Luxe and Active soar: L’Oréal reports ‘best sales growth of the decade’
The beauty major pulled in €29.87bn sales for 2019, up 10.9% on the previous year – up 8% on a like-for-like basis. Total net profit after non-controlling interests for the year was €3.75bn, down 3.8% on the previous year. The final fourth quarter proved strong for L’Oréal with sales of €7.87bn, up 11.4% on the previous year (9.6% like-for-like).
“L’Oréal closed the decade with its best year for sales growth since 2007, at plus 8% like-for-like, and an excellent fourth quarter, in a beauty market that remains very dynamic,” said Jean-Paul Agon, chairman and CEO of L’Oréal.
Agon said all divisions were growing, with particularly strong growth in L’Oréal Luxe and Active Cosmetics. L’Oréal Luxe grew sales by 17.6% (13.8% like-for-like) in 2019, generating €11bn sales for the year, and Active Cosmetics was up 17.1% (15.5% like-for-like) with €2.6bn in sales.
E-commerce and travel retail had also been “powerful growth drivers”, Agon said. “E-commerce grew spectacularly by 52.4% and accounts for 15.6% of sales.”
Travel retail also maintained strong momentum, he said, with a 25.3% sales growth for the year.
L’Oréal Luxe and its ‘four billionaire brands’
L’Oréal said its Luxe division had “outperformed the market” in 2019, proving its success in skin care and fragrances. E-commerce was also increasingly important for Luxe, accounting for more than 20% of total sales across the unit.
“The division’s four billionaire brands posted double-digit growth,” L’Oréal said.
Growth across Lancôme, for example, had been driven by an “excellent performance in skincare”, it said, through its Génefique new formula and the Absolue range. The Idôle launch had also contributed to growth. Yves Saint Laurent and Giorgio Armani also had “a very good year”, with successful fragrance launches and good performance of flagship scents, as did Kiehl’s.
“Overall, L’Oréal Luxe is winning market share, particularly in Asia Pacific and Western Europe, despite the more difficult context in the United States. The division also performed well in a dynamic travel retail market, in Eastern Europe and in Latin America,” L’Oréal said.
Active Cosmetics sees ‘highest growth rate for 20 years’
L’Oréal said its Active Cosmetics business division had also grown at a “rapid pace” in 2019 – “twice that of the dermocosmetics market”. The beauty major said the Active Cosmetics division reported the highest growth rate for 20 years in 2019.
La Roche-Posay had performed particularly well, it said, passing the €1 billion mark, and Vichy had continued to grow with strong performances in Eastern Europe and Latin America. SkinCeuticals was also growing globally, particularly in the US and China.
The Active Cosmetics division performed particularly strong across Asia and North America, L’Oréal said, and equally across all distribution channels globally.
Across its entire global business covering all divisions, L’Oréal reported strongest growth in ‘new markets’, notably Asia Pacific which saw sales surge 30.4% and Eastern Europe with a sales growth of 8.9%.
Sales for 2019 were up 2.6% in Western Europe (1.8% like-for-like) and up 4.6% in North America, although this translated to being down 0.8% like-for-like.
L’Oréal to sell Roger & Gallet
Last week, the beauty major entered into exclusive negotiations with French investment holding Impala to sell its Roger & Gallet perfume brand. In 2018, the brand generated €52m in sales.
The move to sell off the brand formed part of a “strategic review regarding the best development options for the Roger & Gallet brand”, L’Oréal said.