championing beauty in a time of crisis
TRANSCRIPT
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JEAN-PAUL AGONChairman & Chief Executive Officer
CHAMPIONING BEAUTY
IN A TIME OF CRISIS
DEUTSCHE BANK ACCESS GLOBAL
CONSUMER CONFERENCE9 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 creamsdonated
In 40 countries
70% of our factories mobilized
Freeze receivables
from more than 100,000 small professional clients
and perfumeries
Shortening leadtime
of 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 MERSFINANCIAL CRISIS9/11
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
0
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 OPENING2/3
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
C1 - Internal use 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
MARKETEST. Q1
2
≃-8%
-4.8%
1
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MORE CONNECTION
MORE COMMUNITY
+20% WEBSITE TRAFFIC
+15% BEAUTY CONVERSATIONS
2BnTIKTOK
DOWNLOADS
+70%LIVE USAGE
ON INSTAGRAM
+76% OF TIME SPENT ON
WHATSAPP WORLDWIDE
60BnDAILY 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%
C1 - Internal use 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 rate0%
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
of 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."