L'Oréal Strong Out of the Gates for 2012

L'Oréal has announced a promising start to 2012, reporting sales of €5.64 billion in the first quarter, which represents a 9.4% increase, or 7.1% at constant exchanges rates, and a 6.4% like-for-like increase. The beauty company saw growth in all its branches and divisions, with strong dynamism at L'Oréal Luxe, solid growth in North America, and continuing fast growth in new markets, particularly in Asia.

Commenting on the figures, chairman and CEO Jean-Paul Agon said, "These first months [bode] well for the year, as all divisions and all geographic zones are expanding. The worldwide cosmetics market remains strong, and trends are favorable for all brands. L'Oréal Luxe is achieving remarkable growth, bolstered in particular by the dynamism of Lancôme, the success of the designer fragrances, and the vitality of Kiehl's. During the first quarter, the new markets have become the No. 1 geographic zone for the group, driven by very strong performances in Asia. North America is still achieving sustained growth. In Western Europe, in a sluggish market context, the group is growing and improving its positions. Finally, the new initiatives in Eastern Europe are beginning to pay off. These performances demonstrate the relevance of our strategic thrusts and the solidity of the L'Oréal business model, based on excellence in research and creativity in marketing. Although it is not possible to extrapolate from these figures, and despite the economic environment, which remains uncertain, the first three months have reinforced our confidence in the group's ability to outperform the market in 2012, to strengthen its global positions, and to achieve another year of growth in both sales and profits."

The Professional Products division posted growth of 3.1% like-for-like in the first quarter, and 5.6% based on reported figures, thanks to the new markets and the success of its launches in hair colorants and hair care. In Europe and North America, the division is consolidating its leadership. The dynamism of the new markets has been driven by the success of product initiatives in hair colorants and professional hair care products; Asia in particular is accelerating strongly, driven by the growth of Matrix in China and in India.

The Consumer Products division achieved growth of 5.1% like-for-like, and 7.2% based on reported figures. All the division's brands and all geographic zones posted increased sales. In Western Europe, in a sluggish market, the division is increasing its sales and improving its market share, particularly in France, Germany, Italy and the Nordic countries. The situation remains more difficult in the Southern countries. The division also made a good start to the year in North America, bolstered in particular by the success of Garnier skin care initiatives. In the new markets, the trend is positive in all regions. Growth in Asia has been driven by the dynamism of L'Oréal Paris and Men Expert skincare in China, and the L'Oréal Paris hair care line is proving successful in India. Additionally, the division's sales are picking up in Eastern Europe, thanks to the launch of Elsève Triple Resist shampoo enriched in Arginine by L'Oréal Paris, and BB cream and Color Sensation hair colorant from Garnier. In Latin America, the division made a solid start to the year, thanks to success in deodorants and hair colorants. The year also started well in the Africa, Middle East zone, thanks in particular to the Gulf countries.

Luxe sales increased by 12.2% like-for-like and by 17.8% based on reported figures, helped by the positive impact of the Clarisonic acquisition. In Western Europe, in a market with a slightly negative trend, the division is advancing and winning market share, thanks in particular to Lancôme, Yves Saint Laurent and Kiehl's. In North America, L'Oréal Luxe is proving very dynamic, thanks to Clarisonic, Yves Saint Laurent, Ralph Lauren, Kiehl's and Viktor & Rolf. In the new markets, the division's growth is still very strong, particularly in Greater China. The Lancôme brand is proving dynamic there, Yves Saint Laurent has been successful with the strategic launch of its skin care line Forever Youth Liberator, Kiehl's is continuing to grow and Yue Sai has also recorded strong growth. Good advances also were made in the Middle East and in Latin America.

The Active Cosmetics division grew by 4.7% like-for-like and by 5.3% based on reported figures. The division's growth is clearly accelerating in North America and the new markets. In North America, the division's growth has been bolstered by the good results of SkinCeuticals and the extension of the distribution of Vichy and La Roche-Posay, which now includes American drugstores. Asia has started the year very well and Latin America has also grown strongly, driven by Vichy, La Roche-Posay and Innéov. Europe continues to reflect contrasting trends.

For the quarter, The Body Shop sales recorded like-for-like growth at 3.9%, with retail sales growing at 4.7%. It achieved strong growth in the new markets, particularly in the Middle East, and Southeast Asia. In mature markets performance was solid in the Nordics and North America. The brand continues to accelerate its growth in e-commerce, and now has 17 online stores. The brand also has started the global roll-out of its ground-breaking new Pulse boutique format, following successful trials of the concept in 2011.

Galderma's sales increased by 6.6%, like-for-like and +18.4% based on reported figures for Q1 2012. Epiduo (for acne), Restylane (a hyaluronic acid-based dermal filler) and Azzalure (a muscle relaxant for frown lines) all recorded strong growth. The Asia, Pacific zone showed strong growth led by outstanding performance in China. In Europe, solid growth in Germany was partially offset by the increase in sales of Loceryl generics in France. Growth in the United States was impacted by the anticipated entrance of Clobex shampoo and lotion generics, but Oracea (for rosacea) and Différine 0.3% (for acne) boasted excellent results.

More information on this financial report, as well as a geographic zone breakdown, is available here.

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