FINANCIAL ANALYSTS MEETING September 17 th, 2013 Mr. Jochen Zaumseil Executive Vice-President Western Europe Zone
1. COSMETICS MARKET IN WESTERN EUROPE 2
Cosmetics Market in 2012* Size by region Western Europe North America = Asia-Pacific excl. Japan * L Oréal / BMS - Excluding soaps, razors and toothpastes. Sell-in. 3
Cosmetics Market in 2012* Weight by category in Western Europe and North America Face Care 19% 18% Fragrances 15% 18% Hygiene 12% 15% MakeUp 14% 23% HairCare 11% 11% Western Europe North America BodyCare 7% 8% HairColor 6% 7% Styling 5% 5% SunCare 3% 3% * L Oréal / BMS - Excluding soaps, razors and toothpastes. Sell-in. 4
Cosmetics Market in 2012* Weight by channel in Western Europe and North America Mass 45% 51% Luxury 26% 27% Dermocosmetics 2% 11% Western Europe North America Professional 8% 11% Direct Sales 8% 13% * L Oréal / BMS - Excluding soaps, razors and toothpastes. Sell-in. 5
Cosmetics Market in 2012* Beauty Consumption by Capita (in euros excluding Travel Retail) USA 108 Mexico 26 UK Germany 98 80 France 111 Spain Italy 88 93 Russia 52 India 3 China 11 Japan 195 Brazil 61 South Africa 26 * L Oréal / BMS - Excluding soaps, razors and toothpastes. Sell-in. World 31 6
Cosmetics Market in 2012* TOP 10 Markets (Bn euros/sell-in) 1 UNITED STATES 39 2 JAPAN 25 3 CHINA 15 4 BRAZIL 12 5 RUSSIA 6 FRANCE 7 7 7 GERMANY 8 UNITED KINGDOM 9 ITALY 6 6 7 10 SPAIN 4 * L Oréal / BMS - Excluding soaps, razors and toothpastes. Sell-in. 7
Western Europe Beauty Market Growth* 2010/H1-2013 South Europe = Italy, Spain, Portugal & Greece North Europe = France, Germany, UK, Switzerland, Belgium, Netherlands, Austria, Sweden, Norway, Denmark & Finland 2010 2011 2012 H1-2013 Western Europe + 0,8% + 0,7% + 0,0% - 0,9% North Europe + 1,1% + 0,8% + 0,7% + 0,0% South Europe -1,1% -0,7% -3,1% -3,6% * L Oréal / BMS - Excluding soaps, razors and toothpastes.sell-in, H1-2013 provisional estimate 8
2. KEY PLAYERS 9
TOP 10 Players of the Cosmetics Market in Western Europe in 2012* (market share, %) L'Oréal 19% Procter & Gamble 8% Beiersdorf 7% Unilever 6% Henkel 4% Coty 4% LVMH 3% Estée Lauder 3% Chanel 2% Johnson & Johnson 2% * Euromonitor Sell-out Beauty & Personal Care excluding soaps, oral care and razors & blades 10
TOP 3 Players of the Cosmetics Market in Western Europe in 2012 by Channel TOTAL* Mass** Luxury*** Salons**** Dermocosmetics***** #1 L'Oréal L'Oréal L'Oréal L'Oréal L'Oréal #2 P&G P&G Estee Lauder P&G Pierre Fabre #3 Beiersdorf Beiersdorf LVMH Henkel Beiersdorf *Euromonitor Sell-out Beauty & Personal Care excluding soaps, oral care and razors & blades **Panel IRI/Nielsen Europe 14 sell-out ***Internal Estimate ****Kline sell-in *****IMS Europe 8 Panel sell-out 11
TOP 3 Players of the Cosmetics Market in Western Europe in 2012 by Category TOTAL* Hair Care* Skincare* Make-Up* Fragrances* Hygiene* #1 L'Oréal L'Oréal L'Oréal L'Oréal Coty Unilever #2 P&G P&G Beiersdorf Coty L'Oréal Beiersdorf #3 Beiersdorf Henkel Estee Lauder P&G LVMH Colgate L'Oréal *Euromonitor Sell-out Beauty & Personal Care excluding soaps, oral care and razors & blades Skincare = Face + Body + Sun care Hygiene = Shower Gel + Intimate Hygiene + Bath Additives + Talcum Powder + Deodorants + Shaving 12
L Oréal Market Shares in 2012* Western Europe 19% France 28% Europe 4 (UK/GER/IT/SP) 15% = 60% of the Beauty Market in Western Europe North America 14% * L Oréal / BMS - Excluding soaps, razors and toothpastes.sell-in. 13
3. L OREAL 14
Western Europe Key facts & figures 2012 Sales: 7,399.6 million Operating Profit: 21.3% Employees: 30 798 Factories: 18 Research Centers: 11 Evaluation Centers: 3 15
L Oréal cosmetics Sales in 2012 (as a % of sales) by geographic zone North America 25.0% Western Europe 35.6% Latin America 8.8% Eastern Europe 6.8% Asia-Pacific excl. Japan 17.9% Japan 2.7% Africa, Middle-East 3.3% 16
Operating profit by region in 2012 (as a % of sales) Cosmetics operating profit by geographic zone* (as a % of sales) 21.3% 18.4% 18.5% Western Europe North America New Markets * Before central group expenses, fundamental research expenses, stock-option & free grant of shares expenses and miscellaneous items as a % of total cosmetics sales 17
L Oréal Market Share in Western Europe from 2009 to 2012 2009 2010 2011 2012 L'Oréal Western Europe 18.6% 18.8% 18.8% 18.9% L Oréal / BMS - Excluding soaps, razors and toothpastes.sell-in. 18
Total Beauty Mass Market Western Europe* 2011-YTD July 2013 Market Share in value % 30 28 26 28.4 28.9 29.4 24 22 20 18 16 14 12 10 11.6 10.8 10.2 L'Oréal CPD Competitor n.1 Competitor n.2 8 6 10.1 9.7 9.7 4 2 0 2011 2012 2013 YTD * source : NIELSEN/IRI panel / Total Beauty = Hair + Skincare + Make-Up + Deodorant Hair = 14 Countries, Skincare = 14 Countries (9 in Bodycare, 9 in Suncare), Make-Up = 12 Countries, Deodorant = 5 Countries Europe 14 = Germany, Austria, Belgium, Denmark, Spain, France, United-Kingdom, Greece, Italy, Norway, Netherlands, Portugal, Sweden and Switzerland 19
Hair Color Mass Market Western Europe* 2011-YTD July 2013 Market Share in value % 60 50 40 50.0 50.6 52.8 30 20 27.3 28.0 27.2 L'Oréal CPD Competitor n.1 10 0 2011 2012 2013 YTD Years * source : NIELSEN/IRI panel Hair = 14 Countries Europe 14 = Germany, Austria, Belgium, Denmark, Spain, France, United-Kingdom, Greece, Italy, Norway, Netherlands, Portugal, Sweden and Switzerland 20
Face Care Mass Market Western Europe* 2011-YTD July 2013 Market Share in value % 30 25 20 15 10 24.8 26.0 26.8 20.7 20.5 20.7 L'Oréal CPD Competitor n.1 Competitor n.2 5 8.9 7.8 7.0 0 2011 2012 2013 YTD Years * source : NIELSEN/IRI panel Skincare = 14 Countries (9 in Bodycare, 9 in Suncare) Europe 14 = Germany, Austria, Belgium, Denmark, Spain, France, United-Kingdom, Greece, Italy, Norway, Netherlands, Portugal, Sweden and Switzerland 21
4. OPPORTUNITIES 22
L Oréal in Western Europe One Ambition +70 million consumers One Strategy Universalization One Objective Outperform the market and deliver growth 23
Many Opportunities to Grow in Western Europe Strategic Categories Modern Targets Skin Care Make Up Hair Care Seniors The «New Smart» New Brands Distribution Extension Clarisonic Urban Decay Essie 24
There is a North and a South Consumer WE North WE South WE Hair Hair Density Hair Diameter Hair Nature Hair Length Hair Color Hair problems Face Skin Density Skin Diameter Skin Nature SkinColor Skin problems Sensitive skin R&I CMI Country Clustering 2013 Beauty Track France/UK/It/Spain Women 15-75 Medium Thin Straight to wavy Shorter Lighter from Blonde to brown Flat Without volume Stressed hair Weak Perceptions enhanced by cold heating inside buildings Thin - Pores - Sebum 1-2 Dry skin Average 40% Perceptions enhanced by cold weather 25 Very High Medium to thin Straight to curly Longer Darker from darker brown to black Unruly (wavy factor) Oily hair Damaged hair (straightening/curl control desire -> high usage of diffusing dryers and straighteining irons) Perceptions enhanced by heat and sun creating bothersome scalp perspiration Medium ++ Pores ++ Sebum 1-2-4 Skin marks/spots (more olive skin ) Oily skin related problems Average 60% Perceptions enhanced by heat and sun creating bothersome face perspiration
Elder Consumers Opportunities 55+ women account for a growing share of European potential women consumers The new generation of elder 55-65 spend more than the average female population Index 120 versus total population 250 205 222 200 191 171 176 214 190 179 150 172 113 143 TAM 10 2012 100 TAM13 2008 83 28 38 23 36 50 0 TOTAL MOINS DE 25 ACHÈTEUSES ANS DE 25 À 34 ANS DE 35 À 49 ANS DE 50 À 64 ANS 65 + And this will continue 65+ later SOURCE: Eurostat; L'Oréal data from UK 26
WELCOME TO FRANCE 27