PARIS — L’Oréal envisions a beautiful ending for 2003.
The firm expects to reach its objective of registering a 7 to 9 percent sales increase on a constant basis for the year, confirmed Lindsay Owen-Jones, L’Oréal’s chairman and chief executive officer, at a meeting held for analysts and journalists Tuesday. He added the gain will probably be “toward the lower end of that spread.”
The company also is bullish about achieving double-digit earnings growth.
L’Oréal’s net operational profit after minority interests rose 14.9 percent in the period to $982.2 million at current exchange rates, or 908.4 million euros, versus $854.9 million, or 790.6 million euros, in the same half last year.
Operating profits for the first half of 2003 rose 2 percent to $1.12 billion, or 1.04 billion euros, year on year. Adjusted operating profits — including exchange gains and losses — were up 9 percent to $1.22 billion, or 1.13 billion euros.
As reported, L’Oréal’s first-half sales fell 3.2 percent, to $7.72 billion, or 7.14 billion euros. On a like-for-like basis, they rose 7.1 percent.
“Obviously, [the results] are very encouraging from my viewpoint,” Owen-Jones said, adding they’re “in line with expectations.” However, he repeated frequently throughout the meeting that such numbers cannot be directly extrapolative for the year as a whole.
Among other subjects he discussed were:
- L’Oréal’s stake in Sanofi-Synthelabo. The French beauty giant, which holds a stake of less than 20 percent in the pharmaceutical concern, and Total, which owns about 24 percent, can liquidate their shareholder pact in December 2004. “At the end of 2004, there might no longer be a shareholder pact, but we might still be shareholders,” said Owen-Jones.
- North America. “The good news is there has been a slight return to joie de vivre [there],” he said. Owen-Jones also lauded the well-received introductions of Garnier’s Fructis shampoo on the continent.
- Second-half product launches. Numerous L’Oréal brands, such as Lancôme and Cacharel, are gearing up to introduce products in the third and fourth quarters of 2003. These are expected to help spur yearend sales.
— Jennifer Weil
P&G Closes Wella Deal
NEW YORK — Procter & Gamble has closed on the stock purchase agreement with the family shareholders of Wella AG, officially becoming the new majority shareholder of the Darmstadt, Germany-based hair care company.
Following closing on a tender offer on Sept. 10, P&G will own 98.1 percent of Wella voting shares and 79.2 percent of total company shares. The deal is P&G’s largest acquisition, with estimates on the price tag, including debt, approaching $7 billion.
The deal also has been replete with drama. Since P&G announced its proposal to buy Wella on March 19, the consumer products company has hurdled disagreements on the purchase price of the 123-year-old Wella, tackled motions filed by Wella shareholders aiming to block the purchase and contended with rivals such as Henkel, which purchased 6.9 percent of Wella before March 19 in an attempt to spurn off suitors. P&G also never was able to acquire the necessary 95 percent-plus of total company shares to run Wella as a private company.
As a result of the closing, four shareholders on Wella’s supervisory board have resigned. They are: Thomas Olbricht, chairman of the supervisory board; Ulrike Crespo; Sylvia Ströher, and Tilman Pohl.
Synergy potential of about $325.6 million is expected for both companies, realized mainly from lower manufacturing costs, lower media buys and a consolidation of back-office and administrative businesses, including accounting. Wella, which will continue to be a legally independent and publicly listed stock corporation, remains operating from its Darmstadt offices. P&G’s offices in Germany will remain, too.
— Andrea M.G. Nagel
Unilever Sells Brut Brand
NEW YORK — Unilever has agreed to sell the Brut brand of male personal care products to Helen of Troy Ltd. for $55 million in cash.
The deal, which includes Brut’s fragrance, antiperspirant and deodorant products in the Americas, is expected to be completed in the fourth quarter of calendar 2003, and is subject to regulatory approvals.
The brand had combined sales of $45 million in 2002, and Helen of Troy expects it to generate sales of roughly $40 million over the next 12 months.
— Jennifer Weitzman