Loreal 2015 Annual Report Download

Download and view the complete annual report

Please find the complete 2015 Loreal annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 60

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60

ANNUAL
REPORT
2015

Table of contents

  • Page 1
    ANNUAL REPORT 2015

  • Page 2
    ... the 2015 Annual Report cover page to one of the main trends of the year: the digitally-connected beauty influencers, who build online communities that inspire millions of make-up fans around the world, and share content related to the group's brands, as here with NYX Professional Makeup. Photograph...

  • Page 3
    ...al in figures 14 Cosmetics market 16 Worldwide performances 18 The world of brands Consumer Products 22 L'Oréal Luxe 26 Professional Products 30 Active Cosmetics 34 The Body Shop 38 The group's advances Research and Innovation 42 Digital 46 Operations 48 Human Relations 50 Communications, Public...

  • Page 4
    ... euros of sales countries Unique and international portfolio of complementary brands group worldwide (1) 140 st cosmetics in operating profit 4.4 billion euros 497 patents registered in 2015 Commitments for 2020 "Sharing Beauty With All" (1) Source: WWD, "Beauty's Top 100", April 2015...

  • Page 5
    ...to put the Division back on a market share gain track for 2016, by renewing the image of its brands, by seizing every opportunity in the fastest-growing consumer segments, such as make-up and natural haircare, by accelerating the pace of innovation and by stepping up digital investments. In terms of...

  • Page 6
    ... our competitive edge and extends our leadership. It opens up thrilling new horizons for our industry in direct and personalised consumer relationships. Just look at the success of NYX Professional Makeup, our new digital native make-up brand, and how brands like REDKEN, LA ROCHE- POSAY and KIEHL...

  • Page 7
    ... our own potential. In 2015, we celebrated 30 years of leadership. But we are a leader that still has huge potential. Our global market share is only 12.5%. In other words, we still have more than 87% of the market to aim for. I am sure that by offering products that are the best suited, the safest...

  • Page 8
    Beauty for All Offering all women and men worldwide the best of cosmetics innovation in terms of quality, efficacy and safety to satisfy all their desires and all their beauty needs in their infinite diversity. 6 Our Mission

  • Page 9
    ... means globalisation that captures, understands and respects differences. Differences in desires, needs and traditions. To offer tailor-made beauty, and meet the aspirations of consumers in every part of the world. L'Oréal is driven by this vision of the world. SCAN THIS PAGE to watch the video on...

  • Page 10
    ... communities to access work. (1) Reduction in CO2 emissions at factories and distribution centres by 60% in absolute terms and reduction in water consumption and waste by 60% per finished product unit. Our Commitments SCAN THIS PAGE to watch the video presentation of the L'Oréal Corporate...

  • Page 11
    An international portfolio L'Oréal's brand portfolio is organised by Division, which each develop a specific vision of beauty by consumption universe and distribution channels. Our brands CONSUMER PRODUCTS L'ORÉAL LUXE PROFESSIONAL PRODUCTS ACTIVE COSMETICS 9

  • Page 12
    ... development challenges Management, the Board forges its own clear and facing L'Oréal, the leader of a global- independent opinion of the group's development ised and highly competitive cosmetics opportunities. market in which constant innovation This comprehensive dialogue culminates in a shared...

  • Page 13
    ... (term of office renewed in 2013) JEAN-PIERRE MEYERS Vice-Chairman of the Board (term of office renewed in 2012) ANA SOFIA AMARAL (since July 15th, 2014) CHARLES-HENRI FILIPPI (term of office renewed in 2015) SOPHIE BELLON (since April 22nd, 2015) XAVIER FONTANET (term of office renewed in 2014...

  • Page 14
    ... guidelines and direct the activities of L'Oréal all over the world. In 2015, Isabel Marey-Semper joined the Executive Committee as Executive Vice-President Communications, Public Affairs and Sustainable Development. She is also General Manager of the L'Oréal Corporate Foundation. 14 7 3 16...

  • Page 15
    ...Sustainable Development 11 • LUBOMIRA ROCHET Chief Digital Officer Executive Vice-President Research and Innovation 12 • FRÉDÉRIC ROZÉ 7 • MARC MENESGUEN 3 • NICOLAS HIERONIMUS President Selective Divisions President Consumer Products Division Executive Vice-President Americas Zone...

  • Page 16
    ...al business model. Strong progression of sales: +12.1% based on reported figures CONSOLIDATED SALES (2) (in millions of euros) BREAKDOWN OF 2015 COSMETICS DIVISIONS' SALES (as %) +3.9% (3) 25,257 20,343 21,638 22,124 22,532 DIVISIONS 48.7% Consumer Products 29.8% L'Oréal Luxe 14.0% Professional...

  • Page 17
    ... Divisions' profitability 22.7% 18.9% 19.7% Net cash surplus of million euros 20.5% Capital expenditure 4.6% of sales Consumer Products L'Oréal Luxe Professional Products Active Cosmetics Western Europe North America New Markets A dynamic shareholder return policy DIVIDEND PER SHARE...

  • Page 18
    ... 2013 2014 2015 BREAKDOWN OF THE WORLDWIDE COSMETICS MARKET (1) (as %) 36.2% Asia, Pacific 24.0% North America GEOGRAPHIC ZONES 36.1% Skincare 22.9% Haircare PRODUCT CATEGORIES 20.2% Western Europe 10.5% Latin America 6.0% Eastern Europe 3.0% Africa, Middle East 17.3% Make-up 12.2% Fragrances...

  • Page 19
    ... are performing well In 2015, the New Markets generated more than two-thirds of beauty market growth (1). Despite the slowdown in China and Brazil, some growth-relay countries are fulfilling their promise, as is the case with India, South Africa and Turkey. MAKE-UP Lip colour leads the way Driven...

  • Page 20
    ... across geographic Zones and continued to develop its positions in all regions of the world. North America +3.5% (1) North America's growth pace strengthened throughout the year. URBAN DECAY, KIEHL'S and YVES SAINT LAURENT all posted double-digit growth. The Professional Products Division is...

  • Page 21
    ..., hair colour, skincare and deodorants. Africa, Middle East +12.1% (1) Growth was particularly fast in Egypt, Pakistan and Saudi Arabia, where it topped 20% (1). South Africa remained solid. In a context of recent slowdown in several countries, all the Divisions made progress, with market share...

  • Page 22
    20

  • Page 23
    The world of brands With its international portfolio of complementary brands organised in four Divisions, L'Oréal is in a strong position to seize all the opportunities of the beauty market and to meet the aspirations of consumers all over the world and in all distribution channels. 21

  • Page 24
    CONSUMER L'ORÉAL PARIS • GARNIER • MAYBELLINE NEW YORK NYX PROFESSIONAL MAKEUP • DARK AND LOVELY • MG • ESSIE • NIELY 22 PRODUCTS

  • Page 25
    ... New Markets, all the Zones are growing, with strong contributions from Russia, Turkey, Saudi Arabia, India and Mexico. MODERNISING THE GLOBAL BRANDS The new "Make it happen" communications platform by MAYBELLINE NEW YORK has helped MARC MENESGUEN accelerate growth, especially in the United States...

  • Page 26
    ... wide range of blues. THE HIGH-PROFILE LAUNCH OF MACARON LIPPIES NYX Professional Makeup developed a range of lipsticks in bold, bright colours to respond quickly to an emerging trend spotted on social networks. The keys to success INSPIRED BY PROFESSIONALS PROMOTED BY A COMMUNITY OF FANS BASED ON...

  • Page 27
    ...in all Zones and impressive performances in China, where it already represents 20% of sales (1). (1) Including distributor feedback and L'Oréal estimates. Learn more about the Division's digital strategy in the Chinese market. Check out innovations by MAYBELLINE NEW YORK, L'ORÉAL PARIS and ESSIE...

  • Page 28
    LUXE 26 L'ORÉAL LANCÃ"ME • GIORGIO ARMANI • KIEHL'S • YVES SAINT LAURENT • BIOTHERM • URBAN DECAY RALPH LAUREN • SHU UEMURA • CLARISONIC • VIKTOR&ROLF • CACHAREL • HELENA RUBINSTEIN DIESEL • YUE SAI • GUY LAROCHE • PALOMA PICASSO • MAISON MARGIELA

  • Page 29
    ... 2015 was a good year for L'Oréal Luxe, with annual sales increasing by +6.1% like-for-like and +16.7% based on reported figures. Despite fluctuations in the market environment, the Division continued to post great consistency in its performance, while gaining market shares. All our Zones...

  • Page 30
    ...social networks, YVES SAINT LAURENT make-up posted spectacular growth in 2015, particularly in Asia. The brand is reasserting its leading position in lip make-up with Rouge Pur Couture and its new subversive marketing campaign; the worldwide success of the Vernis à Lèvres; and Volupté Tint-In-Oil...

  • Page 31
    ... interactions. Check out the Division's major digital initiatives from 2015. Urban Decay: taking the world by storm In 2015, the brand accelerated worldwide, driven by the phenomenon of young "beauty junkies" who are crazy about make-up. Learn more about URBAN DECAY'S counters and stores. Read...

  • Page 32
    PROFESSIONAL PRODUCTS L'ORÉAL PROFESSIONNEL • REDKEN • MATRIX KÉRASTASE • PUREOLOGY • DECLÉOR • SHU UEMURA ART OF HAIR ESSIE • CARITA • MIZANI 30

  • Page 33
    ..., services and customer experience in our salons. Our commitments to the industry, our education expertise and our brand portfolio mean that we can offer consumers all over the world unique and personalised beauty experiences. (1) Source: L'Oréal 2015 estimates of the worldwide cosmetics market in...

  • Page 34
    ... digital campaign on disastrous hairstyle fads. CLEANSING CONDITIONER BY BIOLAGE Tailor-made professional services To meet consumers' aspirations for increasingly personalised beauty, the Professional Products Division launched scientific innovations and exclusive services that highlight the...

  • Page 35
    ...'s development Salon E-motionâ„¢, an innovative transformation programme As a responsible market leader, the Division is dedicated to revitalising the industry, especially by supporting hair salon transformation. Education is a real business partner for the Professional Products Division and...

  • Page 36
    ACTIVE COSMETICS VICHY • LA ROCHE-POSAY • SKINCEUTICALS ROGER&GALLET • SANOFLORE 34

  • Page 37
    ... the Zones and all the brands posted sales growth. Growth in Latin America, Brazil, Asia and Africa, Middle East was two-digit, an achievement m at ched on ever y c ont i nent by t he LA ROCHE-POSAY brand. In 2015, we launched some strikingly successful innovations with high scientific added value...

  • Page 38
    ... Division strengthened its position as the dermocosmetics market expert in 2015, with a year full of skincare innovations and success stories for its three major brands: LA ROCHEPOSAY, VICHY and SKINCEUTICALS. Lipikar Baume AP+, a crucial advance in the field of dry skin treatment, continued to pay...

  • Page 39
    ... "Skin Checkers" all over the world. A dynamic distribution strategy In pharmacies or in dermacenters, online or in the Travel Retail channel, this multi-channel approach enables the brands to reach increasing numbers of consumers. Explore the Division's points of sale in all markets. A look...

  • Page 40
    ... Youthâ„¢. Its service philosophy ensures its diverse, global customer base benefits from superior in-store experience and customised consultations. In 2015, the brand showed renewed growth in its number one market, the United Kingdom. SKINCARE SALES GROWTH (2) IN-STORE SKINCARE EXPERTS WORLDWIDE...

  • Page 41
    ... Renewed commitment "Enrich not Exploit" Body care is adding a premium range Inspired by ancestral beauty rituals, and with seductive packaging and communication, Spa of the Worldâ„¢, proposes a high-class spa experience at home. The brand has announced to its consumers and stakeholders its new...

  • Page 42
    40

  • Page 43
    advances By drawing on the diversity of its teams and their wealth of expertise, the group once again this year continued its major strategic transformations to invent the beauty of tomorrow and build the New L'Oréal: more universal, more digital and more sustainable. The group's 41

  • Page 44
    ... our digital transformation more than 15 years ago. Today, it is paying off in terms of innovation capacity and differentiation. With the help of digital technologies, we are capitalising on a wealth of skin and hair knowledge accumulated over more than a century, and also developing cutting-edge...

  • Page 45
    250 FARMERS INFORMED AND TRAINED ON ORGANIC FARMING PRACTICES Drawing on nature's finest The use of renewable raw materials, responsibly sourced and processed using the principles of green chemistry, is central to L'Oréal's commitments in terms of innovation. This approach inspired the project to...

  • Page 46
    ...-dandruff shampoos, with different benefits, has been developed by the Pudong centre for the L'ORÉAL PARIS brand. MAKE-UP HAIRCARE With its natural colours suited to the complexion of Chinese women, Pretty & Healthy is a lipstick-lip balm hybrid. L'Oréal researchers based their work on Coscare...

  • Page 47
    ... personalised, high-performance products and services. Digital Learn how digital technology boosts L'Oréal's innovation capacity. A historic expert on pollution and the skin For a number of years L'Oréal has been conducting research into the effects of pollution on the skin. This expertise led...

  • Page 48
    ... ROCHET tion models to match the new opportunities opened up by the digital era, L'Oréal is reinforcCHIEF DIGITAL OFFICER ing its competitive edge and its beauty market leadership. With a highly pragmatic "test-andlearn" approach, applied in hundreds of initiatives worldwide, the group is amassing...

  • Page 49
    ... boutique on the Tmall website, has also been working with the Alibaba website since 2013. In the United States, L'Oréal Luxe makes roughly 15% of its sales via e-commerce (1), using both distributor partners and brand sites. In Russia, the group identified the Ozon website as a strategic player in...

  • Page 50
    ..., Health and Safety; packaging and product development; purchasing; production; supply chain and real estate. (2) L'Oréal's supply chain handles all information and physical flows from the supplier to the distributor customer's points of sale. (3) Extended point-of-sale networks in the New Markets...

  • Page 51
    ... for the global roll-out of Urban Decay Operations play a key role in integrating and rolling out acquisitions within the L'Oréal group. The internationalisation of URBAN DECAY is an excellent example. To support the worldwide development of this American brand, the supply chain teams shared skills...

  • Page 52
    ...corporate culture. (1) Permanent group employees, excluding in some countries, holders of part-time contracts for less than 21 hours per week, beauty advisors and shop assistants; the integration of recent acquisitions and new subsidiaries is gradual. EMPLOYEES WHO RECEIVED DIGITAL TRAINING IN 2015...

  • Page 53
    ... shop assistants; the integration of recent acquisitions and new subsidiaries is gradual. (2) To be rolled out in South Korea in 2016. (3) International Labour Organization. SCAN THIS PAGE to watch the L'Oréal "Share & Care" video L'Oréal is a founding member of the new worldwide company network...

  • Page 54
    ... DEVELOPMENT values are shared by all its employees worldwide. The Communications teams actively foster employee commitment inside the company throughout the year, and with emblematic initiatives such as Citizen Day. This major annual event has a power ful team-building effect, and in 2015...

  • Page 55
    ... contributing some 200,000 volunteer hours. STRONGER COMMITMENT, YEAR AFTER YEAR The event takes different forms in all the countries in which the group operates, with local initiatives. For example, in China employees helped underprivileged communities, and in Turkey they volunteered with an...

  • Page 56
    ... group's financial cash flow and making sure that financing is secure. health depends on closely monitoring With suppliers and customers, the relationship of trust is based on professionalism and ethical behaviour in all exchanges. As for shareholders and investors, the financial communications team...

  • Page 57
    ... its risks more effectively, the system provides support for decision-making and action. Since 2012, the network of managers has grown significantly to more than 110 today, covering almost all the countries in which the group operates. The internal control system enables us to anticipate, prevent...

  • Page 58
    ... THE ANNUAL REPORT L'Oréal in 2015, with its Divisions, brands and countries, driven by its mission - Beauty for All - and by its strategy - Universalisation. THE REGISTRATION DOCUMENT This document includes the 2015 financial statements, the Annual Financial Report, the Management Report of...

  • Page 59
    ... - France FINANCIAL ANALYSTS AND INSTITUTIONAL INVESTORS Françoise Lauvin [email protected] 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 2015 ANNUAL REPORT visit loreal.com or scan this page with the L'Oréal Finance app loreal.com loreal-finance.com