L’Oréal FY22 net profits surge 23% with active cosmetics booming
Yesterday, L’Oréal reported worldwide sales of €38.26bn for the full year of 2022 (FY22), up 18.5% on the previous year. The company generated €10.31bn of this in its fourth quarter (Q4). Net profit, after non-controlling interests excluding non-recurring items, was up 22.6% for the full year at €6.05bn.
In division terms, active cosmetics generated the lion’s share of growth in Q4 and FY22, up 28% to €1.26bn and 30.6% to €5.12bn, respectively. Full year growth was followed by a rise of 18.6% in the L’Oréal Luxe division; 18.3% in Professional Products; and 14.6% in Consumer Products.
Regionally, the biggest growth in FY22 sales came from Latin America, up 34.1% on the previous year. This was followed by a sales rise of 28.1% in South Asia Pacific, Middle East, North Africa and Sub-Saharan Africa [SAPMENA-SSA]; 24.6% in North America; 14.8% in North Asia; and 12.3% in Europe.
A model ‘ideally suited’ to current environment
Nicolas Hieronimus, CEO of L’Oréal, described the company’s full year results as a “remarkable performance”, noting the strength of innovation leadership, highly desirable brands, operational agility, and team commitment.
“Our balanced growth across divisions and regions once again demonstrates the relevance of our multipolar model: strategically centralised and operationally decentralised with a strong entrepreneurial mindset, this model is ideally suited to the current environment,” Hieronimus said.
L’Oréal had “emerged stronger” from 2022, he said, reinforcing its position as “the world’s leading beauty company”.
“These high-quality results allow us to consistently support our social and environmental commitments, in line with our dual ambition of economic and corporate performance. Mindful of the current uncertainties, we remain ambitious for the future, optimistic about the outlook for the beauty market, and confident in our ability to keep outperforming the market and achieve in 2023 another year of growth in sales and profits.”
Speaking to analysts during the company’s earnings call, Christophe Babule, CFO at L’Oréal, outlined how all major categories at L’Oréal had grown in 2022.
In like-for-like growth terms, skin care was up 10.1% at €15.3bn, now representing 40% of L’Oréal’s total business; makeup was up 9.2% at €7.7bn to represent 20%; hair care up 12% at €5.8bn representing 15% of total business; fragrance up 22.8% to €4.5bn to represent 12% of total business; and hair colour up 4.6% at €3.4bn, now representing 9% of L’Oréal’s total business.
Active cosmetics in the spotlight
Myriam Cohen-Welgryn, president of active cosmetics at L’Oréal – the fastest-growing business unit in 2022, said it had been an “outstanding” year for the division, describing active cosmetics as a “now sizeable and profitable business”.
Presenting to analysts, Cohen-Welgryn said growth could be attributed to four key factors: the power of complementary brands within the division, including the might of its two ‘billionaire brands’ La Roche-Posay and CeraVe; strengthened medical leadership; use of digital to amplify the division’s medical strategy; and full speed international growth.
The divisional president said growth would continue into 2023, driven by the continued evolution of dermocosmetics in the wider global beauty category and a booming quest for products that combined health and performance. Better access to information on skin health amongst consumers worldwide would also bolster the business, she said.