Jean-Paul Agon, President of L’Oréal

L’Oréal takes the hit. The French cosmetic giant closed the first half of the year with a decrease of only 11.7% thanks to the push from China and the good evolution of online sales. Only in the second quarter, the most affected by the pandemic, the decrease was 19.4%. He net profit, meanwhile, sank 21.7% in the first half, as reported by the company today.

The group earned 1,822.5 million euros in the first half, compared to 2,326.7 million euros in the same period of the previous year. The decrease is mainly due to non-recurring costs, which amounted to 322 million euros.

Specific, the company recorded a depreciation of assets of 90 million euros, restructuring costs of € 133 million and other costs of € 140 million linked to the health crisis, including health protection measures for employees and store closings.

Between January and June, the company invoiced 13,076.5 million euros, 11.7% less than in the same period of the previous year. Jean-Paul Agon, president and CEO of the company, believes that the results show "strong resilience."

For the executive, the closure of stores has caused a crisis of supply, but not demand. "Consumers' appetite for beauty is intact," stressed the executive.. The company managed to cushion the fall thanks to the good performance in China, which grew by 17.5%, and the take-off of e-commerce, which shot up 64.6% in the period.

The professional products division was the one that worsened in the period, with a decrease of 21.7%. That of consumer products, which includes Maybelline, NYX and L’Oréal Paris, among others, and which is the highest by turnover, fell 10.4% and L’Oréal Luxe fell 14.9%.

Instead, the division of active cosmetics It managed to close the period on the upside, with a rise of 6%, after falling only 0.6% in the second quarter. This area, which includes La Roche-Posay and CeraVe, among others, benefited from its greater strength in the online channel, which was the engine of growth in the period.

By markets, Latin America took the worst part, with a 25% crash, although it only contributes 659.1 million to turnover. For its part, Western Europe fell by 15.6%; North America, 13.1% and emerging countries (where Latin America is also included), 8.5%.

L’Oréal's investment appetite has not slowed during the pandemic. In the last quarter, the company announced the signing of the agreement to acquire Thayers Natural Remedis, an American company specialized in skin care. In parallel, the group finalized the sale of Roger & Gallet to the French holding Impala.

L’Oréal approaches the second semester of the exercise with “lucidity, confidence and determination”, in the words of Agon. “Lucidity because the health crisis is not over; confidence because consumers' appetite for cosmetics remains intact, access to points of sale will be easier and e-commerce will continue to strengthen, ”says the executive; and, finally, determination because we are embarking on an aggressive plan to launch new products to stimulate the return of consumption ”.

"We are determined to beat the evolution of the market, find the path to growth again, if sanitary conditions allow it, and obtain a solid profitability", he concludes.

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