PARIS — Liliane Bettencourt’s having ended an era by leaving L’Oréal’s board has no impact on how it operates or the company’s shareholder structure, chairman and chief executive officer Jean-Paul Agon told financial analysts and journalists Tuesday. He added that L’Oréal is optimistic about its own — and the overall beauty market’s — growth perspectives for 2012.
This story first appeared in the February 15, 2012 issue of WWD. Subscribe Today.
“We are approaching  with very considerable confidence. Firstly, because we believe that in spite of the economic uncertainties the cosmetics market will continue to be buoyant,” Agon said. He was speaking at company headquarters in the Paris suburb of Clichy during L’Oréal’s semiannual meeting to discuss financial results. It took place the day after the news about Bettencourt was announced.
Agon noted the company has not observed any sign of a slowdown, and it estimates the global beauty market growth this year should be approximately 4 percent “with probably the same contrasts as in 2011.”
He was referring to sharp discrepancies in trends between the various regions and the different L’Oréal divisions. The sales rise in new markets, for instance, was 8.2 percent, versus the 0.3 percent dip registered by Western Europe last year. Meanwhile, the Luxury division posted a 7.3 percent revenue increase, while the Active Cosmetics division’s uptick was 0.3 percent.
“The other very good piece of news which is crucially important is that contrary to what many believe, the cosmetics consumers have not changed their behavior since the crisis and value remains intact in the industry,” continued Agon. “There’s been no downgrading, no reduction and no one-size-fits-all in our market.”
In 2011, L’Oréal estimated the worldwide beauty market gained 4.4 percent.
As reported, last year the firm’s net profits grew 8.9 percent to 2.44 billion euros, or $3.4 billion. And sales were up 4.3 percent to 20.34 billion euros, or $28.33 billion. On a like-for-like basis, revenues increased 5.1 percent.
Dollar figures are converted from the euro at average exchange rates for the period to which they refer.
In 2012, the company aims to outperform the market and achieve sales and profit gains. It’s expected the new markets will become L’Oréal’s number-one area sales-wise for the first time.
During the meeting, Agon thanked Bettencourt, the 89-year-old daughter of L’Oréal’s founder, who had been a board member.
“Everybody at L’Oréal is very grateful to Mrs. Bettencourt for her constant support ever since her father died in 1957,” said Agon. “We at L’Oréal all believe that she was the cornerstone of this company. And thanks to her commitment, thanks to her bold vision of the company, thanks to her constant support to the management team, the company has expanded its global reach. So on behalf of every member of the L’Oréal group, I would like to extend our warmest thanks to Mrs. Bettencourt. This transition confirms the Bettencourt Meyers family’s commitment to the L’Oréal group, which is excellent news.”
Agon said Bettencourt’s having exited from the board “changes nothing,” since her grandson Jean-Victor Meyers replaces her. Agon explained it’s an “ideal transition,” since it alters nothing in the balance of the L’Oréal shareholder structure or the way the board operates.
“It is very reassuring for the stability of the company, its shareholdership and its future,” said Agon.
He opted to highlight “two revolutions” — digital media and Asia — which Agon described as transforming the beauty market and L’Oréal.
When it comes to social networks, beauty is among the most discussed topics, said Marc Mensguen, managing director of the company’s strategic marketing department, citing a U.S.-based study by Forrester Research. It found that one in three skin care purchases countrywide are preceded by an online quest for information, and that more than 400 million beauty-related searches are made each month on Google.
For the group overall, e-commerce sales grew more than 35 percent last year.
The Internet’s burgeoning importance spurred L’Oréal in 2011 to increase its digital media budget by 45 percent on-year, making it 8 percent of its total gross media spend.
Meanwhile, Agon considers the Asia-Pacific region a key for future development.
L’Oréal’s gains there have been about three-times faster than the market over the past five years, according to Jochen Zaumseil, managing director of the Asia-Pacific Zone.