Loreal 2012 Annual Report Download - page 9

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In 2012, L’Oréal once again posted strong results.
The group has continued to demonstrate its ability to
outperform the market and strengthen its worldwide
leadership of the beauty sector.
A very good vintage for innovations
This year was a very good vintage for innovations
in our group, which, by creating the finest products in
all channels and categories, has revived the product
offering and driven the market forward. Innovation is at
the heart of our profession. It is the superlative quality
and performance of our products that enables us to
attract and win ever-growing numbers of consumers,
and ensure their loyalty. 2012 was also a year of renewal
for some of our major brands, such as LANCÔME, VICHY,
GARNIER and THE BODY SHOP. Meanwhile, L’Oréal enriched
its brand catalogue—with acquisitions such as CADUM in
France, VOGUE in Colombia and URBAN DECAY in the United
States—to further intensify its coverage of the beauty
market.
Accelerated international
development
In geographic terms, L’Oréal has built up its position,
even in the most difficult markets, such as Western
Europe and the United States, where we have achieved
record market share gains. In North America, the
group grew roughly twice as fast as the market, driven
by the aim of matching our market share level in
Western Europe, where we continue to strengthen
our position, while also improving our profitability. At
the same time, L’Oréal has taken internationalisation
to the next level. 2012 marked a major step forward,
as the New Markets have become, for the first time
ever, the group’s number one sales zone, representing
some 40% of total cosmetics sales.
Strong value creation
2012 was also a year of strong value creation and
growth in financial results, with our sales growth attain-
ing double-digit figures. Operating profit and net profit
reached record levels, and there was a spectacular
increase in cash flow. These results illustrate the strength
and efficiency of the L’Oréal business model. Thanks to
the solidity and quality of our results and the company’s
very favourable prospects, the Board of Directors will
propose a further substantial dividend increase of +15%
to 2.30 euros at the next Annual General Meeting.
Balance of power
The quality of our results is also underpinned by the
very high standards of governance which we strive to
raise year after year. The freedom and independence
of the Board of Directors guarantee the balance of
power with General Management. The Board holds
the resources it needs to deal freely with the questions
at hand and in particular to approve, monitor and
ensure the implementation of the company’s strategic
guidelines, while overseeing the good management
thereof. The balance of power within the Board of
Directors is guaranteed by clearly defining the individual
remits of the Chairman and Chief Executive Officer on
the one hand, and on the other, the 13 board members,
who are free to make their own decisions.
At the Annual General Meeting, the Board will propose
the appointment of Mrs Virginie Morgon as a new Board
Director. Mrs Morgon is an Executive Board Member
of Eurazeo, one of the leading investment companies
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