L’OREAL SAVORS SOLID YEAR

Byline: Jennifer Weil

PARIS — Lindsay Owen-Jones was upbeat and had every reason to be as he ran through L’Oreal’s 2000 results here Thursday.
The French beauty giant’s chief waxed lyrical, even though the figures spoke for themselves. “It’s not every day that one is able to present profit growth of over 24 percent, particularly when it is not caused by a cyclical effect or by an upturn after disappointing figures in earlier years,” he said at the company’s annual performance review. “This is the 16th consecutive year of double-digit growth,” he added, referring to the net profits for the year 2000 of $940 million.
All dollar figures are converted at current exchange rates.
Owen-Jones said L’Oreal’s strong performance was propelled primarily by its 12 main brands’ sales, its extensive geographic reach and fruitful acquisitions.
The company reported group consolidated first-quarter sales were up by 12.7 percent, to $3.06 billion. Currency fluctuations had a positive impact of 1.2 percent.
At comparative group structure and constant exchange rates, the group’s consolidated sales would have been up 7.7 percent. Excluding currency fluctuations, the figure would have been up 11.5 percent.
The cosmetics division posted a 12.9 percent increase in sales for the period; at constant exchange it would have been up 11.7 percent. Owen-Jones said part of the group’s strength stems from solid growth in all its product categories: In the cosmetics division, consumer products registered an increase of 14.8 percent, to $6.07 billion; luxury products’ sales were up 19.8 percent, to $3.05 billion, professional products’ results spiked 27.7 percent, to $1.37 billion, and active cosmetics’ volume rose 15.1 percent, to $516.6 million. The consolidated cosmetics group’s sales were up 17.5 percent year-on-year.
By geographic zone, cosmetics sales grew 6 percent, to $5.61 billion, in Western Europe; 31.4 percent, to $3.36 billion, in North America, and 17.3 percent, to $2.12 billion in the rest of the world. Impressive growth figures were posted in Korea, up 70 percent, Russia (47 percent) , and Brazil (44 percent).
In Japan, Maybelline ranked number one in the mass-market makeup category for the first time, while the Lancome and Helena Rubinstein brands chalked up strong sales in department stores there.
Other acquisitions last year included Matrix, Carsons — which has been fused with Soft Sheen — and Kiehl’s in the U.S. The link with Shu Uemura marks the first time that L’Oreal has taken a stake in an Asian brand and will be used as a first step toward building a third creative pole, after Paris and New York, said Owen-Jones. L’Oreal has a 35 percent stake of Uemura.
The Internet is being used by L’Oreal as a means to diffuse information and for e-commerce. In one month, the company will launch an interactive site called Easy Make Up, where consumers can send digital photographs of themselves for virtual makeovers, said Patrick Rabain, vice president in charge of the consumer products division. The Club des Createurs de Beaute, meanwhile, rang up some 26 percent of its sales on the Internet last year. L’Oreal will continue to work with its retailers to do online shop-in-shops and also start e-tailing more company brands outside of the U.S.

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