Shareholders. 5 reasons. Jean-Paul Agon Investing in a share which achieves sustainable and profitable growth

Transcription

1 Shareholders 5 reasons to take part in the L Oréal adventure Jean-Paul Agon Investing in a share which achieves sustainable and profitable growth Registered shares section Receive a loyalty bonus +10% B E AUTY, A V A L U E F O R T H E F UTU R E

2 Editorial Jean-Paul Agon Chairman and CEO of L Oréal Choosing the world beauty leader and investing in a share which achieves sustainable, responsible and profitable growth F or over a century, L Oréal has been passionately committed to pursuing its adventure in beauty an adventure we enjoy sharing. Beauty is an eternal quest and a market that is constantly growing. Being a L Oréal shareholder means choosing a leading company in a buoyant sector and investing in a share which achieves sustainable, responsible and profitable growth. But it is much more than that. It also means providing long-term support for the development of a company which has all the assets required to further strengthen its leadership: a clear strategic project, the richest brand portfolio in the industry, a strong commitment to Research and Innovation, high standards of governance, loyal partners and the spirit of adventure that has always guided our choices and pushed us beyond our limits. Our long-term strategic vision and constant pragmatism are the foundation for our continued desire to reinvent ourselves and quickly adapt to a changing world. Offering the best in cosmetic innovations to women and men all over the world, while respecting differences is, for me, an exciting mission. At L Oréal, we carry this mission out ethically and responsibly, as we are convinced that a strong culture of integrity creates long-term value. Being a L Oréal shareholder means sharing and supporting this great project, in a relationship of trust to which we are strongly committed. Together, let s write a new chapter in the L Oréal adventure. 02

3 Performance L ORÉAL IN FIGURES L ORÉAL S SHARE 03 1 st cosmetics group worldwide (1) More than 130 countries An international portfolio of 32 complementary brands billion euros of sales in 2014 Return on an investment in L Oréal shares Initial capital multiplied by 12.1 in 20 years (1) that is a TSR of % per year A dividend at 2.70 (2), multiplied by 3.3 in 10 years A dividend which has never declined in over 50 years Over 5 years the L Oréal share has outperformed the CAC 40 index: % L Oréal share variation (3) % CAC 40 variation (3) 04 78,600 employees 501 patents registered in L ORÉAL share VERSUS CAC 40 L'Oréal CAC 40 (reindexed on L'Oréal) , pts 4, pts /30/10 09/30/11 09/30/12 09/30/13 09/30/14 09/30/15 (1) Source: WWD, Beauty s Top 100, April (1) Purchase of 78 shares on September 29 th, 1995: 14, euros. Valuation at September 30 th, 2015, including reinvestment of dividends (1,161 shares at euros): 180, euros. (2) Dividend approved at the AGM of April 22 nd, (3) Period from 09/30/2010 to 09/30/2015.

4 Strategy 5 REASONS TO TAKE PART IN THE L ORÉAL ADVENTURE Being a L Oréal shareholder means sharing and supporting a clear strategic project for a new L Oréal that is universal, digital and sustainable, and investing in a profitable and high-growth share. REASON 1 AN EXCITING MISSION, BEAUTY FOR ALL AN EXCITING MISSION, BEAUTY FOR ALL A UNIQUE STRATEGY, Universalisation Beauty has always been present in the history of humankind. Beauty is rich in meaning, and helps everyone to build self-confidence and to open up to others. For more than a century, L Oréal has devoted itself solely to one business: beauty. Its mission is to offer all the women and men on the planet the best in cosmetics innovation in terms of quality, efficacy and safety. the WORLD LEADER IN BEAUTY (1) 4 Divisions that develop a specific vision for each consumption universe and distribution channel: L Oréal Luxe in the selective channel; Consumer Products in the mass market; Professional Products in hair and beauty salons; Active Cosmetics in dermocosmetics AN INSPIRING AMBITION, WINNING ONE BILLION NEW CONSUMERS 4 5 A RESPONSIBLE COMMITMENT, SHARING BEAUTY WITH ALL A SOLID MODEL, CREATING VALUE Created by a researcher, Eugène Schueller, L Oréal has constantly pushed back the frontiers of science to meet the infinite diversity of beauty desires. INVENTING THE BEAUTY OF TOMORROW 18 RESEARCH AND INNOVATION CENTRES worldwide 501 PATENTS registered in 2014 INVESTMENT IN RESEARCH AND INNOVATION 3.4% of 2014 sales (1) Source: WWD, Beauty s Top 100, April 2015.

5 Strategy REASON 2 A UNIQUE STRATEGY, Universalisation REASON 3 AN INSPIRING AMBITION, WINNING ONE BILLION NEW CONSUMERS Universalisation is globalisation that captures, understands and respects differences. 8 STRATEGIC REGIONS They bring together consumers around the world on the basis of their skin and hair types, climate, expectations and beauty routines. In a worldwide cosmetics market driven by the rise of the middle classes and the growth of consumer spending, L Oréal has the ambition to attract one billion new consumers. AN ALMOST UNLIMITED BEAUTY MARKET Evolution of the middle classes worldwide (1) (in billions) 3.2 Estimated per capita cosmetics spending (2) 07 WATCH THE UNIVERSALISATION VIDEO annual-report-2014/our-strategy 1.8 x New Markets Mature markets To capture every kind of beauty aspiration, L Oréal is extremely attentive to consumers views, and has profound respect for their differences in terms of needs, desires and traditions. This unique strategy is the world vision that drives L Oréal. 1 STRONG CORE (France) 5 RESEARCH AND MARKETING HUBS (United States, Japan, China, India, Brazil) Thanks to the group s Advanced Research expertise, they develop and adapt technologies as close as possible to their consumers. 43 INDUSTRIAL PLANTS They are organised by regions to ensure they are close to the different markets, so that all opportunities can be seized. To succeed in this aim, the group draws on the vitality of its brands, their innovative power and their internationalisation potential. BEAUTY IN THE DIGITAL ERA 20% of the worldwide cosmetics market growth is generated by e-commerce (2) Digital media provide new ways to reach, educate and inspire new consumers, as well as loyal customers, in order to stimulate the market s future growth. A UNIQUE PORTFOLIO of complementary brands with different cultural origins (see pages 11 and 12) STRATEGIC ACQUISITIONS with a global or regional vocation (1) Source: OCDE 2010, The emerging middle class in developing countries. (2) Source: L Oréal estimates of the worldwide cosmetics market in net manufacturer costs. Excluding soaps, oral hygiene, razors and blades. Excluding currency effects.

6 Strategy REASON 4 A RESPONSIBLE COMMITMENT, SHARING BEAUTY WITH ALL REASON 5 A SOLID MODEL, CREATING VALUE 09 Because it is not enough for a company to deliver strong economic performance, L Oréal is committed to the Sharing Beauty With All programme to ensure the group s long-term success. This programme will be the main spearhead of our citizen commitment, which goes along with our economic and financial performance over the long term. LEARN MORE ABOUT THE SHARING BEAUTY WITH ALL PROGRAMME S COMMITMENTS advances Innovating sustainably 67% of new products assessed have an improved environmental or social impact (1). Producing sustainably -50.2% of CO 2 emissions in factories and distribution centres (2). Consuming sustainably 25.4% of brands have implemented initiatives to raise consumer awareness (3). Sharing our growth 85.3% of L Oréal permanent employees have health insurance coverage in line with the best practices in each country (4). Supported by the long-term vision of its shareholding structure, stable management and the expertise and commitment of its 78,600 employees, L Oréal has always targeted profitable and sustainable growth. The solid balance sheet, financial situation and results confirm the strength of L Oréal s business model, which creates value and generates cash flow. 5,000 4,000 3,000 2,000 1, Dividend per share (in euros) Net profit after non-controlling interests (in millions of euros) (2) A balanced and solid business model Net profit after non-controlling interests (2) x28 Dividend per share x78 The economic performances of L Oréal from 2005 to 2014 Sales +55% Operating profit +72% Net earnings per share (1) +105% 1, , (1) Formulas produced in L Oréal factories in 2014, excluding make-up and fragrances. (2) In absolute value, (3) Calculated as a percentage of consolidated sales (4) At the end of (1) Diluted earnings per share, after non-controlling interests, excluding non-recurring items. (2) Net operating profit, excluding nonrecurring items after non-controlling interests. Synthélabo consolidated fully up to Synthélabo equity consolidated from 1999 to Including Sanofi dividend from IFRS since The announcement on February 11 th, 2014, of the disposal of 50% of Galderma leads to account for this business in accordance with IFRS 5 accounting rule on discontinued operations. In accordance with IFRS 11 accounting rule, Innéov has been consolidated under the equity method of January 1 st, All figures for earlier periods have been restated accordingly. Past performance is not necessarily a guide to future performance.

7 Brand portfolio A UNIQUE AND INTERNATIONAL PORTFOLIO OF 32 COMPLEMENTARY BRANDS Consumer Products The Consumer Products Division offers the best in cosmetics innovation to the greatest number of people. Its brands are available in mass-market channels (hypermarkets, supermarkets, drugstores, traditional stores and e-commerce). L Oréal Luxe L Oréal Luxe offers an array of prestigious and modern international brands with a unique heritage, which strive to offer high-quality products through a selective distribution channel, and provide excellent service that respects the diversity of its consumers. Active Cosmetics The Active Cosmetics Division s mission is to help everyone improve the quality and health of their skin, in all healthcare channels worldwide, including pharmacies, drugstores, medi-spas, dermacenters and online sales. Thanks to its close links with health professionals, the Division is world No.1 in dermocosmetics (1). L Oréal s brand portfolio is organised by Division, which develop a specific vision for each consumption universe and distribution channel. 11 The strength and diversity of each brand whether international or regional in scope enable the group to meet the diversity of beauty aspirations around the world. 12 The Body Shop The Body Shop has a unique positioning that complements the L'Oréal portfolio. Professional Products Thanks to education and advanced innovations, the Professional Products Division makes sure that with each passing day more and more people can take advantage of the highest standards of quality and expertise from beauty salon professionals all over the world. VIEW THE GEOGRAPHICAL AND CULTURAL ORIGINS OF THE BRANDS (1) Source: Panels and L Oréal 2014 estimates.

8 Interview MEET THE INDIVIDUAL SHAREHOLDER RELATIONS TEAM Jean Régis Carof Director of Individual Shareholder and Market Authority Relations +33 (0) Valerie Boas Individual Shareholder Relations Manager +33 (0) How would you define the How does L Oréal s business model relationship between L Oréal and create value for shareholders? its shareholders? L Oréal s business model is wellbalanced; thanks to a solid balance With all those who share in the L Oréal adventure individual shareholders, sheet and stable governance, it regularly investors, stakeholders we want to delivers good results. L Oréal generates maintain a close relationship of trust. value for its shareholders especially The Financial Communications teams through a dividend that has never are committed to building a relationship decreased since the share was first based on listening and dialogue in order traded on the stock exchange in to best meet their expectations. Moreover, registered shareholders have benefited from a loyalty bonus since 2009: a dividend increase of 10% (1). You will find more information about registered shares in this brochure. Being a L Oréal shareholder means investing in a solid growth share and taking part in an ambition project that of Universalisation and Beauty for All. Could you tell us more about the tools provided by L Oréal s Financial Communications team? In our effort to be transparent and pedagogical, we are constantly improving our information resources. We provide our shareholders with a ray of different communication tools such as this brochure, the Annual Report and even the Letters to Shareholders. L Oréal is also a pioneer of Financial Communications in the digital age with the L Oréal Finance Mag, our shareholders online magazine, the L Oréal Finance mobile application and, this year, the first digital edition of the Annual Report. You mentioned the L Oréal Finance application. A new version was launched last April. Can you tell us what s new? The L Oréal Finance application is now a personalised app which enables individual users to target their needs and access their favourite content more easily. As a bonus, there is a direct link to the digital edition of the 2014 Annual Report as well as the L Oréal Finance Scan feature. You also meet with L Oréal shareholders on a regular basis. We make a point of organising a number of events as a way for L Oréal to come into close contact with its shareholders. Major events include the Annual General Meeting followed by shareholder meetings all over France, without forgetting our presence at the Actionaria Shareholder Fair. And since 2013, we have organised visits exclusively for registered shareholders to our laboratories, our boutiques, our hairdressing academies and our factories! 14 (1) For shareholders who have held registered shares continuously for a minimum of two years, up to a maximum of 0.5% of the capital for the same shareholder.

9 Registered Shares Section DOWNLOAD THE NEW VERSION OF THE APP FOR AN ENHANCED AND CUSTOMISED EXPERIENCE! BECOME A REGISTERED SHAREHOLDER AND RECEIVE A LOYALTY BONUS +10 % YOUR LOYALTY IS REWARDED L Oréal offers you +10% on your dividend (1). For example, if you register your shares prior to December 31 st, 2015, and keep them in registered form for two full calendar years (until the date of payment of the dividend), you will be entitled to receive the preferential dividend from Before the end of / 2017 From 2018 You transfer your shares to registered form. You keep your shares in registered form for two full calendar years. You receive the first pay-out of the 10% loyalty bonus for your shares held in registered form since You receive the 10% loyalty bonus in the following years if you continue to hold your shares in registered form. (1) Up to a maximum of 0.5% of the capital for the same shareholder, at the closing date of the last fiscal year.

10 CHOOSE BETWEEN MANAGED REGISTERED SHARES AND DIRECTLY REGISTERED SHARES REGISTER OR TRANSFER YOUR SHARES TO REGISTERED FORM i REGISTERED SHARES AND A SHARE SAVINGS PLAN If you hold your L Oréal shares in a share savings plan (PEA) and you would like to benefit from the advantages of holding registered shares, in particular the loyalty bonus, while keeping the tax advantages offered by the PEA, you should choose to hold managed registered shares. i ADVANTAGES OF DIRECTLY REGISTERED SHARES If you would also like to benefit from free management and custody fees, as well as preferential brokerage and bank fees, you should choose to hold directly registered shares. However this is only possible outside a share savings plan (PEA). EXCLUSIVE EVENTS When registering or transferring your shares to registered form, make sure to indicate your address so that you can be invited to attend events organised especially for you! TAXATION Registering your shares will not have any tax impact. The tax treatment of registered shares is identical to that applicable to bearer shares. i i IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT US! SHAREHOLDER VIEWS Watch the video testimonials of shareholders who have chosen registered form VISIT THE LOYALTY BONUS ANS REGISTERED SHARES SECTION ON OUR WEBSITE In this section, you will find all the information you need and the forms for REGISTERING OR TRANSFERRING YOUR SHARES, OR OPENING YOUR ACCOUNT. a dedicated shareholder line is available on from France or from outside France

11 ? Your QUESTIONS WITH REGARD TO REGISTERED SHARES HOW TO CHOOSE THE METHOD OF HOLDING YOUR SHARES? Identify the advantages that interest you the most! If I register my shares, can I sell them just as easily? Yes, your registered shares can be disposed of at any time, just like bearer shares. You retain complete freedom to manage your shares. How long does it take to register my shares or to transfer them to registered form? Time may vary depending on the financial institution. Remember that to qualify for the loyalty bonus from 2018, your shares have to be registered as managed registered shares or transferred to directly registered shares by December 31 st, 2015 at the latest! To make sure that this is the case, we recommend that you transmit your order for registration by December 10 th, 2015 at the latest. How can I obtain a reimbursement of the cost of transferring my L Oréal shares to directly registered form? Some financial intermediaries charge fees to transfer shares to directly registered form, we therefore recommend that you ask your bank for information. We remind you that L Oréal will reimburse you any transfer fees up to a maximum of 50. You simply have to send your request for reimbursement together with proof of the transfer fees and full bank account details to the following address: BNP Paribas Securities Services C.T.S. Émetteurs Service Mouvements Titres Grands Moulins de Pantin 9 rue du Débarcadère PANTIN CEDEX France Custody of your shares Management of your shares Management and custody fees Trade order Brokerage and bank fees Annual tax declaration Entitlement to loyalty bonus of +10% Notice to attend the Annual General Meeting L Oréal and you (1) Upon registration and within the limit of available places. DIRECTLY REGISTERED SHARES BNP Paribas Securities Services Grands Moulins de Pantin Relations Actionnaires L Oréal 9 rue du Débarcadère PANTIN CEDEX France Call from outside France or use the BNP Paribas Securities Services secure website Free To be sent to BNP Paribas Securities Services or placed online on the secure website Preferential fees: - Brokerage fee of 0.15% with a minimum fee of 6.10 excluding tax - Bank fee of 7.62 excluding tax A single tax declaration form (IFU in French) concerning trading in L Oréal shares only is sent to you by BNP Paribas Securities Services MANAGED REGISTERED SHARES Yes, for shares that have been held in registered form continuously for 2 full calendar years and until the date of payment of the dividend Automatic sending of the convening notice paper or electronic version - Automatic sending of the Letter to Shareholders - Invitations to shareholder meetings in your region - Participation in events arranged specifically for registered shareholders (e.g.: factory visits) (1) In the custody of your financial institution Managed by your financial institution Depending on your financial institution s fees To be sent to your financial institution Depending on your financial institution s fees BEARER SHARES A single tax declaration form (IFU in French) showing all the transactions on your share account is sent to you by your financial institution No Sending of the convening notice by your financial institution on request Sending of invitations and information on request

12 HOW TO REGISTER OR TRANSFER YOUR SHARES TO REGISTERED FORM? Regardless of your current situation, the registration of shares or conversion to registered shares takes place in 2 stages! You currently hold bearer shares of L Oréal and you wish to convert them to managed registered shares You currently hold bearer shares or managed registered shares of L Oréal and you wish to transfer them to directly registered shares You are not yet a L Oréal shareholder and you wish to purchase directly registered shares (1) You will have to repeat this step when purchasing new shares. 1 st stage 2 nd stage Send your financial institution a request to register your shares to managed registered shares (1). The form is available on in the Shareholders Corner, section on Loyalty Bonus and Registered Shares. Send your financial institution a request to transfer your shares to directly registered shares. The form is available on in the Shareholders Corner, section on Loyalty Bonus and Registered Shares. Send BNP Paribas Securities Services an agreement for account opening and stock market services (COCPB in French). The form is available on in the Shareholders Corner, section on Loyalty Bonus and Registered Shares. To be sent to: BNP Paribas Securities Services C.T.S. Émetteurs - Service Mouvements Titres Grands Moulins de Pantin - 9 rue du Débarcadère PANTIN CEDEX France or request it on the following number: on outside France Your financial institution will send your registration form to BNP Paribas Securities Services and will continue to manage your account. Your financial institution will transfer your shares to BNP Paribas Securities Services which will become your unique point of contact. BNP Paribas Securities Services will be your unique point of contact. The custody fees for managed registered shares may be increased. The fees for transferring L Oréal shares to directly registered form will be reimbursed by L Oréal for up to a maximum of 50 and upon proof of payment. TRADING CODE BONUS CODE FR L Oréal shares which were registered prior to December 31 st, 2012 and which already benefit from the loyalty bonus are identified by this code.? HOW CAN YOU FOLLOW YOUR REGISTERED SHARES? The introduction of the preferential dividend has made it necessary to create specific ISIN codes. These codes make it possible to determine each year whether the shares concerned will give the right to an ordinary dividend or a preferential dividend. FR The L Oréal share is listed and traded under ISIN code FR L Oréal shares which have been registered during the current year and which will benefit from the loyalty bonus after 2 full calendar years are identified by this code. FR L Oréal shares which were registered in 2013 and which will benefit from the loyalty bonus in 2016 are identified by this code. FR L Oréal shares which were registered in 2014 and which will benefit from the loyalty bonus in 2017 are identified by this code. Only the FR is a trading code. If you want to sell shares with the bonus codes FR , FR , FR , your financial institution will deal with modifying this code in order to execute your order.

13 BECOME A REGISTERED SHAREHOLDER AND RECEIVE A LOYALTY BONUS +10 % A preferential DIVIDEND: 2.97 (1) Instead of 2.70 (2) (1) For shareholders who continuously hold their shares in registered form for a minimum of two full calendar years, up to a maximum of 0.5% of the capital for the same shareholder. (2) Dividend approved at the AGM of April 22 nd, Published by the Financial Communications Department of L'Oréal - Photograph credits: Sasha Balavokaya for L'Oréal (cover page), Thomas Cogny (p.1), NYX (p.3), Thibaut de Saint Chamas (p.3), Lancôme (p.3), Alain Buu (p.13 and 14), Nicolas Fagot for Studio 9 (4 th cover page), X. Designed and published by: Birdie Blue