L’Oréal posts strong Q4 results with growth across the board


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L’Oréal posts strong Q4 results with growth across the board

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L’Oréal has posted strong fourth quarter and annual results and will look to the future ‘with confidence’ after recording growth in all divisions and all regions, despite a challenging economic situation.

The Lancome owner’s results were also boosted after the capital gain on the disposal of Galderma, €2.1 billion, saw net profit come out at €4,910 million euros, which represents a large increase of 66%.

The results make further good reading when considering its US rivals, such as Estée Lauder, Avon and P&G, who saw sales take a hit due to strong dollar gains.

The French firm posted a 4.9% rise in fourth-quarter comparable sales, beating market expectations, which was driven in part by strong demand for its luxury products; with total revenues rising 3.7% for the year to €22.53 billion.

“Despite adverse currency effects, operating margin increased once again in 2014 highlighting the strength of our business model. Following the capital gain realised upon the disposal of Galderma as part of the strategic transaction with Nestlé, net profit has grown strongly,”​ says Jean-Paul Agon, Chairman and Chief Executive Officer of L'Oréal.

“In an economic environment that is uncertain, but more favourable on the monetary front, all our teams are focused to ensure L’Oréal outperforms the market in 2015, and to deliver sales and profit growth.”

Strongest growth

L’Oréal’s fourth quarter results represented its strongest growth of the year in all of its divisions and regions, which Agon says was ‘anticipated.’

L’Oréal Luxe recorded growth of 7.1% like-for-like and 5.7% based on reported figures as the make-up and women’s fragrance categories proved particularly dynamic.

Agon adds that the Active Cosmetics market, like Luxe, also ‘outperformed their market significantly’ with sales advancing by 8.7% like-for-like and 5.3% based on reported figures, while the Professional Products division continued to improve with sales growth of 2.6% like-for-like and 2% based on reported figures in a market that remains difficult.

“Meanwhile, in a slowing market, the Consumer Products Division saw a temporary sag in its growth, particularly in the United States,”​ he adds.

Q4 activity

The fourth quarter was also a busy one for L’Oréal with various acquisition activities as well as a ruling from the French Competition Authority.

In October, L’Oréal USA announced the acquisition of Carol’s Daughter, an American multi-cultural beauty brand with a pioneering heritage in the natural beauty movement.

November saw L’Oréal and Nestlé announce their project to end the operations of their joint venture Innéov in the first quarter of 2015.

And in December, L’Oréal stated that it had been informed of the French Competition Authority’s decision to rule against manufacturers of household and hygiene products​ concerning events which took place in the early 2000s. L’Oréal has appealed this decision.

The acquisition of Niely Cosmeticos, announced in September 2014, is also in the process of being finalised in 2015 having been approved by the Brazilian regulatory authorities.

“2014 was also a year of transformation for L’Oréal, in particular through the acceleration of our digital transformation and strategic acquisitions such as Magic, NYX, Decléor, Carita and Niely, which complement our brand portfolio in key categories and regions of the world,”​ says Agon.

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