L'Oreal : An exceptional group with exceptional results

The 4 divisions ( Professionnels - Grand Public- Luxe- Cosmétique active ) have a turnover of 21, 658 billion Euros with a growth of 3,8%. With an exceptional operational efficiency of 17,3% ; 3,890 billiards an increase of 130, 3 millions in comparison to 2013.
Contrary to many multinational groups, the growth of the operational efficiency is not detrimental to research and development, advertising and promotion costs. Research and development represent 3,4 % of the turnover; many multinational groups hardly represent 2%.
This power of research and development without doubt explains that turnover and these exceptional results of L’Oréal.

The financial markets have made no mistake. With the capitalization of 88,45 billion Euros, L’Oréal is the third capitalization of the CAC 40, after Total and Sanofi but before LVMH. The excellent perspectives of 2015 should comfort the exceptional process of the share which moves from 70 Euros in February 2010 to 158 Euros today.
We can note the stability of the volumes traded and the long term turnover of capital ( 0,19% ) which show the institutional shareholders trust.

The professional Division: An activity which resists very well to the crisis

The professional products have seen their turnover moving from 2,973 billion Euros to 3,032 billion Euros, that is to say a growth rate of 2,6%. This growth is happening in an economic world difficult context apart from the United States and the United Kingdom; stagnation of Europe, interrogative perspectives regarding the Chinese slowing down, troubling geopolitics context regarding some of the emerging markets: Russia, Brazil and Middle East. The turnover of the professional products represents 14% of the global turnover. However, it represents 608,8 million Euros, ( that is to say 20,1% of their turnover) of the operating income.
The recent purchase of the brands Décléor and Carita had a negative effect on the operating income in 2014 with a necessary consolidation. But the perspectives of development of these two last brands are huge. The profitability of the professional division is about to increase.

This professional Division is for the hairdressing salons, the beauty centers and for the avant-garde of the hair professionals.
Apart from l’Oréal Professionnel and Kérastase, it includes the American brands Matrix ( n°1 American ), Essie, Redken, Pureology, Mizani. Décléor and Carita, both objects of the session by Shiseido and finally Shu Uemura, the Japanese ultra luxury. The professional Division has strong positions in the west of Europe ( 33% of the turnover of the division, in North America 37% and in the emerging countries 30% ).

For 2015, the group predict a growth of the turnover and of the EBIT ( + 7% and + 9% ) . The Professional Products Division will benefit without doubt from positive macro-economic factors due to the geographical allocation of its turnover with:

• Perspectives of growth in Europe improved thanks to the Quantitative Easing of the BCE and the fair value of the Euro, and the fall in oil prices.
• A monetary policy always accommodative from the Fed in the United States and a strong dollar with and an increased purchasing power.
• A growth which remains solid in China with the support of the PBOC