L’Oréal confident of outperforming market as sales growth cements strong position

By Andrew McDougall

- Last updated on GMT

L'Oréal CEO Jean-Paul Agon
L'Oréal CEO Jean-Paul Agon

Related tags Europe Eastern europe

Cosmetics giant L’Oréal is confident that it can outperform the market in 2012 having posted strong sales growth for the second quarter.

Based on reported figures the French firm saw sales increase 11.6 per cent in the second quarter to €11.2 billion, resulting in a 10.5 per cent for the first half of the year.

Luxe segment performing well

"L'Oréal recorded a good first half. In a market which reflects contrasting trends but is favourable overall, all branches, divisions and geographic zones achieved growth,”​ said Jean-Paul Agon, chairman and CEO.

The strongest growth is being seen in the company’s L’Oréal Luxe business unit, with particular successes being seen in the Lancôme, Yves Saint Laurent, and Kiehl's brands.

The Active Cosmetics segment is also accelerating significantly, driven by its international dynamics, whilst the Consumer Products division has achieved solid growth.

North America on the rise

However the Eurozone crisis appears to have taken a hit on the cosmetics maker as sales growth was barely noticeable, with negative trends, particularly in Southern Europe taking their toll.

It was a completely different story in North America though, as L'Oréal achieved growth of 17.8 per cent based on reported figures in the first half of 2012, thanks to the Luxe segment once more, with the integration of newly acquired skin care company Clarisonic having a positive effect.

“North America is growing fast, with large market share gains and the strategic acquisition of Clarisonic. Eastern Europe is continuing its recovery, and the group is improving its positions in the major countries of Western Europe,”​ commented Agon.

Confident outlook

The New Markets also posted positive figures and Agon notes that strategic breakthroughs continue to aid growth in Asia and Africa, Middle East.

“The rise of the New Markets, now our number one geographic zone, is continuing, driven by the dynamism of Asia and Africa, Middle East,”​ he said.

Based on the strong performance, L’Oréal remains confident that it will produce another year of solid growth in both sales and profits.

“Despite the uncertain economic environment, we are confident in the group's ability to outperform the market in 2012, and to achieve another year of solid growth in both sales and profits,"​ added the L’Oréal chief.

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