IN A TIME OF CRISIS JEAN-PAUL AGON Chairman & Chief Executive - - PowerPoint PPT Presentation

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IN A TIME OF CRISIS JEAN-PAUL AGON Chairman & Chief Executive - - PowerPoint PPT Presentation

Nov 08, 2022 34 likes •324 views

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

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JEAN-PAUL AGON

Chairman & Chief Executive Officer

CHAMPIONING BEAUTY IN A TIME OF CRISIS

DEUTSCHE BANK ACCESS GLOBAL CONSUMER CONFERENCE

9 June 2020

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Drastic health and security measures on all workplaces (factories, warehouses ….) Limited number of people

  • infected. No fatalities

100% employment & 100% fixed salary guaranteed till end-June 15 million units of hand sanitizers donated >4 million of hand creams donated In 40 countries 70% of our factories mobilized Freeze receivables from more than 100,000 small professional clients and perfumeries Shortening leadtime

  • f payments to

9,000 most vulnerable suppliers

PROTECTION & SOLIDARITY

PROTECTING OUR EMPLOYEES SUPPORTING CAREGIVERS SUPPORTING OUR PARTNERS

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1

BEAUTY IS RESILIENT AND GROWTH WILL RESUME

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0% 1% 2% 3% 4% 5% 6%

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

SARS MERS FINANCIAL CRISIS 9/11

1L’Oréal worldwide beauty market estimates, excluding razors, soaps and toothpastes. 2019 provisional estimates, at constant exchange rates.

THE BEAUTY MARKET IS RESILIENT

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CRISIS OF SUPPLY

MARKET DROP DUE TO LOCKDOWN SHOCK

SHUTDOWN OF HAIRDRESSERS, DEPARTMENT STORES, PERFUMERIES, TRAVEL RETAIL STORES

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CHINA RETAIL IS RECOVERING

JAN / FEB MARCH APRIL Garments

  • 30.9%
  • 34.8%
  • 18.5%

Cosmetics

  • 14.1%
  • 11.6%

+3.5% Jewelry

  • 41%
  • 30%
  • 12.1%

Home Appl

  • 30%
  • 29.7%
  • 8.5%

Furniture

  • 33.5%
  • 22.7%
  • 5.4%

Auto

  • 37%
  • 18%

0%

RETAIL IS RECOVERING COSMETICS IS LEADING THE RECOVERY

  • 25
  • 20
  • 15
  • 10
  • 5

5 10

+7.2% +8% +8%

  • 20.5%
  • 20.5%
  • 15.8%
  • 7.5%

Oct 2019 Jan 2020 Apr 2020

Source: Tradingeconomics.com / National Bureau of Statistics of China YoY evolution (in %)

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CHINA

  • 60%
  • 50%
  • 40%
  • 30%
  • 20%
  • 10%

0% 10%

JAN FEB MAR APR

STRONG APPETITE FOR BEAUTY

THE BEAUTY MARKET IS KICKING UP ACCELERATION ONLINE QUICK RECOVERY OFFLINE

SKINCARE

9%

  • 62%
  • 23%

11% 20% 57% 67% 58%

  • 80%
  • 60%
  • 40%
  • 20%

0% 20% 40% 60% 80%

JAN FEB MAR APR OFFLINE

(GFK – DS/Shopping Mall)

ONLINE

(SmartPath - Tmall)

Source: L’Oréal market estimates

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STRONG APPETITE FOR BEAUTY

ONLINE STRONG OFFLINE RECOVERING PROGRESSIVELY

YTD MAY 20 SKINCARE + 44% FRAGRANCE + 58% MAKE UP + 24% HAIR + 34% TOTAL BEAUTY + 38% TOP BEAUTY CATEGORIES TRAFFIC RECOVERY % 4000 MALLS IN CHINA

FEB. MAR. APR. MAY JUN. JUL. 0% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10%

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BACK TO SALONS

STRONG APPETITE FOR BEAUTY

OF CONSUMERS WENT BACK TO THEIR HAIRDRESSER IN THE 1ST WEEK OF OPENING

2/3

Survey France/US/Germany – May 2020

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  • 50%
  • 45%
  • 40%
  • 35%
  • 30%
  • 25%
  • 20%
  • 15%
  • 10%
  • 5%

0%

W/C 23.03 W/C 27.04 W/C 18.05

STRONG APPETITE FOR BEAUTY

EUROPE NOW IN RECOVERY

P4 (23.03 / 20.04) P5 (21.04 / 19.05) Total

  • 4.8%

+4.1% Brick & Mortar

  • 7.1%

+0.8% E-COM +121.5% +196%

  • 44.7%
  • 40.0%
  • 16.7%

Spain total mass beauty market (Nielsen)

TOTAL MASS MARKET EVOLUTION TOTAL MASS MARKET EVOLUTION

Italy total mass beauty market (Nielsen)

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2

L’ORÉAL IS CHAMPIONING THE BEAUTY MARKET

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1L’Oréal worldwide beauty market estimates, excluding razors, soaps and toothpastes. Q1 2020 provisional estimates, at constant exchange rates. 2Q1 2020 like-for-like sales growth.

OUTPERFORMING IN Q1

BEAUTY MARKET

  • EST. Q1

2

≃-8%

  • 4.8%

1

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MORE CONNECTION MORE COMMUNITY +20%

WEBSITE TRAFFIC

+15%

BEAUTY CONVERSATIONS

2Bn

TIKTOK DOWNLOADS

+70%

LIVE USAGE ON INSTAGRAM

+76%

OF TIME SPENT ON WHATSAPP WORLDWIDE

60Bn

DAILY CONVERSATIONS ON WHATSAPP

FANTASTIC ACCELERATION OF DIGITALIZATION

MORE COACHING MORE CONVERSATION

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INCREASED CONSUMER & CUSTOMER CENTRICITY IN ONLY A FEW WEEKS

MORE CONNECTION MORE SERVICES MORE CONVERSATION

L’ORÉAL, THE CHAMPION OF DIGITAL

X2.5 VIRTUAL TRY-ONS 9 MINUTES TIME SPENT TELECONSULTATION SHOPPABLE LIVE-STREAMING NEW IN-STORE VIRTUAL TESTER MEDIA SHIFT:

77%1 digital media

FROM AWARENESS TO CONVERSION IMPROVED ROI NEW FORMATS NEW TONE OF VOICE

1.2M2 CONVERSATIONS (+28%)

1In April 2In April, excluding Asia

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FANTASTIC ACCELERATION FOR E-COMMERCE

Source: Bank of America, US Department of Commerce, ShawSping Research

US E-COMMERCE PENETRATION % OF RETAIL SALES

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 APRIL 2020

10 YEAR’S GROWTH IN LESS THAN 10 WEEKS

5.6% 6.4% 7.2% 8% 8.8% 9.7% 10.7% 11.8% 13.2% 14.4% 16% 27%

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1Sales 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)

ECOM BOOMING

+53%1 in Q1

SHARP ACCELERATION IN APRIL

>+60%

x2 IN WESTERN EUROPE AND IN THE USA2

OUTPERFORMANCE IN NORTH AMERICA

L’ORÉAL, CHAMPION OF E-COMMERCE

+221%1 growth +58% new consumers x2 increase conversion rate

0% 5% 10% 15% 20% 25% 30% 2015 2016 2017 2018 2019 JAN FEB MAR APR

5% 6% 8% 11% 16% 17% 18% 25% 5X TOTAL BEAUTY MARKET Q1

D2C

0% 10% 20% 30% 40% 50% 60%

MARKET +11% L’ORÉAL +49%

CPD VS TOTAL BEAUTY ECOMM MARKET GROWTH - USA

WEIGHT OF E-COMMERCE INCREASING ALL DIVISIONS, ALL ZONES

1In April - Source: SFCC

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TOP 100 BRANDS OTHER BRANDS

CHAMPIONING WITH WINNING BRANDS

50%

MARKET SHARE TOP BRANDS VS SMALLER BRANDS, MASS EU41

1 Weekly data

7 BRANDS IN THE TOP 20 STRONG TRUSTED ASPIRATIONAL BRANDS PREVAIL IN TIMES OF CRISIS

EXCEPTIONAL QUALITY, SAFETY TRUST, REASSURANCE TRANSPARENCY COMMITMENT TO SUSTAINABILITY PURPOSE DRIVEN STRONG CONSUMER ENGAGEMENT

40% 60%

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CHAMPIONING WITH HERO PRODUCTS

TOP 20 HERO SKUS REPRESENT 30% OF SALES

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SEIZING AND MAXIMIZING ALL OPPORTUNITIES

CATEGORY OPPORTUNITIES

BOOM IN NAILS STRONG GROWTH IN DERMOCOSMETICS

+40% +30%

P1 P2 P3 P4

+30.5% +17.7% ESSIE CATEGORY

2020 Vs 2019

Progression of the nail category & of essie

EXPLOSION IN HOME HAIRCOLOR

Source: Nielsen Q1 2020 like-for-like sales growth

  • 10%
  • 4%
  • 5%
  • 8%

3%

  • 8%
  • 9%
  • 4%

13% 4% 20% 17% 13% 22% 10% 6% 11% 22%

09/03 - 15/03 16/03 - 22/03 23/03 - 29/03 30/03 - 05/04 06/04 - 12/04 13/04 - 19/04 20/04 - 26/04 27/04 - 03/05 04/05 - 10/05

MASS MARKET L'ORÉAL CPD BEAUTY MASS MARKET VALUE SALES EVOLUTION YOY 2020-2019

48% 87% 116% 148% 159% 113% 127% 145% 138% 68% 127% 162% 199% 204% 146% 153% 165% 150%

09/03 - 15/03 16/03 - 22/03 23/03 - 29/03 30/03 - 05/04 06/04 - 12/04 13/04 - 19/04 20/04 - 26/04 27/04 - 03/05 04/05 - 10/05

HAIRCOLOR MARKET HAIRCOLOR L'ORÉAL CPD HAIRCOLOR WEEKLY VALUE SALES EVOLUTION YOY 2020-2019

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CHAMPIONING THANKS TO INNOVATION

STRONG RELAUNCH PLAN

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CHAMPIONING THANKS TO INNOVATION

POWERFUL LAUNCHES FOR H2

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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

CHAMPIONING THANKS TO UNIQUE ORGANIZATION

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CHAMPIONING THANKS TO DEDICATION OF OUR TEAMS

58,000 PEOPLE TELEWORKING ALL FACTORIES AND WAREHOUSES OPENED DURING THE CRISIS

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CHAMPIONING THANKS TO HEALTHY AND SOLID FINANCIAL SITUATION

ROBUST BALANCE SHEET STRONG NET CASH POSITION €4.4Bn net cash end 2019 excluding

financial lease debt Shareholders’ equity > €29Bn

2/3 of total balance sheet

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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

COST DISCIPLINE IN TIME OF CRISIS

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CHAMPIONING THANKS TO SUSTAINABILITY

1Ranking date December 2019

GENDER EQUALITY

OUR PERFORMANCE IS RECOGNIZED

ENVIRONMENT ETHICS

#1 WORLDWIDE ETHICALQUOTE REPUTATION INDEX1 LEADER IN GENDER EQUALITY L’ORÉAL, ONLY COMPANY WITH 3“A” FOR THE 4th YEAR RUNNING

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CHAMPIONING THANKS TO SUSTAINABILITY

L’ORÉAL FOR THE FUTURE

A SOCIAL AND ENVIRONMENTAL SOLIDARITY PROGRAMME €150M

€100 MILLION Environmental impact Investing €50 MILLION to help women in situations

  • f high vulnerability
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CLOSER TO OUR CONSUMERS CLOSER TO OUR RETAIL PARTNERS CLOSER TO OUR SUPPLIERS CLOSER TO OUR COMMUNITIES

L’ORÉAL WILL EMERGE STRONGER THAN EVER

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  • ------------------------ Disclaimer -------------------------

"This document does not constitute an offer to sell, or a solicitation of an offer to buy, L’Oréal shares. If you wish to obtain more comprehensive information about L’Oréal, please refer to the public documents registered in France with the Autorité des Marchés Financiers (which are also available in English on our Internet site: www.loreal- finance.com).This document 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."