Emerging market demand drives revenue growth for L’Oréal

By Andrew McDougall

- Last updated on GMT

Company CEO, Jean-Paul Agon
Company CEO, Jean-Paul Agon

Related tags United states North america

Cosmetics giant L’Oréal is eyeing emerging markets to increase revenue and profits in 2012 following the announcement of strong 2011 results.

The company reported that its net profit amounted to €2.44bn in 2011, up 8.9 per cent, with sales rising 4.3 per cent to €20.34bn ($26.96 billion).

“The good quality of these results means that we are more confident than ever in the group's ability to achieve sustainable and profitable growth. We are well equipped to succeed in our strategy of universalising beauty and to achieve another year of sales and profit growth in 2012,”​ commented CEO Jean-Paul Agon.

‘New Markets’ key to success

And it is the growth in the French firm’s ‘new markets’ that was most impressive with sales of €7.22bn, only slightly behind Western Europe, traditionally L’Oréal’s core business, which posted sales of €7.25bn.

“The group is pursuing its conquest of the New Markets, with Asia and Latin America leading the way, and is making clear progress in North America,”​ said Agon.

“2012 will be a symbolic year, as the New Markets are set to become the group's number one geographic zone.”

Strong performance

Growth in emerging markets was driven by Asia, where sales grew 13.4 per cent, whilst Latin America was up 10.8 per cent.

Despite expansion in most divisions, L'Oréal’s Luxury segment in particular posted a good year, thanks to the performance of Lancôme, Giorgio Armani and Kiehl's.

“These performances demonstrate the relevance of our strategic thrusts and provide further confirmation of the key role played by research, innovation and creativity in our industry,”​ said Agon.

No signs of a slowdown

"2011 was a solid year of development, which has made the group even stronger. In a cosmetics market whose global trend was favourable, L'Oréal achieved sustained sales growth and confirmed its position as the world leader in beauty,”​ he added.

In a news conference discussing the results, Agon announced that he expects L’Oréal’s business to continue to expand as well as the global cosmetics market.

He foresees a four per cent rise in the market this year, having not seen any signs of a slowdown so far.

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