Loreal 2014 Annual Report Download

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VISIT LOREAL.COM
FOR THE FULL VERSION
ANNUAL
REPORT
2014

Table of contents

  • Page 1
    ANNUAL REPORT 2014 VISIT FOR THE FULL VERSION LOREAL.COM

  • Page 2

  • Page 3
    ... ACTIVE Cosmetics / 32 The Body Shop / 36 Travel Retail / 38 EXPERTISE TO DRIVE GROWTH Research and Innovation / 42 Digital / 46 40 Operations / 48 Human Relations / 50 Administration and Finance / 52 Corporate Social Responsibility / 54 BROWSE THE FULL 2014 ANNUAL REPORT ONLINE Visit loreal.com...

  • Page 4
    ... it enables all individuals to express their personalities, gain self-confidence and open up to others. Beauty is a language L'Oréal has set itself the mission of offering all women and men worldwide the best of cosmetics innovation in terms of quality, efficacy and safety. It pursues this goal by...

  • Page 5
    ... 2014? The group's per formance was very solid. We further strengthened our positions in three of our four Divisions. The Active Cosmetics Division and L'Oréal Luxe substantially outperformed their markets in all regions. The Professional Products Division grew faster than its market. The Consumer...

  • Page 6
    ...into a new market: professional skincare. The acquisitions of MAGIC, NIELY and NYX are adding to the presence and potential of the Consumer Products Division in markets of great strategic importance: skincare in China and Asia for MAGIC, hair colour in Brazil and Latin America for NIELY, and make-up...

  • Page 7
    ...and committed L'Oréal teams, which are totally dedicated to continuing our great adventure: in other words, pursuing our "Beauty for All" mission, our Universalisation strategy and our goal of at tracting one billion new consumers. At the same time, we will keep on inventing the New L'Oréal of the...

  • Page 8
    ... edition of which it reviewed this year. These commitments are the foundation namely of the group's policies on compliance, responsible innovation, environmental stewardship, social and societal responsibility and philanthropy. In 2014, the Senior Vice-President and Chief Ethics Officer presented...

  • Page 9
    ... of Directors striving to offer Beauty for All (1) 10 11 06 07 (1) Board members as of 12/31/2014. 12 13 14 15 1 / JEAN-PAUL AGON Chairman and CEO since March 18th, 2011 (term of office renewed in 2014) 2 / FRANÇOISE BETTENCOURT MEYERS (term of office renewed in 2013) 3 / PETER BRABECK...

  • Page 10
    ... Committee is L'Oréal's management body. It sets strategic guidelines and directs the group's activities worldwide. The organisation of L'Oréal changed in 2014 with the appointment of a Chief Digital Officer, Lubomira Rochet. The creation of this position at Executive Committee level reflects the...

  • Page 11
    ... President Consumer Products Division 6 / MARC MENESGUEN Executive Vice-President Americas Zone 12 / FRÉDÉRIC ROZÉ Executive Vice-President Research and Innovation 2 / LAURENT ATTAL 7 / CHRISTIAN MULLIEZ Executive Vice-President Chief Financial Officer 13 / GEOFF SKINGSLEY Executive Vice...

  • Page 12
    ...BRANDS 1 st BREAKDOWN OF 2014 SALES (Cosmetics Divisions, as %) 130 78,600 COUNTRIES EMPLOYEES MORE THAN PATENTS REGISTERED IN 2014 32 501 DIVISIONS 7.7% Active Cosmetics 14.0% Professional Products 28.6% L'Oréal Luxe 49.7% Consumer Products Sales growth in all Divisions and zones In 2014...

  • Page 13
    ...910 5.34 OF TOTAL ASSETS 63% 10 11 2012 2013 2014 2012 2013 2014 With shareholders' equity amounting to 20 billion euros, L'Oréal's balance sheet remains particularly solid, after the purchase of 8% of the capital from Nestlé for 6 billion euros. A dynamic shareholder return policy (at...

  • Page 14
    ... +3.6% GEOGRAPHIC ZONES 2.8% Africa, Middle East 7.3% Eastern Europe 12.5% Latin America 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20.9% North America 21.8% Western Europe 34.7% Asia, Pacific With an estimated worth of 180 billion euros(1), the worldwide cosmetics market has developed at...

  • Page 15
    ... channels, the exclusive experiences and services offered by the brands can be prolonged and personalised. Digital media provide new ways to reach, educate and inspire new consumers, as well as loyal customers, in order to stimulate the market's future growth. Learn more about L'Oréal's digital...

  • Page 16
    .... LATIN AMERICA / + 10.0% (1) Sales increased by +10.0%(1). The Professional Products Division, Active Cosmetics and L'Oréal Luxe recorded double-digit growth and strengthened their positions. Consumer Products Division growth was driven by L'ORÉAL PARIS with Elvive and MAYBELLINE NEW YORK thanks...

  • Page 17
    ... group strengthened its positions, thanks especially to KIEHL'S, YVES SAINT LAURENT, GIORGIO ARMANI, LA ROCHE-POSAY and CLARISONIC. India, Indonesia, Hong Kong and Australia all recorded strong growth. MAGIC, acquired in China in the first half of 2014, grew solidly in the key skincare mask market...

  • Page 18
    ... digital expertise with its sophisticated social network know-how, and is taking advantage of the dynamic trend in professional make-up, now accessible through mass-market outlets. s WATCH THE NYX 2014 FACE AWARDS VIDEO by scanning this page with the L'Oréal Finance app NYX UNITED STATES BRAZIL...

  • Page 19
    ... market(4). Facial masks, at the heart of MAGIC's expertise, are a widely-used beauty routine in China's key skincare category. Alongside L'ORÉAL PARIS, the number 1 skincare brand in China(5), and MAYBELLINE NEW YORK, MAGIC completes the Consumer Products Division portfolio, and its development...

  • Page 20
    THE WORLD OF BRANDS CONSUMER Products / 20 L'Oréal LUXE / 24 PROFESSIONAL Products / 28 ACTIVE Cosmetics / 32 The Body Shop / 36 Travel Retail / 38

  • Page 21
    18 19

  • Page 22
    ... IN 2014 ACQUISITIONS: Three new brands are bolstering the Consumer Products portfolio in key categories and strategic countries: MAGIC, number 1 in face masks in China (2), NYX, the mass-market professional makeup brand, and NIELY (3), in the hair colour market in Brazil (see pages 16 and 17). MAKE...

  • Page 23
    ... Blends in the United Kingdom was boosted by a tailor-made campaign. 2 ULTIMATE BLENDS BY GARNIER Six fragrances designed to match the tastes of British consumers. 3 EXTRAORDINARY OIL BY ELVIVE From a new haircare routine to a full product range, the success of Extraordinary Oil continued in 2014.

  • Page 24
    ..., market share value 2014. SKINCARE MASKS BY MAGIC A widely-used facial skincare routine in China. SAKURA WHITE BY GARNIER A skincare range for radiant skin that meets Asian women's expectations. s WATCH THE SAKURA WHITE VIDEO by scanning this page with the L'Oréal Finance app MEN'S COSMETICS...

  • Page 25
    ...group's brands to offer their consumers new services and experiences. The L'ORÉAL PARIS Makeup Genius app is a first in the field of connected beauty, and provides a genuine digital service in the make-up segment. MAYBELLINE NEW YORK is launching the brow trend in the mass-market with an innovative...

  • Page 26
    ...a priority for the Division. E-commerce is growing steadily at +33.6%(2), thanks to the quality of the brand websites. Digital media also offer the brands new ways of interacting with their consumers. s WATCH THE VIDEO INTERVIEW by scanning this page with the L'Oréal Finance app (1) Like-for-like...

  • Page 27
    ...share value 2014. (3) Source: Women's fragrance segment, aggregate NPD France, UK, Spain, Italy, US and IRI Germany Panels, Generation Travel Retail, Segmenta Latin America, Asia Beauty Research (China, Japan, Hong Kong, Taiwan, South Korea), market share value 2013. (4) Source: Prix d'Excellence de...

  • Page 28
    ...al Luxe in 2014. This category is strategically important for the Division, and is a focal point for the creativity and modernity of its brands, which recorded good performances. digit growth in make-up, boosted by the launches of Baby Doll Kiss & Blush, a highly original product used to colour both...

  • Page 29
    .... KIEHL'S, acquired in 2000, continued its global 1 NAKED PALETTE BY URBAN DECAY Subtly-coloured eyeshadow palettes with powerful consumer appeal. 2 26 27 Seattle native CLARISONIC is one of the most dynamic brands in the L'Oréal Luxe portfolio. As the leader in at-home instrumental cosmetics...

  • Page 30
    ... our distribution network. EDUCATION: Training for beauty professions is the Division's key growth driver, and provides essential support for market development. In 2014, more than 3.5 million beauty professionals were in contact with our education teams. (1) Source: Kline study "Salon Hair Care...

  • Page 31
    ...the face and then for the body. Its success stems from its institute-based aromatic beauty treatments and its sensuous oils. DECLÉOR complements the Professional Products Division's portfolio by opening up a new territory and providing genuine expertise in essential oils. CARITA, an expert brand in...

  • Page 32
    ... Brazilian hair, with a salon procedure and a home routine. The accessible professional brand MATRIX is successfully revamping its Biolage franchise. The new range has been well received in all strategic markets, and is invaluable in terms of winning over new consumers. (1) Source: Prix d'Excellence...

  • Page 33
    ... worn by It Girls, reflect the spirit of L'ORÉAL PROFESSIONNEL. In 2014, the brand teamed up for the first time with an international ambassador, Kirsten Dunst, who was the face of the year's key launches. (1) Source: Kline study "Salon Hair Care: World Market Analysis and Opportunities", July 2014...

  • Page 34
    ...IN 2014 DERMACENTERS: With the ambition to adapt its distribution model by taking on board the realities of different markets, the Active Cosmetics Division continued to open large numbers of dermacenters worldwide, including some in travel retail outlets. SKINALLIANCE IN DERMOCOSMETIC SCIENCE FORUM...

  • Page 35
    ... the brand's expertise and scientific positioning. Resveratrol B E night concentrate, which complements the brand's daily care products, is also a promising growth relay for SKINCEUTICALS. (1) Source: IMS Health, Pharmatrend Europe, anti-ageing market in 8 European countries (France, Italy...

  • Page 36
    ... in Paris, offer a unique sensorial experience. As the Active Cosmetics Division's traditional market, Western Europe remains a region of great strategic importance in growth terms. The brands L A ROCHE- POSAY, SKINCEUTICALS and SANOFLORE are particularly dynamic in this region. BRAZIL Active C[10...

  • Page 37
    ...double-digit growth in 2014 in all geographic zones, reflecting the successful internationalisation of its business model. In China for example, the brand has established itself thanks to its dermatological expertise in the field of pollution, a key issue for Chinese consumers. LA ROCHE-POSAY offers...

  • Page 38
    ...opportunities for The Body Shop in Brazil, which is the fourth largest beauty market in the world (1). PULSE 3.0: 2014 also saw the launch of Pulse 3.0, a new store format, with three aims in mind: to showcase the sensorial appeal of the products, to highlight the skincare expertise of The Body Shop...

  • Page 39
    ... assistance to children in conflict areas. 1 36 37 2 1 DROPS OF YOUTHâ„¢ EYE CONCENTRATE Younger-looking eyes with this anti-ageing skincare, which targets the eye contour. 2 3 CHRISTMAS COLLECTION The Body Shop lights up the holidays with gift sets and limited editions. 3 VITAMINE E AQUA...

  • Page 40
    ... dynamic channel, which is expected to double in size over the next 10 years(4). L'Oréal is the only group with a brand portfolio that covers all of the beauty aspirations of travelling consumers, from luxury to mass-market and from dermocosmetics to professional products, by way of The Body Shop...

  • Page 41
    ...consumers, especially with a brand like KIEHL'S. Serving as a laboratory for enhancing and improving the customer experience, travel retail develops new point-of-sale services. The channel also helps to amplify major successes, such as the fragrances "La vie est belle" by LANCÃ"ME and Sì by GIORGIO...

  • Page 42
    EXPERTISE TO DRIVE GROWTH Research and Innovation / 42 Digital / 46 Operations / 48 Human Relations / 50 Administration and Finance / 52 Corporate Social Responsibility / 54

  • Page 43
    40 41

  • Page 44
    ...of scientific expertise and knowledge of the consumer through the cooperation of laboratories and marketing departments. THE NEW CHALLENGES FOR RESEARCH AND INNOVATION 3.4% INVESTMENTS IN RESEARCH AND INNOVATION (1) PATENTS FILED IN 2014 501 The challenges related to sustainable development are...

  • Page 45
    ...: a groundbreaking discovery Not long after the discovery of the microbiome was shared with the scientific community, L'Oréal Research began work on a promising new cosmetics segment. In 2014, the study of these microorganisms on the skin's surface led to significant initial results in the field of...

  • Page 46
    RESEARCH AND INNOVATION Oils: a global success story Oils are an emblematic example of how L'Oréal's expertise translates into products with worldwide appeal. Their incredible success illustrates both the constant interaction between scientists and consumers and the role played by the regional ...

  • Page 47
    ... example, a study on the perception of hair oils completed in 2014 in four countries shed crucial light on consumer expectations as related to hair type and relationship with the product(1). It highlighted the opportunities and challenges L'Oréal Research will face as it sets out to address these...

  • Page 48
    ... THE VIDEO INTERVIEW by scanning this page with the L'Oréal Finance app L'ORÉAL'S DIGITAL STRATEGY OF MEDIA SPENDING ON DIGITAL 15.7% E-COMMERCE: Today, most consumers research products on the Internet before deciding on a purchase, and increasing numbers of them want to buy cosmetics products...

  • Page 49
    ... site is the reference for consumers looking for online make-up content and advice. A 100% digital experience, all the way through to purchase. The dawn of a new era: connected beauty Digital technology continues to revolutionise the beauty market, in terms of distribution, products and services...

  • Page 50
    ... upgraded through expertise and the roll-out of new information systems, Operations continue to intensify their targeted distributor-centric approach. (1) Operations cover seven fields: Quality; Environment, Health & Safety; Packaging & Product Development; Purchasing; Production; Supply Chain and...

  • Page 51
    ...From design to production and distribution, Operations provide innovative solutions to support the brands as they conquer the New Markets. For instance, Black Naturals by GARNIER, made at the Baddi factory in northern India, is a modern and premium quality hair colourant that is competitively priced...

  • Page 52
    ...on the ability to detect potential and develop individual talents, our Human Relations division continues to further this policy, which can also be adapted to meet new challenges, actively supporting the group's growth momentum. L'Oréal's Universalisation strategy means that we are intensifying our...

  • Page 53
    ... global roll-out of the "L'Oréal Share & Care" programme In 2013, as part of "Sharing Beauty With All", the group made a commitment to set up the "L'Oréal Share & Care" programme in all the countries in which it operates by 2015, to ensure its employees enjoy the best practices in terms of social...

  • Page 54
    ... worldwide roll-out of data processing, analysis, decision-making and simplification tools, such as COMPASS, the new business-oriented financial management system (see page 53). The teams thus supported the group's international development and helped it rise to new challenges. ACQUISITIONS: In 2014...

  • Page 55
    ... model, digital media took centre stage in financial communication tools in 2014, with the L'Oréal Finance mobile app, the shareholders' digital magazine L'Oréal Finance Mag, and the first online edition of the Annual Report. (1) Socially Responsible Investment. ACTIONARIA SHAREHOLDER FAIR Inform...

  • Page 56
    ... in sustainable production and innovation. We are convinced that beauty plays a crucial role in society, and we continue to proactively roll out our philanthropy initiatives with the L'Oréal Foundation. SARA RAVELLA EXECUTIVE VICE-PRESIDENT COMMUNICATION, SUSTAINABILITY AND PUBLIC AFFAIRS...

  • Page 57
    ...ENVIRONMENTAL OR SOCIAL IMPACT (2) 67% -50.2% CO2 EMISSIONS IN FACTORIES AND DISTRIBUTION CENTRES (3) OF THE BRANDS HAVE IMPLEMENTED INITIATIVES TO RAISE CONSUMER AWARENESS (4) 25.4% OF L'ORÉAL'S PERMANENT EMPLOYEES HAVE HEALTH INSURANCE COVERAGE IN LINE WITH THE BEST PRACTICES IN EACH COUNTRY...

  • Page 58
    ... OF THE 2014 ANNUAL REPORT Organised into four sections - Strategy, Performance, Brands and Expertise - the digital edition of the Annual Report provides a comprehensive overview of L'Oréal in 2014. It features rich multimedia content including senior management interviews, video reports and much...

  • Page 59
    ... and production: Publicis Consultants l Verbe 133, avenue des Champs-Élysées, 75008 Paris - France. Competitive positions and market share held by the group's divisions and brands mentioned in this report are based on studies, panels and polls obtained from specialised organisations and companies...

  • Page 60
    FOR THE FULL VERSION OF THE 2014 ANNUAL REPORT visit www.loreal.com or scan this page with the L'Oréal Finance app www.loreal.com www.loreal-finance.com