EMEA beauty business update: LVMH; L’Oréal Group; Unilever; Coty; Inter Parfums; L’Occitane Group
This month has marked financial results season for many of Europe's top multinational beauty businesses.
In our business update, we've summed up how these companies have performed to help you better understand how the beauty industry landscape currently looks, both in EMEA and on a global scale
LVMH
For LVMH’s 2023 financial year, sales hit €86.2bn, which were up by 9% on the previous year.
This growth was at a significantly slower pace than the standout 23% increase it saw for its 2022 financial year.
It appears that the love affair with luxury is waning for many consumers – as spending on luxury goods dropped for LVMH in the US, Europe and China markets in 2023.
However, the group’s Selective Retailing division grew by an impressive 25% (reaching €17.9bn).
This was led by the popular beauty retailer Sephora, which saw a historic year for sales and profit, particularly in Europe, North America and the Middle Eastern.
It noted new store openings two in the UK and one flagship in France on the Champs-Élysées, as well as its store-within-a-store strategy in various Kohl’s department stores in the US market.
LVMH’s luxury Hong Kong-based travel retailer DFS also saw success and benefited from a return of travellers to key travel-retail destinations, such as Hong Kong and Macao.
The group’s Perfumes & Cosmetics division saw strong momentum in fragrances and colour cosmetics across all regions, posting organic revenue growth of 11% for the year, with sales reaching €8.3bn.
It stated that its men’s fragrance Dior’s Sauvage was the world’s best-selling men’s scent last year, while LVMH also mentioned that the Miss Dior, J’adore and L’Or de J’adore fragrances had all fuelled growth for the category.
And in colour cosmetics, Rihanna’s brand Fenty Beauty continued to see strong growth.
L’Oréal Group
For the full financial year in 2023, L’Oréal Group marked its third consecutive year of double-digit growth and sales reached €41.18bn, up 7.6% in reported terms and 11% on an organic basis.
Its Dermatological Beauty Division, which included skin care brands like CeraVe and la Roche Posay saw sales up by 28% to €6.4bn – marking six years of consecutive year of double-digit growth. Vichy saw its strongest growth in 18 years and xxx also noted that CeraVe is the top-selling skin care brand in the US market.
L’Oréal’s Consumer Products Division reached €15bn in sales in 2023, up 12.6% on a like-for-like basis and its best growth in more than 30 years Colour Cosmetics was the top contributing category for the growth, and the L’Oréal Paris brand topped over €7bn in sales.
Its Luxe Division, which includes licences for brands like Prada and YSL Beauty, sales reached €14.92bn, up by 4.5%, with new distribution channels in the US and Amazon offsetting drops in travel-retail sales and the Asia market.
Meanwhile, as consumers continue to put more focus on hair care, the Professional Products Division also reported growth of 7.6% like-for-like which it attributed to a strategic focus on hair care. The L’Oréal Professionnel and Kérastase saw strong growth.
L'Oréal CEO Nicolas Hieronimus stated : “In a challenging environment of geopolitical tensions, inflationary pressures and a stagnating beauty market in China, we delivered our best like-for-like growth in more than 20 years (excluding 2021).
He also added that beauty technology would be a big future focus as: “beauty tech will shape our industry and enable us to further strengthen our leadership,” he said.
Noting that: “It will allow us to know our consumers ever-better, to bring them ever-more impactful and sustainable products and services, and to become ever-sharper in our execution.”
Meanwhile, the group didn’t reach analyst’s predictions for the most recent quarter – the three months up to 31 December 2023.
Although group sales were up by 6.9%, and totalled €10.6bn, they fell short of the predicted growth of 9.5%.
The group experienced a -6.2% drop in sales in the North Asia region (which includes China) and stated that the region “continued to be impacted by the reset in travel retail following the change in policy regarding daigous,” in its press statement.
However, sales in were still up in by 11.6% in Europe and by 9.4% in North America.
Unilever
For its 2023 financial year, British FMCG company Unilever reported that its total underlying sales growth for the group was up by 7%, with positive volume sales.
Its Beauty & Wellbeing division saw a turnover of €12.5bn, which accounted for 21% of the group’s total turnover.
This division saw underlying sales grow by 8.3%, (3.8% on price and 4.4% on volume) and Unilever noted how volume growth accelerated through the year and reached 6.3% in Q4, with strong volumes sales in its Hair Care and Health & Wellbeing categories.
It’s top five markets were: USA; India; China; Brazil; and Mexico.
The Hair Care category saw strong growth in Latin America and Turkey. While Core Skin Care only grew by low-single digit figures, but within this, the Vaseline brand delivered double-digit growth and reached €1 bn of turnover in 2023.
Unilever also added that it’s US-centric Prestige Beauty and Health & Wellbeing portfolios grew ahead of the market and delivered double-digit growth for 2023, with strong performances from Hourglass, Dermalogica and Paula’s Choice.
However, in North Asia, the K-beauty brand AHC declined double-digit as it “reset the cross-border trade channel”, said the business
Meanwhile, Unilever’s Personal Care division, which accounts for 23% of the group business, saw a turnover of €13.8 bn, up by 8.9% for the year, which it said was balanced between price and volume sales, and fuelled by the Deodorants category.
The Deodorants category grew double-digits, with strong volume growth, especially in Europe and Latin America; Skin Cleansing grew by mid-single digits and had positive volumes; and Oral Care grew mid-single digit, led by price.
The group also flagged up that the Dove Personal Care portfolio achieved double-digit growth with balanced price and volume growth.
Unilever CEO Hein Schumacher added that the 2023 sales results showed “an improving financial performance, with the return to volume growth and margins rebuilding.”
“We are moving with speed and urgency to transform Unilever into a consistently higher performing business,” he concluded.
Interparfums
The French fragrance company saw record-breaking annual sales of €798.5m for 2023, which was up by 13% on 2022.
It said the growth was mainly on a volume basis (up by 11.5% in volume sales) and driven by the portfolio's main brands: Jimmy Choo up by 16; Montblanc: up by 12%; and Coach: up by 22%.
In terms of trends, it noted that there was a strong fragrance market in the first half of 2023, but that this has been “less buoyant since last summer”.
It also shared that “inventories are back to more normal levels in the retail sector” and that “Supply chain pressure has decreased.”
Inter Parfums noted that sales in America were up by +13%; in Asia by 18%; but only by 7% in Western Europe.
The company shared that it had experience growth ranging between 25% and 40% for the 3 top-selling brands Asia (+18%), as well as very strong growth in Australia (+35%)
It also saw strong growth in Japan and Taïwan and shared that the “Chinese market was “back on a positive track since the summer” and up by 13.5%.
Jimmy Choo fragrances, now the Group’s top-selling brand, had more than €200m in sales and was up by 16%. The business said that this had been “driven by the established Jimmy Choo and Jimmy Choo Man lines, and above all the continuing international success of the I Want Choo and I Want Choo Forever lines, launched in 2021 and 2022.”
Coty
The French American beauty company Coty is currently halfway through its fiscal financial year for 2024.
The business shared that net revenues increased by 13% year-over-year to $1.73bn for the second quarter of this financial year, and by 16% to $3.36bn for the first half of 2024.
Its Prestige business was especially successful, and revenue grew by 15% (LFL) in Q2 and 18% (LFL) for the first half of the financial year, which CEO Sue Nabi said was “outperforming the market.”
The multinational said that its Burberry Goddess fragrance, which launched last summer, continued to set new records and became the top seller in multiple markets.
Burberry’s Hero and Her scents also saw strong market share gains across the globe for the Burberry brand. While the Hugo Boss, Calvin Klein, Gucci, Chloé, Marc Jacobs and Davidoff fragrance brands all saw double digit growth in the first half.
For Colour Cosmetics in Q2, Kylie, Burberry and Gucci all saw double digit growth; and in the Skincare category, Coty’s relaunched brands Lancaster and philosophy continued their positive momentum.
In the earnings call, Coty CEO Sue Nabi said that Prestige revenue growth and sell-out are continuing to outperform the very strong prestige fragrance market. “While the prestige fragrance market grew close to 10% in both Q1 and Q2, our sell-out in both quarters outperformed, growing 12% to 13%. At the same time, our like-for-like revenue growth was higher, as we benefitted from the year-on-year recovery in fragrance service levels following the supply challenges last year. We estimate this benefit to be in the low-to-mid-single-digits percentage.”
Meanwhile Consumer Beauty was up by 5% (LFL) for Q2 and 7% (LFL) for the first half and strong figures for colour cosmetics, mass fragrances, and mass skin & body care sales.
The company said it had “continued to lean into its social media strategy”, which led to improvements in earned media value and viral launches such as CoverGirl Yummy Gloss and Rimmel Thrill Seeker mascara.
E-commerce grew by 20% overall for the first half.
While all regions saw double digit revenue growth in the quarter.
L’Occitane Group
L’Occitane Group has recorded sales of €843.4m in its third quarter, up by 19.5%, which was mainly attributed to a 199% increase in sales from the Sol de Janeiro brand.
It said the Gen Z-favourite brand, which has been a standout star in the travel-retail industry, had a “record-breaking” holiday season that benefited from the launches of its Delicia Drench Body Butter, new hair mist, and "expansion of its distribution with a significant multi-brand partner in the US."
Indeed, the group announced that within a week of the product’s exclusive launch at UK prestige beauty retailer Space NK, the Delicia Drench Body Butter was "the no.1 SKU across the entire Space NK business with the highest rate of sale in store for a new product."
Current vice chairman and CEO of the group, André Hoffmann, said the business now planned to continue to capitalise on Sol de Janeiro’s stellar popularity and growth and that it planned to “steadily expand its product and category range, and the scale and reach of its distribution.”
The British spa brand Elemis also returned to double-digit growth of 14.7% during the quarter after a “solid” trading period. The business said UK and US sales grew by 23.2% and 19.4% respectively.
Over the past year, the brand has undertaken an ongoing ‘premiumisation strategy’, which it said was intended to boost its “long-term profitability”.
Meanwhile, flagship brand L’Occitane en Provence, saw sales continue to struggle, with figures dropping by 2.9% during the holiday season.
The business noted that sales declined in EMEA, travel-retail sales also dropped, but that this was partially offset by an uptick in sales growth in China that “enabled us to maintain our growth momentum and relative outperformance in the premium beauty market in China and other key markets,” according to Hoffman.
The American market has been most lucrative for the business, with sales up 67.1% for the first three quarters of its financial year, mainly driven by Sol de Janeiro.
IN APAC, sales increased by 6.7% due to strong sales of both L’Occitane en Provence and Elemis in China.
L’Occitane also recently invested in the luxury home fragrance sector with the acquisition of Italian brand Dr. Vranjes Firenze as part of its strategy to “build a geographically balanced portfolio of premium beauty and fragrance brands.”
Hoffman said the business will also “further build on the healthy growth of other brands, including our recently acquired luxury home fragrance brand, Dr. Vranjes Firenze, to round out our portfolio.”
Overall, for the first full nine months of L’Occitane’s 2024 financial year, sales reached €1.9bn, up by 18.9% on the same period the previous year.
In early January, the business had also announced changes in its senior management team. As of 1st April 2024, the functions of group CEO and managing director are set to be combined into a single position, CEO, and the role will be assumed by Laurent Marteau, who will take over from André Hoffmann.
Beiersdorf
Beiersdorf’s results are set to be announced on 29th February 2024, so CosmeticsDesign-Europe will publish these separately.
