Market research firms have been quick to comment on the rising dominance of Asia for L’Oréal. Indeed, Aleksandrina Yotova Consumer Analyst at GlobalData, notes: “The trend for L’Oreal’s Asian growth has continued in the fourth quarter (Q4) of 2018 and has contributed to an annual revenue growth of 24.1% or €7,405.6m. This comes in contrast with a slight decline of 0.3% in Western Europe, which has historically been the company’s stronghold.”
Cosmetics Design Asia editor Amanda Lim predicts that Asia Pacific will be the region that leads L’Oéal’s growth moving forward, suggesting the company is thriving on the back of strong demand from Asia.
L’Oréal’s Chairman and CEO, Jean-Paul Agon, appeared to emphasise L’Oréal’s worldwide performance, however, in his comments on the annual results, rather than singling out any one market or region.
“More than ever, it’s the strength of L’Oréal’s business model, robust and well-balanced, covering all circuits, all categories, all price points and addressing all consumers, that enables the Group to seize opportunities wherever they are,” he said.
“All over the world, our teams are alert and listening to consumers’ needs and desires. They adapt and allocate resources with great agility, always in the pursuit of excellence. This is how L’Oréal delivers profitable and sustainable growth, and strengthens its position as the cosmetics market leader year after year.”
The company’s results mean it has achieved an operating profit of 4.92 billion euros, representing 18.3% of sales, for the preceding 12 months.
Spotlight on Western Europe
As mentioned, the annual results, though overall a big success story, actually saw a slight decline in Western Europe.
The zone recorded sales growth in the fourth quarter, and ended the year at -0.3% like-for-like, and -0.7% reported, L’Oréal confirms.
“In 2018, Western Europe was affected by the sluggishness of some markets, such as France and the United Kingdom, and by a slowdown in the makeup category,” it explains.
L’Oréal Luxe is outperforming its market, however, thanks to the dynamism of Lancôme, Giorgio Armani and Kiehl’s, and the same is true of the Active Cosmetics Division, thanks to the rapid growth of La Roche-Posay and the CeraVe roll-out.
L’Oréal also suggests that its Consumer Products Division is strengthening its positions in makeup, reflecting the good results of the Maybelline New York and Essie brands, and more recently in skincare, thanks to L’Oréal Paris anti-ageing products and Garnier cleansing.