The review of the retail unit with a view to put it up for a reported £1bn sale, according to the company, forms part of ongoing “brand portfolio optimisation . . . in order to give it the best opportunities and full ability to continue its development”.
Generally, the beauty giant performed well last year, enjoying ‘significant growth in sales and robust profits’ for 2016. Revenues rose 4.7% year on year in 2016 to €25.8bn. L’Oréal posted an operating profit of €4.5bn, representing 17.6% of overall sales and about 2% higher than 2015.
Jean-Paul Agon, chairman and chief executive, said: “L’Oréal achieved another good year, with a significant growth in sales and robust profits.”
Worldwide strength
L’Oréal’s report of its results emphasised its cross-market dominance, with Agon stating: “In a generally favourable cosmetics market, the Group has once again accentuated its worldwide beauty leadership thanks to market share gains in its three main geographic Zones.”
Performance for the group was driven particularly by its Luxe division, which is ‘significantly strengthening’, and its Active Cosmetics division, which won ‘market share around the world’ last year, according to Agon.
The company head confirmed that L’Oréal enjoyed steady or strong performance globally, bringing in a solid result even in the trickier emerging markets.
“L’Oréal has accelerated sales and increased its lead in North America. The Group has further accentuated its leadership in Europe, outperforming the market despite the difficult situation in France. Growth in the New Markets has remained solid,” Agon explained.
Looking ahead
Digital beauty looks set to remain a central focus for the group, with Agon calling out its connected beauty leadership as one of the key successes of 2016.
“The digital dynamism of our brands – in both communications and services – means they can develop increasingly strong and personalised interactions with consumers,” he noted.
“The strategic acquisition of IT Cosmetics, and the one in progress of CeraVe, strengthen our unique portfolio of brands and will more than ever enable us to meet our consumers’ beauty aspirations.”
The report on L’Oréal’s 2016 results concluded with an assertion of optimism from Agon, who stated that looking forward, the company believes it can continue to outperform the wider market.
“In an economic context that is still volatile and uncertain, L’Oréal is confident that it will once again outperform the beauty market in 2017 and achieve another year of sales and profit growth.”