L'Oreal's H1 results Reach 5-year High
- Chaileedo Press
- Jul 29, 2022
- 3 min read
Updated: Aug 30, 2022
Abstract: L'Oréal has announced its half-yearly results for 2022. In the first half of 2022, the L'Oréal Group achieved a new record performance in five years.
CHAILEEDO learned that the financial data show that as of June 30, 2022, the L'Oréal Group achieved sales of $18.8 billion, up 13.5% year-on-year. Overall, operating profit increased by 25.3% to $3.837billion and amounted to 20.4% of sales.
According to the earnings data, North Asia has become the L'Oréal Group's top market, achieving sales of about $39.2 billion. Among them, the beauty market in mainland China was more severely affected by the epidemic at the beginning of the second quarter, but L'Oréal Group said it achieved double-digit growth in June.
In terms of operating costs, the L'Oréal Group's R&D expenses, advertising and promotion expenses, and general and administrative expenses all decreased as a percentage in the first half of 2022. Among them, L'Oréal Group's advertising and promotion expenses amounted to $40.8 billion in the first half of the year, accounting for 31.5% of total sales, which is slightly lower than the level of around 40% of Chinese beauty listed companies.
By division, the L'Oréal Group's Luxe Division, Mass Cosmetics Division, Professional Hair Products Division and Active Health Cosmetics Division all recorded significant growth in the first half of 2022.
Of these, the Active Health Cosmetics Division led the way with a 20.9% growth rate, recording sales of approximately $2.6 billion. L'Oréal said that the division's growth rate was boosted by enhanced collaboration with medical professionals. It is reported that on the 16th Skincare Day on May 25 this year, L'Oréal joined hands with authoritative experts from the Chinese Dermatologists Association(CDA) and the Chinese Society of Clinical Oncology (CSCO) for the first time to start La Roche-Posay “Blue Ribbon” Caring For Cancer Patients’ Adverse Skin Reaction Health Summit. It hoped that through the interdisciplinary communication between dermatology and oncology, it could guide the public to pay attention to the skin health problems of tumor patients and provide practical solutions to skin problems.
The L'Oréal Group's Luxe Division became the number one business unit of the L'Oréal Group, achieving sales of approximately $7.02 billion in the first half of this year, up 16.4% year-on-year.The Division outperformed in all three of its categories. The super-premium brands Lancôme Absolue and Helena Rubinstein drove the growth in skincare along with the newly acquired brands Takami and Youth to the People. In fragrances, the Division grew by +35%; global mainstays such as Libre by Yves Saint Laurent and Born in Roma by Valentino were powerful growth drivers. Driven by the success of Maison Margiela and Armani Privé, the Collections segment is booming and showing strong potential. Yves Saint Laurent and the category specialists Shu Uemura and Urban Decay grew significantly faster than the market, which continued to be dynamic.
The mass cosmetics division, on the other hand, ranked fourth among the four divisions with an 8% growth rate, but still contributed about $6.9 billion in sales. Within the division, makeup brands saw the fastest sales growth with brands NYX and Maybelline New York making major contributions. In skincare, even though product deliveries were affected by the blockade in Shanghai at the beginning of the second quarter. L'Oréal Paris brand was still firmly in the driver's seat, topping the number one beauty brand position in the just-passed Tmall 618.
It is worth mentioning that 2022 is the 25th anniversary of the establishment of L'Oreal China, and the L'Oreal Group has made a lot of moves in China in the first half of this year. In May this year, L'Oréal China also signed a contract with Oriental Beauty Valley and announced the establishment of Shanghai Meicifang Investment Co. This is the first investment company set up by L'Oréal since it entered the Chinese market and makes L'Oréal China the first branch of the Group to set up an investment company. In July this year, L'Oréal Group gathered in Hainan, China with its strong portfolio of historic and high-end luxury brands, bringing PRADA perfume and TAKAMI to make their debut in Hainan travel retail business while Lancôme brand was also presented in the French Pavilion.
Looking to the future, Nicolas Hieronimus, L'Oréal Group CEO said that after two years of the impact of the epidemic, which also confirmed the desire of consumers for innovative and superior beauty products, the L'Oréal Group also remains optimistic about the prospects of the global beauty market. In July this year, he publicly expressed his expectations: "I believe that in the near future, China will certainly become the world's largest cosmetics market and L'Oréal's largest market."
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