Strong increase in results

  • Sales: +10.5% based on reported figures*
  • Operating profit: +11.4%, at 16.9% of sales
  • Net profit after non-controlling interests: +10.8%
  • EPS**: +8.9%, at 2.75 euros

Confidence in another year of growth in sales, results and profitability

Commenting on the figures, Mr Jean-Paul Agon, Chairman and CEO of L'Oréal, said:

"With strong growth in sales and results, the first half of 2012 confirms the group's good dynamics. L'Oréal is continuing to strengthen its positions, and is thus reinforcing its leadership of the worldwide cosmetics market.

Driven by an ambitious project, the universalisation of beauty and the conquest of the next billion consumers, the group has continued to build the L'Oréal of tomorrow: dynamising our brands, strengthening our geographic footprint, rolling out our research laboratories, opening new industrial sites, and continuing efforts to raise the productivity of advertising and promotion business drivers and organisational structures.

The growth in results confirms the relevance of our business model: although it is important to emphasise that half-year figures are not particularly representative, this performance reflects the group's ability to build solid and profitable growth.

Bolstered by these results, and despite the uncertainties of the economic environment, we confirm for 2012 our ambition to outperform the market, and achieve another year of growth in sales, results and profitability."

Furthermore, the Board of Directors has decided, in application of the authorisation approved by the Annual General Meeting of April 17, 2012, to buy back L'Oréal shares for a maximum amount of 500 million euros, by December 31, 2012. The shares bought back will be cancelled (see page 5).

* +6.0% like-for-like
** Diluted net earnings per share, based on net profit excluding non-recurring items after non-controlling interests.

A - First-half 2012 sales

  • Based on reported figures, the group's sales, at June 30, 2012, amounted to 11.21 billion euros, an increase of +10.5%. Like-for-like, i.e. based on a comparable structure and identical exchange rates, the sales growth of the L'Oréal group was +6.0%. The net impact of changes in consolidation was +0.7%. Currency fluctuations had a positive impact of +3.8%.Growth at constant exchange rates was +6.7%.
  • If the current exchange rates, i.e. €1 = $1.25 are extrapolated up to December 31, the impact of currency fluctuations on sales would be approximately +5.0% for the whole of 2012.
  • The news release of July 26, 2012 details the activity for the first half of 2012. This news release is available and can be downloaded from the website.

Sales by operational division and geographic zone


2nd quarter 2012 

1st half 2012


 Growth Growth



By operational division







Professional Products


Consumer Products


L'Oréal Luxe


Active Cosmetics


Cosmetics total


By geographic zone


Western Europe


North America


New Markets, of which:

-   Asia, Pacific1,006.69.2%21.1%2,130.912.5%21.9%
-   Eastern Europe338.14.3%3.9%698.23.1%2.7%
-   Latin America448.37.9%5.0%881.88.2%6.2%
-   Africa, Middle East177.823.5%27.5%351.617.2%18.2%

Cosmetics total


   The Body Shop




Group total


(1) Group share, i.e. 50%.

B - First-half 2012: Strong increase in results

The half-year consolidated accounts have undergone a limited examination by the Statutory Auditors.

1)    Operating profitability at 16.9% of sales

Consolidated profit and loss account: from sales to operating profit.

In €m06/30/11As % of sales12/31/11As % of sales06/30/12As % of salesGrowth 06/30/11 06/30/12



Cost of sales

-2,889.528.5%-5,851.528.8%- 3,247.229.0%+12.4%

Gross Profit


R&D expenses

-346.33.4%-720.53.5%- 386.53.4%+11.6%

Advertising and promotion expenses

-3,135.430.9%-6,291.630.9%- 3,403.630.4%+8.6%

Selling, general and administrative expenses

-2,076.120.5%-4,186.920.6%- 2,279.420.3%+9.8%

Operating profit


Gross profit, at €7,966m, grew strongly: +9.7%. It came out at 71.0% of sales, compared with 71.2% in 2011 and 71.5% in the first half of 2011.
The variation particularly reflects the exchange rate effect due to the weakening of the euro against the main currencies, and the impact of the consolidation of the American company Clarisonic. It also reflects a slight increase in promotional offers, in the context of arbitrage with advertising and promotion expenses.

Research and development expenses have remained stable as a percentage of sales, at 3.4%, and have grown strongly. This increase demonstrates the group's constant determination to support its investments in Research and Innovation.
Advertising and promotion expenses came out at 30.4% of sales, a level slightly below that recorded in the first half of 2011.
Selling, general and administrative expenses, at 20.3% of sales, were at a lower level than in the first half of 2011, confirming the fact that productivity efforts are continuing.

Operating profit grew by 11.4%, representing an improvement of 10 basis points compared with the first half of 2011, at 16.9%.

2)    Operating profit by branch and division

 06/30/1112/31/11 06/30/12
 €m% of sales€m% of sales€m% of sales

By operational division


Professional Products


Consumer Products

1,013.3 20.1%1,859.018.9%1,081.719.9%

L'Oréal Luxe


Active Cosmetics


Cosmetics divisions total




Cosmetics branch total


The Body Shop


Dermatology branch**




* Non-allocated = Central group expenses, fundamental research expenses, stock option and free grant of shares expenses and miscellaneous items. As % of cosmetics sales.
** Group share, i.e. 50%.

The profitability of the Professional Products and Consumer Products Divisions, at 19.9%, are virtually stable compared with the first half of 2011.
The profitability of the L'Oréal Luxe Division, at 19.5%, is significantly higher than in the first half of 2011.
The Active Cosmetics Division, whose seasonality is always very pronounced, once again recorded extremely high profitability in the first half of 2012, at 26.1%.

Non-allocated costs, at 2.7%, were reduced slightly compared with the first half of 2011.

The profitability of The Body Shop, which is mainly achieved in the second half of each year, came out at 3.1%.

The profitability of Dermatology, which is traditionally stronger in the second half of each year, came out at 11.0%, a significant improvement on the first half of 2011.

3)    Net earnings per share**: €2.75

Consolidated profit and loss accounts, from operating profit to net profit excluding non-recurring items.

In €m06/30/1112/31/1106/30/12Evolution 06/30/11 06/30/12

Operating profit


Financial revenues and expenses excluding dividends received


Sanofi dividends


Profit before tax excluding non-recurring items


Income tax excluding non-recurring items

-480.7-977.6- 545.0 

Non-controlling interests


Net profit excluding non-recurring items after non-controlling interests*




Net EPS ** (€)


Net profit after non-controlling interests


Diluted net EPS after non-controlling interests (€)


Diluted average number of shares


* Net profit excluding non-recurring items after non-controlling interests does not include capital gains and losses on disposals of long-term assets, impairment of assets, restructuring costs, as well as competition litigation, and associated tax effects or non-controlling interests.
** Diluted net earnings per share excluding non-recurring items after non-controlling interests.

Overall finance costs, at €4.7m, have fallen sharply compared with the first half of 2011, as a result of the significant decline in net debt.
The dividend received from Sanofi for 2011 amounted to €313m, an increase of +6.0%.
Profit before tax excluding non-recurrent items amounted to €2,205.2m, an increase of +10.9%.
Income tax amounted to €545m, representing a rate of 24.7%, slightly above the rate in the first half of 2011.

Net profit excluding non-recurring items after non-controlling interests amounted to €1,658.6m, up by +10.1%.

EPS amounted to €2.75, up by +8.9% compared with the first half of 2011.

After allowing for non-recurring items, linked mainly to industrial restructuring, net profit after non-controlling interests amounted to €1,625.2m, an increase of +10.8%.

4)    Operating cash flow and balance sheet

Gross cash flow amounted to €1,963m, an increase of 9.3% compared with the first half of 2011.

The change in working capital has increased significantly, as is traditionally the case in the first half of the year.
Total cash flows from operating activities (see cash flow statement in Appendix VI) amounted to €1,251m.
Investments amounted to €483m, that is 4.3% of sales.

After payment of the dividend and equity investments, consisting mainly of the acquisition of Cadum, the residual cash flow came out at -€238m.

At June 30, 2012, cash net of financial debt was positive at €234m.

The balance sheet structure, which was already robust, was further reinforced with shareholders' equity representing 66% of total assets.

Share buyback programme.
The L'Oréal Registration Document filed with the AMF (Autorité des Marchés Financiers) on March 14th 2012 describes, on pages 213 and 214, the share buyback program in application of article 241-2 of the General Regulation of the AMF.

"This news release does not constitute an offer to sell, or a solicitation of an offer to buy L'Oréal shares. If you wish to obtain more comprehensive information about L'Oréal, please refer to the public documents registered in France with the Autorité des Marchés Financiers, also available in English on our Internet site
This news release may contain some forward-looking statements. Athough the Company considers that these statements are based on reasonable hypotheses at the date of publication of this release, they are by their nature subject to risks and uncertainties which could cause actual results to differ materially from those indicated or projected in these statements."

Contacts at L'ORÉAL

Individual shareholders and market authorities
Mr Jean Régis CAROF
Tel.: +33 1 47 56 83 02  

Financial analysts and institutional investors
Mrs Françoise LAUVIN
Tel.: +33 1 47 56 86 82  
Tel.: +33 1 47 56 76 71  

Tel.: +33 1 47 56 70 00

For more information, please contact your bank, broker or financial institution (I.S.I.N. code: FR0000120321), and consult your usual newspapers, and the Internet site for shareholders and investors,, or its mobile version on your cell phone,; alternatively, call +33 1 40 14 80 50.

Read the whole news release in a PDF file