L’Oréal reports ‘historic’ full year for 2021: Net profit soars 29%
L’Oréal generated worldwide sales of €9.09bn in the fourth quarter (Q4) of 2021, up 15.4% on the previous year. Within this, L’Oréal’s active cosmetics saw the biggest sales spike, up 28.4% in Q4, followed by professional products (up 18.5%), L’Oréal luxe (up 16.5%) and consumer products (up 10%). Regionally, North America reported the most significant Q4 sales growth, up 25.1% on the previous year.
For the full year of 2021, sales sat at €32.2bn, up 15.3%, with net profit after controlling interests tallying up at €4.59bn, up 29% on the previous year. In sales terms, Latin America reported the biggest annual spike at 20.6%, followed by North Asia (18.6%), North America (18.1%), Europe (10.7%) and South Asia Pacific, Middle East and North Africa [SAPMENA] (10%).
“2021 was a historic year for L’Oréal,” said Nicolas Hieronimus, CEO at L’Oréal. Total group growth was double that of the worldwide beauty market, Hieronimus said, and the company gained market share in all zones, business divisions and product categories.
“…In terms of zones, North America made a strong comeback and joined North Asia as the primary growth contributor. In Europe, boosted by the zone’s reorganisation, L’Oréal achieved significant market share gains and saw a return to 2019 levels. With an extremely volatile public health situation in SAPMENA-SSA and Latin America, L’Oréal demonstrated agility and delivered solid performance,” he said.
Superior innovation, rigorous cost control and extensive investments
The CEO said that in 2021, L’Oréal Luxe became the group’s largest division, demonstrating “remarkable success” in fragrances. Success in this space, L’Oréal said, had been driven by established icons like Libre by Yves Saint Laurent and promising launches like Alien Goddess by Mugler and Luna Rossa Ocean by Prada. L’Oréal Luxe also onboarded Youth to the People following the finalisation of this acquisition.
Hieronimus said L’Oréal’s active cosmetics division also achieved “spectacular growth”, doubling in the past four years. The company said success here had been buoyed by the booming dermocosmetics market as health was now a core concern for consumers, along with strengthened relationships with health care professionals worldwide. Within the division, La Roche-Posay more than doubled its growth rate versus 2020, CeraVe reported “spectacular growth” in the US and worldwide, and Vichy performed well in Europe’s anti-ageing sector, according to L’Oréal.
In volume terms, he said L’Oréal’s consumer products division maintained its position as the biggest global business unit, strengthening its position worldwide with a particularly strong performance in makeup. This, according to the company, had been achieved by e-commerce development sparking growth across all major brands, including Maybelline, Garnier and NYX Professional Makeup.
All of this “exceptional growth”, Hieronimus said, had been driven by “superior innovations, as well as rigorous cost control” that had enabled the company to “invest extensively” in its brands and increase consumer appeal.
Digital growth and beauty tech 'transformation'
L’Oréal also continued to invest in digital throughout 2021, he said, with worldwide e-commerce sales across own-brand websites and retailer websites up 25.7% and this online business now accounting for 28.9% of group sales. “We have been able to seize the opportunities offered by new digital channels. At the same time, we are continuing to digitalise points of sale as part of an integrated omnichannel strategy. We are also pursuing our beauty tech transformation by investing in data and artificial intelligence, and by establishing strategic partnerships, such as our alliance with Verily, to better understand and characterise skin and hair ageing mechanisms.”
And all of this, Hieronimus said, was guided by a continued, overarching focus on social and environmental performance, via employee profit-sharing schemes, youth employment programmes, gender parity actions, advances in carbon neutrality, and environmental leadership recognition.
“…In 2021, all stars aligned for this historic performance,” he said. And as L’Oréal considered the year ahead, he said that despite a “volatile” global market, the company was confident in its ability to outperform the market again and achieve another year of growth in sales and profit.