Robust third quarter growth: +7.1%
The sales of the L'OrÃ©al group, at September 30th 2005, amounted to 10.75 billion euros.
Strong growth continues in North America and new markets
Western Europe again positive in third quarter
Full-year objectives confirmed
Growth which was +3.5% at the end of june, rose to +7.1% in the third quarter, giving a growth rate for the first nine months of +4.7%.
On a like-for-like basis, i.e. based on a comparable structure and identical exchange rates, the group's sales growth, which was +4.1% in the first half-year, amounted to +5.0% in the third quarter, giving a growth rate of +4.4% for the nine months up to September 30th 2005.
Currency fluctuations had a positive impact of +1.7% in the third quarter. Their overall impact up to September 30th has thus been neutral.
The net impact of changes in consolidation amounts to +0.3%, mainly as a result of the acquisition of Skinceuticals in June 2005.
Commenting on the figures, Sir Lindsay Owen-Jones, Chairman and Chief Executive Officer of L'OrÃ©al, said: "As we expected, our rate of sales growth has continued to improve. Western Europe is gradually moving forward again. Strong growth continues in North America and the other regions of the world. The strengthening of the main currencies against the euro has led to a clearly positive exchange rate impact in the third quarter, for the first time in several years. In view of all these factors, we can confirm our sales and earnings targets for the full year 2005".
Cosmetics sales growth by operational division and geographic zone
(1) Group share, i.e. 50%
|At September 30th 2005(*)||At September 30th 2005(*)||At September 30th 2005(*)||3rt Quarter 2005(*)||3rt Quarter 2005(*)|
|€m||Growth like-for-like||Growth reported||Growth like-for-like||Growth reported|
|By operational division|
|By geographic zone|
|Rest of the World, of which:||2,602.2||+13.0%||+16.3%||+13.6%||+20.6%|
|- Latin America||605.1||+11.3%||+18.8%||+16.9%||+31.2%|
|- Eastern Europe||483.5||+28.4%||+33.6%||+33.6%||+39.2%|
|- Other Countries||510.3||+12.1%||+13.8%||+9.8%||+14.9%|
(*) All figures are based on IFRS accounting standards
Sales trends by cosmetics division were as follows :
The sales of the Professional Products Division increased by +5.3% like-for-like. KÃ©rastase has been boosted by the worldwide success of KÃ©rastase RÃ©flection and the launch of the new Volumactive range. L'OrÃ©al Professionnel is continuing to advance with its new hair colourant Majirel and Platinium lightening paste. The success of Redken for Men has been confirmed. Matrix has launched Color Smart for lightened hair and is continuing its international roll-out.
Sales of Consumer Products increased by +4.5% like-for-like, gathering speed in the third quarter (+5.4% like-for-like) and thus confirming the improvement seen in the second quarter. The Garnier brand's sales are growing strongly thanks to the popularity of the Ultra-Lift skincare line and Nutrisse hair colourant, while Fructis haircare products are proving consistently successful. The solid growth of the L'OrÃ©al Paris brand has been bolstered by the launches of the Revitalift Double Lifting skincare line, Infaillible foundation and Volume Shocking mascara, and by the successful men's skincare range Men Expert. Maybelline make-up achieved good third quarter figures both in foundation and mascara.
The sales of the Luxury Products Division grew by +1.7% like-for-like, with a third quarter increase of +2.1%.
The initial response to the new LancÃ´me products - PlatinÃ©um skincare, l'ExtrÃªme mascara and the new perfume, HypnÃ´se - is highly encouraging.
Flowerbomb perfume from Viktor & Rolf is continuing to deliver excellent results both in Europe and North America. The start made by the new perfumes Promesse from Cacharel and City Glam from EmporioArmani is extremely promising for the future.
Kiehl's is continuing its strategy of expansion outside the United States by opening new boutiques.
The Active Cosmetics Department, number one in dermocosmetic skincare products sold in pharmacies, once again achieved strong growth at +13% like-for-like.
This growth reflects the success of the launches and range renewals, such as the anti-wrinkle firmness skincare line Lift-Activ Pro from Vichy and the hair loss treatment Aminexil SP94. Meanwhile, LaRoche Posay is benefiting from the successful launch of the KÃ©rium anti-dandruff range and is making strong inroads into the sun protection and skin blemish segments. The very strong sales growth of InnÃ©ov is continuing.
Western European sales grow once again in the 3rd quarterIn Professional Products, consumer spending in hair salons remained sluggish in many countries, but our initiatives and the success of our product launches have boosted sales, particularly in haircare and hair colourants.
The third quarter growth in Consumer Products sales confirms the positive trend recorded in the second quarter. The favourable reception given to new higher value-added products has enabled us to strengthen all our product ranges: ElsÃ¨ve haircare, Excellence and Nutrisse hair colourants, Dermo-expertise and Skin Naturals skincare, and LÂ’OrÃ©al Paris and Maybelline make-up.
The sales of the Luxury Products Division are gradually improving with the growing success of the new products. The improvement is particularly noticeable in terms of sell-through, which has increased faster than amounts invoiced by the business units.
Once again, the Active Cosmetics sales trend was favourable.
Strong growth continues in the United StatesIn North America, like-for-like sales growth amounted to +6.6%.
Growth was particularly strong in the Consumer Products Division, thanks to the success of Fructis shampoos and styling products and Nutrisse hair colourants, and the dynamic make-up initiatives of LÂ’OrÃ©al Paris, with an excellent start for Infaillible foundation, and Maybelline with the launch of Moisture ExtrÃªme lipstick.
The Professional Products Division has continued to make market share gains, capitalising on the success of Color Smart and Biolage from Matrix and Shades EQ from Redken, and on the rapid growth of KÃ©rastase in the upmarket segment.
At Luxury Products, third quarter growth was hampered by a slowdown in sales in department stores, and by inventory reductions by the stores following the announcement that the two largest chains were merging. On the plus side, the very promising launch of Ralph Lauren perfumes (the men's fragrance Polo Black and the new women's perfume Pure Turquoise) have added to the growing success of Armani Code perfume. The success of the new RÃ©nergie Morpholift Yeux skincare line is strengthening growth at LancÃ´me, alongside the launches of LÂ’ExtrÃªme mascara and Teint Idole Ultra foundation.
Lastly, the recent acquisition of SkinCeuticals is supporting expansion in Active Cosmetics.
Rapid growth in new marketsSales in Asia advanced by +8.1% like-for-like, reflecting strong momentum in countries such as China and Indonesia. Sales in South Korea are still being held back by the crisis in the country's selective distribution channel.
A large number of product initiatives have been taken to bolster the sales growth of Consumer Products, particularly in skincare and make-up, including Unstoppable mascara from Maybelline and Skin Naturals from Garnier. In Luxury Products, Line Peel from Biotherm, RÃ©nergie Morpholift from LancÃ´me and Kiehl's boutiques have all scored successes. Lumi Oil from L'OrÃ©al Professionnel and KÃ©rastase are proving highly successful in Japan. The growth of this division also stems from the roll-out of Matrix in China and the Philippines. Finally, Active Cosmetics is continuing its very powerful expansion thanks to the success of Normateint from Vichy and Mela D-White from La Roche Posay.
Sales in Latin America have increased by +11.3% like-for-like, driven by growth in all the countries in this region. At Consumer Products, L'OrÃ©al Paris is benefiting from the success of its ElsÃ¨ve anti-dandruff shampoos and haircare lines, and of DÃ©contract Rides in the skincare segment. Nutrisse hair colourant and Fructis haircare products are making major contributions to growth at Garnier. Professional Products are taking advantage of the remarkable success of KÃ©rastase Reflection and Redken, and the continuing roll-out of Matrix in Brazil and Chile. Active Cosmetics again recorded a strong increase in sales, reflecting the success of Liftactiv Pro from Vichy and KÃ©rium anti-dandruff shampoo from La Roche Posay.
The strong growth in Eastern Europe (+28.4% like-for-like) again demonstrates the economic dynamism of this region. The scores obtained, particularly in the Russian Federation (+41% like-for-like) and the Czech Republic (+22% like-for-like) are confirming the success of the product initiatives taken by L'OrÃ©al Paris with ElsÃ¨ve haircare and DermoExpertise skincare products, and by Garnier with the launch of Fructis styling products and the development of the ColorNaturals hair colourant and Skin Naturals skincare lines.
In the Other countries, like-for-like sales growth is very rapid at +12.1%. The excellent growth rate of +46% in India reflects the success of lines such as Garnier Skin Natural skincare, Color Natural hair colourants and Fructis shampoos. "This news release does not constitute an offer to sell, or a solicitation of an offer to buy, LÂ’OrÃ©al shares. If you wish to obtain more comprehensive information about LÂ’OrÃ©al, please refer to the public documents registered in France with the AutoritÃ© des MarchÃ©s Financiers.
This news release may contain some forward-looking statements. Although 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'OREALShareholders and market authorities
Mr Jean-RÃ©gis CAROF
Tel. : +126.96.36.199.83.02
Analysts and institutional investors
Mrs Caroline MILLOT
Tel. : +188.8.131.52.86.82
Fax : +184.108.40.206.80.02
Mr Mike RUMSBY
Tel. : +220.127.116.11.76.71