QUESTIONS AND ANSWERS
Once more this year, L’Oréal and its shareholders had substantial discussions. Shareholders had the possibility to send written questions before the Annual General Meeting as well as ask their questions live over the phone during the Meeting.
What is the impact of Covid on your future development strategy?
Jean-Paul Agon: It doesn’t radically change the Group’s strategy over the long term. The Covid crisis has accelerated a number of underlying trends. Firstly, geographically speaking, the Covid has enhanced even more China’s economic development, its market has continued to progress enormously in 2020, and it is persevering in 2021. Strategically, our will to develop in that country is stronger than ever because it is about to become the strongest market for our Group worldwide. The second trend is the acceleration of e-commerce. E-commerce has of course been boosted by the closing of stores. We were ahead of the pack in that field and therefore it encourages us to go even further, even faster. Thirdly, the Covid crisis has certainly pushed consumers to seek out products that are better from a health point of view, better for their skin, and that is certainly what our brands and particularly our Active Cosmetics brands embody. They have developed considerably during the crisis, and that also confirms our strategy. Finally, working from home has developed considerably over the whole of last year. It is still underway. This will probably lead to a new strategy marked by flexibility between working from home and coming to the office occasionally. We had already experienced that to some extent, but it will be amplified by the crisis.
E-commerce exploded during the pandemic. What did you learn from this? Is this going to last?
Jean-Paul Agon: The pandemic crisis will probably go down in history as a turning point for distribution and e-commerce. E-commerce has become the name of the game all over the world because many points of sales were closed, those consumers who had not yet experienced e-commerce discovered that it was an amazing alternative. As far as L’Oréal is concerned, especially in the field of beauty, we were a leader in digital and e-commerce as soon as 2010, 11 years ago. E-commerce has grown by 62%(1), now accounting for 26.6% of our total sales for 2020 and it will keep growing because it is a new extraordinary channel in the 21st century. What is new is that this channel is now developing on all continents, in all countries. We have seen spectacular growth, which continues in the first quarter. For the first time, the growth of our e-commerce business is much stronger outside China than inside China. We already have more than 50% of our e-commerce turnover in China, but in many other countries we are still very far from that. There will certainly be an extraordinary acceleration in the next ten years.
Some topics could not be addressed during the Annual General Meeting due to time constraints, but L’Oréal is committed to addressing them, notably:
How is L’Oréal preparing to become one of the world’s most exemplary groups in terms of improving its environmental footprint?
In June 2020, L’Oréal launched an ambitious programme, L’Oréal for the Future, based on four key areas: transforming our business and respecting “planetary boundaries”, i.e. what the planet can withstand, as defined by environmental science; empowering our business ecosystem in our transformation, and helping it transition to a more sustainable model; contributing to solving the challenges of the world by supporting urgent environmental and social needs; and finally, adopting a Science-Based Targets approach, a methodology developed to establish common international standards on climate.
Barbara Lavernos has been appointed Deputy CEO in charge of Research, Innovation and Technologies: what are her priority missions and what will they bring to the Group?
For over a hundred years, science and innovation have always been the fundamental pillars of L’Oréal’s pioneering spirit and its success with consumers. Today, the Green Sciences(2) revolution and the Technology and Digital revolution are disrupting the world and opening up a new era of invention and innovation. L’Oréal has decided to combine these two revolutions to invent the beauty of the future. A beauty that relies on Research & Innovation, historically at the heart of the Group’s model, while benefiting from the new opportunities offered by technology. This Research, Innovation and Technologies Department will thus enable us to conquer new territories, increase our inventions for the benefit of the brands and continue to strengthen our position as world leader in beauty. The appointment of Barbara Lavernos as Deputy CEO as of 1 May is a strong signal of the strategic importance given by the Group to the contribution of these entities and the synergies thus created for the future growth of the Group.
(1) Sales achieved on our brands’ own websites + estimated sales achieved by our brands corresponding to sales through our retailers’ websites (non-audited data). Like-for-like.
(2) Disciplines L’Oréal is moving towards to meet its sustainable development goals all while providing consumers with unprecedented levels of product performance