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L’Oréal Q4, Full-year 2020 Results

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Gross profit was reported at 20.459 billion euros

L’Oréal announced its full-year 2020 results that reported sales at 27.99 billion euros. Fourth quarter 2020 results were 7.87 billion euros. The company reported an operating profit of 5.20 billion euros for its full-year, representing 18.6% of sales. 

L’Oréal reported its net cash flow at 5.48 billion euros, an increase of 8.9%.

Earnings per share were reported at 7.30 euros. 

Gross profit was reported at 20.459 billion euros, which represented 73.1% of sales.

The professional product division reported sales at 893.8 million euros during Q4 and 3.09 billion euros for the full year. The consumer products division reported sales at 2.991 billion euros during Q4 and 11.703 billion euros for the full year; active cosmetics reported sales at 771.5 million euros during Q4 and3.01 billion euros for the full year.

L’Oréal Luxe reported sales at 3.22 billion euros during the fourth quarter and 10.17 billion euros for the full year.

Jean-Paul Agon, Chairman and CEO of L’Oréal, said: 

In 2020, the Covid-19 pandemic, which spread across the world, triggered a crisis of supply due to the widespread closure of points of sale which led to an unprecedented, if temporary, decline of the beauty market.

Throughout the year, L’Oréal made the protection of all its employees as well as its customers and suppliers an absolute priority and mobilised to produce millions of units of hand sanitiser and hand cream for donation to healthcare and other frontline workers.

Thanks to the outstanding commitment of its employees, L’Oréal has traversed this crisis in the best possible condition and has even grown stronger. As anticipated and announced, the Group returned to growth in the second half, with a fourth quarter in acceleration at +4.8%, and won significant market shares.

Thanks to its strength in digital and e-commerce, which has again increased considerably during the crisis, L’Oréal has been able to maintain a close relationship with all its consumers and compensate to a large extent for the closure of points of sale. As a result, sales achieved in e-commerce rose sharply by +62%, across all Divisions and all regions, reaching the record level of 26.6% of the total Group’s sales for the year.

The Active Cosmetics Division had a record year driven by a dynamic skincare market and the remarkable success of its brands, recommended by healthcare professionals. The Consumer Products Division returned to equilibrium in the second half of the year despite the weight of makeup, and increased its market share in the other major categories. The Professional Products Division, significantly impacted by the closure of salons in the first half of the year, bounced back strongly in the second and significantly outperformed the market over the year as a whole. Lastly, L’Oréal Luxe, in an extremely difficult context, also outperformed the market and even returned to growth in the last quarter.

By geographic Zone, performance was contrasted. In Western Europe and North America, growth was impacted by the development of the pandemic and public health measures, but L’Oréal gained market share in many countries. In the New Markets, the Group saw a return to growth in all Zones in the second half of the year. The performance of China is spectacular and its contribution to the performance of the Group is important.

After demonstrating its resistance over the first half of the year, the Group engaged the second half with a determined and virtuous dynamic: launching major innovations, reinvesting in business drivers leading to a return to growth like-for-like, with flexibility and rigorous cost control allowing for an improvement in profitability. Over the year as a whole, and in spite of the crisis, L’Oréal maintained an operating margin of 18.6%, and generated strong operating cash flow.

The Group’s non-financial performance was equally remarkable. For the fifth consecutive year, L’Oréal was recognised by the CDP as a global leader in sustainable development for its actions to fight climate change, protect forests and manage water sustainably. In addition, the Group was ranked in the top ten among 9,000 companies evaluated by the Refinitiv Diversity & Inclusion Index. L’Oréal was also recognised, for the eleventh time, as one of the world’s most ethical companies by the Ethisphere Institute. Finally, in 2020, L’Oréal launched its L’Oréal for the Future programme with ambitious new sustainability commitments for 2030.

Driven by the strength of its strategic choices and a determined dynamic across the year, L’Oréal has adapted to this unprecedented context and terrible pandemic with speed and agility, accelerated all of its transformations and will emerge stronger.

As the beginning of this new year, which remains marked by uncertainty regarding the evolution of the pandemic, but also by consumer’s appetite for beauty that remains intact across the world, we are confident in our capacity to outperform the market again this year and, subject to the evolution of the sanitary crisis, achieve a year of growth in sales and profits.