CHAMPIONING BEAUTY IN A TIME OF CRISIS - JEAN-PAUL AGON DEUTSCHE BANK ACCESS GLOBAL CONSUMER CONFERENCE
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CHAMPIONING BEAUTY
IN A TIME OF CRISIS
JEAN-PAUL AGON
Chairman & Chief Executive Officer
DEUTSCHE BANK ACCESS GLOBAL
CONSUMER CONFERENCE
9 June 2020
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PROTECTION & SOLIDARITY
PROTECTING OUR EMPLOYEES SUPPORTING CAREGIVERS SUPPORTING OUR PARTNERS
Drastic health and security 15 million units of hand Freeze receivables
measures on all workplaces sanitizers donated from more than 100,000
(factories, warehouses ….) small professional clients
>4 million of hand creams and perfumeries
Limited number of people donated
infected. No fatalities Shortening leadtime
In 40 countries of payments to
100% employment 9,000 most vulnerable suppliers
& 100% fixed salary 70% of our factories mobilized
guaranteed till end-June
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1 BEAUTY IS RESILIENT AND GROWTH WILL RESUME C1 - Internal use
THE BEAUTY MARKET IS RESILIENT
9/11 SARS FINANCIAL CRISIS MERS
6%
5%
4%
3%
2%
1%
0%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
1L’Oréal worldwide beauty market estimates, excluding razors, soaps and toothpastes. 2019 provisional estimates, at constant exchange rates.
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CRISIS OF SUPPLY
MARKET DROP DUE TO LOCKDOWN SHOCK
SHUTDOWN OF HAIRDRESSERS, DEPARTMENT STORES,
PERFUMERIES, TRAVEL RETAIL STORES
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CHINA RETAIL IS RECOVERING
RETAIL IS RECOVERING COSMETICS IS LEADING THE RECOVERY
10 +7.2% +8% +8%
JAN / FEB MARCH APRIL
5
Garments -30.9% -34.8% -18.5%
0
-5 Cosmetics -14.1% -11.6% +3.5%
-10 -7.5% Jewelry -41% -30% -12.1%
-15
Home Appl -30% -29.7% -8.5%
-15.8%
-20
-20.5% -20.5% Furniture -33.5% -22.7% -5.4%
-25
Oct 2019 Jan 2020 Apr 2020 Auto -37% -18% 0%
Source: Tradingeconomics.com / National Bureau of Statistics of China YoY evolution (in %)
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STRONG APPETITE FOR BEAUTY
ACCELERATION ONLINE
THE BEAUTY MARKET IS KICKING UP
QUICK RECOVERY OFFLINE
CHINA SKINCARE
80%
67%
10% 58%
60%
57%
0%
40%
JAN FEB MAR APR
-10% 20%
20% 9% 11%
-20%
0%
-30% JAN FEB MAR APR
-20%
-40% -23%
-40%
-50% -60%
-62%
-60% -80%
OFFLINE ONLINE
Source: L’Oréal market estimates (GFK – DS/Shopping Mall) (SmartPath - Tmall)
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STRONG APPETITE FOR BEAUTY
ONLINE STRONG OFFLINE RECOVERING PROGRESSIVELY
YTD MAY 20 100%
90%
80%
SKINCARE + 44%
70%
60%
FRAGRANCE + 58%
50%
40%
MAKE UP + 24%
30%
20%
HAIR + 34%
10%
0%
TOTAL BEAUTY + 38% FEB. MAR. APR. MAY JUN. JUL.
TOP BEAUTY CATEGORIES TRAFFIC RECOVERY %
4000 MALLS IN CHINA
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STRONG APPETITE FOR BEAUTY
BACK TO SALONS
OF CONSUMERS WENT BACK
2/3 TO THEIR HAIRDRESSER
IN THE 1ST WEEK OF OPENING
Survey France/US/Germany – May 2020
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STRONG APPETITE FOR BEAUTY
EUROPE NOW IN RECOVERY
TOTAL MASS MARKET EVOLUTION TOTAL MASS MARKET EVOLUTION
0%
-5% W/C 23.03 W/C 27.04 W/C 18.05
-10% P4 P5
-15%
(23.03 / 20.04) (21.04 / 19.05)
-16.7%
-20% Total -4.8% +4.1%
-25%
-30% Brick & Mortar -7.1% +0.8%
-35%
-40%
E-COM +121.5% +196%
-45% -40.0%
-50% -44.7%
Spain total mass beauty market (Nielsen) Italy total mass beauty market (Nielsen)
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L’ORÉAL IS CHAMPIONING
THE BEAUTY MARKET
C1 - Internal useOUTPERFORMING IN Q1
BEAUTY
MARKET 1
2
EST. Q1
-4.8%
≃-8%
1L’Oréal worldwide beauty market estimates, excluding razors, soaps and toothpastes. Q1 2020use
provisional estimates, at constant exchange rates. 2Q1 2020 like-for-like sales growth.
C1 - InternalFANTASTIC ACCELERATION OF DIGITALIZATION
+20%
WEBSITE TRAFFIC
+76%
OF TIME SPENT ON
WHATSAPP WORLDWIDE +70% 2Bn
LIVE USAGE TIKTOK
60Bn ON INSTAGRAM DOWNLOADS
+15%
DAILY CONVERSATIONS BEAUTY CONVERSATIONS
ON WHATSAPP
MORE CONNECTION MORE COACHING
MORE COMMUNITY MORE CONVERSATION
C1 - Internal useL’ORÉAL, THE CHAMPION OF DIGITAL
MORE CONNECTION MORE SERVICES MORE CONVERSATION
MEDIA SHIFT:
X2.5 VIRTUAL 1.2M2 CONVERSATIONS (+28%)
77% 1 digital media
TRY-ONS
FROM AWARENESS TO CONVERSION
9 MINUTES TIME SPENT
IMPROVED ROI
TELECONSULTATION
NEW FORMATS
SHOPPABLE
NEW TONE OF VOICE
LIVE-STREAMING
NEW IN-STORE
VIRTUAL TESTER
2In April, excluding Asia
INCREASED CONSUMER & CUSTOMER CENTRICITY IN ONLY A FEW WEEKS
In April use
C1 - 1InternalFANTASTIC ACCELERATION FOR E-COMMERCE
27%
10 YEAR’S GROWTH IN LESS THAN 10 WEEKS
US E-COMMERCE PENETRATION % OF RETAIL SALES
16%
14.4%
13.2%
11.8%
10.7%
9.7%
8.8%
8%
7.2%
5.6% 6.4%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 APRIL 2020
Source: Bank of America, US Department of use
C1 - Internal Commerce, ShawSping ResearchL’ORÉAL, CHAMPION OF E -COMMERCE
ECOM BOOMING
+53% 1 in Q1
SHARP ACCELERATION IN APRIL
>+60%
x2 IN WESTERN EUROPE AND IN THE USA2
WEIGHT OF E-COMMERCE INCREASING ALL DIVISIONS, ALL ZONES
OUTPERFORMANCE IN NORTH AMERICA
30%
25%
25%
18%
16% 17% 5X TOTAL BEAUTY MARKET Q1 D2C
20%
15% 11% 60% CPD VS TOTAL BEAUTY ECOMM
MARKET GROWTH - USA
+221%1 growth
8%
50%
10% L’ORÉAL
5% 6% 40%
+58% new consumers
+49%
5% 30%
MARKET x2 increase conversion rate
0%
20%
+11%
10%
2015 2016 2017 2018 2019 JAN FEB MAR APR
0% 1In April - Source: SFCC
1Sales achieved in Q1 2020 on our brands’ own websites + estimated sales achieved by our brands corresponding to sales through our retailers’ websites (non-audited data)
C1 - Internal useCHAMPIONING WITH WINNING BRANDS
MARKET SHARE TOP BRANDS VS SMALLER BRANDS, MASS EU41
STRONG TRUSTED ASPIRATIONAL BRANDS
60%
PREVAIL IN TIMES OF CRISIS
EXCEPTIONAL QUALITY, SAFETY
TRUST, REASSURANCE
TOP 100 BRANDS
TRANSPARENCY
COMMITMENT TO SUSTAINABILITY
50% PURPOSE DRIVEN
STRONG CONSUMER ENGAGEMENT
OTHER BRANDS
7 BRANDS IN THE TOP 20
40%
1 Weekly data
C1 - Internal useCHAMPIONING WITH HERO PRODUCTS
TOP 20 HERO SKUS REPRESENT 30% OF SALES
C1 - Internal useSEIZING AND MAXIMIZING ALL OPPORTUNITIES
CATEGORY OPPORTUNITIES
BEAUTY MASS MARKET VALUE SALES EVOLUTION YOY 2020-2019
BOOM IN NAILS STRONG GROWTH
20% 22% 22%
17%
13%
IN DERMOCOSMETICS
10% 11% 13%
4% 6%
3%
-4% -5% -4%
-10% -8% -8% -9%
Progression of the nail category & of essie +30.5% 09/03 -
15/03
16/03 -
22/03
23/03 -
29/03
30/03 -
05/04
06/04 -
12/04
13/04 -
19/04
20/04 -
26/04
27/04 -
03/05
04/05 -
10/05
+40%
MASS MARKET L'ORÉAL CPD
EXPLOSION IN HOME HAIRCOLOR
ESSIE +17.7% HAIRCOLOR WEEKLY VALUE SALES EVOLUTION YOY 2020-2019
199% 204% +30%
162%
146% 153% 165% 150%
127%
148% 159% 145% 138%
CATEGORY 68%
116% 127%
113%
87%
P1 P2 P3 P4
48%
2020 Vs 2019 09/03 - 16/03 - 23/03 - 30/03 - 06/04 - 13/04 - 20/04 - 27/04 - 04/05 -
15/03 22/03 29/03 05/04 12/04 19/04 26/04 03/05 10/05
HAIRCOLOR MARKET HAIRCOLOR L'ORÉAL CPD Q1 2020 like-for-like sales growth
Source: Nielsen
C1 - Internal useCHAMPIONING THANKS TO INNOVATION
STRONG RELAUNCH PLAN
C1 - Internal useCHAMPIONING THANKS TO INNOVATION
POWERFUL LAUNCHES FOR H2
C1 - Internal useCHAMPIONING THANKS
TO UNIQUE ORGANIZATION
EACH COUNTRY IS A SPECIFIC CASE WITH DIFFERENT
SANITARY, ECONOMIC, RETAIL SITUATION
THAT REQUIRES OPTIMISATION AND MAXIMISATION
COUNTRY BY COUNTRY
PERFECTLY ADAPTED:
STRATEGICALLY CONCENTRATED / OPERATIONALLY DECENTRALIZED
C1 - Internal useCHAMPIONING THANKS
TO DEDICATION OF OUR TEAMS
ALL FACTORIES AND WAREHOUSES 58,000 PEOPLE
OPENED DURING THE CRISIS TELEWORKING
C1 - Internal useCHAMPIONING THANKS TO HEALTHY
AND SOLID FINANCIAL SITUATION
ROBUST BALANCE Shareholders’ equity > €29Bn
SHEET 2/3 of total balance sheet
STRONG NET €4.4Bn net cash end 2019 excluding
CASH POSITION financial lease debt
C1 - Internal useCOST DISCIPLINE IN TIME OF CRISIS
TRAVEL BAN AS OF MID-FEB TILL END-SEPTEMBER
STRICT CONTROL OF R&I BUDGET. IN LINE WITH BUSINESS ACTIVITY
SUSPENSION OF CONSULTING CONTRACTS
SYSTEMATIC TRANSFORMATION OF ON-SITE TRAINING TO E-LEARNING
CANCELLATION OF PHYSICAL MEETINGS AND SEMINAIRES
COLLECTIVE EVENTS DEFERRED.
DRASTIC ADJUSTMENT OF BUSINESS DRIVERS IN ALL ZONES TO REFLECT
THE STATE OF LOCKDOWN, IN PARTICULAR NON-DIGITAL EXPENSES
POINT OF SALE EXPENSES CUT
STRICT CONTROL OF INVESTMENTS
C1 - Internal useCHAMPIONING THANKS TO SUSTAINABILITY
OUR PERFORMANCE IS RECOGNIZED
ENVIRONMENT GENDER EQUALITY ETHICS
L’ORÉAL, ONLY COMPANY WITH 3“A” LEADER IN GENDER #1 WORLDWIDE ETHICALQUOTE
FOR THE 4th YEAR RUNNING EQUALITY REPUTATION INDEX1
1Rankingdate December
C1 - Internal use 2019CHAMPIONING THANKS TO SUSTAINABILITY
L’ORÉAL FOR THE FUTURE
A SOCIAL AND ENVIRONMENTAL
SOLIDARITY PROGRAMME
€150M
€50 MILLION
to help women in situations
of high vulnerability
€100 MILLION
Environmental impact Investing
C1 - Internal useL’ORÉAL WILL EMERGE
CLOSER TO OUR CONSUMERS
CLOSER TO OUR RETAIL PARTNERS
CLOSER TO OUR SUPPLIERS
CLOSER TO OUR COMMUNITIES
STRONGER THAN EVER
C1 - Internal use------------------------- Disclaimer -------------------------
"This document does not constitute an offer to sell, or a solicitation of an offer to buy, L’Oréal shares. If you wish to obtain more comprehensive information about L’Oréal,
please refer to the public documents registered in France with the Autorité des Marchés Financiers (which are also available in English on our Internet site: www.loreal-
finance.com).This document may contain some forward-looking statements. Although the Company considers that these statements are based on reasonable hypotheses at
the date of publication of this release, they are by their nature subject to risks and uncertainties which could cause actual results to differ materially from those indicated or
projected in these statements."
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