Exane BNP Paribas 12th European Seminar Paris June 10th, Mr. Christian MULLIEZ Executive Vice-President Administration & Finance

Transcription

1 12th European Seminar Paris June 10th, 2010 Mr. Christian MULLIEZ Executive Vice-President Administration & Finance

2 Agenda 1. Key figures full year 2009 and first quarter Update on the worldwide cosmetics market Three major strategic changes, to prepare for the future Paris June

3 Key figures full year : a very tough environment L Oréal : sales and results very close to 2008 level A year of strong financial discipline and investments In million of euros Sales ,472.6 % of sales 100 % EVOLUTION 1,1 % Like for like growth + 0,8 % at constant exchange rates Gross profit 12, % +10 basis points Research and development % + 20 basis points Advertising and promotion Selling, general and admin. expenses 5, , % 21.4 % + 80 basis points 10 basis points Operating profit 2, % 70 basis points Net profit per share* (in euros) % Operating net cash 2, % Gearing 14.4 % Foreign exchange gains and losses have been reclassified to the different lines of the operating profit. Net sales and operating profit remain unchanged. * Net profit per share excl. non recurrent items, after minority interests Paris June

4 Key figures full year 2009 Dividend Pay out ratio In millions of euros EVOLUTION Dividend % Pay out ratio evolution : as % of net profit * * Taking into account the Sanofi history with regards to the dividends ** Based on dividend proposed at the shareholders meeting to be held on April 27th, Paris June

5 Key figures 1 st Quarter 2010 Cosmetics sales by division (in millions of euros) Q : Back to growth Full year st quarter 2010 DIVISIONS m Like for like growth m Like for like growth Professional Products 2, % % Consumer Products 8, % 2, % Luxury Products 4, % 1, % Active Cosmetics 1, % % Total cosmetics 16, % 4, % The Body Shop % % Dermatology / Galderma % % Consolidated sales 17, % 4, % Paris June

6 Highlights by Divisions in Q Professional Products % All time high : conquest of new salons in 2009 Market share gains in all regions Powerful roll out of INOA by L Oréal Professionnel Consumer Products % Luxury Products % Acceleration of volumes Market share gains worldwide Very sustained advances in all New Markets Strong dynamism of Garnier and Maybelline Marked rebound of both the market and L Oréal Acceleration of YSL (Parisienne, La Nuit de L Homme, Opium) Turnaround of Lancôme, spectacular dynamism of Kiehl s Active Cosmetics % N 1 in the global dermo cosmetics segment in 2009 Dynamic international extension of distribution through pharmacies and drugstores Paris June

7 Key figures 1 st Quarter 2010 Cosmetics sales by region (in millions of euros) North America +5.7% Western Europe +2.8% Eastern Europe % Japan + 3.4% Latin America % Africa Middle East + 7.2% Asia excl. Japan % Total New Markets : % NB: The Rest of the World zone has become the New Markets zone with the following distribution: Australia, India and New Zealand, previously in the Africa, Orient, Pacific zone, have been included in the Asia zone which has become Asia, Pacific zone. The Africa, Orient, Pacific zone has become the Africa, Middle East zone. Paris June

8 1. Key figures full year 2009 and first quarter Update on the worldwide cosmetics market Three major strategic changes, to prepare for the future Paris June

9 Rebound of the Worldwide cosmetics market* Estimates** Retail sales 2009 Q HAIR SALONS 3.5 % 0 to + 1 % MASS MARKET % + 3 % to % LUXURY 1.9 % % PHARMACIES % % TOTAL *excluding soaps and toothpastes 2009 provisional estimate **L Oréal estimates. At constant exchange rates + 2 % % to 4 % Paris June

10 Back to market growth Annual growth rate of % over the last 18 years* +5.5% + 3 % à + 4 % (?) +3.0% (*CA GR ) Excluding soap, toothpaste and razors. Provisional estimates for Source: L Oréal estimates Paris June

11 The shift towards the «New Markets» Estimates** Retail sales by Region in 2009 Weight of New Markets in 2009 WESTERN EUROPE 1.0 % NORTH AMERICA 2.5 % JAPAN NEW MARKETS TOTAL 6.0 % % % 50 % of the global cosmetics market 85 % of the world s population **L Oréal estimates. Excluding exchange rate impact, excluding soaps and toothpastes 2009 provisional estimate Paris June

12 1. Key figures full year 2009 and first quarter Update on the worldwide cosmetics market Three major strategic changes, to prepare for the future Paris June

13 3. Three major strategic changes 1. Broadening of the consumer base Accessible innovation Extension into new categories Acceleration of globalization 2. Continuing to transform the company 3. Determined support to R&D, Advertising & Promotion Paris June

14 1. Broadening our consumer base To double the number of clients for L Oréal in the world OUR TARGET ONE BILLION NEW CONSUMERS OUR MISSION 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. Paris June

15 1. Broadening our consumer base a. Accessible innovation; the «trading right» 1 1. Less «niche» innovations 2 2. Highest innovation degree at the heart of each market 3 3. A product offer completed by entry level products Paris June

16 1. Broadening our consumer base b. Extension into new categories An example : deodorants Latin America Eastern Europe Western Eastern Europe Q Q Q GARNIER BI O GARNIER MINERALS Paris June

17 1. Broadening our consumer base b. Extension into new categories An example : Men cosmetics KERASTASE CAPITAL FORCE L OREAL PARIS MEN EXPERT HYDRA ENERGETIC EYES DEODORANTS GARNIER MEN (India, Asia) BIOTHERM FORCE SUPREME RE BUILDER Paris June

18 1. Broadening our consumer base c. Acceleration of globalization Enhancing our consumer penetration BRIMC NEXT 12 NEW COUNTRIES Current Market share for L Oréal (average) 11 % value MS 11 % value MS Virgin markets Countries Brazil Russia India Mexico China Philippines Argentina South Africa Colombia Vietnam Czech Republic Indonesia Poland Turkey Thailand U.A.E. Ukraine Egypt (2009) Kazakhstan (2009) Pakistan (2009) India South Africa Egypt Paris June

19 An example : L Oréal China Key figures and 2009 main launches KEY FIGURES 2009 MAIN LAUNCHES N 2 in the Chinese cosmetics market : 11.7 % MS 2009 Sales: million ( %) (x 2 in 4 years time) 2 factories, 1 Research Center REMARKABLE POSITIONS Matrix : salons Conquest of B, C salons BY CATEGORY Skin Care (all channels) * Men Skin Care (all channels) * Make Up (popular market) ** BY CHANNEL Professional products market * Mass Market ** Luxury products market ** N. 1 N. 1 N. 1 N. 1 N. 2 N. 1 Pharmacy market ** N. 1 L Oréal Paris Hair Expertise Garnier Aquafresh Conquest of a new category Conquest of mass skin care * L Oréal estimates ** Distributor panels Paris June

20 An example : L Oréal China Market share % % 19 % 20 P ,7 % Share 10 8 % L Oréal % 7,7 % 4 % 2 % S. L Oréal s Ranking N 11 N 3 N 2 Paris June

21 An example : L Oréal India Key figures and 2009 main launches KEY FIGURES N 3 in the cosmetics Indian market : 7.5 % MS 2009 Sales: 116 million (+31.5%) (x 2 in 5 years time) 1 factory Matrix Opti Straight salons 2009 MAIN LAUNCHES Conquest of B, C salons REMARKABLE POSITIONS BY CATEGORY Hair color ** Skin Care ** N. 1 N. 2 Garnier Men Powerlight Conquest of mass skin care Men Skin Care ** N. 2 BY CHANNEL Professional products market * Mass market (excl. oil category) * Pharmacy market * N. 1 N. 2 N. 1 Garnier Sachets Conquest of traditional trade From 250,000 to 350,000 points of sales Target : 1 million points of sales * L Oréal estimates ** Nielsen urban Indian Paris June

22 1. Broadening our consumer base c. Stepping up international expansion Weight ofthe«new Markets» inl Oréal cosmetics Sales (%) 33 % in 2009 % Paris June

23 Centralisation of purchasing Closures of industrial sites Better utilisation of equipment, and major progress in productivity Major advances in the «supply chain» : Reduction in inventories : 170 m Reduction in trade accounts receivable: 312 m 2. Continuing transformation in the company Continuation of industrial re engineering and 2009 achievements EVOLUTION GROSS PROFIT (as % of sales) 70.4 % 70.5 % + 10 basis points OPERATING NET CASH (in millions of euros) 1, , % Paris June

24 2. Continuing transformation in the company Reorganization and cost reduction : 2009 achievements Hiring freeze (except for junior staff) in the developed countries Headcount freeze in the «New Markets» Cutting down travel expenses by 50 % Restructuring (North America, The Body Shop ) EVOLUTION SELLING, GENERAL AND ADMIN. EXPENSES 21.5 % 21.4 % -10 basis points Evolution at constant exchange rates and scope Paris June

25 3. Determined increase in growth drivers Research and Development investments EVOLUTION RESEARCH & DEVELOPMENT (as % of sales) 674 patents registered in % 3.5% + 20 basis points Paris June

26 3. Determined increase in growth drivers A year of fast paced breakthrough innovation Lancôme Génifique Lancôme Absolue Precious Cells L Oréal Professionnel INOA Genomics 10 years of research Stem cells 20 years of research No ammonia, no odour O.D.S. technology Paris June

27 3. Determined support to growth drivers A & P investments L Oréal s share of voice ADVERTISING & PROMOTION (as % of sales) EVOLUTION 30.0% 30.8% + 80 basis points SHARE OF VOICE (end of december) EUROPE 15 (1) * 36.3 % 38.6 % USA (2) (14 categories) 19.5 % 22.3 % CHINA 13.0 % 19.0 % RUSSIA (3) (10 categories) 21.1 % 28.8 % BRAZIL (4) 7.2 % 9.5 % (1) Zenith Optimedia (2) CMR Stradegy (3) TNS Gallup Adfact (4) Ibope monitor * At the end of November, L Oréal scope Paris June

28 L Oréal assets to succeed An attractive, complete and diversified portfolio of brands 18 R&D centres on all continents Marketing hubs in all the strategic countries Paris June

29 BACK TO GROWTH Paris June

30 Thierry Prévot Directeur Général de la Communication Financière Group General Manager, Financial Communications Tel. : Fax : tprevot@dgaf.loreal.com Caroline Millot Directeur des Relations avec les Investisseurs Head of Investors Relations Tel. : Fax : cmillot@dgaf.loreal.com Avertissement / Disclaimer «Ce document ne constitue pas une offre de vente ou la sollicitation d une offre d achat de titres L Oréal. Si vous souhaitez obtenir des informations plus complètes concernant L Oréal, nous vous invitons à vous reporter aux documents publics déposés en France auprès de l Autorité des Marchés Financiers (également disponibles en version anglaise sur notre site Internet document peut contenir certaines déclarations de nature prévisionnelle. Bien que la Société estime que ces déclarations reposent sur des hypothèses raisonnables à la date de publication du présent communiqué, elles sont par nature soumises à des risques et incertitudes pouvant donner lieu à un écart entre les chiffres réels et ceux indiqués ou induits dans ces déclarations.» "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: 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." 30