The L'Oréal juggernaut continues.
The world's largest beauty company posted double-digit like-for-like growth for the third year in a row, surpassing €40 billion in sales for the first time in 2023.
More from WWDDespite inflation and a highly disruptive year for China's beauty ecosystem, L'Oréal reported volume sales growth - which was not the case for many of its peers - and said it continued to acquire new consumers. Unit sales increased by 4%.
One of the biggest news stories of the year was the purchase of Aēsop from Natura&Co., which valued the Australian luxury beauty brand at more than $2.5 billion and was L'Oréal's largest acquisition ever. Aēsop had revenues of $537 million in 2022. The deal was signed in April and completed in August, integrating the brand into the L'Oréal Luxe division. Aēsop has approximately 400 boutiques worldwide and recently launched its first stores in China under Natura and launched its first fragrances.
In terms of performance, the mass market consumer products division recorded the best growth in more than three decades, at 12.6% on a comparable basis, driven by both makeup and activities in Europe and emerging markets. The top four brands achieved double-digit growth, with L'Oréal Paris achieving sales of more than €7 billion.
According to L'Oréal, Dermatological Beauty achieved double-digit gains for the sixth consecutive year, growing twice as fast as the dermocosmetics category. La Roche-Posay was the largest contributor to profits, while CeraVe continued to perform well and Vichy saw its strongest growth in 18 years.
L'Oréal Luxe reportedly surpassed the selective market threefold, growing its prestige market share to a record 31.8%. Excluding North Asia, the division grew by double digits, mainly driven by Yves Saint Laurent, Valentino and Prada fragrances. Makeup, especially couture brands, accelerated in the second half.
The story continues
Helena Rubinstein, which acquired L'Oréal in 1984 and has built it over the past decade into a leading player in ultra-premium skin care in Asia, has joined the ranks of L'Oréal's 'billionaire brands', surpassing the threshold of €1 billion in revenue For the first time.
L'Oréal's Professional Products division also gained market share, accounting for 25% of the total market worldwide, according to the company, benefiting from strong demand for high-quality hair care innovations. China and India both contributed to the division's growth, as did the focus on omnichannel.
Geographically, emerging markets contributed 30% of growth and accounted for 15% of the group's revenue, and Europe saw its first year of double-digit profits in more than two decades. Sales accelerated in North America, passing the €10 billion milestone.
L'Oréal has not been immune to the challenges - in China, where the beauty market has generally recovered more slowly due to subdued consumer confidence and a weak labor market, as well as the restructuring of the travel retail ecosystem as the Chinese government cracked down on cracked down on the "daigou" trade and retailers reined in their stock. Still, L'Oréal continued to grow its market share there by 80 basis points, attributing its success to being more focused on the Chinese domestic market rather than travel retail, compared to some of its competitors. In North Asia, sales fell reported by 5.8% and on a comparable basis by 0.9%, but the business outperformed the market as a whole, the report said.
Broken down by category, fragrance sales grew by 16.9% to €5.2 billion; hair care increased by 15.3% to €6.3 billion; skin care rose 10.4% to €16.4 billion, and make-up, with a turnover of €8.1 billion, rose 10%.
Prada, which has been doing well since L'Oréal acquired the license in 2021, especially thanks to the launch of women's fragrance Prada Paradoxe, introduced makeup and skin care in August. In February, L'Oréal announced it had signed a global licensing agreement with Prada SpA for fragrance and beauty under Miu Miu, with the first products launching in 2025. The Miu Miu license was previously held by Coty.
There were also brand exits, as L'Oréal announced plans to phase out Decléor, which it bought from Shiseido in 2014 along with Carita - which it recently relaunched with a more premium positioning under L'Oréal Luxe. The company also sold the green beauty brand Sanoflore to investment fund Ekkio Capital and management. Both brands were part of the Dermatological Beauty department.
On the human resources front, Fabrice Megarbane, previously president of the North Asia zone and CEO of L'Oréal China, where sales have doubled under his leadership since 2019, was appointed Chief Global Growth Officer. He replaced Frédéric Rosé, who retired. Vincent Boinay, previously managing director for global travel retail, stepped into Megarbane's former role in February.
L'Oréal relied heavily on technology, especially biotechnology. It acquired Denmark-based Lactobio, a leading company in precision probiotics and microbiome research. Through its BOLD venture capital fund, it also bought a stake in Genomatica Inc., which develops, produces and markets biotech-based alternatives to key beauty ingredients, bought into Chinese supramolecular chemistry specialist Shinehigh Innovation and led a funding round for "cell-free" biotech company Debut, whose technology widely reproduces ingredients that only occur in trace amounts in nature.
For the perfume category, L'Oréal has entered into an exclusive partnership for green science-based ingredient extraction with Cosmo International Fragrances, as the industry seeks solutions to improve the sustainability footprint of fragrances and replace ingredients of concern in the perfumer's palette. It also announced a partnership with Bakar Labs, the University of California Berkeley biotech incubator.
Investments continued in early 2024, with BOLD taking a stake in Swiss longevity biotechnology company Timeline. This year, BOLD acquired the environmental water technology startup Gjosa, with which it had been working since 2015.
Also in early 2024, L'Oréal announced that it had made a minority investment in Chinese luxury fragrance brand To Summer through its Shanghai Meicifang Investment vehicle, with backing from BOLD. It follows the 2022 investment in Documents, another growing Chinese fragrance label.
Chief Corporate Responsibility Officer Alexandra Palt, who has been instrumental in the company's ambitious sustainability roadmap during her 12 years in the role, has announced plans to step down effective April 1 this year, with Ezgi Barcenas taking on the role to take.
The best of WWD
