CAGNY

February 24th, 2017

Jean-Paul AGON
Chairman and CEO
 .1
WHO WE ARE

February 24th, 2017

 PURE
PLAYER
IN BEAUTY #1
BEAUTY
COMPANY
WORLDWIDE

February 24th, 2017

 A GLOBAL
LEADER

25.8 billion
sales in 2016

12.6% market share *

140 countries
7 billion products sold

89,000 employees

*EXCLUDING SOAPS, RAZORS AND TOOTHPASTES. LORAL ESTIMATES February 24th, 2017
OUR MISSION
BEAUTY
FOR ALL

OUR
STRATEGY
UNIVERSALIZATION

GLOBALIZATION
THAT CAPTURES,
UNDERSTANDS
AND RESPECTS
DIFFERENCES

February 24th, 2017

 ALL CHANNELS
ALL CATEGORIES
ALL PRICES

HAIR DEPARTMENT PHARMACIES

AND BEAUTY MASS STORES DRUGSTORES BRANDED TRAVEL
SALONS MARKET PERFUMERIES MEDISPAS RETAIL RETAIL E-COMMERCE

ACROSS ALL
DISTRIBUTION
CHANNELS

ACROSS
ALL BEAUTY
CATEGORIES

HAIRCARE HAIR COLOR SKINCARE FRAGRANCE MAKE-UP

February 24th, 2017

 PROFESSIONAL CONSUMER L'ORAL ACTIVE
PRODUCTS PRODUCTS LUXE COSMETICS

UNIQUE FLOTILLA
OF
COMPLEMENTARY
BRANDS

February 24th, 2017

 ACQUISITIONS
BOLSTERING
OUR FLOTILLA AND
OF BRANDS FOSTERING
OUR FUTURE *

Consolidated ORGANIC
sales (m)
GROWTH

1967 1980 1985 1990 1995 2000 2005 2010 2015

*AGREEMENT TO ACQUIRE February 24th, 2017

 A SIGNIFICANT
AMERICAN
FOOTPRINT
MORE AS MANY
SALES IN AMERICAN AS
US DOLLARS THAN EUROPEAN
IN EUROS BRANDS

27.3%
US Dollar

24.7%
Euro

WEIGHT IN 2016
CONSOLIDATED SALES
48%
Others

*AGREEMENT TO ACQUIRE February 24th, 2017

 850M
DEDICATED
TO R&I
IN 2016 3,862
R&I
A UNIQUE EXPERTS
RESEARCH
& INNOVATION
POWER
130
MOLECULES
IN 40 YEARS

February 24th, 2017

 89,000 TALENTS
PASSIONATE
ABOUT
BEAUTY

PEOPLE
OVER
ENTREPRENEURIAL PROCESSES
SPIRIT

February 24th, 2017

7TH YEAR
ONE OF THE MOST ETHICAL
COMPANIES IN THE WORLD

#1
PERSONAL & HOUSEHOLD
GOODS CATEGORY
#2
GLOBAL COMPANIES
FOR ALL INDUSTRIES
COMBINED

February 24th, 2017

 STRATEGICALLY
CONCENTRATED
OPERATIONALLY
DECENTRALIZED

UNIQUE
ORGANIZATION

February 24th, 2017

 BALANCED
BUSINESS
MODEL
2016 2016
OPERATING MARGIN OPERATING MARGIN
BY REGION* BY DIVISION*
(as a % of sales) (as a % of sales)

22.9% 23.2%
20.3% 20.2% 21.2%
19.6% 19.7% 20.7%**

WESTERN NORTH NEW PROFESSIONAL CONSUMER LORAL ACTIVE

EUROPE AMERICA MARKETS PRODUCTS PRODUCTS LUXE COSMETICS

*BEFORE CENTRAL GROUP EXPENSES, FUNDAMENTAL RESEARCH EXPENSES, STOCK OPTIONS AND FREE GRANT OF SHARES AND MISCELLANEOUS ITEMS
**DIVISIONS TOTAL February 24th, 2017
 SUSTAINED
GROWTH *
SALES
SINCE 1986 25,837
IN MILLION
EUROS
X11
IN 30 YEARS

2,372

1986 2016

*EXCLUDING SYNTHLABO FROM 1986 TO 1998 February 24th, 2017

 SUSTAINED
PROFIT INCREASE *
3,647
NET PROFIT
SINCE 1986
IN MILLION
EUROS
X27
IN 30 YEARS

133

1986 2016
*NET OPERATING PROFIT, EXCL. NON-RECURRING ITEMS ATTRIBUTABLE TO OWNERS OF THE COMPANY, WITH SYNTHLABO CONSOLIDATED FULLY UP TO 1998; NET PROFIT EXCL.
NON-RECURRING ITEMS ATTRIBUTABLE TO OWNERS OF THE COMPANY, WITH SANOFI-SYNTHLABO EQUITY CONSOLIDATED FROM 1999 TO 2004; NET PROFIT EXCL. NON-RECURRING
ITEMS ATTRIBUTABLE TO OWNERS OF THE COMPANY INCLUDING SANOFI DIVIDEND FROM 2004; IFRS SINCE 2005 February 24th, 2017
 DOUBLE-DIGIT
TSR
ANNUAL TOTAL
SHAREHOLDER
+18.7%
RETURN*

+10.5% +10.8%

20
YEARS
10
YEARS
5
YEARS

*TAKES INTO ACCOUNT THE VALUE OF THE SHARE AND THE DIVIDEND INCOME RECEIVED (EXCLUDING TAX CREDITS). AT DECEMBER 31ST 2016 February 24th, 2017
 LONG-TERM
STRATEGIC
PERSPECTIVE
A SOLID
SHAREHOLDER
BASE *

23.1%
33.0% Nestl
Bettencourt
Meyers family

0.5%
Treasury
stock

43.4%
Free float

*AT 31 DECEMBER 2015 February 24th, 2017

 A HIGH
POTENTIAL
LEADER WORLDWIDE
MARKET SHARE AND
MARKET SHARE
-------
RANKING BY
GEOGRAPHIC
ZONE 2016* 12.6%

NORTH AMERICA WESTERN EUROPE

14.0% 20.2%
N1 N1

MARKET SHARE
IN NEW MARKETS AFRICA, MIDDLE EAST** LATIN AMERICA EASTERN EUROPE ASIA, PACIFIC
-------
13.0% 8.8% 12.8% 9.5%
8.5% N2 N4 N1 N1
EXCL. JAPAN

*EXCLUDING SOAPS, RAZORS AND TOOTHPASTES. LORAL ESTIMATES

RANKING BASED ON EUROMONITOR 2015 FIGURES
**IN THE COUNTRIES WHERE LORAL IS PRESENT February 24th, 2017
 .2
2016
A GOOD YEAR

February 24th, 2017

 GROWTH
ACCELERATION OUTPERFORMANCE
VS. MARKET

+ 4.7% * +4.7% *

+ 3.9 %* +4%**

2015 2016 MARKET LORAL

*LIKE-FOR-LIKE SALES GROWTH
**EXCLUDING SOAPS, TOOTHPASTES AND RAZORS.
2016 PROVISIONAL ESTIMATES. SOURCE: LORAL ESTIMATES. EXCLUDING EXCHANGE RATE IMPACT February 24th, 2017
 MARKET SHARE
GAINS IN OUR
3 STRATEGIC
REGIONS

NORTH AMERICA WESTERN EUROPE NEW MARKETS

+5.8 %* +2.4 %* +6.3 %*

Market**: +4 % Market**: +1 % Market**: +5%

X3
COMPETITOR #2

*2016 LIKE-FOR-LIKE TOTAL DIVISIONS SALES GROWTH

**EXCLUDING SOAPS, TOOTHPASTES AND RAZORS.
2016 PROVISIONAL ESTIMATES. SOURCE: LORAL ESTIMATES. EXCLUDING EXCHANGE RATE IMPACT February 24th, 2017
 CONSUMER LORAL
PRODUCTS LUXE

+4.4 % * +6.9 % *

Market**: +4% Market**: +5.5%

PROFESSIONAL
PRODUCTS

ACTIVE
COSMETICS 3 DIVISIONS
OUT OF 4
+5.7 % * OUTPERFORMED
Market**: +4.5%
THEIR MARKET

+1.8 % *

Market**: +2%

*2016 LIKE-FOR-LIKE SALES GROWTH

**EXCLUDING SOAPS, TOOTHPASTES AND RAZORS.
2016 PROVISIONAL ESTIMATES. SOURCE: LORAL ESTIMATES. EXCLUDING EXCHANGE RATE IMPACT February 24th, 2017
 CONTINUED
MARKET SHARE
GAINS

UNIQUE PORTFOLIO OF ICONIC BRANDS

FAST PACE OF GREAT INNOVATIONS

PERFECT OPERATIONAL EXECUTION

February 24th, 2017

CONSUMER
PRODUCTS REINVENTED
ITSELF

MAXIMIZATION OF MAKE-UP

ROLL-OUT OF NYX PROFESSIONAL MAKE-UP

DEPLOYMENT OF GARNIER ULTRA-DOUX

February 24th, 2017

 ACTIVE LEADS
COSMETICS DERMOCOSMETICS
SKINCARE

STRATEGIC ACQUISITION*

*AGREEMENT TO ACQUIRE February 24th, 2017

 PROFESSIONAL
PRODUCTS

2017

PICK-UP OF THE HAIR COLOR MARKET

FULL DEPLOYMENT OF 2016 LAUNCHES

February 24th, 2017

 4 NEW STRATEGIC Perfect complement
ACQUISITIONS to our make-up artist
brands

Enhances our position

in the fast-growing segment
Expands of alternative perfumery
Active Cosmetics
potential.
x2 turnover of the
division in the US
Taps into new aspirations
in skincare

*AGREEMENT TO ACQUIRE February 24th, 2017

COMPELLING OPERATING EARNINGS NET
SET OF MARGIN PER SHARE** CASH FLOW*
RESULTS
+20BP
(IN EUROS) (IN MILLION EUROS)

+4.6% +9.5%
3,318
17.6%
17.4% 6.46

6.18
3,031

2015 2016 2015 2016 2015 2016

*NET CASH FLOW: GROSS CASH FLOW - CHANGES IN WORKING CAPITAL - CAPITAL EXPENDITURE
**DILUTED EARNINGS PER SHARE, BASED ON NET PROFIT, EXCLUDING NON-RECURRING ITEMS, AFTER NON-CONTROLLING INTERESTS. February 24th, 2017
 A DYNAMIC
DIVIDEND POLICY *
DIVIDEND PER
+6.5%
vs 2015
3.30
SHARE SINCE 1963 LOYALTY 3.10
IN EUROS
BONUS
-------

+10% 2.70
2.50
Dividend 2.30
increase
for shareholders 2.00
who have continuously
held shares in registered 1.80
form for at least
two years

0.44

0.008 0.025 0.097

Shiseido*

Avon*

Kao
J&J*

Chanel*

LVMH

Brands*
Este
Lauder*

Beiersdorf*

Coty
Limited

Henkel
Unilever*

P&G*

1980
1970

1990

2000

2010
1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

*PROPOSED AT THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 20TH, 2017 February 24th, 2017
 PAYOUT RATIO
FROM 1997
TO 2016 51.1 %**
(AS A % OF NET
P R O F I T *)
50.6% 50.2%

48.7%

46.8%
46.3%
44.9%
43.9%

41.1% 41.3%
39.6%
38.5%

36.6% 36.8%
35.7% 36.0%

33.6%

31.6%
30.2%
29.1%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

*TAKING INTO ACCOUNT THE SANOFI HISTORY WITH REGARDS TO THE DIVIDENDS
**BASED ON THE DIVIDEND PROPOSED AT THE SHAREHOLDERS MEETING TO BE HELD ON APRIL 20TH, 2017 February 24th, 2017
 FAST PACE OF
TRANSFORMATION

February 24th, 2017

 TRANSFORMATION #1: DIGITAL

INCREASED
DIGITAL
LEAD
CLEAR
STRATEGIC
DIRECTION
DECENTRALIZED,
AGILE
EXECUTION

February 24th, 2017

 TRANSFORMATION #1: DIGITAL

LORAL
LEADING
E-COMMERCE
+ 33 %*
SALES
GROWTH

* EQUIVALENT
1.7Bn TO OUR
SALES
4 th
COUNTRY

*LIKE-FOR-LIKE SALES GROWTH. SALES ACHIEVED ON OUR BRANDS OWN WEBSITES AND ESTIMATED SALES ACHIEVED BY OUR BRANDS CORRESPONDING TO SALES THROUGH
RETAILERS WEBSITES (NON AUDITED DATA) February 24th, 2017
 TRANSFORMATION #1: DIGITAL

LORAL
CHINA
X 2 #1 IN
E-COMMERCE

OF TOTAL
GROUP
SALES

COMPETITOR COMPETITOR COMPETITOR COMPETITOR

#1 #2 #3 #4

SOURCE: SMARTPATH E-COMMERCE PANEL, 2016 YTD NOV February 24th, 2017
 TRANSFORMATION #1: DIGITAL

OPTIMIZING
OUR COMMUNICATION
3rd WORLDWIDE AND MEDIA
ADVERTISER* EFFICIENCY
32% PRECISION
OF OUR MEDIA ADVERTISING
IN DIGITAL

THE MOST ENGAGING CONTENT

THE MOST RELEVANT CONTEXT
AT THE RIGHT TIME
TO THE RIGHT TARGET

*ADAGE 2014 February 24th, 2017

 TRANSFORMATION #1: DIGITAL

SIGNIFICANT
INVESTMENT
IN TALENT
1,600
DIGITAL
EXPERTS

14,000
UP-SKILLED

February 24th, 2017

 TRANSFORMATION #2: OPERATIONS
ADVANCES IN
MANUFACTURING
AND SUPPLY
CHAIN INDUSTRY 4.0

NEW MORE
PROTOTYPING INDUSTRIAL REACTIVE
TECHNIQUES PLATFORMS SUPPLY
CHAIN

February 24th, 2017

 TRANSFORMATION #3: SUSTAINABLE DEVELOPMENT
PROFOUND
TRANSFORMATION
IN SUSTAINABLE
DEVELOPMENT

1 OF ONLY 2
COMPANIES
WORLDWIDE
WITH 3 As

February 24th, 2017

 TRANSFORMATION #3: SUSTAINABLE DEVELOPMENT

2016
RESULTS

82% of new products
have an improved
environmental or social profile
Dissociate our growth from
our environmental impact
-67% reduction in CO2 emissions
from plants and distribution
centres since 2005
More than 67,000 people
from underprivileged
communities were provided
access to work

+29% production increase

February 24th, 2017
 .3
BRIGHT
PROSPECTS
FOR THE FUTURE

February 24th, 2017

 THE WORLD
IS CHANGING AT
AN AMAZING SPEED

THE DAWN OF
A NEW WORLD OF BEAUTY

February 24th, 2017

 A NEW
GOLDEN ERA
FOR BEAUTY

MORE THAN 2 Tn
PICTURES SHARED
PER YEAR

February 24th, 2017

 THE ERA
OF SOCIAL
BEAUTY

APPEARANCE
SELF-EXPRESSION
SOCIAL SHARING
SELF-ESTEEM
February 24th, 2017
 CONSUMERS
WANT
MORE LARGER
BEAUTY SHARE OF
INCOME SPENT
ON BEAUTY

2.41%
ESTIMATED SHARE OF PERSONAL CARE IN
CONSUMER EXPENDITURE (WORLD)

2.35%
2.33%

1996 2006 2016

SOURCE: EUROMONITOR 2016 (RELEASED IN MARCH 2016) February 24th, 2017

 NEW
CONSUMERS
ASPIRATIONS
MORE INNOVATIONS
NEW, DIFFERENT,
BETTER
PRODUCTS A COMMITMENT TO PREMIUMIZATION
QUALITY, EFFICACY, BEAUTY IS THE CATEGORY
SAFETY, WITH THE HIGHEST
SINCERITY TRADE-UP
RATE*

*SOURCE: MCKINSEY GLOBAL CONSUMER SENTIMENT SURVEY, 2016 February 24th, 2017
 NEW
CONSUMERS
EXPECTATIONS

MORE BEST
PERSONAL CUSTOMIZED IMMERSIVE
RELATIONSHIP ADVICE SHOPPING
WITH AND NEW EXPERIENCE
BRANDS SERVICES

February 24th, 2017

 LOREAL IS
UNIQUELY POSITIONED
TO DRIVE AND LEAD
THIS EXCITING
NEW WORLD
OF BEAUTY

February 24th, 2017

 ASSET #1: SUPERIORITY IN R&I
SUPERIORITY
IN R&I

LEADING HUBS
IN QUALITY, DIGITALIZATION OF ADAPTED TO
EFFICACY LABORATORIES A MULTIPOLARIZING
AND SAFETY WORLD

February 24th, 2017

 ASSET #1: SUPERIORITY IN R&I
UV
PATCH
NEW
SERVICES

MAKEUP
GENIUS

CONNECTED
BRUSH

February 24th, 2017

 ASSET #2: ABILITY TO SPOT TRENDS
QUICK TO SEIZE
AND LEVERAGE
TRENDS

MAKE-UP NATURAL PERSONALIZATION

February 24th, 2017

 ASSET #2: ABILITY TO SPOT TRENDS

MAXIMIZING
THE MAKE-UP
BOOM
+15 %**

+8 %*

+4 %*

BEAUTY MAKE-UP LORAL

MARKET CATEGORY MAKE-UP

*EXCLUDING RAZORS, SOAPS AND TOOTHPASTES. 2016 PROVISIONAL ESTIMATES

SOURCE: LORAL ESTIMATES. EXCLUDING EXCHANGE RATE IMPACT
**2016 LIKE-FOR-LIKE SALES GROWTH February 24th, 2017
 ASSET #3: DIRECT-TO-CONSUMER RELATIONSHIP

CUTTING-EDGE
DIRECT-TO-CONSUMER
RELATIONSHIP

1 Bn
VISITS
ON OUR BRAND DATA
WEBSITES AND ASSETS
SOCIAL MEDIA
PAGES COMPETITIVE
ADVANTAGE

February 24th, 2017

 ASSET #3: DIRECT-TO-CONSUMER RELATIONSHIPS
AT LEAST
2 LORAL BRANDS
IN THE TOP 5
L2 DIGITAL IQ

L2 DIGITAL IQ INDEX: BEAUTY 2016 February 24th, 2017

 ASSET #4: AGILITY TO ADAPT CHANNELS

ADJUSTING OUR
DISTRIBUTION
FOOTPRINT

EXPLORING
OPPORTUNITIES OF
DIRECT-TO-CONSUMER
CHANNELS

February 24th, 2017

 2017
BEAUTY MARKET
ESTIMATE
+4%

OUTPERFORM ANOTHER
THE MARKET, YEAR OF INCREASE
IN EVERY DIVISION IN SALES
AND REGION AND PROFITS

February 24th, 2017

-------------------------Disclaimer -------------------------
"This document does not constitute an offer to sell, or a solicitation of an offer to buy, LOral shares. If you wish to obtain more comprehensive information about LOral, please refer to
the public documents registered in France with the Autorit des Marchs Financiers (which are also available in English on our Internet site: www.loreal-finance.com).This document may
contain some forward-looking statements. Although the Company considers that these statements are based on reasonable hypotheses at the date of publication of this release, they are
by their nature subject to risks and uncertainties which could cause actual results to differ materially from those indicated or projected in these statements."
February 24th, 2017
THANK QUESTIONS
YOU

February 24th, 2017