Growth acceleration: +5.5%1 in 4th quarter
Sales exceeding €10 bn in the New Markets
Record operating margin: 18%
Sales: 26.02 billion euros
o +4.8% like-for-like1
o +2.0% at constant exchange rates
o +0.7% based on reported figures2
Operating profit: 4.68 billion euros, representing 18.0% of sales
Earnings per share3: 6.65 euros, an increase of +3.0%
Net profit after non-controlling interests: 3.58 billion euros, an increase of +15.3%
Net cash flow4: 3.97 billion euros, an increase of +19.6%
Dividend5: +7.6% at 3.55 euros
The Board of Directors of L'Oréal met on 8 February 2018, under the chairmanship of Jean-Paul Agon and in the presence of the Statutory Auditors. The Board closed the consolidated financial statements and the financial statements for 2017.
Commenting on the annual results, Jean-Paul Agon, Chairman and CEO of L'Oréal, said:
"In a beauty market that pursued its steady growth in 2017, L'Oréal had a good year with sustained sales growth momentum, and robust profits. As announced, the second half accelerated compared with the first, particularly in the fourth quarter with +5.5% like-for-like growth.
All the Divisions recorded sales growth, especially L'Oréal Luxe which is delivering spectacular growth, particularly in Asia. The Active Cosmetics Division achieved more than 2 billion euros of sales for the first time. Growth in the Consumer Products Division is being slowed by the continuing difficulties of the American and French markets, while sales in the Professional Products Division improved at the end of the year.
Today more than ever, L'Oréal can rely on its unique portfolio of powerful and complementary brands, eight of which now have sales above one billion euros.
As for the geographic Zones, the New Markets exceeded more than 10 billion euros of sales for the first time ever, thanks especially to the dynamism of the Asia Pacific Zone. Performance in Western Europe remained solid.
2017 was especially notable for the accentuation of our digital edge and the strengthening of our positions in two strategic channels. Firstly in e-commerce6, where our sales accelerated to reach 2 billion euros, an increase of +33.6%. Secondly in Travel Retail, a channel with strong potential, in which L'Oréal celebrated 40 years of presence by strengthening its number one position.
In terms of results, as announced, operating margin has reached the record level of 18% of sales, while increasing research expenses and business drivers. There were improvements in all our operating parameters; the quality of the results is also reflected in the record cash flow.
And finally, in 2017, L'Oréal was recognised for its leadership in corporate social responsibility with, for the second year running, the best score awarded by the CDP7, three "A"s, and L'Oréal has been ranked number 1 in all sectors by Vigeo Eiris. L'Oréal has also obtained first place in the world ranking by Equileap for gender equality.
As for 2018, in a market that should remain dynamic and contrasted, L'Oréal more than ever before has the best advantages in terms of innovation, brand power, digital prowess, and the quality of its teams all over the world, to win market share and strengthen its Beauty leadership. We are therefore confident that, this year once again, we will outperform the market and achieve significant growth in like-for-like1 sales and an increase in profitability."
The Board of Directors will propose to the Annual General Meeting of 17 April 2018 the renewal of the tenure as Director of Mr. Jean-Paul Agon and Mrs. Belén Garijo for a term of four years.
Mr. Xavier Fontanet did not wish to renew his tenure as Director, which expires at the end of the 2018 Annual General Meeting. The Board has expressed its deep gratitude to Mr. Fontanet for his active participation in the work of the Board and of the Committees over the last 16 years.
The Board will propose to the Annual General Meeting the candidacy as a new independent director of Mr. Axel Dumas, Chief Executive Officer of Hermès.
Furthermore, the Board of Directors at its meeting on 8 February 2018 noted the resignation of Mr. Charles-Henri Filippi, as a result of his appointment at Lazard as Managing Director, effective from March 2018, in view of the nature of the business relationships existing between Lazard and L'Oréal. Mr. Filippi's tenure as director ended on 8 February 2018.
The Board wished to warmly thank Mr. Filippi for his contribution to the work of the Board and of the three Committees of which he has been Member or Chairman (Audit Committee, Appointments & Governance Committee, and Human Resources & Remuneration Committee).
The Board will propose to the Annual General Meeting the candidacy as a new independent director of Mr. Patrice Caine, Chairman and Chief Executive Officer of the Thales Group.
As the appointments and renewals presented have an impact on the composition of the Committees, the composition is set out in detail in the table below, subject to the approval of the resolutions relating to the renewals of tenure and appointments at the Annual General Meeting of Shareholders on 17 April 2018.
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De CAC 5.127,56 -24,12 -0,47% L'oreal EUR 174,70 +2,90 vol 152.188