10.25.21
Update: L'Oreal ranks at #1 again—see our latest report: Top 20 Global Beauty Companies 2022
#1 L'Oreal — Top 20 Global Beauty Companies 2021
L'Oreal ranks at #1 in our Top Global Beauty Companies of 2021 Report.Below is a look at the company's highlights, recent acquisitions, best-selling brands, and latest innovations.
Beauty Sales
$34 billion
Key Personnel
Nicolas Hieronimus, chief executive officer; Barbara Lavernos, president research, innovation and technologies; Vincent Boinay, president, Travel Retail; Cyril Chapuy, president, Luxe; Myriam Cohen-Welgryn, president, Active Cosmetics; Vianney Derville, president, Europe zone; Omar Hajeri, president, Professional Products; Fabrice Megarbane, president, North Asia Zone & chief executive officer, L’Oréal China; Alexis Perakis-Valat, president, Consumer Products; Stéphane Rinderknech, president & CEO of L’Oréal USA; Frédéric Rozé, chief global growth officer; Vismay Sharma, president, South Asia Pacific, Middle East, North Africa zones
Major Products
Hair care, skin care, color cosmetics, sun care and fragrances sold under numerous brand names in multiple channels, including: Consumer: Garnier Fructis, L’Oréal Paris, Maybelline, SoftSheen-Carson, NYX, Essie. Luxury: Lancôme, Biotherm, Urban Decay, IT Cosmetics, Helena Rubenstein, Mugler, Kiehl’s, Shu Uemura, Giorgio Armani, Ralph Lauren, Cacharel, Viktor & Rolf, Diesel, YSL Beauté, J-beauty company Takami Co. Active Cosmetics: Professional: L’Oréal Professional, Kerastase, Redken, Pureology, Matrix, Mizano, Shu Uemura Art of Hair, Keraskin Esthetics. Vichy, LaRoche-Posay, CeraVe, Innerve, SkinCeuticals, Sanoflore
New Products
Lancôme Clarifique Dual Face Essence, Lancôme Idôle Aura Eau de Parfum, Prince x Urban Decay capsule collection, Garnier Whole Blends Shampoo Bars, Kiehl’s Ferulic Brew Rejuvenating Facial Essence, Kerastase Blond Absolu, CeraVe Hydrating Facial Cleanser, Maybelline Colossal Mascara, Maybelline FitMe Tinted Moisturizer
Comments
It was a nerve-wracking Covid-complicated year for L’Oréal, but the world’s largest beauty company managed to squeak through with another half billion dollars over the previous year’s total, reaching $34 billion in net sales for FY 2021—and once again securing Beauty Packaging’s No. 1 slot on our Top 20 list.
While the company pivoted a number of facilities to produce hand sanitizer in massive quantities, their regular corporate divisions took a dip, and total L’Oréal sales fell a reported -4.1% like-for-like.
Jean-Paul Agon, who was still CEO when the annual report was released (now succeeded by Nicolas Hieronimus), addressed the impact of Covid on the Beauty industry, saying: “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% [like-for-like], 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,” continued Agon. “As a result, sales achieved in e-commerce rose sharply by +62% [like-for-like], across all Divisions and all regions, reaching the record level of 26.6% of the total Group’s sales for the year.”
In fact L’Oréal’s e-commerce results topped $9 billion for the year.
As to the Group’s 4 Divisions, The Active Cosmetics Division had a record year due to skincare, reporting record growth of +18.9% like-for-like, with sales exceeding 3-billion-euro (skincare and sun protection led all categories with 39.5% of net sales); The Consumer Products Division, which accounts for nearly 42% of sales, stabilized in the second half of the year despite a Covid-induced slide in makeup, reporting -4.7% like-for-like; The Professional Products Division, which took the biggest hit due to salon shutdowns in the first half of the year, bounced back in the second half and then outperformed the market over the year as a whole, ending the year at -6.4% like-for-like.
While global airport closures wreaked havoc on luxury sales, at years-end, L’Oréal Luxe, which accounts for 36% of Group sales, was at -8.1% with last-quarter growth.
By geographic zone, while Western Europe and North American growth was impacted by the pandemic, L’Oréal gained market share in other countries. In the New Markets, the Group saw a return to growth in all Zones in the second half of the year. The company reported that “performance of China is spectacular and its contribution to the performance of the Group is important.” Nearly half of 2020 sales (48.5%) were attributed to New Markets (Asia-Pacific, Eastern Europe, Latin America, Africa-Middle East).
On November 4, L’Oréal announced the change in the geographical scope of some of its Zones.
The North Asia Zone, which will include mainland China, Hong Kong, Taiwan, Japan and South Korea, will be led by Fabrice Megarbane, who is currently CEO of L’Oréal China and a member of the Executive Committee. A new Zone—SAPMENA—created to encompass South Asia, Pacific, Middle East and North Africa, will be headed by Vismay Sharma, currently Managing Director UK and Ireland, who will join the Executive Committee. In addition, a new Sub-Saharan Africa Zone will be run by Burkhard Pieroth. The Group also appointed Frédéric Rozé as Chief Global Growth Officer, to whom all Zone Presidents as well as the Travel Retail business will report.
On December 8, L’Oréal progressed with its sustainability momentum, when it was recognized as a global leader in sustainable development by CDP, a non-profit organization which scores the performance of companies in sustainability and environmental transparency. Of more than 9,600 companies scored by CDP in 2020, L’Oréal is the only one to have been awarded an ‘A’ score in all three areas: fighting climate change, protecting forests and sustainable water management.
In December, L’Oréal announced an agreement to acquire the Japanese company Takami Co., which develops and markets products licensed by the skincare brand Takami, owned by Dr Hiroshi Takami, the founder of two eponymous dermatology clinics in Tokyo.
The Group also added the Azzaro and Mugler fragrance brands to its portfolio in 2020—and reached a licensing deal with Prada for fragrance.
2021 Highlights
In April, L’Oréal USA announced it would open a second company headquarters in the Los Angeles area, in El Segundo, in early 2022. A 100,000 square feet of indoor and outdoor workspace will be designed to bring together the teams from its California-based brands—NYX Professional Makeup, Urban Decay and Pulp Riot, which are currently based in three different locations—into one state-of-the-art creative campus. The second headquarters will also house L’Oréal’s first-ever West Coast-based Professional Products Academy.
While L’Oreal has been accelerating the Group’s sustainability goals, in April, Lancôme revealed a new global sustainability program of its own. Goals include 50% of Lancôme products will be refillable or rechargeable by 2023; 99% of the roses used in Lancôme skincare and makeup products are organic—and 100% of roses will be organic and 60% will be sourced in France by 2021; Philanthropy that empowers women.
When it comes to packaging, Lancôme says it will be increasing its sustainable beauty choices offering products that are refillable, rechargeable and recyclable. For example, Idôle eau de parfum is made with sustainably sourced roses and is refillable and Absolue skincare products are rechargeable via a dedicated capsule reload system. Furthermore, the brand commits to manufacturing products with sustainable packaging by using less virgin materials and more recyclable materials like glass and post-consumer recycled plastic.
May 2021 brought a changing of the guard. Nicolas Hieronimus replaced Jean-Paul Agon in May 2021, becoming the sixth person to hold the position. Agon remains chairman of the company. Hieronimus joined L’Oréal in 1987 as product manager and moved up the ranks. One of his many contributions was launching the Garnier Fructis hair care range.
Also, mid-year, The Prince Estate and Urban Decay announced the launch of a Limited-Edition Capsule Collection inspired by Prince. ‘The Purple One’s’ signature color is highlighted alongside gold and black in the collection created to honor his vibrant self-expression.
In June, L’Oreal revealed they would launch an ‘infinitely recyclable’ plastic cosmetics bottle in 2025, for its Biotherm brand. The future-focused bottle is the result of a years-long partnership with French biotech specialist Carbios, and is made using fully recycled PET.
L’Oréal’s 2025 goal is for 100% of its plastic packaging to be either refillable, reusable, recyclable or compostable; and by 2030 all plastic materials to be either derived from recycled materials or bio-sourced—ending use entirely of virgin plastics of fossil origin.
Also in June, Lancôme Trésor won The Fragrance Foundation’s 2021 Hall of Fame Award. The elegant bottle is angled with rounded edges, representing the softness of the wearer. The band is black, the color a subtle reminder of the power of love and the woman embracing it.
Looking Ahead
In the first half of 2021, L’Oréal reported a return to a pre-covid growth rate, announcing that Sales rose 33.5% in the second quarter to push first half growth to +20.7 percent like-for-like.
As lockdowns opened up growth in the professional products division bounced back, with a 65.9% rise in the second quarter. L’Oréal Luxe and Active Cosmetics also saw strong growth, at +45.7% and + 48.4% respectively, while Consumer Products rose 14.2%.
In terms of geographic zone, second quarter recoveries from Europe, North America, SAPMENA and Latin America saw all regions report double-digit growth in the first half, while North Asia held the lead as the group’s best-performing region, with sales up 23.2%.
New CEO, Nicolas Hieronimus, said, “With the health situation still uncertain, the beauty market is gradually recovering and has recorded double-digit growth. As a result of the determination and continued commitment of our teams, L’Oréal is significantly outperforming the market, with an exceptional second quarter. By the end of June, the Group posted a very strong increase and returned to its pre‑Covid growth rate, up +6.6 percent like-for-like compared to the first half of 2019, with an acceleration of +8.4 percent in the second quarter compared to 2019.”
Hieronimus added, “In the second half of 2021, we will pursue our offensive product launch strategy while at the same time investing in relevant growth drivers to spur the future growth and the desirability of our brands. We are more confident than ever in our ability to outperform the market and achieve a year of growth in both sales and results.”