L'Oréal Finance : First-half 2018 results Aller au contenu principal

Strong pace of growth continues: +6.6% 1
combined with quality results

  • Sales: 13.39 billion euros
  • +6.6% like-for-like 1
  • +7.0% at constant exchange rates
  • -0.2% based on reported figures
  • Double-digit growth at L’Oréal Luxe and Active Cosmetics
  • Very strong growth of the New Markets and gradual improvement of North America
  • Further improvement in profitability: +30 basis points 

Commenting on these figures, Mr Jean-Paul Agon, Chairman and Chief Executive Officer of L'Oréal, said:

"In a beauty market which remains dynamic and is becoming more premium, L’Oréal is continuing to achieve strong growth. In lively markets, the L’Oréal Luxe and Active Cosmetics Divisions have both recorded double-digit growth, driven by the power of their brand portfolios and the quality of their innovations. The Consumer Products Division, especially with a robust performance at L’Oréal Paris, has recorded moderate growth, held back by an environment that is very difficult in some markets. The Professional Products Division, meanwhile, has posted a slight increase in sales.
Across the geographic Zones, the New Markets accelerated once again, especially in Asia. North America is gradually improving, while Western Europe is affected by persistent difficulties in France, and by the slowdown in the United Kingdom.
The Group’s digital lead is continuing, particularly in e-commerce 2, which posted +36.4% growth in the first half and represents 9.5% of sales. L’Oréal also reaffirms its leadership in Travel Retail, which grew by +27.3% 1. 
The Group has delivered quality results paving the way for the future. The strong growth in gross profit indeed enables the Group at the same time to increase profitability, support investments in Research and Innovation, and raise the business drivers to further develop our brands. Net earnings per share has increased by +5.3% 3 and by +10.7% at constant exchange rates. 
The good sales growth and the quality of the first-half results reinforce our confidence in our ability to once again outperform the cosmetics market in 2018, and to achieve significant like-for-like 1 sales growth and an increase in our profitability."

First-half 2018 sales

Like-for-like, i.e. based on a comparable structure and identical exchange rates, sales growth of the L'Oréal group was +6.6%.
The net impact of changes in the scope of consolidation was +0.4%.
Currency fluctuations had a negative impact of -7.2%. If the exchange rates at 30 June 2018, i.e. €1 = $1.164, are extrapolated until 31 December 2018, the impact of currency fluctuations on sales would be approximately -4.3% for the whole of 2018.
Based on reported figures, the Group's sales at 30 June 2018 amounted to 13.39 billion euros, i.e. -0.2%.

Sales by operational Division and geographic Zone

  2nd quarter 2018   1st half 2018
  Growth   Growth
  €m Like-for-like Reported €m Like-for-like Reported
By operational Division            
Professional Products 834.2  +1.4%  -5.3% 1,631.5  +1.6%  -6.2%
Consumer Products 3,066.4  +2.3%  -3.0% 6,136.8  +2.5%  -4.0%
L'Oréal Luxe 2,138.9  +13.0%  +7.4% 4,391.4  +13.5%  +5.9%
Active Cosmetics 572.6  +12.9%  +7.7% 1,231.0  +11.4%  +8.5%
Group total 6,612.1  +6.3%  +0.7% 13,390.7  +6.6%  -0.2%
By geographic Zone             
Western Europe  2,009.3  -2.0%  -2.8% 4,134.1  -0.8%  -1.6%
North America 1,828.7  +3.5%  -4.1% 3,564.4  +3.0%  -6.8%
New Markets, of which: 2,774.1  +15.4%  +7.1% 5,692.2  +15.2%  +5.7%
Asia, Pacific  1,709.6  +22.9%  +16.8% 3,548.1  +22.0%  +13.2%
Latin America 456.1  +1.0%  -10.6% 882.7  +0.6%  -10.4%
Eastern Europe 421.9  +9.7%  -1.2% 899.4  +8.1%  -1.0%
Africa, Middle East4 186.5  +6.8%  -1.2% 362.1  +12.2%  +1.9%
Group total 6,612.1  +6.3%  +0.7% 13,390.7  +6.6%  -0.2%


At the end of June, the Professional Products Division posted +1.6% like-for-like growth and -6.2% based on reported figures.
All the geographic Zones are growing, except for Western Europe, still impacted by the sluggishness of some markets. The United States and the Asia Pacific Zone continue to grow, while Latin America is maintaining its good growth rate.
Hair colour is benefiting from the strong growth of Shades EQ at Redken and the dynamic contribution of SoColor by Matrix and Dialight by L'Oréal Professionnel. In haircare, Kérastase is being boosted by the new Résistance Extentioniste line and the continuing success of Fusio-Dose, the customised in-salon haircare treatment. At L'Oréal Professionnel, the Source Essentielle natural haircare range has made a promising start.


In the first half, the Division posted growth of +2.5% like-for-like, and -4.0% based on reported figures.
L'Oréal Paris is maintaining its growth momentum, thanks to the good performance in facial skincare and particularly its Revitalift anti-ageing franchise, but also the success of new launches such as Dream Lengths in haircare and Color Riche Shine in makeup. Maybelline New York is posting good growth thanks to its foundations and especially Fit me, but also to the strong success of Superstay Matte Ink lipstick and the new Total Temptation mascara.
The Division is still facing difficulties in France - where the market trend is negative - and in Brazil, while growth has edged down in the United Kingdom. It is growing in the other regions, thanks to dynamic performances in Asia, especially in China and India, and in Eastern Europe.
E-commerce sales are growing strongly.


At the end of June, L'Oréal Luxe posted growth of +13.5% like-for-like and +5.9% based on reported figures, maintaining the dynamism it achieved at the start of the year.
The Division's top four brands have all recorded double-digit growth. Lancôme, thanks especially to Génifique, and Kiehl's with Line-Reducing Concentrate and the Midnight Recovery range in particular, are benefiting from accelerating skincare sales and the excellent performance of their star franchises across all regions. Giorgio Armani is accelerating in fragrances, with the success of Sì Passione following that of Emporio You and Acqua di Giò Absolu. Yves Saint Laurent is building up its long-lasting product range in foundations with All Hours and in lip makeup with Tatouage Couture.
The Division is strengthening its positions worldwide, thanks to strong growth in Asia, especially in China where L'Oréal Luxe is confirming its leadership. The Division is also benefiting from the fast growing pace of Travel Retail, and a solid performance in Europe where it is also winning market share. The Division's e-commerce is accelerating, with the successful launch of its Yves Saint Laurent and Giorgio Armani brands on Tmall.


The Active Cosmetics Division continued to accelerate in the first half, with growth of +11.4% like-for-like and +8.5% based on reported figures.
All the major brands are contributing to the Division's growth. La Roche-Posay remains very dynamic with double-digit first-half growth, and excellent performances across all Zones. The innovative Hyalu B5 and Anthelios lines are the leading contributors to this success story. Vichy is maintaining a good growth rate, thanks to the acceleration of Minéral 89, now launched across all Zones, and the excellent start in Asia. SkinCeuticals is continuing its worldwide acceleration. CeraVe is now a significant contributor to the Division's growth, thanks to its excellent performance on its original home market, the United States, and the start of its internationalisation drive in 25 countries.
The Division is growing and winning market share across all Zones. The e-commerce distribution channel is continuing to grow very strongly.

Summary by geographic Zone


Western Europe posted growth of -0.8% like-for-like and -1.6% based on reported figures. It is being held back by the slowdown in the United Kingdom market and by persistent difficulties in France. L'Oréal Luxe is winning market share thanks to Kiehl's facial skincare and Giorgio Armani fragrances. The Active Cosmetics Division is also outperforming its market, with La Roche-Posay proving extremely dynamic. In a sluggish mass market sector, the Consumer Products Division saw its skincare market share edge slightly down in the first half, but is strengthening its position as the makeup leader and posting very promising results for the key haircare launches of Elsève Dream Lengths by L'Oréal Paris and Fructis Hair Food by Garnier. 


The Zone recorded growth of +3.0% like-for-like and -6.8% based on reported figures. While the mass market sector posted moderate growth, the Consumer Products Division increased its market share in makeup, hair colour and haircare, thanks to flagship brands L'Oréal Paris and Maybelline New York. L'Oréal Luxe is continuing to accelerate in skincare, thanks to Kiehl's and Lancôme in particular. The men's fragrances of Yves Saint Laurent and Giorgio Armani are outperforming the market. Professional Products Division sales are growing, driven by a good performance in hair colour. The Active Cosmetics Division is continuing to record outstanding growth, with double-digit increases for the CeraVe, SkinCeuticals, La Roche-Posay and Vichy brands. 


Asia, Pacific: Growth in this Zone came out at +22.0% like-for-like and +13.2% based on reported figures. This strong growth is being boosted by Chinese consumers, as reflected in the growth in China and Hong Kong across all Divisions, especially for premium brands. E-commerce and Travel Retail accelerated in the first half. Southern Asia is extremely dynamic, with market share gains particularly in India and Malaysia.

Latin America: The Zone recorded growth of +0.6% like-for-like and -10.4% based on reported figures. In Brazil, the Consumer Products Division is continuing to face difficulties, whilst the other Divisions are back to a good level of growth. In the rest of the Zone, the Active Cosmetics Division has accelerated, particularly thanks to Vichy and the launch of the CeraVe brand. L'Oréal Luxe is continuing to expand in Mexico and Chile. The Professional Products Division is posting good performances, particularly in Argentina.

Eastern Europe: In this Zone growth amounted to +8.1% like-for-like and -1.0% based on reported figures. Growth is being driven by Turkey and the countries of Central Europe, especially Ukraine and Romania. Among the Divisions, Active Cosmetics posted strong growth, thanks to the robust health of the La Roche-Posay brand. L'Oréal Luxe and the Consumer Products Division are growing.
So is e-commerce, which remains very dynamic. 

Africa, Middle East: The Zone recorded growth of +12.2% like-for-like 4 and +1.9% based on reported figures. The Gulf states are growing, even though the market contexts remain difficult. Trends are very positive in Egypt and South Africa. The Consumer Products and Active Cosmetics Divisions are driving growth in this Zone.  

Important events during the period 1/4/18 to 30/6/18 and post-closing events

  • On 17 April 2018, the L'Oréal Board of Directors decided, in application of the authorisation approved by the Annual General Meeting of 20 April 2017, to buy back L'Oréal shares for a maximum amount of 500 million euros in the second quarter of 2018. 2,497,814 shares were bought back from 23 April to 29 May 2018. They were cancelled by the Board of Directors on 26 July 2018.
  • On 2 May 2018, L'Oréal announced the acquisition of 100% of Nanda Co. Ltd., the Korean lifestyle makeup company founded by Mrs Kim So-Hee in Seoul in 2004. The acquisition was finalised on 20 June 2018.
  • On 15 May 2018, L'Oréal announced the launch of its first Employee Share Ownership Plan, rolled out in 52 countries, representing a maximum of 500,000 shares. The scheme has proven extremely successful, and gave rise to a capital increase on 24 July 2018.
  • On 25 May 2018, L'Oréal finalised the acquisition of professional hair colour brand Pulp Riot, which, under the leadership of its two founders David and Alexis Thurston, has been creating industry-leading content and using social media to inspire stylists. 
  • On 28 May 2018, L'Oréal and Valentino announced the signature of a long-term licence agreement for the creation, development and distribution of fine fragrances and luxury beauty products under the Valentino brand.
  • On 13 June 2018, L'Oréal acquired a stake of 49% in the Tunisian company LiPP-Distribution which distributes the Group's brands in Tunisia. 
  • At 26 July 2018 and after allowing for the two operations mentioned above, the share capital of L'Oréal amounts to 112,016,437.40 euros, divided into 560,082,187 shares, each with a par value of 0.20 euros.    


First-half 2018 results

The limited review procedures of the half-year consolidated accounts have been completed. The limited review report is being prepared by the Statutory Auditors.

Operating profitability at 19.2% of sales

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

In € million 30/6/17 As % of sales 31/12/17 As % of sales 30/6/18 As % of sales Change H1-2018 vs. H1-2017
Sales  13,411.9 100.0%  26,023.7 100.0%  13,390.7 100.0% -0.2%
Cost of sales  -3,780.5 28.2%  -7,359.2 28.3%  -3,598.3 26.9%  
Gross Profit  9,631.4 71.8%  18,664.5 71.7%  9,792.4 73.1% +1.7%
R&D expenses  -425.1 3.2%  -877.1 3.4%  -447.2 3.3%  
Advertising and promotion expenses  -3,913.5 29.2%  -7,650.6 29.4%  -4,018.3 30.0%  
Selling, general and administrative expenses  -2,762.4 20.6%  -5,460.5 21.0%  -2,751.0 20.5%  
Operating profit  2,530.4 18.9%  4,676.3 18.0%  2,575.9 19.2% +1.8%

Gross profit, at 9,792 million euros, came out at 73.1% of sales, a strong improvement of 130 basis points.
Research and Development expenses, at 447 million euros, have risen by +5.2%. Their relative level is slightly growing at 3.3% of sales. 
Advertising and promotional expenses
came out at 30.0% of sales, an increase of 80 basis points, demonstrating the support provided for our brands.
Selling, general and administrative expenses, at 20.5% of sales, have decreased slightly by 10 basis points.
Overall, operating profit, at 2,575 million euros, amounted to 19.2% of sales, an increase of 30 basis points.  

Operating profit by operational Division

  30/6/17     31/12/17 30/6/18
  €m % of sales €m % of sales €m % of sales
By operational Division            
Professional Products  319.9 18.4%  669.4 20.0%  313.4 19.2%
Consumer Products  1,267.5 19.8%  2,419.0 20.0%  1,275.4 20.8%
L'Oréal Luxe  970.2 23.4%  1,855.8 21.9%  1,026.7 23.4%
Active Cosmetics 303.5 26.7%  471.2 22.6%  326.2 26.5%
Total Divisions before non-allocated  2,861.1 21.3%  5,415.4 20.8%  2,941.7 22.0%
Non-allocated 5  -330.7 -2.5%  -739.1 -2.8%  -365.7 -2.7%
Group 2,530.4 18.9% 4,676.3 18.0% 2,575.9 19.2%


The L'Oréal group is managed on an annual basis. This means that half-year operating profits cannot be extrapolated for the whole year.

The profitability of the Professional Products Division increased from 18.4% to 19.2%.

The Consumer Products Division's profitability went from 19.8% to 20.8%. 

L'Oréal Luxe maintained its profitability at 23.4%.

The Active Cosmetics Division remains at a very high profitability level at 26.5%, compared with 26.7% in the first half of 2017.


Net profit excluding non-recurring items


Consolidated profit and loss account: from operating profit to net profit excluding non-recurring items.

In € million 30/6/17 31/12/17 30/06/18 Change H1-2018 vs. H1-2017
Operating profit  2,530.4  4,676.3  2,575.9 +1.8%
Financial revenues and expenses excluding dividends received  -9.9  -22.9  +14.5  
Sanofi dividends  350.0  350.0  358.3  
Profit before tax and associates excluding non-recurring items  2,870.5  5,003.3  2,948.7  +2.7%
Income tax excluding non-recurring items  -687.5  -1,250.5  -646.7  
Net profit excluding non-recurring items of equity consolidated companies  -  -0.1  -0.1  
Non-controlling interests  2.8  -3.9  -1.4  
Net profit excluding non-recurring items, after non-controlling interests 6  2,185.8 7  3,748.7 7  2,300.6  +5.2%
EPS 8 (€)  3.88  6.65  4.08  
Diluted average number of shares 563,423,701 563,528,502 563,242,060  

Overall financial revenues are positive at 14.5 million euros.

Sanofi dividends amounted to 358 million euros.

Income tax excluding non-recurring items came out at 646 million euros, i.e. a tax rate of 22%, below that of the first half of 2017, which was 24%.

Net profit excluding non-recurring items after non-controlling interests came out at 2,300 million euros, an increase of +5.2% compared with the net profit of continuing operations excluding non-recurring items reported on 30 June 2017.

Earnings per share, at 4.08 euros, has risen by +5.3% compared with the first half of 2017. 

Net profit

Consolidated profit and loss account: from net profit excluding non-recurring items to net profit.

In € million 30/06/17 7 31/12/17 7 30/06/18 Change H1-2018
VS. H1-2017
Net profit excluding non-recurring items, after non-controlling interests 6 2,185.8 3,748.7 2,300.6 +5.2%
Non-recurring items of which: -148.3 -167.2 -25.4  
- Impact of applying the IFRS 5 accounting rule relating to discontinued operations on net profit after non-controlling interests  -29.1  -240.1  -  
- Other non-recurring items:        
other income and expenses  -96.2  -276.3  -40.4  
tax effect -22.8 +349.2 +15.0  
Net profit after non-controlling interests 2,037.5 3,581.4 2,275.2 +11.7%


Operating cash flow and balance sheet

Gross cash flow amounted to 2,779 million euros, up by +5.5% compared with the first half of 2017.

The change in working capital amounted to 431 million euros. As in the first half every year, it increased noticeably, particularly because of the impact of the seasonality of part of our business on trade receivables.

Investments, at 780 million euros, represented 5.8% of sales.

Operating cash flow amounted to 1,568 million euros, that is -3.7%.

After payment of the dividend, share buybacks and the costs of acquisitions, the residual cash flow came out at -1,490 million euros.

At 30 June 2018, net cash amounted to 362 million euros, compared with a net debt of 1,492 million euros at 30 June 2017. 




"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 a free translation into English of the First-half 2018 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, and the Internet site for shareholders and investors, www.loreal-finance.com, or the L'Oréal Finance app, alternatively, call +33 1 40 14 80 50.


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

  2017 6 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  
The Body Shop    
Third quarter total 6,097.9  
Nine months:    
Operational Divisions 19,509.9  
The Body Shop    
Nine months total 19,509.9  
Fourth quarter:    
Operational Divisions 6,513.8  
The Body Shop    
Fourth quarter total 6,513.8  
Full year:    
Operational Divisions 26,023.7  
The Body Shop    
Full year total 26,023.7  

Other appendices can be found in the PDF version.

[1] Like-for-like: based on a comparable structure and identical exchange rates.
[2] Sales achieved on our brands' websites + estimated sales achieved by our brands corresponding to sales through our retailers' websites (non-audited data); like-for-like growth.
[3] Diluted net profit per share of continuing operations, excluding non-recurring items, after non-controlling interests.
[4] 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 11.6 million euros on the sales of the Africa, Middle East Zone in the 2nd quarter and the 1st half of 2018. The effect of this new accounting method on the profit and loss account and the balance sheet is not material.
[5] Non-allocated expenses = Central Group expenses, fundamental research expenses, stock options and free grant of shares expenses and miscellaneous items. As a % of total Divisions sales.
[6] Net profit excluding non-recurring items after non-controlling interests, does not include capital gains and losses on disposals of long-term assets, impairment of assets, restructuring costs, tax effects and non-controlling interests.
[7] Net profit from continuing operations, excluding non-recurring items, after non-controlling interests.
[8] Diluted net profit per share of continuing operations, excluding non-recurring items, after non-controlling interests.
[9] In the first quarter 2017, reported Group sales included The Body Shop sales, which amounted to 197.2 million euros.