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

“In 2013, L’Oréal launched its first sustainable development programme, which meant committing to a fundamental transformation in the business. Jean-Paul Agon was quick to drive things forward and the Group has made considerable progress over the last eight years.

Today, with ‘L’Oréal for the Future’, which sets out our sustainable development commitments for 2030, we have relied on the findings of environmental science on the state of the planet and what we need to do in response to the most urgent challenges. As a result, our new targets are aligned with scientific knowledge. It means, for example, that all our sites will be carbon neutral by 2025, 100% of our plastics will come from recycled or biosourced materials and 95% of our ingredients will be plant-based or produced using biotechnologies or green chemistry by 2030.

In terms of packaging, we will continue to produce lighter packs and reduce the amount of plastic we consume. At the same time, we need to respond to this type of issue through innovation. Shampoo bars, for example, produce a significantly smaller environmental footprint both in terms of packaging, which is made from cardboard only, and water consumption. The next step is to tackle the carbon emissions produced by consumers, since the biggest impact generated by using shampoo or shower gel is the energy needed to heat the water.”

“Digital and e-commerce in particular have grown steadily over the last few years because as early as 2014 we began investing in technologies, hiring digital teams, and training our sales teams. As a result, we are now enjoying a comfortable boost from e-commerce, which is especially welcome in the context of the Covid-19 pandemic. We recorded remarkable growth rates in Spain, Brazil, Japan, the United States and Europe. We believe e-commerce will continue to be a significant source of growth in the years to come. 

Thanks to technology developed by ModiFace, the global leader in augmented reality as applied to beauty, which we acquired in 2018, consumers can now virtually try on makeup and hair colour shades with realistic results. The technology is available on all our websites, via our distributors and in brick-and-mortar stores.

At the end of September 2020, e-commerce accounted for nearly 24% ⁽¹⁾ of Group sales— a significant jump of over 60% ⁽²⁾. New forms of e-commerce have taken hold, such as social commerce, a very interactive, real-time online sales approach featuring influencers or consumers filming live product reviews, which incite viewers to buy. Social commerce is growing outside of China on Instagram, Facebook, YouTube and Snapchat and it coincides nicely with our product categories.”

(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.