L’Oréal: News release: “First Quarter 2020 Sales”
Clichy, 16 April 2020 at 6:00 p.m.First Quarter 2020 SalesSales evolution: -4.8% 1Sales: 7.22 billion euros -4.8% like-for-like 1 -5.0% at constant exchange rates -4.3% based on reported figuresResumption of business in China, +6.4% in first quarter 1Growth in e-commerce: +52.6% 2Active Cosmetics Division still posting double-digit growthAll L’Oréal teams strongly mobilisedCommenting on the figures, Mr Jean-Paul Agon, Chairman and CEO of L’Oréal, said: “In a situation marked by the expansion of the Covid-19 pandemic, which first appeared in China and has spread to the rest of the world, L’Oréal’s number one priority is to ensure the protection of its employees. The Group has also taken a large number of solidarity measures for its customers and partners, and is providing support to health authorities 3.The first quarter of 2020 has seen a decline in the cosmetics market of around -8%. In these difficult circumstances, L’Oréal has succeeded in outperforming the market with sales at -4.8% like-for-like 1. The performances by Division are contrasted. The L’Oréal Luxe and Professional Products Divisions are the most impacted due to the closure of perfumeries, department stores and hair salons in many countries. The Consumer Products Division however has seen a more moderate decline, largely because the activity in mass-market retail has been maintained. Lastly, the Active Cosmetics Division is still posting double-digit growth, with the pharmacy channel still open, and a portfolio of brands that is adapted to the strong demand for health-related products.All geographic Zones have progressively been impacted by the closure of sales outlets and the introduction of lockdown measures: first of all in China from January, and then in the rest of the world, particularly in Western Europe from the beginning of March, and in North America from the end of March. As for Travel Retail, it has been heavily impacted by the sharp restrictions on travel worldwide.
Note that China is already seeing an encouraging recovery in beauty product consumption.E-commerce, a key growth driver for the Group, is growing at +52.6%, and now represents close to 20% of sales 2. The current crisis has led to a strong acceleration of the digital transformation on which L’Oréal is particularly well positioned thanks to its strength in e-commerce and its expertise in digital media, content and services which enrich the consumer experience. In an environment that is evolving every day, lockdown measures will clearly continue to have a significant impact on the consumption of skincare and beauty products, and consequently on our business in the second quarter. However, as the example of China has shown, the current situation does not call into question consumers’ strong appetite for beauty products, which remains intact. The market should recover quickly as soon as measures to close sales outlets are lifted.In this context L’Oréal’s fundamentals remain more relevant than ever. First of all, our strength rests on our balanced business model, with our presence in all distribution channels and all categories. In addition, the Group has already introduced very strict measures in terms of operational discipline, with a freeze on the worldwide headcount, a freeze on travel, a reduction in non-essential spending, and a thorough review of business drivers and investments. Furthermore, L’Oréal entered this period with a robust balance sheet, a high level of shareholders’ equity, a positive net cash situation, and with very substantial credit lines available. Finally, it is the outstanding talent and commitment of L’Oréal teams all over the world, and the agility of its organisation, which enable the company to adapt, country by country, to the constantly changing situation.We are therefore confident in our ability to traverse this period of crisis in the best possible conditions and to reaccelerate as soon as conditions permit in each geographic Zone.”First quarter 2020 sales
Like-for-like, i.e. based on a comparable scope of consolidation and constant exchange rates, the L’Oréal group sales were at -4.8%.
The net impact of changes in the scope of consolidation was -0.2%.
Evolution at constant exchange rates amounted to -5.0%.
Currency fluctuations had a positive impact of +0.7%. Extrapolating from the exchange rates on 31 March 2020, i.e. with €1 = $1.095 up to 31 December, the impact of currency fluctuations on sales for the full year 2020 would be approximately -1.0%.
Based on reported figures, the Group’s sales, at 31 March 2020, amounted to 7.22 billion euros, that is -4.3%.Sales by Division and geographic Zone
