Earnings Release • Nov 6, 2012
Earnings Release
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Commenting on these figures, Mr Jean-Paul Agon, Chairman & CEO of L'Oréal, said:
"The quarter confirms the good growth in our sales observed since the start of the year. In a market which reflects highly contrasting trends in different geographic zones and distribution channels, L'Oréal is maintaining its course.
Despite the market slowdown observed in Asia and in Travel Retail, L'Oréal Luxe is proving highly dynamic, thanks to the vitality of its brands and major launches such as "La vie est belle" by Lancôme. The Consumer Products Division is recording solid growth quarter after quarter, and Active Cosmetics is accelerating, driven by its international expansion.
In geographic terms, L'Oréal is continuing its conquests in North America, and in the New Markets. In Asia, the group continues to grow faster than the market. Eastern Europe is gradually recovering, and Latin America is accelerating. The figure for Western Europe reflects good performances in several major countries, and the difficult situations in the southern countries.
Overall, in the current economic environment, the group is outperforming its market, thanks to the quality and diversity of its brand portfolio, and its innovation power.
We confirm our targets for 2012, and our ambition to achieve another year of growth in sales, results and profitability."
Like-for-like, i.e. based on a comparable structure and identical exchange rates, the sales trend of the L'Oréal group was +5.6%.
The net impact of changes in consolidation was +0.6%.
Currency fluctuations had a positive impact of +4.7%.
Growth at constant exchange rates was +6.2%. If current exchange rates (basis €1=\$1.2907) are extrapolated up to December 31st, the impact of currency fluctuations would be +4.3% for the whole of 2012.
Based on reported figures, the group's sales, at September 30th, 2012, amounted to 16.732 billion euros, an increase of +10.9%.
| rd quarter 3 2012 |
At September 30th , 2012 |
||||||
|---|---|---|---|---|---|---|---|
| €m | Growth | Growth | |||||
| Like-for-like | Reported | €m | Like-for-like | Reported | |||
| By operational division | |||||||
| Professional Products | 737.5 | 0.1% | 7.0% | 2,260.9 | 2.0% | 7.2% | |
| Consumer Products | 2,654.6 | 4.9% | 10.9% | 8,099.8 | 4.8% | 9.0% | |
| L'Oréal Luxe | 1,399.9 | 6.6% | 16.7% | 4,051.5 | 9.1% | 17.4% | |
| Active Cosmetics | 345.4 | 5.6% | 8.4% | 1,196.1 | 5.5% | 7.2% | |
| Cosmetics total | 5,137.4 | 4.7% | 11.7% | 15,608.3 | 5.5% | 10.7% | |
| By geographic zone | |||||||
| Western Europe | 1,757.4 | -0.6% | 1.4% | 5,594.6 | 0.4% | 1.7% | |
| North America | 1,350.5 | 7.1% | 22.8% | 3,921.7 | 7.2% | 19.4% | |
| New Markets, of which: | 2,029.5 | 8.1% | 14.9% | 6,092.0 | 9.5% | 14.4% | |
| - Asia-Pacific | 1,067.0 | 7.3% | 19.1% | 3,197.9 | 10.7% | 20.9% | |
| - Eastern Europe | 325.7 | 5.4% | 7.9% | 1,023.8 | 3.9% | 4.3% | |
| - Latin America | 470.1 | 11.4% | 10.2% | 1,351.9 | 9.4% | 7.5% | |
| - Africa, Middle East | 166.7 | 9.6% | 17.2% | 518.3 | 14.7% | 17.9% | |
| Cosmetics total | 5,137.4 | 4.7% | 11.7% | 15,608.3 | 5.5% | 10.7% | |
| The Body Shop | 191.1 | 5.1% | 15.3% | 565.0 | 5.3% | 12.3% | |
| Dermatology(1) | 190.7 | 3.1% | 10.9% | 559.1 | 8.2% | 16.7% | |
| Group total | 5,519.3 | 4.6% | 11.8% | 16,732.4 | 5.6% | 10.9% |
(1) Group share, i.e. 50%.
The Consumer Products Division achieved sales growth at end-September of +4.8% like-forlike and +9.0% based on reported figures. The division continues to make market share gains in Western Europe and in North America.
L'Oréal Paris continued its conquests with Elvive Triple Resist enriched with Arginine and launched Elvive ExtraOrdinary hair oil and Revitalift Triple Power LZR facial skincare, with highly concentrated Pro-Xylane.
Garnier is confirming its facial skincare successes, and has made a breakthrough with Olia, the first mass-market permanent hair colourant to feature ammonia-free ODS 2 technology.
Maybelline is innovating in the mascara segment with Volum' Express the Mega Plush, a gelmousse mascara which combines volume, comfort and softness.
Driven by the fashion for colour, Essie is continuing its internationalisation process in the massmarket segment.
In Western Europe, in a sluggish market, the division is strengthening its positions through haircare and facial skincare, particularly in France, the United Kingdom, Germany and in Northern Europe. The southern countries are still proving difficult in a depressed market context.
In North America, the division reinforced its positions in a market which is growing slightly.
Activity in Eastern Europe is improving, with the rebound of Garnier in facial skincare and hair colourants.
Latin America is accelerating, thanks to the strong growth of Maybelline and the success of Elvive Triple Resist enriched with Arginine.
Asia-Pacific is posting good scores in China, India, Thailand and Indonesia.
The Africa, Middle East zone is continuing its roll-out, driven by the Gulf states and Turkey.
L'Oréal Luxe sales grew at end-September by +9.1% like-for-like and +17.4% based on reported figures, thanks in particular to the acquisition of Clarisonic. In a market which has slowed slightly, L'Oréal Luxe is continuing to win market share worldwide, thanks to its innovations, and its increasingly high-end customer experience.
Lancôme continued to grow strongly, thanks in particular to the launch of the fragrance La Vie est Belle, with Julia Roberts as its ambassador. The brand is still making strong progress in antiageing skincare with Visionnaire, Absolue L'Extrait, and now Génifique Yeux Light Pearl. Yves Saint Laurent is launching Manifesto, its new women's fragrance, and is continuing its success in facial skincare with Forever Youth Liberator, and in make-up with Teint Touche Eclat. Giorgio Armani is consolidating its men's fragrance business with Acqua di Gio Essenza. Kiehl's is growing strongly on all continents.
Biotherm launched Blue Therapy skincare, which symbolises its new "Beauty from the deep" message.
The Designer Fragrance brands, particularly Viktor & Rolf, are maintaining their momentum.
Clarisonic, acquired in December 2011, is continuing its very rapid expansion in the United States, and is starting up operations in France.
In Western Europe, where the market is sluggish, the division is advancing, thanks to the dynamism of its major brands and the success of the Designer Fragrances, such as Diesel Only the Brave Tattoo.
In North America, L'Oréal Luxe is winning market share with Clarisonic, Ralph Lauren, Yves Saint Laurent, Kiehl's and Viktor & Rolf.
In the New Markets, the division's growth continues to be strong and higher than the market trend, particularly in Asia and the Middle East. Kiehl's is building up its sales substantially in Japan, following on from its successes in South Korea and China. In Asia, Lancôme continued to prove dynamic, and this was also the case for Yves Saint Laurent.
In the Middle East, Giorgio Armani is advancing with its premium perfume line Armani Privé.
In Latin America, Kiehl's is continuing its roll-out in Brazil, and Ralph Lauren is improving its positions.
In Travel Retail, in a market which, as expected, is decelerating, the division is maintaining its leadership.
At end-September, the Active Cosmetics Division posted sales growth of +5.5% like-for-like and +7.2% based on reported figures. The division achieved slight growth in Western Europe and is continuing to accelerate in North America.
La Roche Posay is performing well in all geographic zones, bolstered by the success of its whole catalogue.
Vichy is confirming its recovery, with a new advertising campaign and the successful launch of Idéalia.
Roger&Gallet is continuing its global roll-out with the success of its new fragrance, Rose imaginaire, and SkinCeuticals, which is expanding in international markets, while remaining extremely dynamic in the United States.
At the end of September, all the geographic zones have achieved growth. In Western Europe, the division is winning market share. North America is accelerating, particularly in the United States, thanks to the opening of new sales outlets at Walgreens.
The New Markets remain dynamic, despite the slowdown in Asia.
At end-September, the market in Western Europe reflects highly contrasting trends: growth rates in Southern Europe are negative, while in the other countries in this zone growth is slightly positive. Against this background, L'Oréal is making market share gains, and recorded growth of +0.4% like-forlike and +1.7% based on reported figures, driven by good performances in France, the United Kingdom, Germany and Travel Retail.
At September 30th , 2012, L'Oréal recorded growth in North America of +7.2% like-for-like, and +19.4% based on reported figures.
The good performance of L'Oréal Luxe reflects the successes scored by Clarisonic, Kiehl's, Yves Saint Laurent and Viktor & Rolf. The Consumer Products Division is continuing to make market share gains thanks to good performances in hair products, Garnier facial skincare and L'Oréal Paris and Essie make-up. The Active Cosmetics Division is continuing to extend its distribution.
At end-September 2012, the New Markets recorded growth of +9.5% like-for-like, and +14.4% based on reported figures.
At the end of September, The Body Shop recorded like-for-like sales growth at +5.3%.
The Body Shop is growing strongly in the New Markets, especially in the Middle East and in South East Asia. In the mature markets, the brand is feeling the impact of the tougher economic environment in Southern Europe, but maintains a solid performance in the rest of Europe.
The brand has launched several important innovations such as BB Cream All-in-One, a one-of-a-kind texture which transforms on application, as well as Pore Minimiser in its iconic Tea Tree range featuring Community Fair Trade organic tea tree oil from Kenya.
The Body Shop continues to recruit new customers particularly through the rapid development of its ecommerce channel, with 20 sites now live. The brand is rolling out its innovative Pulse boutique concept globally, focused on story-selling and a unique and interactive consumer experience.
At September 30th, 2012, The Body Shop has a total of 2,787 stores.
Despite increased competitive intensity from generic competition, Galderma recorded sales at September 30th, 2012, up by +8.2% like-for-like and +16.7% based on reported figures.
With regard to the prescription business, increased competition from generics to several of Galderma's mature brands (Differin, Clobex, Loceryl, Tetralysal and MetroGel) undermined the growth from newer innovative products such as Epiduo and Oracea, both of which are on track to deliver record performances in 2012.
The non-prescription drug business delivered strong results for the quarter and the medical Aesthetic & Corrective business continued to gain market share, led by the Restylane dermal filler franchise and Azzalure, the muscle relaxant.
In geographic terms, growth in Asia and Latin America was particularly robust and was partially offset by results from Europe.
To the best of the company's knowledge, no events or changes occurred during the period which could significantly modify the group's financial situation.
"This news release does not constitute an offer to s ell, or a solicitation of an offer to buy L'Oréal shares. If you wish to obtain more comprehensive information about L'Oréal, please refer to the public documents registered in France with th e Aut orité des Marchés Financiers, also available in English on our Internet site www.loreal-financ e.com.
This news release may contain some forward -looking statements. Although the Company considers that these statements are bas ed on reas onable hypotheses at the dat e of publication of t his release, they are by their nature subject to risks and uncertainties which could cause actual results to differ mat erially from those indic ated or projected in these statemen ts."
Contacts at L'ORÉAL (Switchboard: +33 1 47 56 70 00)
Individual shareholders Financial analysts and
and market authorities Institutional investors Journalists
Tel: +33 1 47 56 83 02 Tel: +33 1 47 56 86 82 Tel: +33 1 47 56 76 71
Mr Jean Régis CAROF Mrs Françoise LAUVIN Mrs Stephanie CARSON-PARKER [email protected] [email protected] [email protected]
For more information, please contact your bank, broker or financial institution (I.S.I.N. code: FR0000120321), and consult yo ur usual newspapers, and the Internet site for shareholders and investors, http://www.loreal-finance.com, or its mobile version on your cell phone, http://loreal-finance.mobi; alternatively, call +33 1 40 14 80 50.
| 2011 | 2012 | |
|---|---|---|
| First quarter: | ||
| Cosmetics | 4,861 | 5,309 |
| The Body Shop | 170 | 180 |
| Dermatology | 130 | 154 |
| First quarter total | 5,160 | 5,643 |
| Second quarter: | ||
| Cosmetics | 4,644 | 5,162 |
| The Body Shop | 168 | 194 |
| Dermatology | 177 | 215 |
| Second quarter total | 4,989 | 5,570 |
| First half: | ||
| Cosmetics | 9,505 | 10,471 |
| The Body Shop | 337 | 374 |
| Dermatology | 307 | 368 |
| First half total | 10,150 | 11,213 |
| Third quarter: | ||
| Cosmetics | 4,600 | 5,137 |
| The Body Shop | 166 | 191 |
| Dermatology | 172 | 191 |
| Third quarter total | 4,938 | 5,519 |
| Nine months: | ||
| Cosmetics | 14,105 | 15,608 |
| The Body Shop | 503 | 565 |
| Dermatology | 479 | 559 |
| Nine months total | 15,087 | 16,732 |
| Fourth quarter: | ||
| Cosmetics | 4,766 | |
| The Body Shop | 264 | |
| Dermatology | 226 | |
| Fourth quarter total | 5,256 | |
| Full year | ||
| Cosmetics | 18,871 | |
| The Body Shop | 768 | |
| Dermatology | 705 | |
| Full year total | 20,343 |
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