CA Cheuvreux Autumn Conference. Mr Jean Paul AGON Chief Executive Officer. September 30 th, September 30th,

Transcription

1 CA Cheuvreux Autumn Conference September 30 th, 2010 Mr Jean Paul AGON Chief Executive Officer September 30th,

2 A few figures 1 st cosmetics group worldwide 23 international brands 17.5 billion euros of sales in % operating margin* 1,997 m net profit** 130 countries 64,600 employees 674 patents registered in 2009 * 2009 figures ** Net profit excluding non-recurring items, after minority interests, capital gains and losses on disposals of long-term assets, impairment of assets, restructuring costs, associated tax or minority interests effects. September 30th,

3 The Six fundamentals of the L Oréal business model A solid growth market Constant quest for quality and innovation Unique portfolio of powerful and diversified brands Presence in all distribution channels Presence in all markets A healthy and solid financial situation September 30th,

4 One year later We are Back to Growth September 30th,

5 I. The Cosmetics Market has picked up well II. First-half Results: Back to Growth III. First-half Results bear out our major strategic choices September 30th,

6 I. The Cosmetics Market has picked up well September 30th,

7 Worldwide Cosmetics market Annual growth rate of % ( )* +5.5% Rebound of the cosmetics market Net manufacturing price (sell in) + 4 % (e) +3.0% + 1 % (*CAGR ) Excluding soap, toothpaste and razors. Net manufacturing price (sell in) Provisional estimates for Source: L Oréal estimates September 30th,

8 Worldwide cosmetics market* Estimates ** Rebound of the cosmetics market Net manufacturing price (sell in) Sell in 1 st Half 2010 (shipments) Western Europe % North America % Japan 1.3 % New Markets excl. Japan TOTAL % % *excluding soaps and toothpastes 1 st half 2010 provisional estimate **L Oréal estimates. Excluding exchange rate impact September 30th,

9 II. First half Results: Back to Growth September 30th,

10 Consolidated sales growth First half 2010 Impact of changes in consolidation Exchange rate impact Like for like % % % Back to strong organic growth BASED ON REPORTED FIGURES % September 30th,

11 Consolidated sales at end June 2010 Back to growth in all Divisions GROWTH (%) Like for like Professional Products % Consumer Products % Luxury Products % Active Cosmetics % COSMETICS TOTAL % On January 1 st, 2010, Roger & Gallet has been transferred from the Luxury Products Division to the Active Cosmetics Division. The figures for the first half 2009 and full year 2009 have been restated to take into account these changes. September 30th,

12 Cosmetic Sales by geographic zone at end June 2010 Back to growth in all Zones Like for like Western Europe % North America % New Markets % COSMETICS % On January 1 st, 2010: The travel retail business of YSL Beauté, which was previously recorded 100% under Western Europe, has now been broken down between the Western Europe, North America and New Markets zones. The Rest of the World zone has become the New Markets zone with the following distribution: Australia, India and New Zealand, which were previously in the Africa, Orient, Pacific zone have been included in the Asia zone which has become the Asia, Pacific zone. The Africa, Orient, Pacific zone has become the Africa, Middle East zone. The figures for the first half 2009 and full year 2009 have been restated to take into account these changes. September 30th,

13 Cosmetics sales by business segments at end June 2010 Back to growth in all Product Categories 1 st HALF 2010 Like for like Skincare % Haircare % Make up % Hair colourants % Fragrances % Hygiene + Other % COSMETICS % September 30th,

14 Strong increase in 2010 half year results both in terms of value and quality COST OF SALES SELLING, GENERAL AND ADMIN. EXPENSES ADVERTISING AND PROMOTION EXPENSES OPERATING PROFIT 110 BASIS BASIS BASIS POINTS POINTS POINTS BASIS POINTS September 30th,

15 A healthy and solid financial situation 06/30/ /31/ /30/2010 Operating net cash % change 940m 2,597m 1,182m % Net debt 3,658m 1,958m 1,673m Gearing* 32.0 % 14.4 % 11.7 % * Net debt / shareholders equity group share September 30th,

16 III. First half Results bear out our major strategic choices September 30th,

17 Five major strategic pillars Concentrating on high value added worldwide innovations at accessible prices Opening up new product categories Accelerating international expansion Sustained investments in R&D and advertising and promotion 5 Industrial re engineering and cost reduction September 30th,

18 Concentrating on high value added worldwide innovations at accessible prices Main new launches in H Professional Products Consumer Products Luxury Products Active Cosmetics The Body Shop September 30th,

19 Concentrating on high value added worldwide innovations at accessible prices1 Adapting our Brands and Divisions Strategy PROFESSIONAL PRODUCTS DIVISION CONSUMER PRODUCTS DIVISION LUXURY PRODUCTS DIVISION ACTIVE COSMETICS DIVISION PREMIUM brands AFFORDABLE brands September 30th,

20 Concentrating on high value added worldwide innovations at accessible prices Less «niche» innovations 2 2. Highest innovation degree at the heart of each market 3 3. A product offer completed by entry level products September 30th,

21 Concentrating on high value added worldwide innovations at accessible prices1 Adapting the Formats to each Consumer and Retailer Light Cream 40 ml ( 2 ) Light Cream 20 ml Light Sachet 7,5 ml ( 0.18 ) September 30th,

22 Opening up new product categories 2 Deodorants Latin America Eastern Europe Eastern Europe Western Europe Q Q Q GARNIER BI O GARNIER MINERALS September 30th,

23 Opening up new product categories 2 Men s cosmetics: presence in all distribution channels KERASTASE CAPITAL FORCE L OREAL PARIS MEN EXPERT HYDRA ENERGETIC EYES DEODORANTS GARNIER MEN (India, Asia) BIOTHERM FORCE SUPREME RE BUILDER September 30th,

24 Accelerating international expansion3 NEW MARKETS BRAZIL % MEXICO % ARGENTINA % UKRAINE % RUSSIA % INDIA % INDONESIA % KOREA % CHINA % PHILIPPINES % L Oréal cosmetics sales, like for like growth in H September 30th,

25 Accelerating international expansion3 A New Strategy From a strategy of intensive penetration targeting a limited number of consumers, primarily in Western Europe and North America... to a strategy of extensive penetration of a very large number of potential consumers. September 30th,

26 53 OF THE WORLDWIDE MARKET % 87 % OF WORLDWIDE MARKET GROWTH September 30th,

27 Accelerating international expansion3 The «New Markets» Zone = 80 % of the estimated Worldwide Market Growth The Market Growth ( ) New Markets 80 % September 30th,

28 Accelerating international expansion3 Accelerating international expansion L Oréal: 14.6 % L Oréal market shares, by region (H1 2010) * North America 16.3 % Western Europe 23.1 % Eastern Europe 12.4 % Japan 2.8 % Asia Pacific 10.0 % Latin America 11.5 % Total New Markets : 12.0 % * excluding soaps and toothpaste L Oréal Estimates BMS On a 2009 higher revised basis. 28 September 30th,

29 Accelerating international expansion 3 Stepping up international expansion Weight of New markets in cosmetics sales % H1 September 30th,

30 Accelerating international expansion3 Strong profitability levels for L Oréal in the «New Markets» Cosmetics branch 2009 Operating profit margin by regions (before non allocated expenses 2009) 25% 20% 15% 10% 5% 0% 20,9% 18,0% 16,5% 14,6% Total Western Europe North America New markets September 30th,

31 Sustained investments in R&D 4 and advertising and promotion H H EVOLUTION RESEARCH & DEVELOPMENT % September 30th,

32 Sustained investments in R&D and advertising and promotion ADVERTISING & PROMOTION (as % of sales) 30.6% 30.1% 30.3% 30.0% 30.1% 30.8% H H EVOLUTION ADVERTISING & PROMOTION % September 30th,

33 Industrial re engineering and cost reduction 5 Continued industrial re engineering Centralisation and optimisation in purchasing Improvement in industrial productivity Modernisation and streamlining of the «supply chain» H H EVOLUTION GROSS PROFIT (as % of sales) 70.2% 71.3% +110 bps September 30th,

34 Industrial re engineering and cost reduction 5 Continued cost reduction efforts Strict control of our expenses Internal reorganisations H H EVOLUTION SELLING, GENERAL & ADMIN. EXPENSES (as % of sales) 21.3 % 20.3 % 100 bps September 30th,

35 TO OFFER WOMEN AND MEN THE WORLD OVER THE BEST QUALITY, MOST EFFECTIVE, SAFEST COSMETICS AND THEREBY SATISFY ALL THEIR BEAUTY NEEDS AND DESIRES IN ALL THEIR INFINITE DIVERSITY.

36 Thierry Prevot Group General Manager, Financial Communications and Strategy Prospective Analysis Tel.: Fax: tprevot@dgaf.loreal.com finance.com Caroline Millot Head of Investors Relations Tel.: Fax: cmillot@dgaf.loreal.com Avertissement / Disclaimer "This document does not constitute an offer to sell, or a solicitation of an offer to buy, L Oréal shares. If you wish to obtainmore comprehensive information about L Oréal, please refer to the public documents registered in France with the Autorité des Marchés Financiers (which are also available in English on our Internet site: finance.com).this document may contain some forward looking statements. Although the Company considers that these statements are based on reasonable hypotheses at the date of publication of this release, they are by their nature subject to risks and uncertainties which could cause actual results to differ materially from those indicated or projected in these statements." September 30th,