Beauty Sales: $29.7 billion
L’Oréal’s Frédéric Rozé was appointed executive vice president of the Americas Zone.
Major Products: Color cosmetics, skin care, hair care, sun care, and fragrance sold under a large number of brands in a variety of channels, including L’Oréal Professionnel, Redken, Kerastase, Matrix, L’Oréal Paris, Garnier, Maybelline, SoftSheen-Carson, Essie, Lancôme, Giorgio Armani, YSL Beauté, Biotherm, Kiehl’s, Ralph Lauren Fragrances, Shu Uemura, Diesel, Cacharel, Helena Rubenstein, Clarisonic, Viktor&Rolf, Vichy, La Roche-Posay, SkinCeuticals, Roger&Gallet, Inneov, Cadum, Urban Decay and The Body Shop.
New Products: Lancôme DreamTone, Garnier Olia Hair Color, Garnier BB Cream, YSL Beauté Touche Éclat Foundation, YSL Forever Light Creator, Redken Curvaceous, La Roche-Posay Anthelios Cell-OX ShieldT XL; L’Oréal Paris Sublime Bronze Self-Tanner Collection, Kiehl’s Super Multi-Corrective Cream, The Body Shop Brazil Nut Bodycare.
Stephanie Martins, L’Oréal NA’s vice president of packaging and development—and a member of Beauty Packaging’s Board of Advisors
The Cosmetics branch (Consumer Products, L’Oréal Luxe, Professional Products, Active Cosmetics) delivered the bulk of sales at $27.5 billion. The Body Shop contributed about $1.1 billion, with Dermatology hovering around the $1 billion mark.
The world’s leading beauty company says that business was so good in 2012, it outpaced the gains of the global cosmetics market, which it reported as 4.6%. In North America, the L’Oréal Group grew roughly twice as fast as the market. Corporate sales in New Markets rose 9.2%, making it the group’s No. 1 sales zone for the first time, with nearly 40% of cosmetics sales.
L’Oréal made tremendous strides in hair care, but also brought significant launches to market in skin care, fragrance, cosmetics and dermocosmetics as well.
In New Markets, Asia-Pacific accounted for 20.6% of Cosmetics sales, followed by Latin America (8.8%), Eastern Europe (6.8%) and Africa, Middle East (3.3%). The remaining regions were Western Europe (35.6% of sales) and North America (25%).
Within Cosmetics, Consumer Products sales accounted for slightly more than half (51.5%), followed by Luxe (26.8%), Professional (14.4%) and Active (7.3%). By business segment, Skin Care continued to top the list at 29.1%, followed by Makeup (21.5%), Hair Care (21%), Hair Color (14.1%), Perfumes (9.7%) and Other (4.6%).
Jean-Paul Agon, chairman and chief executive officer, said in the Group’s annual report that in addition to strengthening its global leadership in the beauty world, 2012 was also “a year of renewal” for brands such as Lancôme, Vichy, Garnier and The Body Shop. L’Oréal also added strategically to its portfolio with acquisitions such as Cadum in France, Vogue in Colombia and Urban Decay in the U.S.
Agon also maintains that innovation is key, and that the company achieved success in this direction in all categories. In total, the Group registered 611 patents in 2012.
L’Oréal sprinted ahead with its research and innovation in hair care, opening the largest hair research center in the world in Saint-Ouen, France, as well as a fifth regional research hub in Mumbai, India. In December, the beauty company opened an enormous hair care production plant in Mexico.
Lancôme’s ombré-shaded, multi-dimensional bottle lends a futuristic look to the technologically advanced DreamTone.
The company also stepped up its efforts toward social responsibility and sustainable production methods. L’Oréal’s global mottoes are “Beauty for All ” and “Beauty Is Universal,” and its further goal in this respect is to gain a billion new consumers over the next decade.
The Professional Products Division posted a 2.1% like-for-like and +6.7% reported growth in 2012. In the technical products category, the long-lasting hair colorant ODS2 (Oil Delivery System) was introduced worldwide under the brands INOA2 by L’Oréal Professionnel, Chromatics by Redken and ColorInsider by Matrix.
The Consumer Products Division achieved sales growth of +5% like-for-like and +8.9% based on reported figures, driven by strategic advances in Western Europe and North America, along with major product initiatives. Again, hair care proved strong, boosted with products such as Elvive by L’Oréal Paris, Arginine Resist, and Olia by Garnier, the first home-use hair colorant to feature ODS technology. In fact, the hair care division set a new all-time record for market share in Western Europe—in France, as well as in North America.
2012 was a year of acceleration for The Body Shop, whose sales grew by 4.9% like-for-like.
Thanks to consumers’ penchant for luxury cosmetics, L’Oréal Luxe sales grew by 8.3% like-for-like and +16% based on reported figures. The division significantly outperformed market growth, due especially to Lancôme, and sales in Asia and North America. The Lancôme brand grew strongly, driven by innovations in facial skin care with Génifique Yeux Light Pearl, and in fragrances with the launch of La Vie est Belle, the top worldwide launch of the year in its category.
Facial skin care continues it strength in the Luxe category, with Lancôme joined by Kiehl’s globally, and Clarisonic in the U.S.
In Fragrance, Ralph Lauren’s Big Pony Collection for Women and Flowerbomb by Viktor & Rolf continue as top performers.
In makeup, the results of a late 2012 launch of Maestro foundation by Giorgio Armani, and the acquisition in December of Urban Decay, hold much promise. (L’Oréal also acquired the Colombian makeup brand Vogue, in October.)
L’Oréal says purchasing was also particularly strong in its Active Cosmetics branch—about twice that of the dermocosmetics market—with sales growth of 5.8% like-for-like. Vichy and La Roche-Posay were especially good performers. In fact, 2012 was the first year in which the division made more than 50% of its sales outside Western Europe.
In April 2013, Sir Lindsay Owen-Jones announced that he would resign from the board of directors of L’Oréal effective April 26. Owen-Jones served as chief executive officer of the multinational beauty conglomerate from 1988 to 2006.
For the first half of 2013, L’Oréal’s sales increased 4.7% to just over $15 billion. Investments in research and innovation and in advertising were cited as growth drivers. Emerging markets again played a key role.
Commenting on the figures, Agon said: “In the first half, in a market whose growth slowed down slightly, L’Oréal has continued to record good sales dynamics, and achieved further growth in profits.” He also said that operating profit had reached a “historically high level” at 17.4% of sales.
In May, Agon announced a number of changes within the executive ranks. Nicolas Hieronimus was appointed president selective divisions (supervising all the Selective Divisions of L’Oréal—Luxury, Active Cosmetics, Professional Products, The Body Shop); Jean-Jacques Lebel retired as president of the consumer products division and was replaced by Marc Menesguen. In addition three new zones were created: the Americas headed by Frédéric Rozé, Eastern Europe headed by Alexandre Popoff, and Western Europe headed by Jochen Zaumseil. Alexis Perakis-Valat was appointed executive vice-president Asia Pacific Zone.
In June, Youssef Nabi, president of Lancôme worldwide, resigned, and Xavier Vey started his new job as Lancôme U.S. president, succeeding Serge Jureidini.
In August L’Oréal announced its pending acquisition of China’s Magic Holdings International, a manufacturer of cosmetic facial masks. (Please see more on this key acquisition at www.beautypackaging.com; Expert’s View by Rob Field-Marsham.)
Just last month, L’Oréal India announced its first acquisition—Cheryl’s Cosmeceuticals, a pioneer in professional skin care products and treatments in more than 10,000 beauty salons across the country, and annual sales of about 3 million euros.