The world’s biggest cosmetics company, L’Oreal, has recorded continued growth at well above market average rates for its second quarter and first half financial results, although southern European revenues decline.
The company said that sales for the second quarter grew at a like-for-like basis of 5.6 percent to reach €5.39bn, while this figure represented a reported figure of 4.5 per cent, including the impact of foreign currency fluctuations.
The quarterly figure was very much in line with the full first half year results, which showed that total cosmetics sales came in at €10.99bn, a figure that represented a like-for-like increase of 5.7 per cent and a reported figure of 4.9 per cent, which accounted for the impact of foreign currency.
Each division and zone showed growth
“Although market growth has been slightly slowing down, L’Oréal continued to demonstrate its good dynamics and recorded a solid first half. Each division and zone is growing and outperforming its market,” said L’Oreal chairman and CEO Jean-Paul Agon.
Breaking the figures down to business divisions, the results showed that the consumer goods division is continuing to provide particularly strong growth, with like-for-like sales growing by 6.1 percent during the second quarter to reach €2.80bn.
This figure was overshadowed by growth in the smaller active cosmetic division, which showed like-for like sales growth of 8.6 per cent during the quarter, to reach €409m, a figure that was driven by the performance in the Western European market.
Professional products slows overall growth
The professional products division showed the slowest like-for-like growth, up 2.7 per cent during the quarter to €779m as global consumers continue to cut back on visits to hair salons, while the L’Oreal Luxe division showed 5.5 percent like-for-like growth during the period to reach €1.40bn.
Geographically, the results show that the Western European market continues to struggle, while the company’s new markets led the way with double digit growth overally.
In Western Europe the market grew at 1.7 per cent on a like-for-like basis during the second quarter to reach a turnover of of €1.90bn. The company said that the figure represented falling sales in southern Europe, while the rest of the market continues to remain stagnant.
New markets make up for slow performance in Europe
The North America market showed a like-for-like increase of 4.5 per cent during the quarter, to reach €1.37bn, figures that were driven by the L’Oréal Paris Advanced Haircare line, Olia hair colourant by Garnier, and the ramp-up of Essie.
New markets showed like-for-like sales growth of 10.3 percent during the quarter at €2.11bn, a figure that was driven by an 15.2 per cent increase in revenues from Latin America and a 15.1 per cent increase in revenues from Africa and the Middle East.
The preliminary results will be followed in a few weeks by the full results, which will also include the full profit figures.