SALES AT SEPTEMBER 30th, 2004.
10.93 billion euros, up by +6.4% like-for-like.
Full-year targets confirmed.

- STRONG GROWTH IN NORTH AMERICA AND IN NEW AND EMERGING MARKETS

- DIFFICULT CLIMATE IN EUROPE

- GRADUAL DECLINE IN NEGATIVE IMPACT OF EXCHANGE RATES

- ACHIEVEMENTS IN LINE WITH OUR TARGETS


The sales of L'Oréal at September 30th 2004 amounted to € 10.93 billion, an increase of 3.7% compared with 3.6% up to the end of June.
The impact of currency fluctuations, which was –3.3% at the end of June, amounted to -3.2% at the end of September.

The net impact of changes in consolidation (in China, the consolidation of Mininurse and Yue Sai; and in Japan the 100% consolidation of Shu Uemura) was +0.5% at the end of September.

Commenting on the figures, L'Oréal Chairman and Chief Executive Officer Mr Lindsay OWEN-JONES said: "At the end of September, the increase in our sales, reflecting the same trend as the first half-year, is in line with our expectations. L'Oréal's strategy of retail channel diversification and strong geographic expansion outside the group’s original markets has enabled like-for-like growth of +6.4%, despite the sluggish climate in Europe. The sales growth achieved means we can confirm our full-year results targets".

Sales growth by operational division and geographic zone was as follows:

At September 30th 2004 
€ m Growth
Like-for-like Published figures
By operational division      
Professional Products 1,516 + 7.3 % + 4.9 %
Consumer Products 5,922 + 5.1 % + 2.4 %
Luxury Products 2,517 + 6.9 % + 4.0 %
Active Cosmetics 679 + 16.6 % + 15.1 %
Cosmetics total 10,706 + 6.4 % + 3.8 %
       
By geographic zone      
Western Europe 5,578 + 1.1% + 1.2 %
North America 2,827 + 7.8 % - 0.6 %
Rest of the World, of which: 2,301 + 19.6 %
+ 17.2 %
- Asia 937 + 19.3 % + 20.9 %
- Latin America 528 + 16.1 % + 6.4 %
- Eastern Europe 374 + 31.5 % + 27.8 %
- Other Countries 463 + 15.6 % + 15.5 %
Cosmetics total 10,706 + 6.4 % + 3.8 %
Dermatology (1) 208 + 4.1 % - 1.9 %
Group total 10,931 + 6.4 % + 3.7 %
(1) Group share, i.e. 50% With +6.4% like-for-like growth, that is based on a comparable structure and identical exchange rates, over the first nine months of the year, L'Oréal cosmetics sales once again grew faster than the market. Performance was particularly good in the hair salon and selective retail channels which account for almost half of group sales.

- The Professional Products Division, whose products are sold through hair salons, achieved like-for-like growth of +7.3%, outstripping the rate of market growth. The upward trend was strengthened in particular by the launch of Redken for Men, the complete revamping of the Tecni.Art styling line from L’Oréal Professionnel and the continuing development of Matrix.

- The Consumer Products Division maintained like-for-like sales growth of +5.1%, driven by a very strong performance in North America and the Rest of the World. In a competitive market, unit sales grew faster than revenues, reflecting the many market share gains and performances of our products. The growth rate reflects successful launches such as XXL mascara and Dream Matte Mousse foundation from Maybelline, FructisSleek + Shine shampoo from Garnier and, at L'Oréal Paris, Studio Hot styling products, the Dermo Expertise Refinish skincare line and True Match and Cashmere Perfect foundations.

- The Luxury Products Division continued to achieve good like-for-like sales growth at +6.9% up to the end of September.
The latest launches - Resurface Peel and Juicy Wear from Lancôme, Line Peel from Biotherm and Hydra Genius from Helena Rubinstein, together with Armani Mania and Black Code from Giorgio Armani - have been very well received. Moreover, the Kiehl’s and Shu Uemura brands are growing strongly as their international expansion continues.

- Active Cosmetics, which sells its products through pharmacies, again produced strong like-for-like growth of +16.6%. The international expansion of the brands continued to accelerate while market share gains were achieved in Western Europe. The success of the Lyposine slimming and Normaderm anti-acne lines from Vichy, together with Rosaliac, the anti-rosacea product from La Roche Posay, made a strong contribution to this performance.

With a difficult climate in the United States and Germany, the dermatology branch achieved like-for-like sales growth of +4.1% at the end of September. In this context, Galderma continued to win market share.

Strong expansion in North America
Exceptional growth in new markets

- In North America, sales growth has accelerated to 7.8% like-for-like, at the end of September.
Each division has made substantial market share gains.
In Professional Products, Redken and Kérastase continue to record spectacular growth and win over new salons.
In Consumer Products, the success of Fructis by Garnier has been confirmed in both haircare and styling, and Maybelline has chalked up two product successes with the newly-launched XXL Mascara and Dream Matte Mousse foundation.
Lastly, in Luxury Products, Lancôme has made great strides forward in make-up with the immediate success of new Hypnose mascara and Juicy Wear lipstick, and the launch of the latest women's fragrance, Armani Mania.

- Sales in Western Europe have risen by +1.2%. In a growing market, the Professional Products Division scored important successes, particularly with its new colourant range Luo and the revamped Tecni.Art styling line.

For the Consumer Products Division, 2004 continues to be a difficult year in France; however encouraging market share gains have been recorded over the last few months, consolidating the division's already strong position.

The economic climate in Germany remains unfavourable, but on the other hand strong advances have been made in the other West European countries - particularly the United Kingdom, Spain and the Nordic countries.

The sales of the Luxury Products Division continued to grow, particularly in the United Kingdom, Spain and Northern Europe. The success of Hypnôse from Lancôme, the revamping of Aquasource from Biotherm and the launch of Armani Mania all made strong contributions to these results.

The strong growth of Active Cosmetics in all countries has once again enabled the Vichy and La Roche Posay brands to improve their market shares, particularly in Spain, Portugal and the Netherlands.

- Like-for-like growth in new markets has continued at a rapid rate of +19.6%.

- Sales in Asia increased by +19.3% like-for-like, driven by China with +67%, Hong Kong with +42% and Taiwan with +25%. Consumer Products have been boosted by the popularity of the Garnier brand including the expansion of the Mininurse brand in China, the growth of Maybelline, and the integration of the Chinese brand Yue-Sai.
The success of Kérastase and Vichy has been confirmed. Lastly, brands are continuing to be introduced into new countries (launch of Shu Uemura in China and Indonesia, etc.), and global brands are being rolled out for the first time in this zone (Matrix in China).

- In Latin America, like-for-like sales growth amounted to +16%, supported by Mexico with +15% and Argentina with +23%, as the upturn in the latter country continues.
In the Professional Products Division, the Kérastase brand is now recognised as the major haircare institute brand.
In the Consumer Products Division, the success of the Garnier brand continues with Fructis shampoo and Nutrisse colourant, while Dermo Expertise by L'Oréal Paris is growing strongly with its Pure Zone and Decontract Rides lines. The strong penetration of the Active Cosmetics Department is also worth noting, with the introduction of dermocosmetics counters in pharmacies.

- In Eastern Europe, the nine-month sales confirm the very good growth momentum in the countries concerned.
This is particularly true in Poland with +19% and the Russian Federation with +45%, which are building on the rapid expansion of the Garnier brand in the hair colour market with Garnier Color Naturals, and in the skincare and haircare markets with Garnier Skin Naturals and Fructis respectively. Maybelline make-up is another success story.
Meanwhile, the Vichy brand in pharmacies and the Matrix brand in hair salons have enabled the Active Cosmetics and Professional Products Divisions to speed up their growth.
Finally, the Luxury Division's performance has been very promising.

- Sales in the Other Countries have grown rapidly by +15.6% like-for-like, particularly in India with +47%, Turkey with +29% and Australia with +17%.

Pre-tax consolidated sales of the L'OREAL group for the 2004 first nine months (B.A.L.O., 29.10.04, page 27127) (french)