PARIS — L’Oréal registered a 17.6 percent rise in 2012 net income and said it is “well-prepared” to outpace the beauty market’s growth this year.
This story first appeared in the February 12, 2013 issue of WWD. Subscribe Today.
The firm’s net profits reached 2.87 billion euros, or $3.69 billion, in the 12 months ended Dec. 31, it said Monday after the Paris Bourse closed. L’Oréal’s operating income was up 12.3 percent to 3.7 billion euros, or $4.75 billion.
Company sales in the period increased 10.4 percent to 22.46 billion euros, or $22.88 billion. On a like-for-like basis, revenues advanced 5.5 percent.
Dollar figures are calculated at average exchange for the period to which they refer.
The full-year operating profits and organic sales were in line with UBS’ estimate, according to analyst Eva Quiroga in a research note published Monday.
Jean-Paul Agon, L’Oréal chairman and chief executive officer, said that 2012 “was a good year for L’Oréal on many fronts. The group achieved strong sales growth and once again demonstrated its ability to outperform the beauty market and to gain market share, even in the more difficult markets of Western Europe and the United States.”
Agon lauded innovation stemming from each of the company’s divisions and major business segments, and he highlighted that “2012 also marked a milestone in the acceleration of the group’s internationalization, as the ‘New Markets’ became the number-one geographic zone.
“Lastly, the profits and cash flow have grown very strongly, reaching record levels and confirming the power of our business model,” he continued.
L’Oréal’s fourth-quarter 2012 sales grew 9 percent to 5.73 billion euros, or $7.43 billion. On a like-for-like basis, the French beauty giant’s revenues gained 5.3 percent in the three months.
The quarterly top-line growth was “slightly ahead of consensus (5.1 percent) and our expectations (4.7 percent),” according to initial perspectives published by Andrew Wood, an analyst at Sanford C. Bernstein & Co. “In [fourth-quarter 2012], L’Oréal saw most regions and businesses deliver above expectations.…only dermatology and luxury were below, the latter being a bigger worry given that it has been the major driver of L’Oréal growth in recent quarters.”
In the period by geographic zone, sales rose 3.2 percent in Western Europe, 14.8 percent in North America and 11.3 percent in new markets. In division terms, revenues gained 5.3 percent for professional products, 8.7 percent for consumer products, 12.3 percent for L’Oréal Luxe and 8.6 percent for active cosmetics. The Body Shop’s sales were up 9.8 percent, while dermatology revenues grew 4.8 percent.
L’Oréal said it will propose at its next annual general meeting on April 26 a new share-buyback plan amounting to 500 million euros, or $669.3 million at current exchange, in the first half of this year.
“We are facing the future with optimism and confidence,” stated Agon. “The group is thus well-prepared to outperform the market in 2013 and to achieve another year of sales and profit growth.”