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Submitted In Partial Fulfillment Of The Requirements For BBA (GENERAL) Semester VI Programme Of G.G.S Indraprastha University, Delhi.
Submitted By (Jatin Sukhija) (BBA (General) ± Semester ±VI) Enrl.No:0581241708 DELHI INSTITUTE OF RURAL DEVELOPMENT NANGLI PUNA, DELHI -36
Declaration I here by declare that the major project report , entitled ³Loreal: The biggest cosmetic comapany´, is based on my original study and has not been submitted earlier for award of ant degree or diploma to any institute or university.
Place: New Delhi Date: 4th April 2011
Candidate signature name: Jatin Sukhija Enrl.no: 0581241708
Countersigned Name: Ashima Verma Supervisor Name:Dr. J.P Varshney Director Delhi Institute Of Rural Development Of Rural Development
I owe a great many thanks to a great many people who helped and supported me during the writing of this book.
My deepest thanks to Lecturer, [Ashima Verma] the Guide of the project for guiding and correcting various documents of mine with attention and care. He has taken pain to go through the project and make necessary correction as and when needed.
Acknowledgement 4.Contents 1.Annual report for 2010 11.Declaration 3.Contents 5.Introduction 6.L¶ORÉAL brands 7..Future prospects and references 10.Strategic analysis 8. Title page 2.Conclusions/ Recommendations .Outlook and objectives 9.
Concentrating on hair colour. it has developed activities in the field of cosmetics. Hauts-de-Seine. L'Oréal is a listed company. History In 1907. skin care. developed a hair dye formula called Auréole. Schueller registered his company. a young French chemist. sun protection. Eugène Schueller. France. make-up.Introduction The L'Oréal Group is the world's largest cosmetics and beauty company. The guiding principles of the company. but the founder's daughter Liliane Bettencourt and the Swiss food company Nestlé each control over a quarter of the shares and voting rights. which eventually became L¶Oréal. which he then sold to Parisianhairdressers. the Société Française de Teintures Inoffensives pour Cheveux ("Safe Hair Dye Company of France" literally "French Society of Inoffensive Hair Dyes"). perfumes and hair care. . the original L¶Oréal. In 1909. the company is active in the dermatological andpharmaceutical fields and is the top nanotechnology patent-holder in the United States. were research and innovation in the field of beauty. Schueller formulated and manufactured his own products. With its registered office in Paris and head office in the Paris suburb of Clichy.
The company's products are found in a wide variety of distribution channels. makeup and fragrances.In 1920. L¶Oréal got its start in the hair-color business. L¶Oréal currently markets over 500 brands and many thousands of individual products in all sectors of the beauty business: hair color. from hair salons and . By 1950. that number reached 1. the research teams were 100 strong. the small company employed three chemists. but the company soon branched out into other cleansing and beauty products.000 by 1984 and is nearly 2.000 today. hair styling. cleansers. body and skin care. permanents.
L'Oréal controlled the film company Paravision. In the UK. one in Japan: Kawasaki. The company has recently faced discrimination lawsuits in France related to the hiring of spokesmodels and Institutional racism. The shift to "we" was made to create stronger consumer involvement in L'Oréal philosophy . In the mid 2000s. A future facility in the US will be in Berkeley Heights. A book by Monica Waitzfelder.and supermarkets. details how L'Oréal.perfumeries to hyper . From 1988 to 1989. one was established in Shanghai. one in the U. L¶Oréal has five worldwide research and development centers: two in France: Aulnay and Chevilly. this was replaced by "Because you're worth it". Kanagawa Prefecture.: Clark.S. On 17 March 2006. published in French as L'Oréal a pris ma maison and in English as L'Oréal stole my house!. whose properties included the Filmation and De Laurentiis libraries. a company claimed to be anti-Semitic by the author. In late 2009. L'Oréal's famous advertising slogan is "Because I'm worth it". Sanofi-Synthélabo merged with Aventis in 2004 to become Sanofi-Aventis. took over the Waitzfelder home in the German city of Karlsruhe (after the Nazis had engineered the removal of the family) to make it its German headquarters. health/beauty outlets. L'Oréal has faced widespread condemnation from OFCOM regarding truth in their advertising and marketing campaigns concerning the product performance of one of their mascara brands. New Jersey. the slogan was changed again to "Because we're worth it" following motivation analysis and work into consumer psychology of Dr. Maxim Titorenko. StudioCanal acquired the Paravision properties in 1994. L¶Oréal purchased Synthélabo in 1973 to pursue its ambitions in the pharmaceutical field. New Jersey. Synthélabo merged with Sanofi in 1999 to become Sanofi-Synthélabo. L'Oréal purchased cosmetics company The Body Shop for £652 million. and in 2005. pharmacies and direct mail. China.
Protest group Naturewatch states that L'Oréal continues to test new ingredients on animals. In 2010 significant growth occurred at Indonesia with 61 percent increase of unit sales or 28 percent of net sales. though they implicitly acknowledge that they continue to perform animal testing of ingredients. The company states that no animal testing for finished products has taken place since 1989 and that L'Oreal has invested significantly in alternative methods for chemical safety testing. calls were made for shoppers to boycott The Body Shop. The production will be absorbed 25 percent by domestic market and the rest will be exported. February 2011: L'Oreal will has the largest factory in the Jababeka Industrial Park. Following L'Oréal's purchase of The Body Shop. L'Oréal also owns a Hair and Body products line for kids called L'Oréal Kids. The Body Shop founder Dame Anita Roddick was forced to defend herself against allegations of abandoning her principles over L'Oréal's track record on animal testing. As a result. She declared that her belief in the power of cosmetics to enhance female beauty was greater than any concern over animal testing. Indonesia with total investment of US$50 million and it will be ready in October 2011.and lifestyle and provide more consumer satisfaction with L'Oréal products. Business . . Cikarang. In 1987. the slogan for which is "Because we're worth it too". who continue to be against animal testing. L'Oréal and 3 Suisses founded Le Club des Créateurs de Beauté specializing in mail order sales of cosmetic products.
L¶Oréal USA Béatrice Dautresme. EVP of Finances Jean-Jacques Lebel. Françoise Bettencourt Meyers. Lindsay OwenJones. Note thePiet Mondrian-esque design. Peter BrabeckLetmathe. Chief Executive Officer. Management committee The management committee includes: Jean-Paul Agon. Bernard Kasriel. President of Professional Products Geoff Skingsley. Annette Roux and Louis Schweitzer. EVP of Corporate Communications Jean-François Grollier. Franck Riboud. Francisco Basco. Corporate governance Board of directors Current members of the board of directors of L¶Oréal are: JeanPaul Agon. Chief Executive Officer Frederic Roze. Jean-Pierre Meyers. Liliane Bettencourt. President of Consumer Products Nicolas Hieronimus. Marc Lacharrière. Charles-Henri Filippi. Werner Bauer. EVP of Human Resources Marc Menesguen. Xavier Fontanet. President of Luxury Products Stockholders As at year end 2009: . EVP of Research and Development Christian Mulliez.L'Oréal Paris hair gel.
7% of sales derived from cosmetic activities and 2.Breakdown of share ownership: 31. profits.029 bn and net profit was ¼1. the world's number 3 and Europe's number 1 pharmaceutical company. In 2003.0% by the Bettencourt family. It operates 42 manufacturing plants throughout the world.221 bn.9 bn.749 bn. In 2007. 29. 24% of which work in France. and 5.500 people.7% from Western Europe at ¼7. 2.585 million on sales of $19.811 million. Joint ventures and minority interests L¶Oréal holds 10.506 bn.5% from dermatological activities.900 of its employees. There were 60. which accounts for 2. 96.7% from rest of the world at ¼2. 25.4% treasury shares. which employ 14. In 2003.441 bn. Community involvement and awards .000 people.1% from luxury products at ¼3. employing 50.3% of consolidated sales is invested in research and development.41% of the shares of Sanofi-Aventis. 3. The Laboratoires Innéov is a joint venture in nutritional cosmetics between L¶Oréal and Nestlé. it applied for 515 patents. and the remaining 36.6% from North America at ¼3. etc. L¶Oréal announced its 19th consecutive year of double-digit growth.5% from active cosmetics at ¼0. The company had earned $2. L¶Oréal has operations in over 130 countries. they draw on L¶Oréal's knowledge in the fields of nutrition and food safety. Cosmetic sales by geographic zone breakdown: 52. 19.9% from professional products at ¼1.8% from consumer products at ¼7. Its consolidated sales was ¼14. Cosmetics sales by division breakdown: 54. 13.653 bn.699 bn.8% is public Sales. 27.784 bn. Galderma is another joint venture in dermatology between L'Oréal and Nestlé. L¶Oréal was ranked 353 in the Fortune Global 500.850 employees.8% by Nestlé.
allegedly told Yanowitz to fire a dark-skinned sales associate despite the associate's good performance.000 students. L'Oréal organizes every year the L'Oréal Brandstorm. Scientific and Cultural Organization (UNESCO) and carry a grant of $100. the Supreme Court of California ruled that former L'Oréal sales manager Elyse Yanowitz had adequately pleaded a cause of action for retaliatory termination under the California Fair Employment and Housing Act.000 USD in funding over two years to fifteen young women scientists engaged in exemplary and promising research projects.000.000 USD for each laureate. and other litigation On August 11.000 and a third prize of $2500. The L'Oréal-UNESCO Awards for Women in Science was established to improve the position of women in science by recognizing outstanding women researchers who have contributed to scientific progress.  The same partnership awards the UNESCO-L'Oréal International Fellowships. The game is related to marketing and has a first prize of $10. The awards are a result of a partnership between the French cosmetics company L'Oréal and the United Nations Educational." Wiswall retired as president of the luxury products division of L'Oréal USA at the end of 2006.In 2008. Claims of racial discrimination in advertising. providing up to $40. . 2005. L'Oréal was named Europe's top business employer by The European Student Barometer. a survey conducted by Trendence that covers 20 European countries and incorporates the responses of over 91. Wiswall pointed to a "sexy" blonde-haired woman and said. get me one that looks like that. When Yanowitz refused. and remanded the case for trial. The case arose out of a 1997 incident in which Jack Wiswall. then the general manager for designer fragrances. a second prize of $5. an acknowledged business game for students in 43 countries. "God damn it.
Garnier was ranked in the 61st position in the list of Most Trusted brands of India. near Paris. Hauts-de-Seine. They also failed to state that the model was wearing false eyelashes. and active cosmetics markets. such as the mass. . In July 2007. L'Oréal is reported as saying the decision was "incomprehensible".L'Oreal's product. luxury. In July 2007." In fact. reached the top 100 brands of The Brand Trust Report published by Trust Research Advisory in India. Brands Brands are generally categorized by their targeted markets.In May 2007. France L'Oréal Group has its head office in the Centre Eugène Schueller in Clichy. The building. the British Advertising Standards Authority attacked L'Oréal for a television advert on its ³Telescopic´ mascara. professional.000 for recruitment practices that intentionally excluded non-white women from promoting its shampoo. in Clichy. "Fructis Style". and would challenge the measure in court. Garnier . Head office Centre Eugène Schueller. L'Oréal was one of several cosmetic manufacturers ordered by the Therapeutic Goods Administration in Australia to withdraw advertising regarding the wrinkle removal capabilities of their products. by separating and thickening at the roots and by thickening the tips of the lashes. L'Oréal head office. featuring Penélope Cruz. stating "it will make your eyelashes 60% longer. it only made the lashes look 60% bigger. the Garnier division and an external employment agency were fined ¼30.
1. the customers are used as test subjects for new hair colours. with its brown glazed façade of windows. L'Oréal USA has its headquarters in New York City. and employees moved into the facility in 1978. As of 2005. per day. and unemployed people." Klawitter added that the facility "gives the impression of a high-security zone" due to the CCTV cameras and security equipment.constructed in the 1970s from brick and steel. is every bit as ugly as its neighborhood. 90 hairdressers served 300 women. students. its New Jersey headquarters is in Berkeley Heights L¶ORÉAL brands Consumer Brands: L'ORÉAL Paris Garnier SoftSheen-Carson Maybelline New York Le Club de Createurs Professional Products: Kérastase L'ORÉAL Professional . The world's largest hair salon is located inside the head office building. In 2005 Nils Klawitter of Der Spiegel said "the building.400 employees work in the building. including retirees. The building is often referred to as the "Beauty Factory" by the public. replaced the former Monsavon factory.
Matrix Redken .
Strategy Analysis of L'Oreal Strategy analysis focuses on the long-term objective generating alternative strategies.L¶Oreal has numerous competitors. couple with the external andinternal audit information. and selecting strategies to pursue. They will also prevent competitors to have an advantage over L¶Oreal. ST Strategies and WT Strategies. It is known as the TOWS matrix.This report will be based upon the effectiveness of current strategies of L¶Oreal. Theexternal opportunities and threats were identified earlier (see part 1) by developing the ³External Factor Evaluation Matrix´ and ³Competitive Pro . To have an advantage on competition. a real global leader in every segment of the industry. L¶Oreal has to apply some strategies that include internal audit information and external opportunities that will make the company stronger.L¶Oreal encounters threats and opportunities and they have weaknesses and strengths. objectives and mission. The firm¶s present strategies. WO Strategies. It is an important matching tool that helps managers develop four types of strategies: SO Strategies. provide a basis for generating and evaluating feasible alternative strategies (David 200).
"L"tmOreal: The Beauty of Global Branding" Business Week. Exchange rate fluctuations, still positive at 0. With the global expansion, new innovations and the Internet strategy, it will definitely increase the sales and automatically more profits. It has adapted to every particular environment. INPLEMENTATIONL"tmOreal has opened the last door to the world. To achieve that, they provide training for employees throughout the world that joins them. ST StrategiesST strategies use a firm"tms strengths to avoid or reduce the impact of external threats. EFFECTIVENESS OF STRATEGIESL"tmOreal capitalize on opportunities in the global market. That makes L"tmOreal competitors more hustling to catch up. file Matrix" is important for the current strategies development. In 2001, the group made two acquisitions: BioMedic, which specializes in skin care products to accompany
dermatological and plastic surgery treatments, and Colorama, a Brazilian mass-market make-up brand. Outlook and objectives Effective supplier relations are essential for sustainable development and L¶Oréal has set itself key objectives in this area. We will: y Continue to increase, develop and formalise our business exchanges with suppliers: y Increase coverage of business reviews to all categories and regions, y Measure progress against specific environmental and SD KPIs, y Conduct a supplier satisfaction survey to identify critical issues and areas of improvement, y Ensure ongoing feedback to suppliers following Invitations to Tender. Continue promoting internal awareness of sustainable development issues among purchasing teams: y Organise specific workshops on SD across the categories and regions, y Continue training buyers on good purchasing practices (Purchasing Strategy & Practices training) to achieve a rate of 90%. Carbon Disclosure Project (CDP) Supply Chain: y Monitor progress of the 26 first suppliers of L¶Oréal that are participating in the CDP Supply Leadership Project, y Integrate new suppliers into the CDP Supply Leadership Project, from Latin America and Asia. Encourage suppliers to achieve FSC certification and reduce their packaging and energy consumption, Continue the social audits programme with the objective of 400 audits in 2010,
.Pursue the deployment and further development of the "L¶Oréal Buy & Care"programme.
Social data scope. We performed the work described below in order to obtain moderate assurance as to whether procedures used to compile the selected social . based on our review. indicators. These procedures.Increase the visibility of supplier innovations and facilitate access to L¶Oréal decision-makers in Research & Innovation and marketing. These standards are available on the Group's website. together with the data published in the Group sustainable development report. General Direction L¶Oréal Group 14. were prepared under the responsibility of the Human Resources Executive Management in accordance with the Group's internal reporting standards. reporting method and systems Review report by one of the statutory auditors on the procedures used to compile certain social data published in the Group sustainable development report. we have performed a review designed to enable us to express moderate assurance on the procedures used to compile certain social data published in the L¶Oréal Group sustainable development report and identified by the sign ( ). rue Royale 75008 Paris Further to your request and in our capacity as Statutory Auditor of the L¶Oréal Group. Nature and scope of our work We performed the work according to The Compagnie Nationale des Commissaires aux Comptes (CNCC) professional doctrine related to this review. Our responsibility is to express a conclusion on the procedures for compiling the selected social data.
due and proper inclusion of the social data obtained from the reporting systems in the consolidation packages. HR Information Systems Department. we obtained assurance as to the: y y y y existence of instructions concerning definitions of the data to be compiled and the related calculation methods. Corporate HR Support Services. data taken from the management database of executives' profiles and careers (nationalities. number of employees' representatives. assessed on a test basis. We performed the following work: y At headquarters level: For each of the areas reviewed. and we do not express. a conclusion on the accuracy of the figures published. number of employees per gender. Our work was based on the following indicators: total cost of the retirement programmes. we met with various representatives from the departments listed below responsible for organizing the reporting procedures as well as for the consolidation of social data at Group level: the Labor Relations Department. our review is not intended to express. Corporate Learning for Development Department. absenteeism rate. number of executives by gender. existence of reporting and consolidation procedures.data are free of material misstatement. A higher level of assurance would have required more extensive procedures. number of employees and executive staff trained. amount allocated to the WPS program. number of women amongst the management committee for instance). . Based on interviews with these representatives and reviews of documents (Group consolidation manuals and subsidiary reporting schedules). % of countries which complete local social security and mandatory programmes. Moreover. consistency of the data published with the scope set for such data.
Finland. the consolidation procedures at country level and exhaustiveness of the scope. Our work was based on interviews with the individuals responsible for reporting at country level as well as with other people involved in the data collection and reporting procedures. We were assisted in our work by Sylvain Lambert. These tests were carried out at country consolidation level. . Sweden.At subsidiary level: Additional tests were carried out to ensure the understanding and correct application of Group reporting procedures by the subsidiaries. except for the two specific indicators related to retirement (total cost of the retirement programmes. % of countries which complete local social security and mandatory programmes) performed for all countries at headquarters level. the existence and appropriateness of internal control procedures at country level with a view to ensuring compliance with such procedures by the subsidiaries. Partner in charge of our Sustainable Development Practice. Norway. and Spain) and in respect of the aforementioned indicators. on a selection of five countries (Denmark. The tests involved assessing: y y y the understanding and application of Group data definitions and data collection procedures at country and subsidiary level.
Climate Counts is a non-profit website based .Review L¶Oreal received a score of 58 out of a possible 100 in the latest (2008) Climate Counts Scorecard.
Climate Counts has found no public information to suggest that L¶Oreal supports public policy that addresses climate change.45 Kimberly-Clark.9 L'Oreal. its greenhouse gas emissions or climate footprint). These companies still have work to do.9 Colgate-Palmolive. Climate Counts has found that L¶Oreal has been measuring its companywide impact on global warming since 2001.9. ³Policy Stance: 0/10 points. L¶Oreal deserves a rating of 58/20 = 2.. L¶OREAL¶S PERFORMANCE L¶Oreal has a relatively strong record on climate change. My rating = 69/20 = 3.75 Procter & Gamble. ³Reduce: 35/56 points. My rating = 3. Climate Counts has found that L¶Oreal has made some public information available on its companywide efforts to address global warming.in New Hampshire that was founded by Stonyfield Farm Organics (85% owned by Groupe Danone). Climate Counts has found that L¶Oreal has established clear goals to reduce its energy use and has reduced its impact on global warming (i. My rating = 58/20 = 2. Climate Counts Score: 44/100. tying for second place among the six companies in the "Household Products" sector reviewed by Climate Counts.2 .e. My rating = 44/20 = 2. ³Review: 16/22 points. Climate Counts has this to say about L¶Oreal: ³STRIDING ± The best Climate Counts choice. Climate Counts Score: 58/100. Climate Counts Score: 58/100. My rating = 58/20 = 2. According to my method (see below). Climate Counts Score: 69/100. Change from 2007 score: +4.´ PEER PERFORMANCE* Unilever.´ ³Score: 58. but they¶re beginning to hit their stride. ³Report: 6/12 points. Climate Counts Score: 75/100.
Starbucks is labeled as ³Striding´ (green) for a score of 49 in the pitiful Food Services sector. not just those that are categorized in the same sector by Climate Counts. For example. potential factors include prior performance and peer performance.75 * I include here some major companies that could be considered peers. In addition to the 0-to-100 point scale. Climate Counts appears to be considering more than the raw score in assigning these categories. assisted in the development of the scoring system. So there¶s a lot of room for improvement across the board. the highest score is 82 (Nike) and most (67) of the scores are below 50. and verified the scoring results for accuracy. provided strategic guidance on the Climate Counts program. Climate Counts categorizes companies as ³Stuck´ (red). . whereas Dell is labeled as merely ³Starting´ (yellow) for the same score of 49 in the climate-conscious Electronics sector. Climate Counts Score: 15/100.´ while both companies compete directly on personal and household products. ³Starting´ (yellow) or ³Striding´ (green). My rating = 29/20 = 1. METHODOLOGY Climate Counts says they ³use a 0-to-100 point scale and 22 criteria to determine if companies have: MEASURED their climate ³footprint´ REDUCED their impact on global warming SUPPORTED (or suggest intent to block) progressive climate legislation Publicly DISCLOSED their climate actions clearly and comprehensively ³GreenOrder. a leading sustainability strategy firm.´ Of the 104 companies on the Climate Counts website. For example. Climate Counts categorizes Unilever as ³Food Products´ and Procter & Gamble as ³Household Products. Climate Counts Score: 29/100.45 The Clorox Company.Avon Products. My rating = 15/20 = 0.
Jones also received the prestigious 'Manager of the Year 2002' award from the French Prime Minister. L'Oreal's Chairman and CEO. breadth. the honour was given in appreciation and recognition of the 'depth. ." -. 2002. Lindsey Owen Jones (Jones) was honoured with the µBest Manager of the Last 20 Years' title by the French Minister of Finance and Economy. L¶Oreal Makes Waves In November 2002. Challenges. for Europe by 'The Economist Group'. which was sponsored by the leading French business publication. the France-based leading global cosmetics major.One Brand at a Time: The Secret of L'Oreal's Global Makeover. This award instituted by the leading French business publication. August 12. I decided to ignore them and simply divide the raw Climate Counts score (0-100) by 20 to create my Citizens Market rating from 1-5. Le Nouvel Economiste. was in recognition of Jone¶s outstanding achievements in transforming L'Oreal from a French company into a global powerhouse. L¶Oreal ± Building a Global Cosmetic Brand ³It is a strategy based on buying local cosmetics brands. giving them a facelift and exporting them around the world. In the same month. Awarded by the publisher of the world's leading weekly business and current affairs journal The Economist. Francis Mer.As the methodology for assigning the three Stuck/Starting/Striding categories was not clear. Jean-Pierre Raffarin. L'Oreal. and diversity of L'Oreal's management team. received the 'Global Corporate Achievement Award 2002¶. Jones was the first foreign head of any French company to receive this award.
named Aureole. unlike other hair colour products that used relatively harsh chemicals. Commenting on L'Oreal's performance. Garnier. He . The uniqueness of this formula.2 for a note on the global cosmetics industry). Biotherm. a French chemist. Helena Rubinstein." Known for its diverse mix of brands (from Europe. Kiehl's. Armani. and Asia). "At L¶Oreal. perfection. Schueller set up a company and named it 'Societe Francaise de Teintures inoffensives pour Cheveux¶. Shu Uemura. we are 50. and Ralph Lauren. Eugene Schueller (Schueller). Redken. respectively. and Italy. Jones said. From the very beginning. which had operations in 130 countries in the world. Two years later. Schueller used advertising in a major way to market his products. like L'Oreal Paris. Matfix. L'Oreal was the only cosmetics company in the world to own more than one brand franchise and have a presence in all the distribution channels of the industry (refer Exhibit C. posted a turnover of ¼ 13. the company employed three in-house chemists and made brisk business selling hair colour in various countries like Holland. By 1920. developed an innovative hair colour formula. Schueller gave a lot of importance to research and innovation to develop new and better beauty care products. L'Oreal Professionnel. was that it did not damage hair while colouring it. Austria. Background In 1907. Maybelline. La Roche-Posay.000 people who share the same desire. Vichy.6% and 26% growth in profit in 2001 and 2002 (half-yearly results). L'Oreal. Soft Sheen Carson. The company recorded a 19.7 billion in 2001. in 1909.These honours were not just a 'cosmetic' eulogy. Lancome. Schueller formulated and manufactured his products on his own and sold them to Parisian hairdressers.8. because it is not just about business but about a dream we have to realize. for it was the only company in its industry to post a double-digit profit for 18 consecutive years (refer Exhibit 1 for L¶Oreal's key financials). L'Oreal deserved them. Cacharel. America.
the company launched the legendry advertisement campaign 'Because I'm worth it' to promote the 'Preference' line of hair colour. the company's name was changed to L'Oreal. when he persuaded Liliane Bettencourt (Bettencourt). a France-based manufacturer of personal care products. Francois DaIle (DaIle). Schueller's daughter and the company's main shareholder. while the other half was publicly traded. Amber Solaire is back". half of L'Oreal's stock was sold to Gesparal. Votre Beaute. high-quality. and advanced products at an affordable price. The slogan summed up the company's philosophy of providing the most innovative. after Schueller's death. L'Oreal became a publicly traded company. The first movie advertisement was for L'Oreal's 'Amber Solaire' (sun care cream) with the tagline. took over as the company's Chairman and CEO. which was an adaptation of one of the brands 'L' Aureole' (the halo). the Swiss food products giant. . During the 1950s. to dilute her majority stake. This posed a threat to its existence as it could easily come under the state's control. In 1933. Later.used promotional posters made by famous graphic artists like Paul Colin. 1 In 1963. the company pioneered the concept of advertising products through film commercials screened at movie theaters. His efforts bore fruit a decade later in 1973. In the early 1940s. which went on to become one of the most famous jingles in France. Schueller. Charles Loupot. "Just as it was before the war. smell good' for Dop shampoo. Shueller's deputy. In 1972. therefore. created and launched a beauty magazine for women named.2 which in turn could affect its international growth plans. 49% of Gesparal's stock was sold to Nestle. In 1957. Later. In 1937. and Raymond Savignac to promote his company's products. began taking steps to internationalize L'Oreal's ownership structure to prevent it from coming under the control of the government. Dalle. while the remaining 51 % was held by Bettencourt. he started the 'clean children' campaign and created a jingle 'Be nice and clean.
it conveyed that. "The extra 50% L'Oreal . In the cosmetics business. L'Oreal's decision to differentiate its products by attaching an emotional quality to its brands thus worked very well. Commenting on the campaign. According to a article. profit margins tend to be generally low as there was not much differentiation between the products offered by various companies. an analyst stated. The emotional pitch." This translated directly into profits for the company.The campaign was considered as brilliant by many marketing gurus. The slogan seemed to cleverly differentiate L'Oreal's products from others and proved to be a 'winning' factor. ''Because I'm worth it". indirectly conveyed the message that ''I'm willing to pay more". "I will prove that I value myself by paying more than I have to.
Jones was given the responsibility of looking after L'Oreal's US operations (the company's most important overseas operation) during 1981-4. Professional. Luxury. Jones persuaded Macy's. Consumer. L'Oreal's products had become quite popular in many countries outside France. and the Far East. On The Road To Fame By the 1970s. South America. and Pharmaceutical. one of the leading retail stores in the US. Due to his exceptional performance. During 1978-81 Jones functioned as the head of L'Oreal's Italian business. body and skincare cosmetics. Managing the company's US operations was not an easy task. the company's business expanded considerably. Jones' colleagues argued that European brands such as Lancome (in the luxury cosmetics segment) could never compete with established American brands like Estee Lauder and Revlon. Jones¶ entry in the late-1970s marked the beginning of a new era of growth for the company. that is. to give Lancome the same shelf space that it gave to Estee Lauder.S. and everyone's happy. Although the company started as a hair colour manufacturer.charges for nothing other than your warm glow of self-satisfaction. It started distributing its products through agents and consignments to the U. over the decades it had branched out into a wide range of beauty products such as permanents. . and cleansers and fragrances over the decades (refer Table 1 for product launches till the mid-1990s and Table 2 for a segment wise break-up of sales for the year 2002). styling aids. In spite of their doubts and the reluctance of retailers to carry European brands. L'Oreal soon emerged as the only cosmetics brand in the world that had products in all segments of the Industry. Russia. Genius." Over the next few years.. goes from your pocket right to theirs.
L'Oreal's image was so closely tied to Parisian sophistication. Jones deliberately took L'Oreal down a different road. Commenting on his decision." The rationale for the above decision was to 'make the brands embody their country of origin'. mainly in France. almost 75% of the company's sales were in Europe. it was difficult to market its brands internationally. As he tried to continue Dalle's work. Jones said. Buying Maybelline was . and had a French-born daughter).3 The company acquired Maybelline in 1996 for $ 758 million. he decided to acquire brands of different origins. In what proved to be a major advantage later on. It 'Is' Maybelline One of the first brands that L'Oreal bought in line with the above strategy was the Memphis (US) based Maybelline. He was aware that DaIle had begun the work of internationalizing L'Oreal to prevent it from remaining as 'just a French cosmetics company'. Jones thus decided to take a series of concrete steps to make L'Oreal a globally recognized brand and the leading cosmetics company in the world.Not surprisingly. Many analysts were of the opinion that Jones had turned what many marketing gurus had considered a 'narrowing factor' into a 'marketing virtue'. Jones. During the late 1980s and early 1990s. a company insider with good management skills. "We have made a conscious effort to diversify the cultural origins of our brands. In the cosmetics industry. married an Italian. The reason Jones had so much conviction in this philosophy was his own multicultural background (he was born in Wale. May Be? No. they generally homogenized their brands to make them acceptable across different cultures. companies did not acquire diverse brands. studied at Oxford and Paris. succeeded DaIle as L'Oreal's Chairman in 1988. he realized that he had to tackle the situation created by L'Oreal's image. By choosing to work with brands from different cultures. Lancome's sales increased by 25% in the US in 1983.
In addition. In 1999. Maybelline's sales rose steeply from just over $320 million in 1996 to $ 600 million in 1999. In 1996. Maybelline had a 3% share in the US nail enamel market. the company launched Maybelline's new make-up line called 'Miami Chill' with bold colours like yellow and green. The company also attached 'New York' to the brand name in order to associate Maybelline with 'American street smart'. only 7% of its revenues ($350 million) came from outside the US. This revamp was very successful: Maybelline's market share in the US increased to 15% in 1997 from just 3% in 1996. thus gaining world rights to Maybelline.a risky decision because the brand was well known for bringing out ordinary. In 1995-6.' because the nail enamel dried within one minute of application. buoyed by the success of Maybelline in the US. "Memphis just did not quite fit the sort of profile for finding some of the key people we needed. The first thing that L'Oreal did was to move Maybelline's headquarters to New York. The company positioned it as a product used by the 'urban woman on the go'. However. Maybelline was not a well-known brand outside the US. L'Oreal decided to overcome this problem by giving Maybelline a complete makeover and turning it into a global mass-market brand while retaining its American image. In 1997. Maybelline's 'Moisture Whip' (a wet . L'Oreal acquired the Maybelline brand in Japan from Kose Corporation. It also renamed Maybelline's 'Great Finish' line of nail polish 'Express Finish. staid colour lipsticks and nail polishes." Then L'Oreal aggressiveness promoted the US origins of Maybelline by attaching the tagline 'Urban American Chic' to it. the brand¶s Japanese distributor. a city known for fast and sophisticated lifestyles. This gave the brand a new look and targeted it at spirited and lively teenagers and middle-aged women. Jones said. Commenting on this decision. L'Oreal introduced its new line of Maybelline lipsticks and nail polishes in the Japanese market.
and repackaged and marketed them aggressively. Commenting on this. Commenting on the success of the brand." By the end of 1999." L'Oreal followed this strategy for the other brands it acquired over the years. Yoshitsugu Kaketa. gave them a face lift. and Kheil's (skin care) (refer Table 3). an August 2000 article stated. While in 1999 50% of the brand's total revenues came from outside the US. Cosmair Inc.. and investing in new facilities. Commenting on the company's superior brand management framework. Ralph Lauren (fragrances). such as Redken (hair care). SoftSheen (skincare and cosmetics). Helena Rubenstein (luxury cosmetics). "It was so successful in Japan that we started to sell Water Shine in Asia and then around the world.look lipstick) did not do well in Japanese markets as it dried quickly after application." Cashing in on the Maybelline Formula Maynelline's success proved Jones' philosophy of creating successful cosmetic brands by embracing two different yet prominent beauty cultures (French and American). Caron (skin care and cosmetics). by 2000 the figure increased to 56%. L'Oreal gave the lipstick a makeover by adding more moisturizers to it. L'Oreal's Consumer-Products General Manager (Japan). L'Oreal acquired the above relatively unknown brands. said. said. Maybelline was being sold in more than 70 countries around the world. expanding into key international markets. Maybelline became the leading brand in the medium priced makeup segment in Western Europe with a 20% market share. "It is a crossfertilization. The US-based hair . "L'Oreal achieved sales growth of nearly 20% by developing new products. head of Maybelline. The new Japanese version of 'Moisture Whip' was given a new name-'Water Shine Diamond'. Water Shine-Diamonds became a runaway success in Japan. all the while concentrating on increasing the reach of the group's top 10 brands. Guy Peyrelongue. 4 US Division.
Analysts were skeptical of this move as they thought introducing new brands in the same category would cannibalize L'Oreal's own established brands. The brand to be promoted was selected on the basis of the local culture. L'Oreal promoted Maybelline. and for those who preferred 'French' products. Jones said. it sold all its different lines in all countries. L'Oreal acquired Redken. Similarly. Thus. Both these brands catered to African-American women. Even though it had brands originating in different cultures. teams had ample freedom to innovate and develop better products. Since self-competition was encouraged at L'Oreal. "The only way to favour creativity in large corporations is to favour multiple brands in different places which compete with each other. where it would have to compete with L'Oreal's Preference line of hair care products. the L'Oreal brand was promoted. Jones merged these two brands as SoftSheen-Carson and used them as a launch pad to aggressively promote itself outside the US . the brand derived over 30% of its $ 200 million revenues in 2002 from outside the US. This kind of competitive spirit from within allowed L'Oreal to beat competition from other players in the market. However. he argued that the competition would inspire both the Redken and Preference marketing teams to work harder." To encourage competition and nurture creativity. However. Jones took a different point of view. L'Oreal operated two . for people who preferred 'American products. L'Oreal firmly believed in the strategy of promoting all its brands in different nations. L'Oreal promoted only one brand aggressively in a country.specifically Africa. the company promoted Asian and Italian brands for customers who preferred them. As a result. Jones also encouraged competition between the different brands of the company. a US-based hair care brand in 1998. Commenting on this. and introduced it in the French market. most of it from South Africa. For instance.care firms Soft Sheen and Carson were acquired in 1998 and 2000 respectively.
However. "That is a big challenge for this company-to add brands. Originally positioned in the luxury segment. Marlene Eskin. the model sported a green lipstick and white eye shadow. the largest ever for any cosmetic company in one year. living in urban centres like London. In 1999. L'Oreal made sure that each of its brands had its own image and took care that the image of one product did not overlap with the image of another product.one in Paris and the other in New York. and Tokyo. which was more than the industry average of less than 2%. The company spent around 3% of its revenues on research every year. In one of its advertisements. Now. "Is it incoherent for younger people to buy luxury cosmetics? Why? Perhaps it was 10 years ago when luxury was equated to the middle-aged customer.research centres . New York. Many analysts even thought that such advertising for a traditional luxury brand was incoherent. Jones argued that industry observers who held this opinion had not taken into account how fast the market was changing. Paris. These centres helped Jones maintain L'Oreal's image as the 'scientific' beauty company. Helena Rubinstein had the image of a product used by middle aged-women. The company also opened a Spa 5 in New York to promote the brand (the first instance of a company attempting to run a retail operation as part of a promotional package). A cosmetics industry analyst. L'Oreal relaunched the brand and targeted it at a much younger and trendier audience than the brand's typical luxury customers (middle-aged women)." One of L'Oreal's most radical experiments was the makeover and relaunch of the Helena Rubinstein skin care and cosmetics brand. yet keep the differentiation. the biggest luxury consumers in all of Asia. which is one of the strongest . L'Oreal also made use of 'dramatic' advertisements to promote the brand. But sorry. He said. said. L'Oreal employed 2700 researchers from all over the world and had 493 patents registered in its name in 2001. the target users were women aged between 20-30 years.
as against ¼ 1236 million for the financial year 2001. The company posted a profit of ¼ 1464 million for the financial year 2002. Heather Locklear." Thus. Virginie Ledoyen. Lancome.luxury markets in the world. Laeticia Casta. Kate Moss. But she can also be young and trendy. Vanessa Williams. L'Oreal¶s brand management strategists believed that good brand management was all about hitting the right audience with the right product. for promoting its brands. She can be. and Natalie Imbruglia. Jennifer Aniston. from all parts of the world. original positioning for Helena Rubinstein to be the coolest of the traditional luxury brands. Its overall sales grew by 10% in 2002. "It is a very carefully crafted portfolio." Jones also said. Noemie Lenoir. and Shu Umeura. it is very good. So the whole idea that it is incongruous for Helena Rubinstein to be cutting edge in terms of image and makeup is out of date by about 10 years. Catherine Deneuve. On the contrary. Gong Li. L'Oreal cleverly positioned Helena Rubinstein as a luxury brand for a younger audience without overlapping its image with that of other luxury brands like Biotherm. Beyonce Knowles. Diana Hayden. Dayle Haddon. and much . Jones said. Milla Jovovich. L'Oreal attached a tinge of glamour to its brands to make them more appealing to customers." Future Prospects L'Oreal's efforts paid off handsomely. The company liberally used celebrities from various fields of life. are between 20 and 25. Some of the well-known personalities featured in L'Oreal's promotional campaigns included Claudia Schiffer. Each brand is positioned on a very precise segment. Commenting on the company's brand portfolio management strategies. which overlaps as little as possible with the others. This is why the Guccis and Pradas have taken the luxury-goods market by storm. "The worldwide luxury consumer no longer equates to a middle-aged lady. Andie MacDowell. Jessica Alba.
The company had also announced a cost-cutting programme. Even Revlon. Latin America (sales grew by 22% with sales in Brazil increasing to 50%). Looking at the future with optimism. Jones said. Through Inneov. L'Oreal's rival in the luxury segment. and Eastern Europe (sales grew by 30% with sales in Russia increasing by 61 %). One such initiative was Laboratoires Inneov. had posted nine consecutive quarterly losses since late-2001. Industry observers noted that L'Oreal was much ahead of its competitors in terms of profitability and growth rate. Avon. China contributed 61 %). L'Oreal ventured into new businesses that were closely related to its core activities. Analysts observed that this would mark the beginning of 'neutraceutical6 development. L'Oreal's joint venture with Nestle." L'Oreal expected the cosmetics market to grow at 4-5% per annum in the future. The prospects for the next three to four years seem promising to me. Not all competitors were in such bad shape though. and Procter & Gamble had been performing quite well. commented. Estee Lauder. However. global reach. "The Inneov business will draw on both the growing demand for skin products designed to retain youthfulness and the growing market for dietary supplements. rival companies like Beiersdmf (a Germany based company that owns the globally popular brand Nivea). had reportedly posted a 22% drop in profits in August 2002. A research analyst at Frost and Sullivan (US based leading provider of strategic market and technical information). L'Oreal's competitor in the mass-market segment. L'Oreal has the good fortune of being involved in a business that is a bit less . In March 2003. and narrow product focus'. industry analysts agreed that no other cosmetics player matched L'Oreal's combination of 'strong brands. L'Oreal entered the market of cosmetic nutritional supplements. "No other consumer products group has grown as quickly as we have.of this increase was attributed to impressive growth rates achieved in emerging markets like Asia (of the 21 % increase in sales volume.
which could provide security to the French community and its trade. which was nurtured by French politicians.L. and directing the ways in which France's publicly owned businesses were managed. L'Oreal being a publicly traded company was easily susceptible to come under the state's influence. It was relaunched in 1957. 2. (later . It was sold to Plough Inc. The French people were attached to the notion of having a special identity called the 'I' exception francaise'. If the strategists at the helm of affairs continued focusing on enhancing stakeholder value year after year. Therefore. 3. the economic climate is bleak. Maybelline expanded its product portfolio to include other cosmetics and built up a sizeable brand equity.sensitive than others to economic cycles. This was yet another indicator of the fact that L'Oreal seemed to be going from strength to strength each year. the future would continue to be rosy for the company that sold millions of women the dream of living a 'beautiful' life. Amber Solaire was withdrawn from the market during the war period due to production hitches. Williams. but you will still buy a tube of lipstick that lets you 'take a different sort of trip' for a much smaller price. the French state played a central role in subsidizing. it was under the control of the Williams family. Initially launched in 1936. REFERENCES 1. When. Fortune. It was rooted in two beliefs: the threat from the outside world (global trade and Anglo-Saxon economics) and the role of the French state in preventing such threat. for the first time. The French political system was attached to the idea of a strong French state. Till 1967. After beginning with the hugely successful mascara (a cosmetic to darken eyelashes). managing. In March 2003. you might put off buying a new car. Maybelline was established in 1915 in the US by T. the company entered the prestigious list of the world's fifty most admired companies compiled by leading business magazine.
Colorsilk. and finally to L'Oreal in 1996. L'Oreal remained the overall industry leader. competed with L'Oreal in the mass-market segment with skincare. Prescriptives. Belgium) refers to any place/resort that has one or more of the following facilities: therapeutic baths. Vidal Sassoon. Panteen Pro-V. Bobbi Brown Essentials. as it was the only company that competed in all four segments. beauty treatment. The term 'neutraceutical' is derived by combining two words 'nutritional' and 'pharmaceutical' and refers to foods that acts as medicines. health improvement. Wash & Go (haircare). The cosmetics industry has always been characterized by & intensive research and innovation by companies to introduce newer and better products. haircare and bodycare products. Camay. the industry has witnessed many changes in terms of the manufacture of cosmetics owing to growing awareness . Laura Biagiotti. L'Oreal's wholly-owned US subsidiary. Donna Karan. in 1990. 4. Coty. Stila. Cover Girl. Aveda. to Wasserstein Perella & Co. Proctor and Gamble. lnfasil. Other companies like Avon. The US based Revlon Inc also competed with L'Oreal in the mass-market segment with brands like Charlie. Neutraceuticals act as a source of specific food that provides essential nutrients to users. massages. Fire&lce and Skinlights. Some of P&G's well-known brands include Biactol. Jac. and Helmut Lang (perfumes). and Siseido competed globally in the massmarket segment. Ellen Betrix. relaxation and meditation (not an exhaustive list). Estee Lauder competed with L'Oreal in the luxury segment with brands like Estee Lauder. Since the 1990s. The word spa (originally name of famous mineral springs in Spa. Hugo Boss.Schering-Plough Corp. Established in 1946 in New York. Kose. Nice n' Easy. Tommy Hilfiger. Loving Care. Origins. Herbal Essences. La Mer. Colorsay. US. Cliniaje.) in 1971. and Jo Malone. exercise. Aramis. 6. Natural Instincts. 5. Rejoice. Max Factor skincare). MAC. the US based FMCG manufacturer. mineral springs.
. that is products that combine the qualities of nutrients and beauty aids.among consumers about the harmful effects that harsh chemicals (generally used in cosmetics) may cause to their body (skin and hair). Industry analysts speculate that the market for these products would rise sharply in the 21st century. the industry as a whole is now moving towards 'cosmecuticals' and 'neutraceuticals'. Due to the increased focus on 'wellness'. This was one of the reasons for the manufacture of products with natural or herbal ingredients by companies like L'Oreal and P&G.
2011 under the chairmanship of Sir Lindsay OwenJones and in the presence of the Statutory Auditors.80 euro The Board of Directors of L'Oréal met on February 10 th . The group .2% ¾ Confidence in a new year of sales and profit growth ¾ Increase in dividend**: +20% at 1. Chief Executive Officer of L'Oréal. Commenting on the figures. The Board closed the consolidated financial statements and the financial statements for 2010. Mr Jean-Paul Agon.6% ¾ Net earnings per share*: +17.2010 Annual Results STRONG GROWTH IN SALES AND PROFITS ¾ 2010 sales: 19. said: ³In the context of an upturn in the cosmetics market.6% like-for-like ¾ Operating profit: +18.6% based on reported figures +5.5 billion euros +11. L¶Oréal achieved strong sales growth.
advanced in all zones. 2010 was a year of conquests for the group. it bolstered its position as the world number one in beauty. with several of our brands achieving spectacular breakthroughs: L¶Oréal Professionnel with its hair colourant Inoa. and La Roche-Posay which is continuing its . all channels and all business segments. Yves Saint Laurent which is experiencing a true renaissance. Maybelline in mass-market make-up. more dynamic than the market.
with sales of more than one billion euros. . These performances confirm the relevance of the strategic thrusts adopted at the end of 2008: accessible innovation. In 2010. 2010 was also a year of strong profit growth. the actions taken over the last two years to improve operating efficiency are continuing to pay off. Well prepared to seize all strategic opportunities.expansion. particularly in Asia and Latin America. clearly improving its positions in North America. and strengthening of our R&D and advertising & promotional investments. and driven by the ambition of winning a further one billion new consumers. The group is growing in Western Europe. new product categories. and continuing its conquest of the new strategic markets. accelerated globalisation of our brands. L¶Oréal China became the group¶s number three cosmetics subsidiary. L¶Oréal is turning a new page in its history: the page of universalisation and beauty for everyone.
´ Furthermore. 2011 the payment of a dividend of 1. Sir Lindsay Owen-Jones said: ³With this level of growth and results. At the end of the board meeting. we are confident in the group¶s ability to achieve a new year of sales and profit growth in 2011. Jean-Paul Agon and his teams have succeeded in opening up new areas for growth and profitability. Thanks to their drive and imagination. The Board will also propose to the Annual General Meeting on April 22nd 2011 the renewal of the terms of office of Mrs Liliane BETTENCOURT. which are also paving the way for the future. the group produced a good performance in 2010. The proposal by the Board of Directors to pay a dividend of 1.80 euro is an expression of our confidence in the group¶s solidity and dynamism.80 euro per share.´ . the Board of Directors has decided to propose to the Annual General Meeting on April 22 nd .Supported by an encouraging start to the year. Mrs Annette ROUX and Mr Charles-Henri FILIPPI. an increase of +20% compared with 2009.
Growth at constant exchange rates was +6. 1) Cosmetics sales PROFESSIONAL PRODUCTS .496 billion euros.4%.6%. at December 31 st . 2011. Based on reported figures.6%. The net impact of changes in consolidation amounted to +0.loreal. based on a comparable structure and identical exchange rates. amounted to 19. i. 2010. ** proposed at the Annual General Meeting of April 22 nd . an increase of +11.Follow us on twitter @lorealpress 2/15 A ± 2010 sales Like-for-like. based on net profit excluding nonrecurring items attributable to the group.6%. Currency fluctuations had a positive impact of +5. the group¶s sales.com .0%.www.e. the sales trend of the L¶Oréal group was +5.* diluted net earnings per share.
In the West. the division is asserting its role as the unchallenged leader in this channel.000 new salons. while Wonderbrown. a luxury haircare line . More than ever before. Repositioned at a more accessible price per application. rolled out through a portfolio of highly complementary brands. In 2010. and +13. is expanding in the United States. X-Tenso Moisturist by L¶Oréal Professionnel is driving the worldwide development of ³Brazilian straightening´.8% based on reported figures. Its initiatives. Haircare is growing. Inoa by L¶Oréal Professionnel is a worldwide success. enabled the conversion of more than 35. both in recruiting consumers and hairdressers and winning their loyalty. the Professional Products Division achieved growth in 2010 of +4. In textures. Optistraight by Matrix and Dulcia Advanced perm by L¶Oréal Professionnel are winning over Asia. supported by innovative launches: Kérastase Chronologiste.In a hairdressing market which picked up slightly.1% like-for-like. In hair colourants. a colourant for dark hair. SoColor by Matrix is conquering many salons in Europe. the initiatives introduced in technical products brought decisive success.
has completed the SalonCentric network. with significant growth in Germany. The acquisition of two distributors. China. where L¶Oréal Professionnel is helping to build the professional markets of the future by opening its first institute for the training of young hairdressers. The dynamism of the make-up market. the number one category in this division. and dynamic growth for Mizani and Pureology. 2010 saw a return to growth for Matrix.5% likefor-like and +11. the United Kingdom.with caviar. stimulated growth across all . CONSUMER PRODUCTS The Consumer Products Division recorded growth of +5. In North America. and also in the Middle East and Brazil. The New Markets are dynamic. In Western Europe. the division is winning market share. L¶Oréal Professionnel Fiberceutic with intracylane and Colourist Solutions by Pureology. It is winning market share in North America and the New Markets. Sweden and France. while Redken is strengthening its leadership in the United States. CB Sullivan and Peel¶s. Kérastase is gradually accelerating. L¶Oréal Professionnel and Matrix are driving the division¶s growth. Indonesia. with strong growth rates in India.4% based on reported figures.
Youth Code achieved good scores. In skincare. It became the make-up market leader in the United States thanks to the success of Falsies mascara and Instant Age Rewind The Eraser foundation. Garnier is strengthening its leadership in the facial skin cleanser segment for young people with the launch of Pure Active Exfo-Brusher. the tinted skincare line BB Cream is proving highly successful. Finally. The brand is continuing its progress in the new category of deodorants: it is consolidating the positions it has won in Latin America and in Eastern Europe. All the brands are growing. the United States and Asia.zones. L¶Oréal Paris had a good year in haircare with strong growth in Latin America. and in Asia where the Garnier Men launch complements the L¶Oréal Paris Men Expert range. and above all Maybelline which achieved growth of +13. Volume Million Lashes mascara proved to be a worldwide success. the division is making considerable progress in the men¶s skincare category. . In make-up. and is moving into Western Europe.3% likefor-like. In Asia. particularly in Western Europe where Men Expert is now number 1 in the market. Maybelline is growing strongly in all regions.
thanks to L¶Oréal Paris haircare and Garnier deodorants. the division posted sell-out growth in line with the market trend. and particularly its leadership in Travel Retail. particularly in the United Kingdom. Indonesia and the Philippines thanks to L¶Oréal Paris haircare. . www. in a sluggish market. hair colourants. It thus consolidated its worldwide positions. In the context of an upturn in the selective market. haircare and styling.loreal. the division significantly improved its positions with market share gains in make-up. and L¶Oréal Paris and Garnier men¶s skincare. In North America. haircare and deodorants. India. and in China. in a market which was also stable. the division advanced thanks to make-up. The New Markets are being galvanised by powerful regional initiatives: in Brazil and Argentina.Follow us on twitter @lorealpress 4/15 LUXURY PRODUCTS The Luxury Products Division recorded growth of +7% like-for-like and +11. Germany and Scandinavia.5% based on reported figures. make-up. Its major core brands delivered good performances.In Western Europe.com .
with double-digit growth: the brand has had a string of successes in fragrances .L¶Homme Yves Saint Laurent. which won the Prix d¶Excellence Marie-Claire. with Eyes to kill Excess mascara proving a hit with consumers. La Nuit de L¶Homme. thanks to a new advertising campaign and the launch of Trésor in Love. the relaunch of Opium and the arrival of Belle d¶Opium ± and is making a strong comeback in make-up with the launch of Rouge Pur Couture. particularly Génifique. In Western Europe. Kiehl¶s achieved an exceptional breakthrough in 2010 on all continents. Yves Saint Laurent is experiencing a renaissance. Its . not forgetting Giorgio Armani Cosmetics.Lancôme returned to strong growth. the product of ten years of research. driven by the success of the new women¶s fragrance Acqua di Gioia. the division is clearly number one. Giorgio Armani had a very good year. bolstered by the success of its skincare lines. but also by the launch of Teint Miracle foundation. The fragrance Trésor by Lancôme is growing strongly. Lastly. and sales are in line with the market trend.
yet the Yves Saint Laurent.9% based on reported figures. ACTIVE COSMETICS The annual sales of the Active Cosmetics Division grew by +4. the division confirmed its position as number one in dermocosmetics. Kiehl¶s and Viktor & Rolf brands are posting strong sales growth. and is winning market share everywhere. Germany. The good performances of the Yves Saint Laurent.momentum is boosted by France. China. the division is growing faster than the market: in Asia. Kiehl¶s and Ralph Lauren brands are also worth noting.7% like-for-like and +8. where the division is continuing to make conquests. thanks in particular to Redermic[+]. Across the world. Giorgio Armani and Shu Uemura. the situation is more contrasting. and in Eastern Europe. In North America. and the good performances of Lancôme. In the New Markets. La Roche-Posay achieved double-digit growth. Kiehl¶s. the United Kingdom and the Scandinavian countries. thanks to the dynamism of Travel Retail. . All the brands and all the zones achieved growth. Ralph Lauren showed outstanding performance with The Big Pony Collection.
and the opening up of China. thanks to its roll-out in European markets. thanks in particular to Brazil. which is a very strategic segment for pharmacies.loreal. All the zones ended the year with positive growth. Innéov strengthened its leadership in Western Europe and achieved a spectacular breakthrough in Brazil. SkinCeuticals recorded very strong growth. The division is accelerating in the New Markets. Launched at the end of the year in Western Europe. This initiative is enabling the brand to reinforce its position in bodycare.Vichy saw the success of the LiftActiv franchise confirmed in the anti-ageing market on all continents. Latin America produced a good performance. and particularly in China.com .www. and internationalisation has begun in Western Europe and Brazil.Follow us on twitter @lorealpress 5/15 Multi-division summary by geographic zone . NutriExtra bodycare has been very well received. Canada and Brazil. and this was particularly clear in Western Europe. Thanks to a dynamic last quarter in hair products. The integration of Roger & Gallet into the division is extremely encouraging.
7% like-for-like. All divisions recorded positive growth. and +22. far exceeding the market growth trend.5% based on reported figures. The Consumer Products Division produced a very strong performance. thanks in particular to the excellent results of Maybelline. NEW MARKETS With growth of +11. particularly in the United Kingdom. NORTH AMERICA 2010 brought significant growth.6% based on reported figures. at +4.1% like-for-like and +12. and +2. Asia.3% like-for-like.9% .WESTERN EUROPE With performances of +1. The Professional Products Division had a very good year thanks to the success of Inoa. The Luxury Products Division continued the recovery which began at the end of 2009. the group recorded +11. Germany. Pacific: Over the full year.2% growth in this zone like-for-like. Sweden and France. the group¶s growth was very slightly faster than the market trend. and in Travel Retail. +22. the group is growing twice as fast as the market. The main driving forces are Asia and Latin America.4% based on reported figures.
continued to win market share. thus becoming the group¶s number three cosmetics subsidiary. at +8. through haircare and deodorants.2% excluding Japan. Mexico has returned to growth. and +13. L¶Oréal China. driven by the dynamism of its Men¶s lines. make-up.1% like-for-like and +15. particularly thanks to make-up. and the continuing advances of the Luxury Products Division. despite the highly contrasting market situations in different countries. Garnier. Ukraine and Russia are the most dynamic countries. and haircare initiatives.5% like-for-like and +32. particularly in India. Eastern Europe: Growth remains sustained. The Consumer Products Division is the driving force of this expansion. The group is continuing to win market share. All the major countries in this zone are growing.3% based on reported figures. Indonesia. and exceeded the 1 billion euros of sales mark. and also in South Korea and Taiwan.based on reported figures. particularly Brazil and Argentina. Latin America: Sales advanced by +17.6% based on reported figures. . the Philippines. With another year of double-digit growth. like-forlike.
a fragrance with Community Fair Trade Ecuadorean alcohol and also Rainforest. The brand has also . Dreams Unlimited. with contrasting trends.1%. Middle East: Sales grew by +4. an eco-conscious haircare range. with trends differing between the developed countries and the New Markets. particularly in Eastern Europe. The brand is stepping up its militant approach to innovation. with launches including Natrulift. Asia.1% like-for-like and +13.8% based on reported figures. which completed its strategic reorganisation. The Body Shop had a year of contrasting performances. The Body Shop is accelerating its expansion into the New Markets. The Body Shop sales The Body Shop ended the year with like-for-like growth at ±1.Africa. Above all. Lebanon and Morocco recorded strong growth. Retail sales are at -2. a firming skincare line with organic pomegranate. 2010 was a year of transition for The Body Shop. and India where the brand has doubled the number of its stores.6%. While the situation remains difficult in South Africa and Turkey.
The company recorded double-digit growth in all regions across the world.com . Metvix (skin cancer). The . with a like-for-like increase of +16.1% and +23.Follow us on twitter @lorealpress 6/15 Galderma sales Galderma achieved record sales. including franchisees. Oracea (rosacea). Galderma also significantly expanded its presence in the corrective and aesthetic dermatology segment. Strategic prescription brands Epiduo (acne).extended its distribution into new channels. www.loreal. to increase its reach and its visibility. Clobex (scalp psoriasis). the actions taken on the operational front continue to deliver: The Body Shop is steadily improving its profitability.605 stores. Lastly. re-enforcing its position as a worldwide leader in dermatology. Retail sales: total sales to consumers through all channels. Rozex/Metro (rosacea) and Loceryl (onychomycosis) have all shown excellent results. At the end of 2010.0% based on reported figures. Sell-out is growing twice as fast as the market. The Body Shop has a total of 2. such as the Internet and Travel Retail.
S. the group¶s subsidiary L'Oréal USA. announced the launch of a bid for the Swedish company Q-Med. On December 13 th 2010. the salon distribution business of Peel's Salon Services. B ± Important events during the period 10/01/10 . L¶Oréal USA¶s SalonCentric division is extending its distribution. This acquisition should enable Galderma to accelerate its . a hyaluronic acid dermal filler range. a Nebraskabased company which operates in 12 central states of the U. via its SalonCentric division. the pharmaceutical company Galderma.company continued to successfully launch Azzalure (a botulinum toxin type A developed for use in aesthetic medicine) in several European countries and broadened its product portfolio with the pre-launch of Emervel. which now covers the vast majority of U.S. territory. a 50:50 joint venture between L'Oréal and Nestlé.12/31/10 On December 10 th 2010. which specialises in corrective and aesthetic dermatology. With this new acquisition. acquired.
Net financial debt amounted to 41 million euros.3% of shareholders¶ equity. representing 0.79% of Q-Med shareholders. and allowing for the exercise of options. After receiving the support of 77. for the second consecutive year. with shareholders¶ equity representing 62% of total assets.171 million euros. The balance sheet. that its offer has been extended by 15 days and increased to SEK 79 per share.development in the highly dynamic segment of corrective and aesthetic dermatology.5% of sales. Galderma has indicated today.891 billion euros. at 3. There was a very positive change in the working capital requirement. by 132 million euros. which decreased in 2010. February 10 th . Capital expenditure continued to be contained. has been strengthened. After dividend payment and purchases of investments. whose structure was already robust. . the residual cash flow comes out at 1. Balance sheet and Debt Gross cash flow amounted to 3. in a statement. Cash flow Statement. up by +15% compared with 2009.
2011 The Board of Directors has decided to propose that the Annual General Meeting of Shareholders of April 22 nd . 2010: 600. 2011 (ex-dividend date April 29 th at 0:00 am). . an increase of +20% compared with the dividend paid in 2010. the Board of Directors has set the amount of the share capital at December 31 st .Proposed dividend at the Annual General Meeting on April 22 nd .517 euros. This dividend will be paid on May 4 th .20 euro. representing a total of 120.992.585 shares with a par value of 0. 2011 should approve a dividend of 1.80 euro per share.198. Share capital Finally.
no material misstatement came to our attention that would cause us to believe that the social data selected and published on the Group Sustainable Development report has not been prepared in accordance with the Group's reporting procedures. Neuilly-sur-Seine.Conclusion Based on our work. . The portfolio of 23 global brands including household names such as Maybelline. Few consumer brands are better known than those of the L¶Oréal Group. Garnier and Biotherm. whether it be for cosmetics. Vishal Sahgal. talks to Jayne Alverca about the importance of promoting sustainable development. are all at the forefront of their market. fragrance or hair care. as well as the L¶Oréal Paris brand itself. skin care. 2010 Statutory Auditor PricewaterhouseCoopers Audit Etienne Boris Sylvain Lambert. June 4. industrial director of the Pune manufacturing facility. Sustainable Development Practice L¶Oréal India The L¶Oréal Group cares about more than making women beautiful.
India did not begin a programme of liberalisation for foreign companies until the early 1990s.000 employees were behind sales of ¼17. Today.Headquartered in Paris. L¶Oréal¶s presence in India dates back to 1994. L¶Oréal has over a hundred years¶ experience in bringing out the best in women of all ages and races. ³L¶Oréal has a strong belief in the value of manufacturing close to its markets.5 billion last year. the group has a presence in 130 countries and its 65. However. industrial director of the company¶s Pune manufacturing facility. so at first.´ explains Vishal Sahgal. manufacturing was .
and our first location was simply too remote. ³Pune is where all our operations are now based and we have up to 600 people working for us at any one time.´ he asserts. Even within the vigorous framework that all L¶Oréal manufacturing centres operate. Sales of L¶Oréal products in India have been meteoric. driven by the belief that no one has more expertise than L¶Oréal in the manufacture of the products that we are famous for. Sahgal believes that the achievements ofthe manufacturing facility at Pune are something special. Environmental sustainability and corporate social responsibility (CSR) are the twin pillars that support this broader aim. For example. Our Colour Naturals brand is very accessible. ³Our Pune factory stands out within the group for its environmental achievements. ³The state government of Maharashtra where we are based awarded the Pune factory first prize in the Excellence in Energy Management category in 2009 for its various energy conservation projects. we have also been instrumental in creating new markets. Since 2004.´ . and it offers an international quality standard that was never available before. Similarly. hair colour and skin care lines for L¶Oréal¶s Consumer Products division and Professional Products division has taken place at Pune. costing close to ¼2. ³We need to attract and retain the best talent in order to grow. hair colouration was revolutionised by L¶Oréal when we introduced fashion shades which women had never been used before. ³In 1998 we were finally able to move into direct production.undertaken by a sub-contractor. manufacturing for hair care.´ Sahgal explains that promoting sustainable development is a fundamental tenet within all plants and distribution centres that operate under L¶Oreal¶s umbrella.´ Sahgal explains. ³We not only give products that are better in terms of quality and safety.´ he adds.´ he comments. we introduced Indian consumers to conditioners for the first time and they have quickly taken over from traditional hair oils.
250. it reaches out to deserving female students from Maharashtra and scholarships worth Rs. has helped young women passionate about science to achieve their dreams and aspirations of pursuing a career in science.´ he says. which is implemented together with the French NGO Aide et Action. to heat water for washing in our processes. . ³We do not like oneoff donations and look for long term projects which will have a long term impact in the communities around Pune. The Pune factory itself has recently picked up another prize.´ he explains. The L¶Oréal India For Young Women in Science scholarships programme. for its approach to good citizenship within the community where it is based. with the support of the Indian National Commission for Cooperation with UNESCO. Thirtyfive scholarships have been awarded to date. ³It is expensive and quite complex to organise so it is done centrally. Pune and Hyderabad and it represents wonderful opportunity for the girls involved. this time the internal Citizen of the World Award. rather than expensive diesel oil. A project aptly named µBeautiful Beginnings¶.000 each are given to five young girls to pursue graduate studies in any scientific field. This led to the proportion of waste being recovered from the site to increase from 95 per cent to 99 per cent. aims to help girls from marginalised communities who were unable to complete their normal education to train as beauty therapists and achieve financial independence. At corporate level. we again picked up first prize for a project that uses vermin culture to convert chemical sludge into useful fertiliser. the Pune site has won a number of accolades. the company¶s Indian headquarters in Mumbai has achieved a rare synergy between its core business. where many of our staff come from. Two years latter. Established in 2003. L¶Oréal also believes that the world needs science and science needs women. ³We won the internal award for the best environmental project in 2007 for a project that involved using 320 solar cells.Within the L¶Oréal Group. but at present µBeautiful Beginnings¶is operating in Mumbai.´ he says. which is beauty and good citizenship.
´ he concludes. is an integrated project that looks at safety.in . www.co.´ Meanwhile. ensure that minimum wages are paid and that there is no requirement for excessive working hours. the environment and child education. which we deal with in turn on a quarterly basis with the aim of raising standards and improving the local quality of life. Sahgal believes that the factory¶s steady expansion creates a virtuous cycle in the local economy.³µProject Care¶. We rely on a mix of professional trainers and our own employees from these villages who feel a huge pride in our work and whose voice is sometimes more acceptable to local communities than outsiders. On the procurement side. The government has labour laws.loreal. as at least 50 per cent of staff are recruited from surrounding villages. ³Last year we grew our capacity by 30 per cent and there is still enormous scope for L¶Oréal in India. which won us the first prize. health and hygiene. We only want to work with those that do.´ The project is ongoing and includes facets such as free medical checkups for the elderly and a scheme to support schools with redundant laboratory and IT equipment that still has relevance in the classroom. ³Suppliers must pass our stringent quality requirements and also a Safety and Social Audit. we give something back to the society that has contributed to our success. The company is also involved in a partnership that will provide two new classrooms to a local school²at present the children have to study outside. It is very important that as we grow. L¶Oréal extends its values by insisting on a very specific vetting process. but not all companies comply. We use external consultants like Intertech who will monitor for unacceptable practices such as child labour.
Unusually for the industry. biology and toxicology. On the basis of synthesised molecules produced by the Applied Research teams or proposed by external suppliers. Ceramide R and sun filters. Applied Research prepares for the medium term.800 staff working in 30 different specialist fields such as chemistry. L'Oréal's research budget has increased fourfold. The performance. Japan and the United States employ over 2. scientific research has always been the heart of the L'Oréal Group's strategy. Development deals with the short term. safety and quality of our products rely on this continuous search for innovative scientific advances. Significant research achievements of recent years include skin models. L'Oréal is one of the few companies able to carry out all stages of research and development. In the 1980s. L'Oréal aims to understand the fundamental mechanisms that govern skin and hair. Through advanced research. for example hair loss and pigmentation. Working in close partnership with the marketing teams. Research centres in France. More than 3% of the Group's turnover is invested in R & D every year and over the past ten years. the development laboratories design products on the basis of innovations proposed by the Applied Research branch. L'Oréal scientists succeeded in . this equated to 469 million euros. The Group focuses its work on the following three sectors: Advanced Research aims to prepare for the future by concentrating on innovations for the next ten years.Since the company was founded in 1907 by the chemist Eugne Schueller. the Applied Research teams improve cosmetic products and study new concepts. Advanced Research is also responsible for the creation of new molecules upon which the development of new products depends.000 new formulas are created each year. In 2002. More than 3. starting with advanced research into hair and skin.
55% of L'Oréal research staff are women. y y y y y Eugne Schueller. L'Oréal has registered more than 1. which repairs the cuticle of damaged hair. it first appeared in a L'Oréal Elvive shampoo in 1995. Today these skin models are routinely used for biological research and for evaluating the safety and efficacy of products. strengthening it and making the hair shine.400 patents. including 501 in 2002. In 2002. Discovered in 1989. More than 120 new molecules have been patented and used by L'Oréal over the last 40 years. In the last three years. Mexoryl XL has been incorporated in all the L'Oréal Group's sun protection products in the UK since 1999.Ceramide R is a synthetic ceramide.reconstructing skin through cell engineering. 3% of the L'Oréal Group's consolidated sales is invested in R&D every year. was the inventor of the world's first synthetic hair colorants. the chemist who founded L'Oréal in 1907. Conclusion L¶ORÉAL is the world market leader in cosmetics They are very innovative and invest a lot of money in research and development . this equated to 469 million euros. The first photostable UVA and UVB filter.
Products are positioned in the high-priced segment because of their high quality They offer well coordinated products for different target groups To keep their strength alive they have to observe their competitors Recommendations Observation of the market Competition analysis Using competitive intelligence to achieve strategically competitive advantages Early market entry Growing competition to ensure the long-term economic success at the market .
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