By and  on February 17, 2006

PARIS — L'Oréal said Thursday it would seek annual growth of 6 to 8 percent, with part of that coming from acquisitions.

Reporting its 21st year of double-digit increases in profits, the French beauty giant also told analysts that its income spiked 37 percent to 1.97 billion euros, or $2.46 billion at average exchange rates, in the year ending Dec. 31 over 2004.

As reported, L'Oréal increased its 2005 sales 6.5 percent to 14.53 billion euros, or $18.1 billion, versus 2004.

The firm's financial analyst meeting Thurs­day marked the debut of incoming chief executive Jean-Paul Agon, who takes on the role in April — and ended with a standing ovation for outgoing ceo Lindsay Owen-Jones, who will remain as non-executive chairman and president of L'Oréal's board.

The gathering was full of nostalgia, as Owen-Jones presided over the event for the last time. Owen-Jones, who has had one of the most storied careers in the beauty industry's history, was lauded by financial analysts. They reminisced with anecdotes of his 21-year tenure at the helm of the world's biggest beauty company.

For his part, Owen-Jones showed a video and picture presentation of financial analysts' meetings from years past and gave a running commentary about some of their main themes. In 1991, for instance, analysts focused on Unilever's acquisition of Elizabeth Arden, and how that would impact L'Oréal's business. In 1993, they showed concern that mass market brands would cannibalize prestige brands. In 2000, the Internet was a key topic of discussion.

On Thursday, the company's future strategy was highlighted, alongside its 2005 financial results.

During the meeting, Agon spoke to financial analysts for the first time, and was very pointed about strategy looking ahead. "L'Oréal has always been a growth business and will remain so," he said. "Our ambition is to return to a comparative growth target of 6 percent to 8 percent per year. Pursuing this growth will always be our number-one priority."

He added internal growth will remain a mainstay for L'Oréal, but that acquisitions are also important.

Analysts were impressed by the new ceo. "Agon made a very strong first presentation," said Eva Quiroga, an analyst at UBS. "It was good to see that top-line growth, which will ultimately drive valuations, is at the very top of his priority list."

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