Earnings Release • Apr 18, 2013
Earnings Release
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Commenting on these figures, Mr Jean-Paul Agon, Chairman and CEO of L'Oréal, said:
"L'Oréal has made a solid start to the year, with good organic growth, along with really significant market share gains.
The Consumer Products, L'Oréal Luxe and Active Cosmetics divisions are growing strongly, driven by major innovations such as Olia by Garnier, L'Oréal Paris Advanced Haircare, La Vie est Belle by Lancôme, or Idéalia by Vichy. All our brands are on the offensive, and this has enabled the group to post new records for market shares, especially in Western Europe and North America. Growth trends in the New Markets are homogeneous and sustained. The Professional Products Division meanwhile is still being held back by the very difficult market context, particularly in Southern Europe.
These strategic advances, together with the quality of initiatives across all divisions, both in developed countries and the New Markets, make us confident in our ability to outperform the market in 2013, and to achieve another year of growth in both sales and profits."
Like-for-like, i.e. based on a comparable structure and identical exchange rates, the sales growth of the L'Oréal group was +5.5%.
The net impact of changes in consolidation was +1.0%.
Currency fluctuations had a negative impact of -1.4%.
Growth at constant exchange rates was +6.5%. If end of March current exchange rates (€1 at \$1.2813) are extrapolated up to December 31st, the impact of currency fluctuations would be -1.0% for the whole of 2013.
Based on reported figures, the group's sales at March 31st, 2013 amounted to 5.932 billion euros, an increase of +5.1%.
| Quarterly sales | Growth | |||
|---|---|---|---|---|
| € million | 1st quarter 2012 | 1st quarter 2013 | Like-for-like | Reported |
| By division | ||||
| Professional Products | 755.6 | 752.6 | 0.0% | -0.4% |
| Consumer Products | 2,769.5 | 2,920.8 | 6.5% | 5.5% |
| L'Oréal Luxe | 1,315.5 | 1,422.0 | 7.2% | 8.1% |
| Active Cosmetics | 468.6 | 497.6 | 7.2% | 6.2% |
| Cosmetics total | 5,309.1 | 5,593.0 | 5.8% | 5.3% |
| By geographic zone | ||||
| Western Europe | 1,953.9 | 1,990.4 | 1.7% | 1.9% |
| North America | 1,263.4 | 1,371.4 | 6.3% | 8.5% |
| New Markets, of which: | 2,091.7 | 2,231.1 | 9.4% | 6.7% |
| - Asia, Pacific | 1,124.3 | 1,188.4 | 7.7% | 5.7% |
| - Latin America | 433.5 | 458.7 | 11.8% | 5.8% |
| - Eastern Europe | 360.0 | 389.7 | 9.2% | 8.2% |
| - Africa, Middle East | 173.8 | 194.3 | 15.0% | 11.8% |
| Cosmetics total | 5,309.1 | 5,593.0 | 5.8% | 5.3% |
| The Body Shop | 180.4 | 181.9 | 1.8% | 0.8% |
| Dermatology(1) | 153.5 | 156.7 | -0.4% | 2.1% |
| Group total | 5,643.0 | 5,931.6 | 5.5% | 5.1% |
(1) Group share, i.e. 50%.
At end-March, the Professional Products Division is stable in like-for-like terms, posting -0.4% based on reported figures. Markets in mature countries remain difficult, particularly in Southern Europe, and salon visits in the United States have contracted. The dynamic trend of the New Markets is continuing.
The luxury haircare segment remains buoyant, and is reflected by the growth at Kérastase, bolstered by the launches of Densifique, the hair density activator with Stemoxydine®, and Initialiste hair beauty serum.
In the hair colourant category, the worldwide roll-out of ODS technology is continuing with INOA Suprême by L'Oréal Professionnel, ColorInsider by Matrix and Chromatics Beyond Cover by Redken. The accessibly priced hair colourant Socolor by Matrix is being rolled out in Asia.
The division, historically exposed to mature markets, is above all feeling the effects of economic sluggishness in Italy, Spain and Portugal, with a very sharp fall in salon visits. In the New Markets, the division is strengthening its positions in Russia, and is growing strongly in India, Indonesia and Africa-Middle East.
In the first quarter, the Consumer Products Division achieved growth of +6.5% like-for-like and +5.5% based on reported figures, driven by the success of its major product initiatives and significant market share gains in key countries.
At end-March, L'Oréal Luxe has advanced by +7.2% like-for-like and +8.1% based on reported figures, including the first time consolidation of the Urban Decay brand. L'Oréal Luxe is growing faster than the market, thanks to good growth trends for the major brands in the portfolio, and its performances in the New Markets and in North America.
In the first quarter, the sales of the Active Cosmetics Division clearly accelerated at +7.2% like-forlike (+6.2% based on reported figures), thanks to the recovery of Vichy and the continuing strong growth of La Roche-Posay.
The European context is still adversely affected by declining markets in the Southern countries, especially in hair salons and the selective market. Thanks to strong market share gains by the Consumer Products and Active Cosmetics divisions, good growth in Germany and France, and a turnaround in Spain, L'Oréal recorded growth of +1.7% like-for-like and +1.9% based on reported figures.
L'Oréal posted growth of +6.3% like-for-like and +8.5% based on reported figures. The good results are continuing in the Consumer Products Division, thanks to the launches of Advanced Haircare and Miracle Blur by L'Oréal Paris, and Olia by Garnier. L'Oréal Luxe also produced a solid performance, thanks to Clarisonic, Kiehl's, Yves Saint Laurent and Viktor&Rolf, together with Urban Decay, which was consolidated for the first time. Vichy and SkinCeuticals made a good start to the year in Active Cosmetics.
Asia-Pacific: L'Oréal recorded growth of +7.7% like-for-like and +5.7% based on reported figures. If Japan is excluded, like-for-like growth came out at +8.9%.
The group is continuing to gain market share, thanks especially to L'Oréal Luxe. There are contrasting trends in markets in this region: South Korea is strongly negative, but China, India and the ASEAN countries remain buoyant.
At L'Oréal Luxe the first quarter reflected continuing strong growth in China. The Consumer Products Division posted, with L'Oréal Paris, good performances in China and India, and proved dynamic in Indonesia and Thailand.
At end-March, The Body Shop recorded sales growth of +1.8% like-for-like, and +0.8% based on reported figures. The Middle East and South-East Asia posted good growth while sales in mature markets are being affected by the depressed economic environment.
Internet sales are clearly proving to be a strategic channel for recruiting new consumers.
The Body Shop is launching Absinthe, a range of handcare products.
Galderma sales decreased by -0.4% like-for-like, and +2.1% based on reported figures.
The first quarter was affected by a combination of negative factors, especially pressure from generics in Europe which, as announced, is impacting Tetralysal (acne). Loceryl (fungal nail infections) is also experiencing stiffer competition in Germany and Russia.
Sales of prescription products are increasing. Epiduo, the world's first prescription treatment in the topical acne market, and Clobex (psoriaris) are growing strongly, especially in North America. Medical solutions in aesthetic and corrective dermatology are continuing to advance, driven by the strong growth of Azzalure (muscle relaxant), particularly in Asia-Pacific.
Spirig has been consolidated since 1st March, 2013.
This a free translation into English of the First Quarter 2013 press release issued in the French language and is provided solely for the convenience of English speaking readers. In case of discrepancy, the French version prevails.
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 your usual newspapers, and the Internet site for shareholders and investors, http://www.loreal-finance.com, alternatively,call +33.1.40.14.80.50.
"This news release does not constitute an offer to sell, 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 the Autorité des Marchés Financiers, also available in English on our Internet site www.loreal-finance.com.
This news release may contain some forward-looking statements. Although the Company considers that these statements are based on reasonable hypotheses at the date of publication of this release, they are by their nature subject to risks and uncertainties which could cause actual results to differ materially from those indicated or projected in these statements."
| 2012 | 2013 | |
|---|---|---|
| First quarter: | ||
| Cosmetics | 5,309 | 5,593 |
| The Body Shop | 180 | 182 |
| Dermatology | 154 | 157 |
| First quarter total | 5,643 | 5,932 |
| Second quarter: | ||
| Cosmetics | 5,162 | |
| The Body Shop | 194 | |
| Dermatology | 215 | |
| Second quarter total | 5,570 | |
| First half: | ||
| Cosmetics | 10,471 | |
| The Body Shop | 374 | |
| Dermatology | 368 | |
| First half total | 11,213 | |
| Third quarter: | ||
| Cosmetics | 5,137 | |
| The Body Shop | 191 | |
| Dermatology | 191 | |
| Third quarter total | 5,519 | |
| Nine months: | ||
| Cosmetics | 15,608 | |
| The Body Shop | 565 | |
| Dermatology | 559 | |
| Nine months total | 16,732 | |
| Fourth quarter: | ||
| Cosmetics | 5,204 | |
| The Body Shop | 290 | |
| Dermatology | 236 | |
| Fourth quarter total | 5,730 | |
| Full year | ||
| Cosmetics | 20,812 | |
| The Body Shop | 855 | |
| Dermatology | 796 | |
| Full year total | 22,463 |
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