L'Oréal SA is the largest cosmetic company in the world and a leader in beauty product research, development and sales. The multinational company, with headquarters in Paris, France, manufactures and markets L'Oréal-label products and other brands. L'Oréal manufactures a wide range of consumer and luxury products for sale in drug stores and other retail outlets, including hair care, skincare, sun protection, makeup, and fragrances. The company also has a Professional Products division and manufactures products used and sold exclusively by beauty salons. L'Oréal earns annual revenue of approximately $29 billion. The company continues to acquire some of the world's leading beauty brands to market under the L'Oréal umbrella.
L'Oréal's Executive Committee guides the company's diverse operations across multiple major geographic zones. The Committee has been steered since 2006 by Jean-Paul Agon, the Chairman and CEO of L'Oréal since March of 2011. Laurent Attal serves as Executive Vice-President of Research & Innovation, while Christophe Babule acts as General Chief Executive of Administration and Finance.
L'Oréal in the News
In early February 2019, L'Oréal released a financial report for 2018. Notably, the company posted sales growth of 7.1% like-for-like, a stronger figure than L'Oréal has achieved in more than a decade. It appears that the company has benefited from an increased appetite among consumers in Asia, allowing L'Oréal to generate revenues of about $8.1 billion for the fourth quarter. This constitutes an increase of 8.6% year-over-year.
Midway through 2018, L'Oréal announced the creation of a corporate venture capital fund designed to support innovative startups. Known as BOLD, or "Business Opportunities for L'Oréal Development," the company aims to tap into up-and-coming startup potential.
L'Oréal's Revenue Growth
For 2018, L'Oréal posted an operating profit of €4.92 billion. This marks a gain of 5.3% over 2017 figures of €4.68 billion. The company posted earnings per share of €7.08, representing an increase of 6.5% over the prior year. This resulted in a net profit after non-controlling interests of €3.89 billion, for an increase of 8.8% over the previous year, as well as a dividend of €3.85, which increased by 8.5%.
1. Maybelline New York
In 1915, Mabel Williams launched Maybell Laboratories with her brother. By the 1930s, the company had grown sufficiently to sell a variety of cosmetic products across the U.S. L'Oréal announced plans to purchase Maybelline in a cash deal for a reported $508 million in 1995. The deal also involved L'Oréal taking on an additional $152 million in debt. Today, Leonardo Chavez is Global President of Maybelline New York. The subsidiary is a key component of L'Oréal's Consumer Products Division, which reported sales of €6.14 billion for the first half of 2018 and operating profit of €1.28 billion for the same period. Since the 1995 acquisition, Maybelline has continued to provide affordable cosmetics in stores around the world, with a particular focus on eye products. Maybelline New York is also the official sponsor of 13 fashion weeks around the world.
Launched in 1904 and acquired by L'Oréal about 60 years later, Garnier is one of the largest brands under the L'Oréal umbrella. L'Oréal purchased Garnier in 1965 for an undisclosed amount. Today, Delphine Viguier acts as Garnier Global Brand President. Garnier is a mass-market cosmetics company focusing on products related to both skin and hair care. Now, Garnier joins Maybelline New York as a pillar of L'Oréal's Consumer Products division. In addition to being a crucial component of L'Oréal's overall revenue stream, Garnier offers the cosmetics giant the opportunity to continue to develop its sustainability practices. Over the years, Garnier has engaged in multiple efforts to commit to sustainable sourcing of its ingredients, to improve the biodegradability of its products and to lessen the environmental impact of its packaging.
4. NYX Cosmetics
Entrepreneur Toni Ko founded NYX Cosmetics with the specific goal of selling to L'Oréal. At age 25, the Korean immigrant launched the beauty company that first sold makeup pencils. The company quickly expanded due to consumer enthusiasm expressed on social media, and Ko added additional products to the makeup line, such as eye colors and lipstick, and sold them at affordable prices. L'Oréal acquired NYX Cosmetics in 2014 for a rumored $500 million fee. At the time of L'Oréal’s acquisition, award-winning NYX Cosmetics products were available at stores such as Target and Ulta and generated approximately $93 million in annual revenue. The acquisition gives L'Oréal access to markets where sales of its own products have slowed. Now known as NYX Professional Makeup, this subsidiary is headquartered in Los Angeles and is available in more than 70 countries.
L'Oréal announced plans to purchase skincare brands CeraVe, AcneFree, and Ambi in the first days of 2017. The brands were purchased for $1.3 billion in cash. Founded in 2005, CeraVe is a maker of cleansers, moisturizers, sunscreens and related products. In the previous two years, CeraVe has seen an average growth of more than 20% per year. Consumers can find CeraVe products in beauty retailers, drug stores and online. The purchase also included AcneFree, a maker of over-the-counter skin-cleanser and acne-removal products available without a prescription, and Ambi, a maker of generalized skincare products. Together, these three brands generated combined annual sales of about $168 million in 2016. Since March of 2017, L'Oréal has owned these brands in full.
Actress and entrepreneur Paula Kent Meehan entered the haircare industry in 1960 to develop protein-based products that were less damaging to hair. The name Redken combines the last names of the actress and her stylist, Jheri Redding. The company, which specialized in research and development, allowed licensed stylists to treat damaged hair in the salon setting and revolutionized the haircare industry. Redken owns more than 60 global patents on haircare products and ingredients and is sold in more than 50 countries worldwide. Headquartered in New York City, the company was acquired by L'Oréal in 1993 for an undisclosed amount.
In recent years, L'Oréal has moved to acquire several new subsidiary cosmetics companies. In 2016, for instance, the company acquired Atelier Cologne, its Cosmetics, and Saint-Gervais Mont Blanc. 2015 saw the purchase of Niely, while 2014 added Decléor, Carita and other labels as well.
L'Oréal views acquisitions as a "fundamental part" of its business strategy Since the company's founding roughly a century ago, L'Oréal has focused on targeted acquisitions designed to compliment and increase the scope of its original product offerings. Today, L'Oréal enjoys the most diverse portfolio of cosmetics companies in the world, and this is a key portion of the company's long-term growth strategy.