KEPLER CHEUVREUX. Jean-Paul AGON. Chairman and CEO. September 18 th 2014

Transcription

1 KEPLER CHEUVREUX September 18 th 2014 Jean-Paul AGON Chairman and CEO

2 AGENDA Our fundamentals A solid but contrasted first half 2014 An unusual year for the cosmetics market Confidence for the future 2 // September 18 th 2014

3 OUR FUNDAMENTALS I 3 // September 18 th 2014

4 A PURE PLAYER IN BEAUTY FOR 105 YEARS WHO WE ARE THE WORLD LEADER IN ITS INDUSTRY 23 BILLION SALES IN ,2% MARKET SHARE A LEADING R&I FORCE 3590 RESEARCHERS 748 MILLION BUDGET IN 2013 A PORTFOLIO OF 30 COMPLEMENTARY BRANDS PERMANENTLY ENRICHED BY ACQUISITIONS ALL DISTRIBUTION CHANNELS ALL CULTURAL ORIGINS ALL PRICE RANGES A UNIQUE STRATEGY: UNIVERSALIZATION 4 // September 18 th 2014

5 A VERY BALANCED BUSINESS MODEL 20.1% ** BALANCED GEOGRAPHIC POSITIONS BALANCED OPERATING PROFIT BY DIVISION * (as a % of sales) 20.5% 19.9% 20.0% 21.2% NORTH AMERICA 25.1% 20.1% ** WESTERN EUROPE 35.1% 39.8% NEW MARKETS BREAKDOWN OF 2013 COSMETICS SALES BY REGION BY REGION * (as a % of sales) 22.2% 18.7% 19.2% PROFESSIONAL PRODUCTS CONSUMER PRODUCTS L ORÉAL ACTIVE LUXE COSMETICS WESTERN EUROPE NORTH AMERICA NEW MARKETS 5 // September 18 th 2014 * Before central group expenses, fundamental research expenses, stock-option & free grant of shares expenses and miscellaneous items as a % of total cosmetics sales ** Cosmetics divisions total

6 A POWERFUL & LONG TERM BUSINESS MODEL NET PROFIT SINCE 1985 * (IN MILLION EUROS) 3117 * Net operating profit, excl. non-recurring items attributable to owners of the company, with Synthélabo consolidated fully up to 1998; net profit excl. non recurring items attributable to owners of the company, with Sanofi-Synthélabo equity consolidated from 1999 to 2004; net profit excl. non-recurring items attributable to owners of the company including Sanofi dividend from 2004; IFRS since // September 18 th 2014

7 A SOLID BUT CONTRASTED FIRST HALF 2014 II 7 // September 18 th 2014

8 CONTRASTED GROWTH BY DIVISION CONSOLIDATED SALES AT THE END OF JUNE 2014 * PROFESSIONAL PRODUCTS CONSUMER PRODUCTS L ORÉAL LUXE ACTIVE COSMETICS +3.0% +2.0% +7.4% +8.1% COSMETICS TOTAL +4.0% *Like-for-like sales growth 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, Inneov has been consolidated under the equity method as of January 1 st All figures for earlier periods have been restated accordingly. 8 // September 18 th 2014

9 CONTRASTED GROWTH BY ZONE COSMETICS SALES AT THE END OF JUNE 2014 * North America +0.9% Western Europe +2.8% Eastern Europe ** +6.1% Japan +1.5% Latin America +7.8% Africa Middle East ** +14.5% *Like-for-like growth. In accordance with IFRS 11 accounting rule, Inneov has been consolidated under the equity method as of January 1 st All figures for earlier periods have been restated accordingly. ** As of July 1 st 2013, Turkey and Israel, which were previously included in the Africa, Middle East zone, were transferred to the Eastern Europe zone. All figures for earlier periods have been restated accordingly. Asia Pacific excl.japan +7.1% TOTAL NEW MARKETS +7.3% 9 // September 18 th 2014

10 FURTHER INCREASE IN PROFITABILITY H bp OPERATING PROFIT (as a % of sales) 18.2% 17.9% 19.6% -50bp OPERATING PROFIT BY DIVISION * (as a % of sales) 21.1% 20.3% +30bp +30bp 28.2% +50bp H H PROFESSIONAL PRODUCTS CONSUMER PRODUCTS L ORÉAL LUXE ACTIVE COSMETICS * Before central group expenses, fundamental research expenses, stock-option & free grant of shares expenses and miscellaneous items as a % of total cosmetics sales. In accordance with IFRS 11 accounting rule, Inneov has been consolidated under the equity method as of January 1 st All figures for earlier periods have been restated accordingly. 10 // September 18 th 2014 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.

11 +30bp +7.5% * +5.9% OPERATING PROFIT (as a % of sales) Adjusted EPS* (in euros) NET OPERATING CASH FLOW (in million euros) A VALUE CREATING BUSINESS MODEL THAT GENERATES CASH FLOW H % 18.2% H H H H H H // September 18 th 2014 * Comparison of diluted earnings per share, based on net profit excluding non recurring items attributable to owners of the company as reported in H with H diluted earnings per share excluding non recurring items, attributable to owners of the company, adjusted for the strategic transaction between L Oréal and Nestlé as from January 1 st, 2014.

12 AN UNUSUAL YEAR FOR THE COSMETICS MARKET III 12 // September 18 th 2014

13 A VERY CONTRASTED 2014 MARKET NORTH AMERICA +1.5/+2.5 % ESTIMATED WORLDWIDE COSMETICS MARKET GROWTH WESTERN EUROPE +0/+1 % +3/+3.5 % +0/+1 % JAPAN 13 // September 18 th /+6.5 % NEW MARKETS EXCL. JAPAN 2014 WORLDWIDE COSMETICS MARKET - ESTIMATED GROWTH BY REGION * *Excluding razors, soaps and toothpastes. Source: L Oréal estimates. Excluding exchange rate impact

14 2014 WORLDWIDE COSMETICS MARKET- ESTIMATED GROWTH BY DISTRIBUTION CHANNEL * ESTIMATED WORLDWIDE COSMETICS MARKET GROWTH +3/+3.5 % A VERY CONTRASTED 2014 MARKET LUXURY MASS MARKET DERMO- COSMETICS HAIR SALONS +4/+5% +2.5/+3.5% +5/+6% +0.5/+1% *Excluding razors, soaps and toothpastes. Source: L Oréal estimates. Excluding exchange rate impact 14 // September 18 th 2014

15 LATEST 2014 MARKET FORECAST WORLDWIDE COSMETICS MARKET GROWTH OVER THE PAST 20 YEARS * 5.0% 2014 FORECAST: +3/+3.5% 3.0% F 15 // September 18 th 2014 * L Oréal BMS estimates - excluding soaps, toothpastes and razors. Net manufacturing price (sell-in) - provisional estimate. Growth at constant exchange rate

16 AMBITION FOR 2014 OUTPERFORM THE GROWTH OF THE COSMETICS MARKET GROW LIKE-FOR-LIKE SALES IMPROVE PROFITABILITY AS A % OF SALES INCREASE IN EPS/ ACCRETION IMPACT 16 // September 18 th 2014

17 CONFIDENCE FOR THE FUTURE IV 17 // September 18 th 2014

18 STRENGTHENING WORLDWIDE LEADERSHIP N o 1 NORTH AMERICA 14.3% N o 4 LATIN AMERICA 8.5% L OREAL MARKET SHARE BY GEOGRAPHIC ZONE 2013 * N o 1 WESTERN EUROPE 19.3% N o 2 AFRICA MIDDLE EAST 10.2% (in the countries where L Oréal is present) N o 1 EASTERN EUROPE 11.8% N o 2 ASIA PACIFIC 10.5% excl. Japan L ORÉAL WORLD : MATURE MARKETS : NEW MARKETS : N o 8 JAPAN 2.2% 12.2% 16.9% 8.6% 18 // September 18 th 2014 *Excluding soaps, razors and toothpastes. L Oréal Estimates BMS

19 MARKET SHARE GAINS COSMETICS MARKET * GROWTH AND L ORÉAL LIKE-FOR-LIKE COSMETICS SALES GROWTH +5.6% +5.0% +5.5% +5.2% +4.2% +4.6% +4.6% +3.8% MARKET 19 // September 18 th 2014 *excluding soaps, razors and toothpastes provisional estimates Source: L Oréal estimates. Excluding exchange rate impact

20 ACQUISITIONS TO FOSTER OUR FUTURE ORGANIC GROWTH Consolidated sales ( m) // September 18 th 2014 IFRS norms from 2004

21 4 ACQUISITIONS IN 2014 COMPLEMENT OUR BRAND PORTFOLIO AND BOOST OUR GEOGRAPHIC PRESENCE DECLÉOR & CARITA MAGIC HOLDINGS NYX PPD CPD CHINA CPD USA AGREEMENT TO ACQUIRE NIELY CPD BRAZIL ENTERING THE PROFESSIONAL SKINCARE MARKET SKINCARE MASKS IN CHINA A PROFESSIONAL MAKE-UP ARTISTRY MASS MARKET BRAND A COMPLEMENTARY MASS HAIR COLOR BRAND IN BRAZIL 21 // September 18 th 2014

22 ACCELERATION OF OUR DIGITAL TRANSFORMATION APPOINTMENT OF A CHIEF DIGITAL OFFICER AT EXECUTIVE COMMITTEE LEVEL CREATIVITY, CONTENT, CONSUMER CONNECTIVITY DIGITAL MEDIA >13% of our net media expenses E-COMMERCE Sales +25% * *H Like-for-like sales growth of our own e-commerce websites 22 // September 18 th 2014

23 VERY IMPORTANT STEP IN THE EVOLUTION OF OUR CAPITAL STRUCTURE SHAREHOLDING STRUCTURE AS OF 8 JULY 2014 ** GOVERNANCE Shareholders pact adapted to reflect the new shareholding structure The number of Nestlé representatives on the L Oréal Board was reduced from 3 to 2 Standstill adjusted for the Bettencourt Meyers family s and Nestlé s stakes Bettencourt Meyers family 33.17% (30.64%*) Nestlé 23.20% (29.44%*) CONCERTED ACTION BETWEEN THE BETTENCOURT MEYERS FAMILY AND NESTLÉ CONFIRMED Treasury shares Others 1.26% 42.38% (1.01%*) (38.91%*) 23 // September 18 th 2014 * as a % of share capital based on a total number of shares of 605,901,887 as of ** as a % of share capital based on a total number of shares of 559,808,399 as of after cancellation of the repurchased shares

24 SOLID PROSPECTS SUSTAINED MARKET GROWTH MARKET SHARE GAINS ENHANCED WORLDWIDE LEADERSHIP PROFIT INCREASE DYNAMIC DIVIDEND POLICY 24 // September 18 th 2014

25 Sophie Gasperment Group General Manager, Financial Communication Strategic Prospective Tel. : Fax : sophie.gasperment@loreal.com Françoise Lauvin Head of Investor Relations Tel. : Fax : francoise.lauvin@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 obtain more 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." 25 // September 18 th 2014