August 26 th, 2010 FIRST HALF RESULTS Mr Jean Paul AGON Chief Executive Officer 26/08/2010
I. The Cosmetics Market has picked up well 26/08/2010
Worldwide Cosmetics Market 1 st half 2010* Sell in (shipments) ~_ + % * *excluding soaps and toothpastes. 1st half 2010 provisional estimate Source: L Oréal estimates. Excluding exchange rate impact 26/08/2010
Worldwide cosmetics market* Estimates ** Sell in 1 st Half 2010 (shipments) Western Europe + 0.2 % North America + 2.0 % Japan 1.3 % New Markets excl. Japan TOTAL + 9.5 % + 4.0 % *excluding soaps and toothpastes 1 st half 2010 provisional estimate **L Oréal estimates. Excluding exchange rate impact 26/08/2010
Cosmetic markets in the New Markets zone excluding Japan* Estimates** Sell in 1 st Half 2010 (shipments) Asia Pacific excl. Japan + 10.8 % Latin America + 12.7 % Africa, Middle East + 5.8 % Eastern Europe + 5.1 % TOTAL + 9.5 % *excluding soaps and toothpastes 1 st half 2010 provisional estimate **L Oréal estimates. Excluding exchange rate impact 26/08/2010
53 % OF THE WORLDWIDE MARKET 87 % OF WORLDWIDE MARKET GROWTH
Worldwide cosmetics market* Estimates** + 4.0 % + 1.0 % 2009 S1 2010 *excluding soaps and toothpastes 1 st half 2010 provisional estimate **L Oréal estimates. Excluding exchange rate impact 26/08/2010
II. The upturn in organic growth bears out our major strategic choices 26/08/2010
Consolidated sales growth First half 2010 Impact of changes in consolidation Exchange rate impact Like for like + 0.3 % + 3.6 % + 6.3 % BASED ON REPORTED FIGURES + 10.2 % 26/08/2010
Consolidated sales at end June 2010 GROWTH (%) Like for like Professional Products + 5.3 % Consumer Products + 5.6 % Luxury Products + 9.7 % Active Cosmetics + 4.7 % COSMETICS TOTAL + 6.4 % 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. 26/08/2010
Cosmetic Sales by geographic zone at end June 2010 Like for like Western Europe + 2.0 % North America + 4.9 % New Markets + 13.0 % COSMETICS + 6.4 % On January 1, 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. 26/08/2010
Cosmetics sales by business segments at end June 2010 1 st HALF 2010 Like for like Skincare + 7.0 % Haircare + 3.5 % Make up + 6.7 % Hair colourants + 5.2 % Fragrances + 7.9 % Hygiene + Other + 25.1 % COSMETIC + 6.4 % 26/08/2010
Concentrating on high value added worldwide innovations at accessible prices Breakthroughs in new product categories Accelerating international expansion Increasing investments in R&D and advertising and promotion 1 2 3 4 26/08/2010
26/08/2010
Concentrating on high value added worldwide innovations at accessible prices Breakthroughs in new product categories Accelerating international expansion Increasing investments in R&D and advertising and promotion 1 2 3 4 26/08/2010
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Concentrating on high value added worldwide innovations at accessible prices Breakthroughs in new product categories Accelerating international expansion Increasing investments in R&D and advertising and promotion 1 2 3 4 26/08/2010
CHINA + 14.3 % Cosmetic sales Like for like growth
BRAZIL + 23.7 % Cosmetic sales Like for like growth
RUSSIA + 17.6 % Cosmetic sales Like for like growth
INDIA + 32.3 % Cosmetic sales Like for like growth
MEXICO + 11.5 % Cosmetic sales Like for like growth 26/08/2010
SOUTH KOREA + 21.0 % Cosmetic sales Like for like growth 26/08/2010
ARGENTINA + 38.1 +38,1 % Cosmetic sales Like for like growth 26/08/2010
UKRAINE + 19.8 % Cosmetic sales Like for like growth 26/08/2010
INDONESIA + 25.1 % Cosmetic sales Like for like growth 26/08/2010
PHILIPPINES + 26.1 % Cosmetic sales Like for like growth 26/08/2010
Concentrating on high value added worldwide innovations at accessible prices Breakthroughs in new product categories Accelerating international expansion Increasing investments in R&D and advertising and promotion 1 2 3 4 26/08/2010
R&D expenses (in millions of euros) 1 st half 2009 1 st half 2010 R&D EXPENSES 286.9 308.7 + 7.6 % 26/08/2010
INNOVATION 26/08/2010
UNIVERSALISATION 26/08/2010
Advertising & Promotion expenses (in millions of euros) 1 st half 2009 1 st half 2010 ADVERTISING & PROMOTION EXPENSES (in millions of euros) 2634.5 2950.4 + 12.0 % 26/08/2010
Continue to increase advertising & promotional investments Optimise their costs and productivity 26/08/2010
Concentrating on high value added worldwide innovations at accessible prices Breakthroughs in new product categories Accelerating international expansion Increasing investments in R&D and advertising and promotion 1 2 3 4 26/08/2010
26/08/2010
III. Strong increase in Results in terms of value and quality 26/08/2010
CENTRALISATION AND STRATEGISATION IN PURCHASING IMPROVEMENT IN INDUSTRIAL PRODUCTIVITY MODERNISATION AND OPTIMISATION OF THE SUPPLY CHAIN
Gross profit (as % of sales) 1 st half 2009 1 st half 2010 GROSS PROFIT (as % of sales) 70.2 % 71.3 % + 110 basis points 26/08/2010
Selling general and administrative expenses (as % of sales) 1 st half 2009 1 st half 2010 SELLING GENERAL AND ADMINISTRATIVE EXPENSES (as % of sales) 21.3 % 20.3 % 100 basis points 26/08/2010
Advertising & Promotion expenses (as % of sales) 1 st half 2009 1 st half 2010 ADVERTISING & PROMOTION EXPENSES (as % of sales) 30.0 % 30.5 % + 50 basis points 26/08/2010
Operating profitability (as % of sales) 1 st half 2009 1 st half 2010 OPERATING PROFITABILITY (as % of sales) 15.7 % 17.3 % + 160 basis points 26/08/2010
Operating net cash (in millions of euros) 1 st half 2009 1 st half 2010 OPERATING NET CASH (in millions of euros) 940.1 1,182.2 + 25.8 % 26/08/2010
Gearing 1 st half 2009 Full year 2009 1 st half 2010 GEARING* 32.0 % 14.4 % 11.7 % * Net debt / shareholders equity group share 26/08/2010
OUR AMBITION 1 BILLION NEW CONSUMERS
Thierry Prevot Group General Manager, Financial Communications Tel.: + 33 1 47 56 86 22 Fax: + 33 1 47 56 74 93 email: tprevot@dgaf.loreal.com http://www.loreal finance.com Caroline Millot Head of Investors Relations Tel.: + 33 1 47 56 86 82 Fax: + 33 1 47 56 74 93 email: 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: www.loreal 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."