2021 UNIVERSAL REGISTRATION DOCUMENT

The performance conditions concern:

• For the 07 October 2021, 14 October 2020, 18 April 2019,and 17 April 2018 plans:
  • for 50% of shares granted, the increase in comparable Cosmetics net sales for the 2022, 2023 and 2024 financial years under the 2021 plan; for the 2021, 2022 and 2023 financial years under the 2020 plan; for the 2020, 2021 and 2022 financial years under the 2019 plan; and the 2019, 2020 and 2021 financial years under the 2018 plan in relation to the growth in net sales for a panel of competitors;
  • for 50% of shares granted, the increase over the same period in the Group’s consolidated operating profit.

The calculation will be based on the mean of the performance in the 2022, 2023 and 2024 financial years under the 2021 plan; in the 2021, 2022 and 2023 financial years under the 2020 plan; in the 2020, 2021 and 2022 financial years under the 2019 plan; and in the 2019, 2020 and 2021 financial years under the 2018 plan; and will use a predefined allocation scale based on the performance percentage achieved. No performance condition applies below a block of 200 shares.

The plans of 22 April 2015, 20 April 2016 and 20 April 2017 were finally granted by the allocation of, respectively, 706,262 shares on 23 April 2019, 835,600 shares on 21 April 2020 and 742,276 shares on 21 April 2021.

As at 31 December 2021, the performance conditions we redeemed achieved.

In September 2020, Group employees had the opportunity to join a Shareholding Plan based on a traditional format with discount and matching contribution.

The subscription price was set at €223.25, representing 80% of the average share price over the 20 trading sessions prior to the decision by the Chairman and Chief Executive Officer setting the subscription period from 17 September to 2 October 2020 during which 417,966 shares were subscribed. This number does not include the subscription reserved for a Trustee under the laws of England and Wales, as part of a Share Incentive Plan established for Group employees in the UK, with the final number of shares subscribed determined at 5,327 in June 2021.

For French employees, free shares were offered upon subscription in proportion to their personal contribution to the plan with a maximum of 4 shares offered for 10 shares subscribed.

For employees in other countries, shares were offered under a free share plan with a continued employment condition for the employee and proportionate to how much the employee contributes to the plan, with a maximum of 4 shares offered for 10 shares subscribed. The shares will be allocated to employees on 3 November 2025 provided they are still with the Group on that date.

The capital was increased on 3 November 2020 by 452,967 shares.

NOTE 18.  Provisions for liabilities and charges

(1) L’Oréal S.A. was ordered to pay a fine of €189.5 million following the decision handed down in the first instance by the French competition authority on 18 December 2014. L’Oréal appealed against this decision. On 27 October 2016, the Paris Court of Appeal upheld the first instance decision. L’Oréal lodged an appeal in cassation. On 27 March 2019, the Court of Cassation partially overturned the ruling relating to the amount of the fine imposed on L’Oréal. On 18 June 2020, the Second Court of Appeal confirmed the initial amount of the fine. L’Oréal lodged a second appeal with the Court of Cassation against this ruling. The decision is expected in the first half of 2022. The provision was maintained in liabilities and the payment recognised in “Other current assets” (see note 16).

(2) This section mainly includes provisions set aside to cover risks related to government bodies, commercial and financial risks.

The changes in provisions for liabilities and charges impact the 2021 income statement as follows: