-like. The luxury, consumer products and active cosmetics divisions all posted sustained growth. The consumer products division is significantly outperforming the market trend, thanks in particular to Maybelline and Garnier. The recently acquired Essie brand had a very good year. Growth in the professional products division is less substantial, but is nevertheless ahead of the professional market trend.

As of December 31, 2011, the new markets posted growth of 9.5% like-for-like and 8.3% based on reported figures. Excluding Japan, the new markets recorded growth of +10.6% like-for-like, driven by the constant dynamism of Asia. L'Oréal achieved annual growth in Asia-Pacific of 13% like-for-like and +13.4% based on reported figures. If Japan is excluded, growth in this zone amounted to +16.1% like-for-like and +15.5% based on reported figures. Despite the disasters which hit Japan, Australia, New Zealand and Thailand during the year, the group is continuing to improve its positions throughout the zone, driven by markets whose dynamism remains intact.

At the end of 2011, the group is at -2.8% like-for-like in Eastern Europe. In a dismal economic context which is affecting all the countries in this zone, the group's divisions recorded contrasting levels of performance. The professional products division and L'Oréal Luxury are improving their penetration. In the consumer products division, a program of carefully adapted initiatives is under way, for Garnier in particular.

In 2011, L'Oréal achieved growth of 13.2% like-for-like in Latin America. Argentina, Mexico and Central America are the growth drivers in this zone. Brazil is still posting a solid trend. All the group's divisions recorded good performances, particularly the active cosmetics division. The very good results of Maybelline makeup in the consumer products division are worth noting.

And the Africa-Middle East region achieved growth of 10.5% like-for-like. In this zone, growth is being driven by the countries of the Levant, the Gulf and Turkey, and by two recently created subsidiaries, Pakistan and Egypt. However, the situation is more contrasted in South Africa. All divisions are contributing to the dynamism of this expansion.

Also in 2011, The Body Shop achieved solid sales growth at 4.2% like-for-like, with a sharp acceleration in the in the fourth quarter. Retail sales also increased by 3.8%. In 2011, The Body Shop achieved growth in Europe and North America and quickly expanded in the new markets. The brand experienced strong growth in the Middle East, particularly in Saudi Arabia and Egypt, as well as in Asian countries such as India and Hong Kong, and in Eastern Europe. The brand now has 16 online stores and is continuing to grow at an accelerated rate in e-commerce. Finally, The Body Shop now has a robust presence in global travel retail outlets across 44 markets. At the end of 2011, The Body Shop has a total of 2,748 stores, an addition of 143 since December 31, 2010.

And Galderma's sales increased by 8.4% like-for-like and 17.1% based on reported figures. Galderma confirmed its dynamism thanks to the success of its innovative products, which offset the negative impact of generics on the sales of Differin 0.1% gel and cream (acne) in the United States and Loceryl lacquer (onychomycosis) in Europe. The expansion of Galderma in the new markets such as Brazil, Russia, and the Asian countries has contributed to this solid growth. Good performances in Germany and the United Kingdom are also worth noting. Galderma continued to invest in R&D and manufacturing, thus assuring its strategic development in the three key segments: prescription products, OTC products, and aesthetic and corrective medical solutions.

Find more details on this financial report here.

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