L’Oréal: News release: “2020 Annual Results”

 Clichy, 11 February 2021 at 6.00 p.m.2020 Annual ResultsL’Oréal accelerates growth in the fourth quarter, reinforces its market shares, and preserves its profitability at 18.6%Sales: 27.99 billion euros-4.1% like-for-like ¹-3.6% at constant exchange rates-6.3% based on reported figuresOperating profit: 5.20 billion euros, representing 18.6% of salesEarnings per share ²: 7.30 eurosNet cash flow ³: 5.48 billion euros, an increase of +8.9%Dividend ⁴: 4.00 euros, an increase of +3.9% The Board of Directors of L’Oréal met on 11 February 2021, under the chairmanship of Jean-Paul Agon and in the presence of the Statutory Auditors. The Board closed the consolidated financial statements and the financial statements for 2020.Commenting on the annual results, Jean-Paul Agon, Chairman and CEO of L’Oréal, said: “In 2020, the Covid-19 pandemic, which spread across the world, triggered a crisis of supply due to the widespread closure of points of sale which led to an unprecedented, if temporary, decline of the beauty market.Throughout the year, L’Oréal made the protection of all its employees as well as its customers and suppliers an absolute priority and mobilised to produce millions of units of hand sanitiser and hand cream for donation to healthcare and other frontline workers.Thanks to the outstanding commitment of its employees, L’Oréal has traversed this crisis in the best possible condition and has even grown stronger. As anticipated and announced, the Group returned to growth in the second half, with a fourth quarter in acceleration at +4.8% ¹, and won significant market shares.Thanks to its strength in digital and e-commerce, which has again increased considerably during the crisis, L’Oréal has been able to maintain a close relationship with all its consumers and compensate to a large extent for the closure of points of sale. As a result, sales achieved in e-commerce ⁵rose sharply by +62% ¹, across all Divisions and all regions, reaching the record level of 26.6% of the total Group’s sales for the year.The Active Cosmetics Division had a record year driven by a dynamic skincare market and the remarkable success of its brands, recommended by healthcare professionals. The Consumer Products Division returned to equilibrium in the second half of the year despite the weight of makeup, and increased its market share in the other major categories. The Professional Products Division, significantly impacted by the closure of salons in the first half of the year, bounced back strongly in the second and significantly outperformed the market over the year as a whole. Lastly, L’Oréal Luxe, in an extremely difficult context, also outperformed the market and even returned to growth in the last quarter.By geographic Zone, performance was contrasted. In Western Europe and North America, growth was impacted by the development of the pandemic and public health measures, but L’Oréal gained market share in many countries. In the New Markets, the Group saw a return to growth in all Zones in the second half of the year. The performance of China is spectacular and its contribution to the performance of the Group is important.After demonstrating its resistance over the first half of the year, the Group engaged the second half with a determined and virtuous dynamic: launching major innovations, reinvesting in business drivers leading to a return to growth like-for-like, with flexibility and rigorous cost control allowing for an improvement in profitability. Over the year as a whole, and in spite of the crisis, L’Oréal maintained an operating margin of 18.6%, and generated strong operating cash flow.The Group’s non-financial performance was equally remarkable. For the fifth consecutive year, L’Oréal was recognised by the CDP as a global leader in sustainable development for its actions to fight climate change, protect forests and manage water sustainably. In addition, the Group was ranked in the top ten among 9,000 companies evaluated by the Refinitiv Diversity & Inclusion Index. L’Oréal was also recognised, for the eleventh time, as one of the world’s most ethical companies by the Ethisphere Institute. Finally, in 2020, L’Oréal launched its L’Oréal for the Future programme with ambitious new sustainability commitments for 2030.Driven by the strength of its strategic choices and a determined dynamic across the year, L’Oréal has adapted to this unprecedented context and terrible pandemic with speed and agility, accelerated all of its transformations and will emerge stronger.At the beginning of this new year, which remains marked by uncertainty regarding the evolution of the pandemic, but also by consumer’s appetite for beauty that remains intact across the world, we are confident in our capacity to outperform the market again this year and, subject to the evolution of the sanitary crisis, achieve a year of growth in sales and profits.”***Annual General Meeting to be held on 20 April 2021In view of the extension of the state of medical emergency until 1 June 2021 and the measures that could prevent shareholders from being physically present, the Annual General Meeting usually held at the Palais des Congrès in Paris is likely to be held on a restricted attendance basis under special rules applicable to “closed doors” (à huis clos) shareholder meetings, at L’Oréal’s headquarters, 41 rue Martre in Clichy.
For this reason and in accordance with Order No. 2020-321 of 25 March 2020 as amended by Order No. 2020-1497 of 2 December 2020, the Board of Directors in its meeting of 11 February 2021 gave full powers to the Chairman and CEO to hold the Annual General Meeting on such a basis if the circumstances so require, pursuant to the specific regulations that will be in force at such time.
Shareholders will be informed of the arrangements for the Annual General Meeting no later than the date of publication in the BALO (Bulletin des Annonces Légales Obligatoires) of the convening notice of the Annual General Meeting planned for 31 March. This information will also be available on the “Annual General Meeting documents” page in the “Regulated information” section of the loreal-finance.com website.Appointments and renewals of tenureAt its meeting of 11 February 2021, the Board of Directors decided to propose to the Annual General Meeting the renewal of the tenure as director of Ms. Françoise Bettencourt Meyers, Mr. Paul Bulcke and Ms. Virginie Morgon for a four-year term.
The Board of Directors also decided to propose the appointment of Mr. Nicolas Hieronimus as a director at the Annual General Meeting of 20 April 2021. As announced in the news release of 14 October 2020, the Board meeting that will take place after the Annual General Meeting will be called upon to appoint Mr. Hieronimus as CEO of the company, effective from 1 May 2021. The functions of Chairman and Chief Executive Officer will be dissociated from this date, Mr. Jean-Paul Agon being appointed as Chairman of the Board of Directors.The Board of Directors will propose to the Annual General Meeting the candidacy as new independent director of Mr. Alexandre Ricard, Chairman and CEO of the Pernod Ricard group. Mr. Alexandre Ricard will bring to the Board his knowledge of consumers and his marketing and digital expertise in the luxury and mass retail markets, particularly in Asia and America.
If the Annual General Meeting approves the proposed resolutions, the Board of Directors will be composed of 16 directors, 14 appointed by the Meeting and two directors representing the employees.
The balances in terms of independence and diversity are as follows:Seven independent directors out of 14 directors appointed by the Annual General Meeting, i.e. 50%,Seven women and seven men out of 14 directors appointed by the Annual General Meeting, i.e. parity at 50%.Additional details regarding these proposals for the renewal and appointment of directors will be available for shareholders in the Universal Registration Document, which will be published online on 16 March, and in the online convening notice on the loreal-finance.com website from 30 March.
2020 Sales