IN POLE POSITION FOR THE DECADE AHEAD - Jean-Paul AGON CHAIRMAN & CHIEF EXECUTIVE OFFICER - L'Oréal Finance
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IN POLE POSITION FOR THE DECADE AHEAD Jean-Paul AGON CHAIRMAN & CHIEF EXECUTIVE OFFICER 21 February 2020
KEY INDICATORS 2019
SALES #1 BEAUTY PLAYER
€29.9 Bn WORLDWIDE1
OPERATING MARGIN NET PROFIT2
18.6% €4.4 Bn
OPERATING CASH FLOW3 EARNINGS PER SHARE4
€5 Bn €7.74
MARKET CAPITALIZATION5
c. €15O BILLION
1Source:
WWD, Beauty’s Top 100, May 2019. 2Net profit, excluding non-recurring items after non-controlling interests. 3Operating cash flow = Gross cash flow + changes in
21 February 2020 working capital - investments. 4Diluted earnings per share, based on net profit, excluding non-recurring items, after non-controlling interests. 5Based on 02.18.2020
BEST GROWTH
in 12 years
+8%
LIKE-FOR-LIKE
21 February 2020 2019 like-for-like sales growth.
A very dynamic
BEAUTY MARKET
21 February 2020
WORLDWIDE BEAUTY MARKET
+5.0 % / +5.5 %
21 February 2020 Source: L’Oréal 2019 estimates. Excluding razors, soaps and toothpastes. At constant exchange rates.
ECONOMIC, DEMOGRAPHIC & SOCIOLOGICAL
fundamental evolutions
MEN’S CONSUMPTION
MIDDLE & UPPER CLASSES
AGEING POPULATION
21 February 2020
1 DIGITAL REVOLUTION
in Beauty
BEAUTY IS
VISUAL & SOCIAL
21 February 2020
2
LEAPFROG
of traditional
distribution
21 February 2020
3
Appetite for beauty of
YOUNG
GENERATIONS
21 February 2020
4
STRONG PREMIUMIZATION
of the market
21 February 2020Beauty market
6 POWERFUL ENGINES
by region1 by sector1 by category1
ASIA PACIFIC LUXURY DERMOCOSMETICS SKINCARE
≃+ 9% ≃+ 10% ≃+ 7% ≃+ 8%
E-COMMERCE TRAVEL RETAIL
≃+ 27% ≃+ 22%
21 February 2020 1Source: L’Oréal 2019 estimates. Excluding razors, soaps and toothpastes. At constant exchange rates.OUR STRATEGY
to concentrate on the
fastest growing segments
and to outperform them
HAS BEEN VERY SUCCESSFUL
21 February 2020G R O W T H E N G I N E 1
LUXURY
+14% 2
≃ +10% 1
Market L’Oréal
Luxe
21 February 2020 1Source: L’Oréal 2019 estimates. Excluding razors, soaps and toothpastes. At constant exchange rates. 22019 like-for-like sales growth.G R O W T H E N G I N E 1 L U X U R Y
A UNIQUE PORTFOLIO STRONG DIGITAL AT THE CENTER OF
OF ICONIC BRANDS INNOVATIONS THE MARKETING MODEL
4 BILLIONAIRE BRANDS SKINCARE E-COMMERCE
+17%1 +22%2 21% 3 OF SALES
12019 combined like-for-like sales growth. 22019 like-for-like sales growth. 3Sales achieved on our brands’ own websites
21 February 2020 + estimated sales achieved by our brands corresponding to sales through our retailers’ websites (non-audited data).G R O W T H E N G I N E 2
DERMOCOSMETICS
STRONGEST
GROWTH
+15% 2
IN 20 YEARS
≃ +7% 1
ALL REGIONS
ALL CHANNELS
ALL BRANDS
Market Active
Cosmetics
21 February 2020 1Source: L’Oréal 2019 estimates. Excluding razors, soaps and toothpastes. At constant exchange rates. 22019 like-for-like sales growth.G R O W T H E N G I N E 2 D E R M O C O S M E T I C S
NEW BILLIONAIRE
E-COMMERCE
+55% 2
NEW GROWTH RELAYS
>40% 1
TRUSTED RECOMMENDED RETAIL E-COMMERCE
BRANDS BY 160,000 EXCELLENCE & DIGITAL
DOCTORS
12019 like-for-like sales growth. 22019 like-for-like sales growth. Sales achieved on our brands’ own websites + estimated
21 February 2020 sales achieved by our brands corresponding to sales through our retailers’ websites (non-audited data).G R O W T H E N G I N E 3
SKINCARE
+20% 2
#1 CATEGORY
35% OF SALES
≃ +8% 1
#1 GROWTH DRIVER
Market
21 February 2020 1Source: L’Oréal 2019 estimates. Excluding razors, soaps and toothpastes. At constant exchange rates. 22019 like-for-like sales growth.G R O W T H E N G I N E 3 S K I N C A R E
THE POWER OF INNOVATION
21 February 2020G R O W T H E N G I N E 4
ASIA PACIFIC
+25% 2
DOUBLE-DIGIT
≃ +9% 1 GROWTH IN
MANY COUNTRIES
Market
21 February 2020 1Source: L’Oréal 2019 estimates. Excluding razors, soaps and toothpastes. At constant exchange rates. 22019 like-for-like sales growth.G R O W T H E N G I N E 3 A S I A P A C I F I C
#1 ZONE
LEADER WITH
STRONG POTENTIAL
10%
MARKET
SHARE
21 February 2020 Source: L’Oréal 2019 estimates. Excluding razors, soaps and toothpastes.G R O W T H E N G I N E 5
E-COMMERCE
+52% 2
≃ +27% 1 ALL DIVISIONS
ALL REGIONS
ALL FORMATS
Market
1Source: L’Oréal 2019 estimates. Excluding razors, soaps and toothpastes. At constant exchange rates. 22019 like-for-like sales growth.
21 February 2020 Sales achieved on our brands’ own websites + estimated sales achieved by our brands corresponding to sales through our retailers’ websites (non-audited data).G R O W T H E N G I N E 6
TRAVEL RETAIL
+25%
EXTENDING
OUR LEADERSHIP
PORTFOLIO OF BRANDS
COVERING ALL NEEDS
21 February 2020 2019 like-for-like sales growth.L’ORÉAL significantly
OUTPERFORMED
the market
+5.0% / +5.5% 1
+8% 2
Beauty market
21 February 2020 1Source: L’Oréal 2019 estimates. Excluding razors, soaps and toothpastes. At constant exchange rates. 22019 like-for-like sales growth.IMPROVEMENT IN REDUCTION
GROSS MARGIN IN SG&As1
(% SALES) (% SALES)
72.8% 73.0% 20.9% 20.3%
2018 2019 2018 2019
21 February 2020 1Selling, general and administrative expensesOPERATING ADVERTISING &
MARGIN PROMOTION EXPENSES
(% SALES) (% SALES)
18.6% 30.8%
18.3% 30.2%
2018 2019 2018 2019
21 February 2020DIVIDEND
PER SHARE
€4.25
€3.85
+10.4%
2018 2019
21 February 2020 To be proposed at the Annual General Meeting on 21 April 2020.L’ORÉAL
perfectly positioned
FOR THE NEXT
DECADE
21 February 2020A LEADER WITH STRONG POTENTIAL
MARKET SHARE1 AND RANKING2 BY GEOGRAPHIC ZONE
WESTERN EUROPE
EASTERN EUROPE
NORTH AMERICA 20% 13%
13% N°1
N°1
N°1 ASIA PACIFIC
AFRICA, MIDDLE EAST
10% 10%
LATIN AMERICA
N°1
8% N°2
N°3
1Source: L’Oréal 2019 estimates. Excluding razors, soaps and toothpastes. At constant exchange rates.
21 February 20208 WINNING ASSETS
1 C UT T I N G E D G E R & I
2 P O WE R F UL B R A N D S
3 DIGITAL EXCELLENCE
4 E-COMMERCE LEADERSHIP
5 PERFECT BALANCE
6 UN I Q UE C UL T UR E & O R G A N I Z A T I O N
7 L O N G - T E R M B US I N E S S M O D E L
8 EXEMPLARY RESPONSIBILITY
21 February 2020CUTTING EDGE R&I
1
THE WORLD'S LARGEST
RESEARCH FORCE
dedicated to beauty
4,100
R&I EXPERTS
€1Bn
R&D EXPENSES
21 February 2020CUTTING EDGE R&I
1 L e a d i n g t h e w a y o n technologies t h a t a r e
REVOLUTIONIZING BEAUTY
GREEN SCIENCES EXPOSOME MICROBIOME
21 February 2020POWERFUL BRANDS
2 UNIQUE PORTFOLIO OF BRANDS
PROFESSIONAL CONSUMER L’ORÉAL ACTIVE
PRODUCTS PRODUCTS LUXE COSMETICS
21 February 2020POWERFUL BRANDS
2 9 BILLIONAIRE BRANDS
+9%
21 February 2020 2019 combined like-for-like sales growth.POWERFUL BRANDS
2
2 BRANDS 2 NEW BRANDS PRADA LICENSE
CHANGING DIVISIONS FOR L’ORÉAL LUXE IN 2021
21 February 2020DIGITAL EXCELLENCE
3 MASTERING THE NEW MARKETING MODEL
PRECISION PERFORMANCE
MARKETING OPTIMIZED IN REAL TIME
≃ 50%
OF MEDIA SPEND
PROPRIETARY DIGITAL COCKPIT,
STRONGLY ENHANCING ROI
ON DIGITAL
≃ 80%
ON PRECISION
ADVERTISING
21 February 2020DIGITAL EXCELLENCE
3
POWER TO ENGAGE
1.3 Bn 25%
CONSUMER BEAUTY GLOBAL TRAFFIC
DATA POINTS1 ON YOUTUBE
1.2 Bn 7.4 Bn
VISITORS ON VIDEO VIEWS ON
OUR WEBSITES YOUTUBE
21 February 2020 1Mass personalization of marketing and consumer interactions.DIGITAL EXCELLENCE
3 SERVICES & EXPERIENCE
20 SERVICES
20 BRANDS
70 COUNTRIES
21 February 2020DIGITAL EXCELLENCE
3
More than
30,000 managers
UPSKILLED
Many capabilities
INTERNALIZED
21 February 2020DIGITAL EXCELLENCE
3
LEADER OF THE NEW
BEAUTY TECH
WORLD
21 February 2020E-COMMERCE LEADERSHIP
4 Mastering
THE NEW E -COMMERCE MODEL
% OF GROUP SALES1
15.6%
11.0%
8.0%
6.4%
5.1%
3.4%
2014 2015 2016 2017 2018 2019
21 February 2020 1Sales achieved on our brands’ own websites + estimated sales achieved by our brands corresponding to sales through our retailers’ websites (non-audited data).E-COMMERCE LEADERSHIP
4 ONLY THE BEGINNING OF
THE E-COMMERCE JOURNEY
WEIGHT OF E-COMMERCE IN THE BEAUTY MARKET (IN %)
ARGENTINA BRAZIL SOUTH MALAYSIA SPAIN RUSSIA JAPAN GERMANY FRANCE UK KOREA
AFRICA
MEXICO CHILE SINGAPORE ITALY INDIA THAILAND TURKEY POLAND CANADA USA CHINA
21 February 2020 Source: L’Oréal 2019 estimates. Excluding razors, soaps and toothpastes.PERFECT BALANCE
5
PERFECT
BALANCE
21 February 2020PERFECT BALANCE
5 ABSOLUTE COVERAGE
7 DISTRIBUTION CHANNELS
PHARMACIES
DEPARTMENT STORES DRUGSTORES
HAIR SALONS MASS RETAIL PERFUMERIES MEDISPAS BRANDED RETAIL TRAVEL RETAIL E-COMMERCE
5 BEAUTY CATEGORIES
ALL PRICE ALL ALL
SEGMENTS REGIONS PSYCHOGRAPHICS
HAIRCARE HAIR COLOR SKINCARE FRAGRANCES MAKE-UP
21 February 2020PERFECT BALANCE
5 PERFECT BALANCE
in terms of sector
ACTIVE COSMETICS 8.9% 11.5% PROFESSIONAL PRODUCTS
L’ORÉAL LUXE 36.9% 42.7% CONSUMER PRODUCTS
BREAKDOWN OF 2019 SALES BY DIVISION
21 February 2020PERFECT BALANCE
5 PERFECT BALANCE
in terms of region
ASIA PACIFIC 32.3% 27.7% WESTERN EUROPE
OTHER MARKETS 14.7% 25.3% NORTH AMERICA
BREAKDOWN OF 2019 SALES BY GEOGRAPHIC ZONE
21 February 2020PERFECT BALANCE
5 PERFECT BALANCE
in terms of category
4.4% OTHERS*
FRAGRANCES 9.3%
35.0% SKINCARE
HAIR 25.0%
26.3% MAKE-UP
BREAKDOWN OF 2019 SALES BY BUSINESS SEGMENT
21 February 2020 * Others include hygiene products and the sales of third party brands by the US professional products distributorsUNIQUE CULTURE & ORGANIZATION
6
A LEADER WITH THE SPIRIT LONG-TERM
OF A CHALLENGER UNIQUE VISION
APPROACH
A LARGE COMPANY WITH SHORT-TERM
THE SPIRIT OF A START-UP PRAGMATISM
21 February 2020UNIQUE CULTURE & ORGANIZATION
6
EMPOWERED STRATEGICALLY
CONCENTRATED
LOCAL TEAMS
UNIQUE
ORGANIZATION
AGILITY & EXCELLENCE OPERATIONALLY
ON THE FIELD DECENTRALIZED
21 February 2020LONG-TERM BUSINESS MODEL
7
LONG-TERM BUSINESS MODEL
to deliver consistent, sustainable
& reliable growth
21 February 2020LONG-TERM BUSINESS MODEL
7
TOPLINE GROWTH
The best route to value creation
F O C U S O N T O P L I N E G R O WT H
+
OPERATIONAL DISCIPLINE
21 February 2020LONG-TERM BUSINESS MODEL
7 CONSISTENT GROWTH
IN OPERATING MARGIN
20%
18.6%
18.3%
18.0%
17.6%
17.4%
17.3%
17.0%
18%
16.6%
16.5%
16.2%
16.1%
15.7%
15.6%
15.5%
15.3%
16%
14.9%
14.8%
14.0%
14%
12.9%
12.1%
12%
10.0%
10%
8%
2000 2001 2002 2003 2004 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
IFRS
21 February 2020LONG-TERM BUSINESS MODEL
7
SUSTAINED PROFIT INCREASE
NET PROFIT SINCE 1989 IN MILLION EUROS
4,357
x20
IN 30 YEARS
223
1989 2019
21 February 2020LONG-TERM BUSINESS MODEL
7
A DYNAMIC DIVIDEND POLICY
DIVIDEND PER SHARE SINCE 1998 IN EUROS
4.25 1
+10.4%
DIVIDEND INCREASE FOR
+10%
SHAREHOLDERS WHO HAVE
CONTINUOUSLY HELD SHARES 3,80
IN REGISTERED FORM FOR AT 3.55
LOYALTY BONUS LEAST 2 CALENDAR YEARS 3.30
3.10
2.70
2.50
2.30
2.00
1.80
1.44 1.50
1.38
1.18
PAYOUT RATIO: 54.9%
2
1.00
0.73 0.82
0.54 0.64
0.34 0.44
0.28
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
21 February 2020 1To be proposed at the Annual General Meeting on 21 April 2020. 2Based on the dividend proposed at the Annual General Meeting on 21 April 2020.LONG-TERM BUSINESS MODEL
7
DOUBLE-DIGIT TSR
17.1%
15.1% 15.6%
3
YEARS
5
YEARS
10
YEARS
21 February 2020 Takes into account the value of the share and the dividend income received. At 31 December 2019.LONG-TERM BUSINESS MODEL
7 A POWERFUL VALUE -CREATING
BUSINESS MODEL
TEN YEAR EVOLUTION OF THE SHARE PRICE
€265.7
x3.4
€78.0
31/12/2009 31/12/2010 31/12/2011 31/12/2012 31/12/2013 31/12/2014 31/12/2015 31/12/2016 31/12/2017 31/12/2018 31/12/2019
21 February 2020 Source: Nasdaq Thomson Reuters Eikon, stock prices from 31 December 2009 to 14 February 2020EXEMPLARY RESPONSIBILITY
8 Extending our lead in
SUSTAINABILITY
21 February 2020EXEMPLARY RESPONSIBILITY
8 DEEP TRANSFORMATION
We decouple
We offer products We provide access
that combine our environmental to work to people
performance with impact from from underprivileged
sustainability our growth communities
85% OF NEW -78%2 CO2 90,635 PEOPLE
PRODUCTS1 +37%3 PRODUCTION
have an improved
environmental
or social profile
21 February 2020 1New or renovated products 2Emissions from plants and distribution centres since 2005 32005-2019EXEMPLARY RESPONSIBILITY
8 L’ORÉAL,
A SUSTAINABLE COMPANY
ONLY COMPANY WITH 3 “A” FOR THE 4th YEAR IN A ROW
21 February 2020EXEMPLARY RESPONSIBILITY
8
L’ORÉAL,
AN INCLUSIVE
COMPANY
World leader
gender equality
21 February 2020EXEMPLARY RESPONSIBILITY
8 L’ORÉAL,
AN ETHICAL COMPANY
#1 worldwide
Ethical Quote
Reputation Index
21 February 2020 Ranking date December 2019EXEMPLARY RESPONSIBILITY
8 New, extremely ambitious
2030 COMMITMENTS
21 February 2020STARTING THIS NEW YEAR
AND NEW DECADE
Stronger than ever
21 February 2020Deep solidarity with Chinese people 21 February 2020
After a period of disturbance
consumption resumes
STRONGER THAN BEFORE
21 February 2020Assuming that the epidemic
follows a similar pattern,
Confidence in our capacity
to outperform the market
and
Achieve another year of growth
in both sales and profits
21 February 2020THANK YOU
MERCI
21 February 2020------------------------- 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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