by The L’Oréal juggernaut continues.
Registering its third consecutive year of double-digit growth in like-for-like terms, the world’s largest beauty company surpassed €40 billion in sales for the first time in 2023.
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Despite inflation and a particularly turbulent year for China’s beauty ecosystem, L’Oréal reported sales growth — which was not the case for many of its peers — and said it continued to recruit new consumers. Unit sales gained 4%.
Among the biggest news 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 2022 sales of $537 million. The agreement was signed in April, and closed in August, with the brand integrated into the L’Oréal Luxe division. Aēsop has around 400 boutiques worldwide, and recently Natura introduced its first stores in China as well as launching its first fragrance.
In terms of performance, the Consumer Products supermarket division registered the best growth in over three decades, at 12.6% like-for-like, driven by makeup as well as business in Europe and emerging markets. Its four main brands registered double-digit growth and L’Oréal Paris surpassed sales of €7 billion.
Dermatological Beauty saw its sixth consecutive year of double-digit gains, growing twice as fast as the dermocosmetics category, according to L’Oréal. La Roche-Posay was the main contributor to gains, while CeraVe continued to perform well and Vichy saw its strongest growth in 18 years.
L’Oréal Luxe has reportedly tripled the discretionary market and increased its share of the premium market to 31.8%. Excluding North Asia, the division grew by double digits, driven especially by fragrances under Yves Saint Laurent, Valentino and Prada. Makeup, especially the couture brands, accelerated in the second half.
Helena Rubinstein, who was acquired by L’Oréal in 1984 and has been associated with a leading ultra-premium skincare player in Asia for the past decade, has joined the ranks of L’Oréal’s “billionaire brands”, surpassing the €1 billion threshold in income. for the first time.
L’Oréal’s Professional Products division also gained market share, accounting for 25% of the total worldwide market, according to the company, and benefiting from strong demand for premium 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 group sales, with Europe seeing its first year of double-digit gains in over two decades. Sales in North America increased, surpassing the €10 billion milestone.
L’Oréal was not immune to the challenges — in China, where the overall beauty market was recovering from weak consumer sentiment and a weak labor market, as well as the restructuring of the travel-retail ecosystem as the Chinese government declined. regarding “daigou” trade and retailers remained in their inventory. However, L’Oréal continued to grow its market share there, by 80 basis points, attributing its success to a greater focus on the Chinese domestic market, rather than travel retail, compared to some of its competitors. In North Asia, sales fell 5.8% in reported terms and 0.9% like-for-like, but outperformed the overall market, he said.
Broken down by category, fragrance sales grew 16.9% to €5.2 billion; hair care increased by 15.3% to €6.3 billion; skin care gained 10.4% to €16.4 billion, while make-up increased by 10%, with sales of €8.1 billion.
Prada, which has done well since L’Oréal received the license in 2021, especially thanks to the launch of women’s fragrance Prada Paradoxe, makeup and skin care in August. In February this year, L’Oréal announced that it had signed a global licensing agreement with Prada SpA for fragrances and beauty under Miu Miu, with the first products to be launched in 2025. The Miu Miu license was previously held by Coty this.
There were also brand exits, with L’Oréal announcing plans to spin off Decléor, bought from Shiseido in 2014 along with Carita – which it recently relaunched with a more premium position under L’Oréal Luxe. The company also sold the green beauty brand Sanoflore to the investment fund Ekkio Capital and management. Both brands sat within the Dermatological Beauty category.
In terms of personnel, Fabrice Megarbane, previously president of the North Asia zone and CEO of L’Oréal China, where sales have doubled under his leadership since 2019, has been named chief global growth officer. He replaced Frédéric Rosé, who has retired. Vincent Boinay, who was general manager for travel retail worldwide, joined Megarbane in February this year.
In other news, L’Oréal has pursued technology, particularly biotechnology, in a big and general way. It benefited from Denmark-based Lactobio, a company at the forefront of precision probiotics and microbiome research. Through his venture capital fund BOLD, he bought a stake in Genomatica Inc., which develops, produces and commercializes biotechnology-based alternatives to key beauty ingredients, bought into Chinese supramolecular chemistry specialist Shinehigh Innovation and led funding round for “cell-free” biotechnology firm Debut, whose technology reproduces ingredients on a scale that is only found in trace amounts in nature.
For the fragrance category, L’Oréal revealed 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 fragrance palette. It also announced a partnership with University of California Berkeley biotech incubator Bakar Labs.
The investments continued into early 2024, with BOLD participating in the Swiss longevity biotech company Timeline. This year, BOLD acquired environmental water-tech start-up Gjosa, with which it has partnered 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 Meicifang Shanghai Investment vehicle backed by BOLD. It follows a 2022 investment in Documents, another growing Chinese fragrance label.
Chief corporate responsibility officer Alexandra Palt, who has been central to the company’s ambitious sustainability agenda during her 12 years in the role, has announced plans to step down on April 1 this year, with Ezgi Barcenas taking over the role.
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