CHAMPIONING BEAUTY IN A TIME OF CRISIS JEAN-PAUL AGON Chairman & Chief Executive Officer DEUTSCHE BANK ACCESS GLOBAL CONSUMER CONFERENCE 9 June 2020 C1 - Internal use
PROTECTION & SOLIDARITY PROTECTING OUR EMPLOYEES SUPPORTING CAREGIVERS SUPPORTING OUR PARTNERS Drastic health and security 15 million units of hand Freeze receivables measures on all workplaces sanitizers donated from more than 100,000 (factories, warehouses ….) small professional clients >4 million of hand creams and perfumeries Limited number of people donated infected. No fatalities Shortening leadtime In 40 countries of payments to 100% employment 9,000 most vulnerable suppliers & 100% fixed salary 70% of our factories mobilized guaranteed till end-June C1 - Internal use
1 BEAUTY IS RESILIENT AND GROWTH WILL RESUME C1 - Internal use
THE BEAUTY MARKET IS RESILIENT 9/11 SARS FINANCIAL CRISIS MERS 6% 5% 4% 3% 2% 1% 0% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1 L’Oréal worldwide beauty market estimates, excluding razors, soaps and toothpastes. 2019 provisional estimates, at constant exchange rates. C1 - Internal use
CRISIS OF SUPPLY MARKET DROP DUE TO LOCKDOWN SHOCK SHUTDOWN OF HAIRDRESSERS, DEPARTMENT STORES, PERFUMERIES, TRAVEL RETAIL STORES C1 - Internal use
CHINA RETAIL IS RECOVERING RETAIL IS RECOVERING COSMETICS IS LEADING THE RECOVERY +8% +8% 10 +7.2% JAN / FEB MARCH APRIL 5 Garments -30.9% -34.8% -18.5% 0 Cosmetics -14.1% -11.6% +3.5% -5 -7.5% -10 Jewelry -41% -30% -12.1% -15 Home Appl -30% -29.7% -8.5% -15.8% -20 Furniture -33.5% -22.7% -5.4% -20.5% -20.5% -25 Auto -37% -18% 0% Oct 2019 Jan 2020 Apr 2020 YoY evolution (in %) Source: Tradingeconomics.com / National Bureau of Statistics of China C1 - Internal use
STRONG APPETITE FOR BEAUTY ACCELERATION ONLINE THE BEAUTY MARKET IS KICKING UP QUICK RECOVERY OFFLINE CHINA SKINCARE 80% 67% 10% 58% 57% 60% 0% 40% JAN FEB MAR APR 20% -10% 11% 20% 9% -20% 0% JAN FEB MAR APR -30% -20% -23% -40% -40% -50% -60% -62% -60% -80% OFFLINE ONLINE (GFK – DS/Shopping Mall) ( SmartPath - Tmall) Source: L’Oréal market estimates C1 - Internal use
STRONG APPETITE FOR BEAUTY ONLINE STRONG OFFLINE RECOVERING PROGRESSIVELY YTD MAY 20 100% 90% 80% SKINCARE + 44% 70% 60% FRAGRANCE + 58% 50% 40% MAKE UP + 24% 30% 20% HAIR + 34% 10% 0% TOTAL BEAUTY + 38% FEB. MAR. APR. MAY JUN. JUL. TOP BEAUTY CATEGORIES TRAFFIC RECOVERY % 4000 MALLS IN CHINA C1 - Internal use
STRONG APPETITE FOR BEAUTY BACK TO SALONS OF CONSUMERS WENT BACK 2/3 TO THEIR HAIRDRESSER IN THE 1 ST WEEK OF OPENING Survey France/US/Germany – May 2020 C1 - Internal use
STRONG APPETITE FOR BEAUTY EUROPE NOW IN RECOVERY TOTAL MASS MARKET EVOLUTION TOTAL MASS MARKET EVOLUTION 0% W/C 23.03 W/C 27.04 W/C 18.05 -5% P4 P5 -10% (23.03 / 20.04) (21.04 / 19.05) -15% -16.7% -20% Total -4.8% +4.1% -25% Brick & Mortar -7.1% +0.8% -30% -35% E-COM +121.5% +196% -40% -40.0% -45% -44.7% -50% Spain total mass beauty market (Nielsen) Italy total mass beauty market (Nielsen) C1 - Internal use
2 L’ORÉAL IS CHAMPIONING THE BEAUTY MARKET C1 - Internal use
OUTPERFORMING IN Q1 BEAUTY MARKET 2 1 EST. Q1 -4.8 % ≃ -8 % 1 L’Oréal worldwide beauty market estimates, excluding razors, soaps and toothpastes. Q1 2020 provisional estimates, at constant exchange rates. 2 Q1 2020 like-for-like sales growth. C1 - Internal use
FANTASTIC ACCELERATION OF DIGITALIZATION +20% WEBSITE TRAFFIC +76% OF TIME SPENT ON +70% 2Bn WHATSAPP WORLDWIDE LIVE USAGE TIKTOK 60Bn +15% ON INSTAGRAM DOWNLOADS DAILY CONVERSATIONS BEAUTY CONVERSATIONS ON WHATSAPP MORE CONNECTION MORE COACHING MORE COMMUNITY MORE CONVERSATION C1 - Internal use
L’ORÉAL, THE CHAMPION OF DIGITAL MORE CONNECTION MORE SERVICES MORE CONVERSATION MEDIA SHIFT: X 2.5 VIRTUAL 1.2M 2 CONVERSATIONS (+28%) 77% 1 digital media TRY-ONS FROM AWARENESS TO CONVERSION 9 MINUTES TIME SPENT IMPROVED ROI TELECONSULTATION NEW FORMATS SHOPPABLE NEW TONE OF VOICE LIVE-STREAMING NEW IN-STORE VIRTUAL TESTER 2 In April, excluding Asia INCREASED CONSUMER & CUSTOMER CENTRICITY IN ONLY A FEW WEEKS 1 In April C1 - Internal use
FANTASTIC ACCELERATION FOR E-COMMERCE 27% 10 YEAR’S GROWTH IN LESS THAN 10 WEEKS US E-COMMERCE PENETRATION % OF RETAIL SALES 16% 14.4% 13.2% 11.8% 10.7% 9.7% 8.8% 8% 7.2% 6.4% 5.6% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 APRIL 2020 Source: Bank of America, US Department of Commerce, ShawSping Research C1 - Internal use
L’ORÉAL, CHAMPION OF E -COMMERCE ECOM BOOMING +53 % 1 in Q1 SHARP ACCELERATION IN APRIL >+60 % x2 IN WESTERN EUROPE AND IN THE USA 2 WEIGHT OF E-COMMERCE INCREASING ALL DIVISIONS, ALL ZONES OUTPERFORMANCE IN NORTH AMERICA 30% 25% 25% 16% 17% 18% 5X TOTAL BEAUTY MARKET Q1 D2C 20% 11% CPD VS TOTAL BEAUTY ECOMM 60% +221% 1 growth 15% MARKET GROWTH - USA 8% 50% 10% L’ORÉAL 6% +58% new consumers 5% 40% +49% 5% 30% x2 increase conversion rate MARKET 20% +11% 0% 10% 2015 2016 2017 2018 2019 JAN FEB MAR APR 1 In April - Source: SFCC 0% 1 Sales achieved in Q1 2020 on our brands’ own websites + estimated sales achieved by our brands corresponding to sales through our retailers ’ websites (non-audited data) C1 - Internal use
CHAMPIONING WITH WINNING BRANDS STRONG TRUSTED ASPIRATIONAL BRANDS MARKET SHARE TOP BRANDS VS SMALLER BRANDS, MASS EU4 1 PREVAIL IN TIMES OF CRISIS 60% EXCEPTIONAL QUALITY, SAFETY TRUST, REASSURANCE TRANSPARENCY TOP 100 BRANDS COMMITMENT TO SUSTAINABILITY 50 % PURPOSE DRIVEN STRONG CONSUMER ENGAGEMENT OTHER BRANDS 7 BRANDS IN THE TOP 20 40% 1 Weekly data C1 - Internal use
CHAMPIONING WITH HERO PRODUCTS TOP 20 HERO SKUS REPRESENT 30% OF SALES C1 - Internal use
SEIZING AND MAXIMIZING ALL OPPORTUNITIES CATEGORY OPPORTUNITIES BEAUTY MASS MARKET VALUE SALES EVOLUTION YOY 2020-2019 BOOM IN NAILS STRONG GROWTH 22% 22% 20% IN DERMOCOSMETICS 17% 13% 13% 11% 10% 6% 4% 3% -4% -4% -5% -8% -8% -9% -10% +40% +30.5% 09/03 - 16/03 - 23/03 - 30/03 - 06/04 - 13/04 - 20/04 - 27/04 - 04/05 - Progression of the nail category & of essie 15/03 22/03 29/03 05/04 12/04 19/04 26/04 03/05 10/05 MASS MARKET L'ORÉAL CPD EXPLOSION IN HOME HAIRCOLOR +17.7% HAIRCOLOR WEEKLY VALUE SALES EVOLUTION YOY 2020-2019 ESSIE +30% 199% 204% 146% 153% 165% 150% 162% 127% 148% 159% CATEGORY 113% 127% 145% 138% 68% 116% 87% P1 P2 P3 P4 48% 2020 Vs 2019 09/03 - 16/03 - 23/03 - 30/03 - 06/04 - 13/04 - 20/04 - 27/04 - 04/05 - 15/03 22/03 29/03 05/04 12/04 19/04 26/04 03/05 10/05 HAIRCOLOR MARKET HAIRCOLOR L'ORÉAL CPD Q1 2020 like-for-like sales growth Source: Nielsen C1 - Internal use
CHAMPIONING THANKS TO INNOVATION STRONG RELAUNCH PLAN C1 - Internal use
CHAMPIONING THANKS TO INNOVATION POWERFUL LAUNCHES FOR H2 C1 - Internal use
CHAMPIONING THANKS TO UNIQUE ORGANIZATION EACH COUNTRY IS A SPECIFIC CASE WITH DIFFERENT SANITARY, ECONOMIC, RETAIL SITUATION THAT REQUIRES OPTIMISATION AND MAXIMISATION COUNTRY BY COUNTRY PERFECTLY ADAPTED: STRATEGICALLY CONCENTRATED / OPERATIONALLY DECENTRALIZED C1 - Internal use
CHAMPIONING THANKS TO DEDICATION OF OUR TEAMS ALL FACTORIES AND WAREHOUSES 58,000 PEOPLE OPENED DURING THE CRISIS TELEWORKING C1 - Internal use
CHAMPIONING THANKS TO HEALTHY AND SOLID FINANCIAL SITUATION ROBUST BALANCE Shareholders’ equity > €29Bn SHEET 2/3 of total balance sheet STRONG NET €4.4Bn net cash end 2019 excluding CASH POSITION financial lease debt C1 - Internal use
COST DISCIPLINE IN TIME OF CRISIS TRAVEL BAN AS OF MID-FEB TILL END-SEPTEMBER STRICT CONTROL OF R&I BUDGET. IN LINE WITH BUSINESS ACTIVITY SUSPENSION OF CONSULTING CONTRACTS SYSTEMATIC TRANSFORMATION OF ON-SITE TRAINING TO E-LEARNING CANCELLATION OF PHYSICAL MEETINGS AND SEMINAIRES COLLECTIVE EVENTS DEFERRED. DRASTIC ADJUSTMENT OF BUSINESS DRIVERS IN ALL ZONES TO REFLECT THE STATE OF LOCKDOWN, IN PARTICULAR NON-DIGITAL EXPENSES POINT OF SALE EXPENSES CUT STRICT CONTROL OF INVESTMENTS C1 - Internal use
CHAMPIONING THANKS TO SUSTAINABILITY OUR PERFORMANCE IS RECOGNIZED ENVIRONMENT GENDER EQUALITY ETHICS L’ORÉAL, ONLY COMPANY WITH 3“A” LEADER IN GENDER #1 WORLDWIDE ETHICALQUOTE FOR THE 4 th YEAR RUNNING EQUALITY REPUTATION INDEX 1 1 Ranking date December 2019 C1 - Internal use
CHAMPIONING THANKS TO SUSTAINABILITY L’ORÉAL FOR THE FUTURE A SOCIAL AND ENVIRONMENTAL SOLIDARITY PROGRAMME €150M €50 MILLION to help women in situations of high vulnerability €100 MILLION Environmental impact Investing C1 - Internal use
L’ORÉAL WILL EMERGE CLOSER TO OUR CONSUMERS CLOSER TO OUR RETAIL PARTNERS CLOSER TO OUR SUPPLIERS CLOSER TO OUR COMMUNITIES STRONGER THAN EVER C1 - Internal use
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