"All six cylinders of our engine — technological innovations, creation of major products, value enhancement, brand power, internationalization and acquisitions — have been running better and faster than before," said Jean-Paul Agon, the French beauty giant's chief executive officer, on Friday during a financial analyst meeting held at company headquarters in a Paris suburb.
"We have every reason to believe that our cylinders will continue to run well in the second half, and so enable us to well maintain this momentum. This is why we have raised our target for like-for-like sales growth to plus-7 percent to 8 percent for the full year."
As reported, L'Oréal posted profit after minority interests of 1.18 billion euros, or $1.57 billion at average exchange, up 8.4 percent in the first half of 2007 versus the same year-ago period. This came on sales of 8.51 billion euros, or $11.3 billion, which rose 9.4 percent, or 7.7 percent at constant group structure and exchange. L'Oréal also increased its organic sales growth target range for 2007, formerly setting it at 6 to 8 percent.
Agon fielded wide-ranging questions, including one regarding L'Oréal's acquisition policy.
"You should only make an acquisition when it makes true strategic sense," explained Agon. "Mr. [Christian] Mulliez [the company's executive vice president of administration and finance] and his team have never had as much work to do in terms of acquisitions because our philosophy now is to look at absolutely everything, to scrutinize all of the opportunities out there. That doesn't mean we're going to make more acquisitions, but we're not going to miss any acquisitions that are right up our street.
"We buy something because we feel that it is a good piece of the strategic puzzle," he added.
Agon said he's been happy with the company's buys over the past 18 months, including of The Body Shop, Sanoflore and PureOlogy, as well as the launch of Diesel fragrances, "an entirely new brand — like an acquisition," he said.
Agon is also bullish on L'Oréal's recent takeovers of U.S. salon beauty distributors Beauty Alliance and Maly's West. When asked whether there's a good chance that non-L'Oréal-owned brands will pull out of them, it was made clear it is too soon to know for sure.
A Stella McCartney sketch of a custom dress made from protein-based silk in partnership with biotech lab Bolt Threads. The dress will be displayed at The Museum of Modern Art's upcoming design exhibition, "Items: Is Fashion Modern?"