PARIS — Jean-Paul Agon, L'Oréal's newly minted chief executive officer, presided over his first corporate financial analyst meeting Thursday with a flourish. The company exceeded market expectations, when it reported a 21.9 percent spike in net profits to 1.09 billion euros, or $1.34 billion at average exchange, for the first half of this year.
The strong performance, due to cost-control efforts, added-value products and the positive impact of currency fluctuations, makes it look highly likely that the French beauty giant will hit double-digit earnings-per-share gains for 2006.
Operating profits for the company rose 19.6 percent to 1.33 billion euros, or $1.64 billion, in the period ended June 30. L'Oréal's earnings before interest and taxes margin was 17.1 percent, versus 15.6 percent in the first half of 2005.
The company's profits came on revenues that, as reported, reached 7.79 billion euros, or $9.58 billion, an 8.7 percent increase in the half. On a like-for-like basis, L'Oréal's sales rose 5.8 percent.
They were the best half-yearly revenues the company has posted since 2001.
L'Oréal's profits were announced at a financial analyst meeting held in the company's headquarters in the Paris suburb of Clichy.
The conference was banner in a couple of respects. The meeting marked the change in management that occurred earlier this year when Agon took over the helm from Lindsay Owen-Jones, who had presided as ceo for the last 22 years. He is now the company's non-executive chairman.
At the conference, Agon said, "We are happy with the upturn in sales growth." He also reiterated that half-yearly figures are not necessarily representative of full-year results.
Agon highlighted L'Oréal's sales growth in all of its markets, particularly Western Europe, where the company's consumer and luxury products had particularly strong showings.
He emphasized, as well, that a first for the company was that its cosmetics sales in the "rest of the world" zone (not including Western Europe and North America) outpaced those in North America in the most recent half. During the period, for those regions outside Europe and North America, revenues came to about 2 billion euros, or $2.46 billion, up 17.5 percent year-on-year. North America's reached 1.97 billion euros, or $2.42 billion, a 9.5 percent gain.
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