Strong growth in half - year earnings :
Net profit up by 26.3%



The group's consolidated net sales at 30 June, 2001 amounted to € 6.98 billion. Sales growth was 13.5% compared with the 1st half of 2000.

Net profit before capital gains and losses after minority interests, used to compute earnings per share, amounted to € 587.1 million, growing by 26.3%. This figure does not include non-recurrent items, and in particular the net capital gain recorded on the disposal of the investments in Marie-Claire and Lanvin. This gain is included in the net book profit after minority interests, which amounted to € 700.7 million, an increase of 52.9%.
According to Mr Lindsay OWEN-JONES, Chairman and Chief Executive Officer of L'Oréal, "despite the less favourable economic climate in the main markets, L'Oréal was able to maintain strong growth in sales and profit.

While these figures cannot be extrapolated directly, they are extremely encouraging, and allow us to look forward to get another year of strong internal growth and improvement in margins. The 2001 fiscal year should therefore be a very good year for L'Oréal."

Strong growth in sales

New products
  • The brands concentrated their product launches on the group's core business segments: colourants, make-up, hair care, skin care and perfumes. Amongst others, there were successful launches for the colourants Open by L'Oréal Paris and Lumia by Garnier, Smooth Result foundation by Maybelline, the Oleo-Relax hair care line by Kerastase, Age Fitness skin care from Biotherm and the Emporio White fragrance by Giorgio Armani.

  • Following the success of the Age Perfect skin care line by L'Oréal Paris, several other products were launched to take advantage of the high potential of the "baby boomers" market: Absolue by Lancôme, Novadiol by Vichy and the new shampoo line Elsève Regenium by L'Oréal Paris.

Sustained growth in the United States
  • L'Oréal achieved 30% sales growth in the United States thanks to acquisitions, and by gaining large market shares, particularly in colourants and in perfumes, where for the first time ever L'Oréal succeeded in putting four of its women's perfumes into the top ten chart.

Major successes in new markets
  • In China, where the group's sales increased by more than 20%, Lancôme became the number one brand in the main department stores, while Maybelline further consolidated its leadership in mass-market make-up.

  • The group has achieved exceptional success in several other markets: Mexico (+30%), Russia (+65%), Thailand (+30%), India (+29%).
  • The group is continuing to systematically introduce its core brands into new countries: Garnier in Korea, Vichy in Mexico, La Roche Posay in Hungary, and Helena Rubinstein in China.
    In the cosmetics sector, sales trends by geographical zone at 30 June, 2001 were as follows:
At 30 June 2001 (€ millions) Growth on a comparable basis Growth based on solidated figures
Western Europe
3,462.7 + 4.6 % + 4.8 %
North America 2,104.3 + 9.3 % + 29.8 %
Rest of the World 1,227.9 + 14.5 % + 15 %
Cosmetics total 6,794.9 + 7.7 % + 13.4 %
Strong increase in operating profit

Adjusted operating profit increased by 23.0% to € 814.4 million. It represented 11.7% of consolidated sales, compared with 10.8% at end-June 2000.
+ Adjusted operating profit (1) by sector
At 30 June 2000 As % of sales At h0 June 2001 As % of sales
Cosmetics € 631.3 m 10.5% € 790.3 m 11.6 %
Dermatology (2) € 32.9 m 28.1 % € 25.7 m 18.8%
Consolidated total € 661.9 m 10.8% € 814.4 m 11.7%
(1) Operating profit including exchange rate gains and losses.
(2) Group share, i.e. 50%.
The net financial charge, excluding exchange rate gains and losses, amounted to € 87.3 million compared with € 60.2 million at end-June 2000, due to acquisitions carried out mainly in the second half of 2000.

Consequently, the pre-tax profit of fully consolidated companies amounted to € 727.1 million, an increase of 20.8%.

Corporate taxes at group level increased 16.6% to € 261.4 million.

Net profit before capital gains and losses of the fully consolidated companies was thus € 465.7 million, an increase of 23.4%.

Substantial contribution from equity affiliates

The group share of net profit of equity affiliates amounted to € 126.2 million. The contribution of SANOFI-SYNTHELABO to consolidated profit was € 125.7 million, an increase of 47.5%.
Main half-year indicators
At 30 June 2000 (2) At 30 June 2001 in € millions Growth
Consolidated sales 6,149.9 6,978.3 + 13.5 %
Operating profit 690.2 792.4 + 14.8 %
Adjusted operating profit (1) 661.9 814.4 + 23.0 %
Pre-tax profit of fully consolidated companies 601.7 727.1 + 20.8 %
Net profit of fully consolidated companies 377.6 465.7 + 23.4 %
Group share of net profit of equity affiliates 91.0 126.2 + 38.6 %
Net profit before capital gains and losses and minority interests 468.6 591.9 + 26.3%
Net profit before capital gains and losses after minority interests 464.9 587.1 + 26.3 %
(1) Operating profit including exchange rate gains and losses.
(2) Some subsidiaries have reclassified their accounts to comply with the group's accounting plan. These reclassifications do not affect the group's earnings levels.

2001 Interim report (Published in the Bulletin des Annonces Légales Obligatoires (# 117 issue, 28 September 2001), pages19733 to 19737)