L'Oréal Finance : 2018 Annual Results Aller au contenu principal

Best sales growth in more than 10 years: +7.1%1
New record for operating margin: 18.3%

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  • Sales: 26.9 billion euros

    • +7.1% like-for-like1
    • +8.0% at constant exchange rates
    • +3.5% based on reported figures
  • Operating profit: 4.92 billion euros, representing 18.3% of sales
  • Earnings per share2: 7.08 euros, an increase of +6.5%
  • Net profit after non-controlling interests: 3.89 billion euros, an increase of +8.8%
  • Dividend3: 3.85 euros, an increase of +8.5%

The Board of Directors of L'Oréal met on 7 February 2019, under the chairmanship of Jean-Paul Agon and in the presence of the Statutory Auditors. The Board closed the consolidated financial statements and the financial statements for 2018. 

Commenting on the Annual Results, Jean-Paul Agon, Chairman and CEO of L'Oréal, said:  

"In a beauty market that accelerated significantly in 2018, L'Oréal marked its best year of growth since 2007, at +7.1%1, following a strong fourth-quarter increase of +7.7%1. 

All Divisions are growing, especially L'Oréal Luxe and Active Cosmetics, which both recorded double-digit growth. The big brands are the star performers, particularly in the L'Oréal Luxe Division, where Lancôme sales crossed the 3 billion euro mark. The Active Cosmetics Division achieved its highest growth for more than 10 years in a very dynamic skincare market. In the Consumer Products Division, 2018 was a good year for L'Oréal Paris and Maybelline New York. The Professional Products Division meanwhile recorded a modest increase in sales, thanks to a significant acceleration in the final quarter. 

The performance by geographic Zone remained differentiated. In Western Europe, progress was held back by difficulties in some markets, while growth in North America improved compared with the previous year. The New Markets achieved their best performance since 2007, and the Asia Pacific Zone, driven by China, has now overtaken North America with sales exceeding 7 billion euros. 

2018 was another very good year for two of our most powerful growth drivers. Firstly, e-commerce 4 which advanced by +40.6%, and now accounts for 11% of Group sales. Secondly, Travel Retail, which broke the 2 billion euro barrier with an increase of +27.1%.

The gross margin increased significantly and, after strong investments in research, innovation, and business drivers, the operating margin set a new record at 18.3% of sales.                                                                                      

More than ever, it's the strength of L'Oréal's business model, robust and well-balanced, covering all circuits, all categories, all price points and addressing all consumers, that enables the Group to seize opportunities wherever they are. All over the world, our teams are alert and listening to consumers' needs and desires. They adapt and allocate resources with great agility, always in the pursuit of excellence. This is how L'Oréal delivers profitable and sustainable growth, and strengthens its position as the cosmetics market leader year after year. 

And finally, in 2018, L'Oréal was recognised once again for its leadership in corporate environmental and social responsibility, notably by the CDP which identified L'Oréal, for the third consecutive year, as a world leader in sustainable development, with three ‘A' scores for the management of climate change, water security and forests. L'Oréal has also been acknowledged for its commitment to gender equality, and was named number 1 in Europe for gender parity by Equileap. In terms of ethics, L'Oréal remains exemplary, and is ranked number 1 worldwide by the ethical reputation index Covalence EthicalQuote. 

In an economic context that remains volatile and uncertain, we are confident, thanks to our innovations, powerful brands, digital excellence and in particular our outstanding teams all over the world, that we can pursue our corporate social responsibility commitments, outperform the beauty market in 2019 and achieve another year of growth in both sales and profits."                                                                

The Board of Directors will propose to the Annual General Meeting of 18 April 2019 the renewal of the tenure as director of Mrs. Sophie Bellon for a term of four years.
The Board will propose to the Annual General Meeting the candidacy of Ms Fabienne Dulac, Deputy CEO of the Orange Group, Chief Executive Director of Orange France, as a new independent director.
If the Annual General Meeting approves the proposed renewal of tenure and candidacy, the number of independent directors will be 8 out of 14, representing an independent director ratio of 57%. The number of women on the Board of Directors will be 7 out of 14 directors appointed by the Annual General Meeting, which corresponds to a women's representation rate of 50%5.

2018 Sales

Like-for-like, i.e. based on a comparable scope of consolidation and constant exchange rates, the sales growth of the L'Oréal group was +7.1%.
The net impact of changes in the scope of consolidation amounted to +0.9%.
Growth at constant exchange rates was +8.0%.
At the end of 2018, currency fluctuations had a negative impact of -4.5%.
Based on reported figures, the Group's sales, at 31 December 2018, amounted to 26.9 billion euros, an increase of +3.5%.

Sales by Division and Geographic Zone


  4th quarter 2018   At 31 December 2018
  Growth   Growth
  €m Like-for-like Reported €m Like-for-like Reported
By Division            
Professional Products 857.2 +3.5% +3.1% 3,262.5 +2.0% -2.6%
Consumer Products 3,041.7 +2.8% +4.5% 12,032.2 +2.5% -0.7%
L'Oréal Luxe 2,651.5 +14.7% +15.3% 9,367.2 +14.4% +10.6%
Active Cosmetics 523.0 +11.9% +10.7% 2,275.5 +11.9% +9.2%
GROUP TOTAL 7,073.4 +7.7% +8.6% 26,937.4 +7.1% +3.5%
By Geographic Zone            
Western Europe 2,075.1 +0.9% +1.3% 8,065.1 -0.3% -0.7%
North America 1,849.2 +2.2% +5.0% 7,234.3 +2.7% -1.6%
New Markets, of which: 3,149.1 +16.5% +16.5% 11,638.1 +16.1% +10.3%
 - Asia Pacific 2,063.3 +26.2% +29.3% 7,405.6 +24.1% +20.4%
 - Latin America 6 463.4 -2.8% -5.1% 1,784.8 -0.4% -8.6%
 - Eastern Europe 454.2 +9.1% +1.0% 1,754.2 +9.1% +0.2%
 - Africa, Middle East 7 168.2 -2.7% -1.1% 693.5 +4.9% +0.2%
GROUP TOTAL 7,073.4 +7.7% +8.6% 26,937.4 +7.1% +3.5% 


The Professional Products Division ended the year at +2.0% like-for-like and -2.6% reported.
The year was marked by renewed dynamism in this Division, which accelerated in the fourth quarter. All geographic Zones are growing, except for Western Europe. The return to growth in the United States and Brazil has been confirmed. Momentum was maintained in the Asia Pacific Zone, driven by India and China, and in Eastern Europe.
Haircare is benefiting from the strong growth of Kérastase, combining the success of Resistance Extentioniste and Fusio-Dose customised in-salon haircare with the roll-out of a selective multi-channel strategy. Dynamism in hair colour is being driven by Shades EQ by Redken, which recorded another year of growth, the success of the SoColor Cult launch at Matrix and the good performance of Dia at L'Oréal Professionnel.


The Consumer Products Division posted fourth quarter growth of +2.8% like-for-like, and ended the year at +2.5% like-for-like and -0.7% reported.
The Division's three major brands are growing. L'Oréal Paris and Maybelline New York are maintaining their very good annual momentum, and Garnier accelerated in the fourth quarter.
Skincare is growing strongly, with double-digit growth worldwide in facial skincare, thanks to the excellent performance of Revitalift Filler by L'Oréal Paris, Garnier tissue masks and Men Expert skincare. Makeup growth continues, driven especially by Maybelline New York and the global success of Superstay Matte Ink and Fit Me!. In haircare there were two very successful launches: Elseve Dream Lengths and Fructis Hair Food.
The Division is facing ongoing difficulties in Western Europe, where the market remains sluggish, and in Brazil. It is winning market share in the United States and Eastern Europe, and continuing to accelerate sharply in Asia, thanks in particular to China and India.
E-commerce4 continues to show strong growth. 


L'Oréal Luxe sales grew by +14.4% like-for-like and +10.6% reported, with a second half at +15.1% like-for-like. The Division outperformed the market and made 2018 a historic year.
The Division's four billionaire brands are posting double-digit growth. Lancôme is being driven by its skincare performance, with franchises Génifique and Absolue, and the undisputed success of La Vie est Belle. Yves Saint Laurent and Giorgio Armani had a very good year in fragrances, with Black Opium, Y, Sì Passione and Acqua di Giò Absolu, and in foundations. Kiehl's is benefiting from the acceleration in skincare, with an excellent performance from Line-Reducing Concentrate. The successful development of IT Cosmetics and Atelier Cologne is continuing. 
L'Oréal Luxe is winning market share in Asia Pacific, particularly in China where growth is double-digit. The Division performed well in dynamic markets in Travel Retail, Eastern Europe and Latin America. In Western Europe and Africa, Middle East, it is outperforming more difficult markets.
Meanwhile, the Division continues to accelerate in e-commerce4.


The Active Cosmetics Division maintained strong growth momentum in the fourth quarter, and ended an outstanding year at +11.9% like-for-like and +9.2% reported.
The Division continues to win market share across all geographic Zones at a rapid pace, with growth remaining strong in North America and in Asia.
All the major brands are contributing to the Division's growth. La Roche-Posay ended the year with double-digit growth, driven by its anti-wrinkle innovation Hyalu B5, and core franchises Anthelios and Effaclar, and is performing well across all Zones. Growth at Vichy is again bolstered by the success of Minéral 89, the star product of 2018. SkinCeuticals is posting very strong growth in all Zones, and strengthening its number 1 position in professional skincare in the United States. CeraVe is recording double-digit growth in North America, and has now been rolled out in more than 30 countries.
E-commerce4 is accelerating sharply, and accounts for more than 13% of the Division's sales.


Multi-division summary by Geographic Zone


The Zone recorded sales growth in the fourth quarter, and ended the year at -0.3% like-for-like, and -0.7% reported. In 2018, Western Europe was affected by the sluggishness of some markets, such as France and the United Kingdom, and by a slowdown in the makeup category.
L'Oréal Luxe is outperforming its market, thanks to the dynamism of Lancôme, Giorgio Armani and Kiehl's, and the same is true of the Active Cosmetics Division, thanks to the rapid growth of La Roche-Posay and the CeraVe roll-out. The Consumer Products Division is strengthening its positions in makeup, reflecting the good results of the Maybelline New York and Essie brands, and more recently in skincare, thanks to L'Oréal Paris anti-ageing products and Garnier cleansing.


The Zone posted growth of +2.7% like-for-like and -1.6% reported.
The Consumer Products Division remains on track, and increased its market share in the makeup and hair colour segments, thanks to strong performances by the L'Oréal Paris, Maybelline New York and Essie brands. In luxury, skincare is a highly dynamic segment, with the Kiehl's and IT Cosmetics brands outperforming the market. L'Oréal Luxe is also growing faster than its market in the fragrance category. In the Professional Products Division, growth is driven by the Redken and Matrix brands, and by the acquisition of Pulp Riot. The upturn in the sales of the iconic Kérastase brand is also worth noting. The Active Cosmetics Division posted a good performance close to 20% with its brands CeraVe, SkinCeuticals, La Roche-Posay and Vichy, which are all delivering double-digit growth.


Asia Pacific: Growth in this Zone came out at +24.1% like-for-like and +20.4% reported. All four Divisions are winning market share. The dynamism of Chinese consumers, combined with the good performance of premium brands and rapid growth in several other South-East Asian markets as well as in Travel Retail, were the Zone's main growth drivers. The four Divisions posted robust fourth-quarter figures, thanks to the success of Singles' Day (11/11) sales in China. The acquisition of Stylenanda in June strengthened the Group's position in the Zone.

Latin America: The Zone is at -0.4% like-for-like and -8.6% reported. The L'Oréal Luxe and Active Cosmetics Divisions are posting strong growth, and winning market share. In Brazil, the Professional Products Division is growing strongly, while the performance of the Consumer Products Division reflects ongoing challenges, but improved in the second half. The adjustment on 1 July to allow for hyperinflation in Argentina had a negative impact of -2.0% like-for-like on the Zone's annual growth.

Eastern Europe: In this Zone growth amounted to +9.1% like-for-like and +0.2% reported. Growth was driven by all four Divisions, but especially by Active Cosmetics. Across the individual countries, Turkey, Ukraine, Romania and Czech Republic posted very dynamic growth. E-commerce4 is growing very quickly, by more than 50%. 

Africa, Middle East: The Zone recorded growth of +4.9% like-for-like and +0.2% reported, despite the unfavourable geopolitical context and sluggish markets, especially in the Middle East. Egypt and Morocco posted good growth, and all Divisions increased their market share. There was positive development in South Africa and Kenya, thanks in particular to the Consumer Products Division and the launch of the Mixa bodycare range.

Important events during the period 01/10/18 to 31/12/18 and post-closing event


  • On 19 November 2018, the L'Oréal group announced two important changes within its Executive Committee: Christophe Babule is appointed Executive Vice-President, Chief Financial Officer, and will succeed Christian Mulliez as of 8 February 2019. Cyril Chapuy was appointed President L'Oréal Luxe, as of 1 January 2019, reporting to Nicolas Hieronimus, Deputy CEO in charge of Divisions.
  • On 5 December 2018, L'Oréal announced the launch of BOLD, Business Opportunities for L'Oréal Development, a corporate venture capital fund that will take minority stakes in innovative startups with high growth potential. The fund will invest in new business models in marketing, Research & Innovation, digital, retail, communication, supply chain and packaging.
  • On 20 December 2018, Covalence EthicalQuote ranked L'Oréal number 1 worldwide across all industries in its reputation index. This ranking of the world's largest listed companies reflects stakeholder and media perceptions, and companies' communication on environmental, social, governance and human rights issues.
  • On 22 January 2019, L'Oréal was recognised for the third year in a row as a global leader in corporate sustainability by non-profit organisation CDP, with three ‘A' scores for the management of climate change, water security and forests. 

2018 Results

Audited financial statements, certification in progress. 

Operating profitability at 18.3% of sales

Consolidated profit and loss accounts: from sales to operating profit. 

  2017 2018
  €m % sales €m % sales
Sales 26,023.7 100.0% 26,937.4 100.0%
Cost of sales -7,359.2 28.3% -7,331.6 27.2%
Gross profit 18,664.5 71.7% 19,605.8 72.8%
R&D expenses -877.1 3.4% -914.4 3.4%
Advertising and promotion expenses -7,650.6 29.4% -8,144.7 30.2%
Selling, general and administrative expenses -5,460.5 21.0% -5,624.7 20.9%
Operating profit 4,676.3 18.0% 4,922.0 18.3%

Gross profit, at 19,605 million euros, came out at 72.8% of sales, compared with 71.7% in 2017, which is an improvement of 110 basis points. 
Research and Development expenses, at 914 million euros, have increased by 4.3%.
As announced, advertising and promotion expenses increased to 30.2% of sales, representing an increase of 80 basis points. 
Selling, general and administrative expenses, at 20.9% of sales, have been reduced by 10 basis points.
Overall, operating profit has grown by +5.3% to 4,922 million euros, and amounts to 18.3% of sales, representing an increase of 30 basis points. 

Operating profit by Division

  2017 2018
  €m % sales €m % sales
By Division        
Professional Products 669.4 20.0% 651.5 20.0%
Consumer Products 2,419.0 20.0% 2,428.1 20.2%
L'Oréal Luxe 1,855.8 21.9% 2,072.4 22.1%
Active Cosmetics 471.2 22.6% 523.0 23.0%
Divisions total 5,415.4 20.8% 5,675.0 21.1%
Non-allocated 8 -739.1 -2.8% -753.1 -2.8%
Group 4,676.3 18.0% 4,922.0 18.3%

The profitability of the Professional Products Division came out at 20.0%.
The profitability of the Consumer Products Division came out at 20.2%, an improvement of 20 basis points compared with 2017.
The profitability of L'Oréal Luxe, at 22.1%, increased by 20 basis points.
The profitability of the Active Cosmetics Division came out at 23.0%, representing an increase of 40 basis points. 
Non-allocated expenses amounted to 753 million euros, which is stable in relative value.

Profitability by Geographic Zone

  2017 2018
 Operating profit €m % sales €m % sales
Western Europe 1,860.4 22.9% 1,682.5 20.9%
North America 1,411.3 19.2% 1,430.0 19.8%
New Markets 2,143.6 20.3% 2,562.5 22.0%
Geographic Zones total9 5,415.4 20.8% 5,675.0 21.1%

Profitability in Western Europe came out at 20.9%, 200 basis points lower than last year.
In North America, profitability came out at 19.8%, an increase of 60 basis points compared with 2017.
And in the New Markets, profitability increased by 170 basis points compared to the previous year, and amounted to 22.0% of sales.

Net profit

Consolidated profit and loss accounts: from operating profit to net profit excluding non-recurring items. 
€m 2017 2018 % growth
Operating profit 4,676.3 4,922.0 +5.3%
Financial revenues and expenses excluding dividends received -22.9 -1.9  
Sanofi dividends 350.0 358.3  
Profit before tax excluding non-recurring items 5,003.3 5,278.4 +5.5%
Income tax excluding non-recurring items -1,250.5 -1,286.8  
Net profit excluding non-recurring items of equity consolidated companies -0.1 +0.1  
Non-controlling interests -3.9 -4.1  
Net profit excluding non-recurring items after non-controlling interests 3,748.710 3,987.6 +6.4%
EPS11 (€) 6.65 7.08 +6.5%
Net profit after non-controlling interests 3,581.4 3,895.4  +8.8%
Diluted EPS after non-controlling interests (€) 6.36 6.92  
Diluted average number of shares 563,528,502 563,098,506  

Finance expenses came out at approximately 1.9 million euros. 
Sanofi dividends amounted to 358 million euros. 
Income tax excluding non-recurrent items amounted to 1,286 million euros, representing a tax rate of 24.4%.  
Net profit excluding non-recurring items after non-controlling interests12 from continuing operations amounted to 3,987 million euros, an increase of +6.4%, and +10% at constant exchange rates. 
Earnings per Share, at 7.08 euros, is up by +6.5%. 
Non-recurring items after non-controlling interests amounted to -92 million euros net of tax. 
Net profit came out at 3,895 million euros, an increase of +8.8%. 

Cash flow statement, Balance sheet and Cash position

Gross cash flow amounted to 5,178 million euros, an increase of 4.1%.
The working capital requirement decreased by 113 million euros.
At 1,416 million euros, investments represented 5.3% of sales. 
Net cash flow13 at 3,875 million euros, is down slightly after a strong increase in the previous year.
The balance sheet is particularly solid, with shareholders' equity amounting to 26.9 billion euros, and net cash at 2,751 million euros at 31 December 2018.

Proposed dividend at the Annual General Meeting of 18 April 2019

The Board of Directors has decided to propose to the shareholders' Annual General Meeting of 18 April 2019 a dividend of 3.85 euros per share, an increase of +8.5% compared with the dividend paid in 2018. The dividend will be paid on 30 April 2019 (ex-dividend date 26 April 2019 at 0:00 a.m., Paris time). 

Share capital

At 31 December 2018, the capital of the company is formed by 560,396,652 shares, each with one voting right.

"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."
This is a free translation into English of the 2018 Annual Results news 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

Individual shareholders and market authorities
Mr Jean Régis CAROF
Tel.: +33 1 47 56 83 02
[email protected] 

Financial analysts and Institutional investors 
Mrs Françoise LAUVIN
Tel.: +33 1 47 56 86 82
[email protected] 
Tel.: +33 1 47 56 76 71
[email protected]

Tel.: +33 1 47 56 70 00

For more information, please contact your bank, broker or financial institution (I.S.I.N. code: FR0000120321), and consult your usual newspapers, the Internet site for shareholders and investors, www.loreal-finance.com, or the L'Oréal Finance mobile app, alternatively, call +33 1 40 14 80 50.


Appendix 1: L'Oréal group sales 2017/2018 (€ million)

  201714 2018
First quarter:    
Operational Divisions 6,847.8 6,778.6
The Body Shop 197.2  
First quarter total 7,045.0 6,778.6
Second quarter:    
Operational Divisions 6,564.2  6,612.1
The Body Shop    
Second quarter total 6,564.2  6,612.1
First half:    
Operational Divisions 13,411.9  13,390.7
The Body Shop    
First half total 13,411.9  13,390.7
Third quarter:    
Operational Divisions 6,097.9  6,473.3
The Body Shop    
Third quarter total 6,097.9 6,473.3 
Nine months:    
Operational Divisions 19,509.9  19,864.0
The Body Shop    
Nine months total 19,509.9  19,864.0
Fourth quarter:    
Operational Divisions 6,513.8  7,073.4
The Body Shop    
Fourth quarter total 6,513.8  7,073.4
Full year:    
Operational Divisions 26,023.7  26,937.4
The Body Shop    
Full year total 26,023.7  26,937.4


  1. Like-for-like sales growth: based on a comparable scope of consolidation and identical exchange rates. See page 3 for more details.
  2. Diluted earnings per share, based on net profit, excluding non-recurring items, after non-controlling interests, from continuing operations.
  3. Proposed at the Annual General Meeting of 18 April 2019.
  4. Sales achieved on our brands’ own websites + estimated sales achieved by our brands corresponding to sales through our retailers’ websites (non-audited data).
  5. The two directors representing employees are not taken into account in calculating these percentages, in accordance with the AFEP-MEDEF Code.
  6. The Group has applied the IAS 29 accounting rule (Financial Reporting in Hyperinflationary Economies) to Argentina from 1 July 2018 onwards. The negative impact of this adjustment amounts to 200 basis points on like-for-like growth in Latin America and to 10 basis points on the growth of the whole L’Oréal group in the full-year 2018.
  7. The application of the IFRS 15 accounting rule from 1 January 2018 has resulted in the restatement of sales with distributors when they operate as agents and not on their own behalf. The impact of this restatement amounted to 7.6 million euros on the sales of the Africa, Middle East Zone in the fourth quarter of 2018. The effect of this accounting method on the profit and loss account and the balance sheet is not material.
  8. Non-allocated = Central Group expenses, fundamental research expenses, free grant of shares expenses and miscellaneous items. As a % of sales.
  9. Before non-allocated.
  10. Net profit, excluding non-recurring items after non-controlling interests, from continuing operations.
  11. Diluted earnings per share, based on net profit, excluding non-recurring items, after non-controlling interests, from continuing operations.
  12. Non-recurring items include impairment of assets, net profit of discontinued operations, restructuring costs and tax effects of non-recurring items.
  13. Net cash flow = Gross cash flow + changes in working capital - capital expenditure.
  14. In the first quarter 2017, reported Group sales included The Body Shop sales, which amounted to 197.2 million euros. 



Appendices 2 to 6 are available in hte full PDF version of the news release which can be downloaded here below: