L’Oréal S.A.

Sector: Beauty Countries of operation: China, France, India, Japan, the UK, the US and 144 other countries Key product categories: Fragrance, haircare, hygiene, makeup and skincare Annual Metrics [caption id="attachment_151356" align="aligncenter" width="700"] Calendar year ends December 31[/caption]   Company Profile L’Oréal is the world’s largest beauty company, manufacturing and selling beauty products for women and men in 150 countries. The company was founded in 1909 and is headquartered in Clichy, France. Product offerings include fragrance, haircare, hygiene, makeup and skincare through four divisions: Active Cosmetics, Consumer Products, L’Oréal Luxe and Professional Products. The company sells through a variety of channels, including branded retail, drugstores, hair salons, mass-market retail channels, medispas, perfumeries, pharmacies, supermarkets, travel retail and online. It has approximately 85,400 employees as of the end of fiscal 2021. Brands under its four divisions include the following:

1. Active Cosmetics: CeraVe, La Roche-Posay, Roger & Gallet, Sanoflore, SkinCeuticals and Vichy
2. Consumer Products: Essie, Garnier, L’Oréal, Magic, Maybelline and NYX
3. L’Oréal Luxe: Atelier Cologne, Biotherm, Cacharel, Clarisonic, Diesel, Giorgio Armani Beauty, Guy Laroche, Helena Rubinstein, House 99, It Cosmetics, Kiehls, Lancôme, Maison Margiela, Paloma Picasso, Proenza Schouler, Shu Uemura, Urban Decay, Victor & Rolf, Yue Sai and Yves Saint Laurent
4. Professional Products: Biolage, Carita, Decleor, Kerastase, Redken, Matrix, Mizani, Pureology, Seed Phytonutrients and Shu Uemura

Company Analysis Coresight Research insight: L’Oréal is a leader in the global beauty industry with a diverse brand portfolio. In recent years, the company has strengthened its position in skincare, the global beauty market’s fastest-growing category. L’Oréal outperformed the beauty industry in 2021 as it rebounded from the pandemic: annual revenue increased 16.1%, ecommerce sales rose 25.7%—representing 28.8% of sales—and net income rose 29%.

Tailwinds	Headwinds
Strong brand names and diverse portfolio give the company a competitive edge over its peers Growing leadership position in China, the second-largest beauty market in the world Growing digital prowess will allow it to provide more personalized products Robust innovation and its ability to offer unique products allow the company to meet constantly changing consumer demands	Ever-changing consumer preferences may impact demand of certain products High level of competition in the cosmetic industry is a constant threat to future growth

Strategy In its 2020 annual report, L’Oréal highlighted the following five strategic focus areas: 1. Focus on a single business:

• Continue to focus on a single business—beauty—which provides a significant competitive advantage, backed by over 100 years of cosmetics experience, with talented specialists and in-depth knowledge of consumers.

2. Focus on universalization as a unique development strategy

• Focus on universalization to offer personalized beauty across the world. This strategy differs from standardization as it is specially curated with attention to consumers, aiming to understand their desires, lifestyles, needs and traditions.

3. Prioritize digital and beauty technology

• Prioritize digital and beauty technology, with a particular focus on the latter, as major breakthroughs have been made in artificial intelligence (AI), biotechnology, internet of things, nanotechnology and robotics, among others.

4. Emphasize omnichannel logistics strategy

• Implement omnichannel logistics for its distribution, manufacturing and sales processes to optimize the company’s agility—enabling it to respond to market variations in all distribution channels and adapt in real time. With this strategy, the company aims to deliver the best service to its customers.

5. Gain one billion new customers, especially in new markets

• Attract one billion new customers in the next decade, particularly in new markets. L’Oréal considers Asia Pacific to be a key market and aims to accelerate its presence in Africa.

Revenue Breakdown (2021) [caption id="attachment_151357" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]   Recent Developments

Date	Development
April 19, 2022	L’Oréal reports first quarter sales of €9.06 billion ($9.9 billion), up 13.5% like-for-like and 19.0% reported, with all regions and divisions participating in growth and “consumer purchasing behavior unaffected by inflation.”
March 15, 2022	L’Oréal successfully prices its inaugural €3 billion ($3.1 billion) bond, including a sustainability-linked tranche.
March 11, 2022	L’Oréal receives Long-Term Issuer Credit ratings of AA from financial services company S&P Global Ratings and an Issuer Rating of Aa1 from Moody’s Corporation, another financial services company. Both companies rated L’Oréal as “stable.”
December 8, 2022	L’Oréal signs an agreement to acquire Youth to the People, a California-based skincare brand created with superfood extracts.
December 7, 2021	L’Oréal’s Board of Directors agrees to a strategic transaction with Nestlé, for L’Oréal to repurchase 4% of its own shares held by Nestlé.
October 4, 2021	L’Oréal receives L’AGEFI Grand Prix Award for exemplary corporate governance.
September 20, 2021	L’Oréal is confirmed as a United Nations Global Compact LEAD company for the seventh year, rewarded for its ongoing commitment to the UN’s ten principles for responsible business and for placing the UN’s Sustainable Development Goals (SDGs) at the center of its growth strategy.
June 24, 2021	L’Oréal and Facebook announce a new platform integrating ModiFace, a L’Oréal-owned augmented reality (AR) and AI company, to introduce an AR-powered makeup try-on on Instagram.
April 4, 2021	L’Oréal announces the appointment of Asmita Dubey as Chief Digital Officer and member of its Executive Committee. Dubey succeeds Lubomira Rochet, who served seven years at L’Oréal.
March 23, 2021	L’Oréal announces a minority investment in Swiss environmental technology startup Gjosa, made through its corporate venture capital fund.
December 23, 2020	L’Oréal enters into an agreement to acquire Takami Co., Ltd. from Hiroshi Takami, renew a long-term brand licensing agreement with the company and sign a collaboration contract with its clinics.
October 14, 2020	L’Oréal’s Board of Directors announces that it will appoint Nicolas Hieronimus as CEO and renew Jean-Paul Agon’s role as Chairman, a position he has held since 2011.
June 18, 2020	L’Oréal USA enters into an agreement to acquire Thayers Natural Remedies from Henry Thayer Company. After the completion of the acquisition, L’Oréal will integrate the brand into its Consumer Products Division.
May 14, 2020	L’Oréal announces that Myriam Cohen-Welgryn has been appointed President of the Active Cosmetics Division and a member of its Executive Committee.
January 6, 2020	L’Oréal announces the launch of Perso, an AI-powered at-home system for beauty personalization. Developed by L’Oréal Technology Incubator, Perso’s features a four-step process to deliver on-the-spot skincare and cosmetic formulas that increase personalization as it is used.
December 12 2019	L’Oréal and Prada announce that they have signed a long-term license agreement for the creation, development and distribution of luxury beauty products for Prada.
October 29, 2019	L’Oréal announces that it has invested in Cathay Innovation, a global venture capital fund, founded to support entrepreneurs in sustainable technology.
October 21, 2019	L’Oréal signs an agreement to acquire CFG France, CFG UK, Clarins Fragrance Group, Cosmeurop Sas, Mugler SA and Thierry Mugler S.A.S from Groupe Clarins SA on October 21, 2019.
October 3, 2019	L’Oréal announces that it has developed the first paper-based cosmetic tube, allowing L’Oréal brands to replace most plastic currently used in tubes with a new bio-based paper-like material.
September 9, 2019	L’Oréal USA announces the appointment of Stéphane Rinderknech as President and CEO, Executive Vice President North America and member of L’Oréal's Executive Committee. He succeeds Frédéric Rozé and will report to him in his role as Executive Vice President Americas.
September 9, 2019	L’Oréal announces that it has invested in Fireside Fund II, managed by Fireside Ventures—a venture fund focusing on Indian consumer brands that was founded in 2017.
June 26, 2019	L’Oréal announces its participation in Carbios’s new capital increase. Carbios creates innovative bio-industrial solutions to increase the lifecycle of plastic and textile polymers.
June 3, 2019	L’Oréal announces the introduction of “MYT—Make Your Technology,” its first 4.0 technology incubator for its employees, focusing on the future of the industry and supply chain.
May 17, 2019	L’Oréal and Alibaba Group announce the launch of La Roche-Posay’s Effaclar Spotscan app on Alibaba’s Tmall and Taobao platforms, introducing the technology to Chinese consumers.
April 2, 2019	L’Oréal announces plans to develop its French manufacturing capabilities, dedicating its Aulnay-sous-Bois plant to perfume production.
March 8, 2019	L’Oréal announces a partnership with Hello Tomorrow Global Challenge, an international deep-technology competition aiming to empower and connect startups focused on major industrial and social challenges.
February 19, 2019	L’Oréal is recognized as a global leader in sustainability for the third consecutive year at the CDP Europe awards, due to its initiatives to reduce carbon emissions, strengthen water stewardship and combat deforestation in its supply chain.
December 5, 2018	L’Oréal announces the launch of Business Opportunities for L’Oréal Development (BOLD), a corporate venture capital fund that will acquire minority stakes in innovative startups with high growth potential. The fund will invest in new business models in communication, digital, marketing, packaging, retail, R&I and supply chain and support the startups with the company’s expertise, mentorship and networking.
November 20, 2018	L’Oréal announces two appointments: Christophe Babule as Executive Vice President, Chief Financial Officer and member of its Executive Committee and Cyril Chapuy as President of L’Oréal Luxe and a member of the its Executive Committee.
November 14, 2018	L’Oréal launches La Roche-Posay “My Skin Track UV,” a battery-free wearable electronic device that measures ultraviolet (UV) levels. It uses a precise sensor to measure UV and a companion app tracking humidity, pollen and pollution exposure.

  Management Team

• Nicolas Hieronimus—CEO and Director
• Christophe Babule—CFO and Executive VP
• Antoine Vanlaeys—COO
• Barbara Lavernos—Deputy CEO and President of Research, Innovation and Technology

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Source: Capital IQ/Coresight Research