Letter to shareholders - N°77 - autumn / winter 2020

 Message from the Chairman 

JEAN-PAUL AGON
Chairman and Chief Executive Officer of L’Oréal

“In the context of the ongoing epidemic crisis, L’Oréal’s absolute priority continues to be to protect the health of all its employees worldwide.

The Group was able to return to growth as soon as this third quarter thanks to the determination and the relevance of the strategic choices taken in all Divisions and geographic Zones.

After a first half marked by a crisis of supply, linked to the closure of points of sale around the world, L’Oréal put everything in place, as early as June, to stimulate demand for its brands and products and to re-engage all its business drivers. All of the launches initially planned went ahead, business drivers and media investments were strengthened, and “Back to Beauty” plans were deployed with our distribution partners everywhere, in brick-and-mortar and e-commerce, to stimulate the return to consumption. This return to growth is evidence of consumers’ robust appetite for beauty products and our innovations. It is also the fruit of the remarkable commitment of all the teams, who were mobilised in all areas of the Group and in all countries.

All these initiatives enabled us to significantly outperform a beauty market which is still on the road to recovery. The Professional Products Division posted its best quarter in many years, thanks to the reopening of salons and the acceleration of e-commerce. Despite its extensive exposure to the makeup category, the Consumer Products Division returned to growth thanks to a number of commercial operations. L’Oréal Luxe significantly outperformed its market thanks to a very strong launch plan and its unique portfolio of complementary brands. Finally, the Active Cosmetics Division achieved a record quarterly growth, driven by the remarkable success of all its brands. All Divisions were able to seize market opportunities, particularly in the skincare category, where our brands are on the offensive. The teams also harnessed the power of e-commerce ⁽¹⁾, which grew at a rate of +61.6% ⁽²⁾.

In geographic terms, North America and all of the new markets returned to growth in this quarter, with remarkable performances in certain countries, such as China and Brazil.

As a result, in a sanitary environment which remains difficult and uncertain, our performance in the third quarter strengthens our ambition to achieve like-for-like growth for the second half, and to deliver solid profitability.”

(1) Sales achieved on our brands’ own websites + estimated sales achieved by our brands corresponding to sales through our retailers’ e-commerce websites (non-audited data).
(2) Like-for-like: based on a comparable structure and identical exchange rates.