Clichy, 26 July 2018 at 6.30 p.m.
First-half 2018 results
Strong pace of growth continues: +6.6%
[1]
combined with quality results
-
Sales: 13.39 billion
euros
-
Double-digit growth at L'Oréal
Luxe and Active Cosmetics
-
Very strong growth of the New
Markets and gradual improvement of
North America
-
Further improvement in
profitability: +30 basis points
Commenting on these figures, Mr
Jean-Paul Agon, Chairman and Chief Executive Officer of L'Oréal,
said:
"In a beauty
market which remains dynamic and is becoming more premium, L'Oréal
is continuing to achieve strong growth. In lively markets, the
L'Oréal Luxe and Active Cosmetics Divisions have both recorded
double-digit growth, driven by the power of their brand portfolios
and the quality of their innovations. The Consumer Products
Division, especially with a robust performance at L'Oréal Paris,
has recorded moderate growth, held back by an environment that is
very difficult in some markets. The Professional Products Division,
meanwhile, has posted a slight increase in sales.
Across the
geographic Zones, the New Markets accelerated once again,
especially in Asia. North America is gradually improving, while
Western Europe is affected by persistent difficulties in France,
and by the slowdown in the United Kingdom.
The Group's
digital lead is continuing, particularly in e-commerce [2], which
posted +36.4% growth in the first half and represents 9.5% of
sales. L'Oréal also reaffirms its leadership in Travel Retail,
which grew by +27.3% [1].
The Group has delivered quality results paving the
way for the future. The strong growth in gross profit indeed
enables the Group at the same time to increase profitability,
support investments in Research and Innovation, and raise the
business drivers to further develop our brands. Net earnings per
share has increased by +5.3% [3] and by
+10.7% at constant exchange rates.
The good sales growth and the quality of the
first-half results reinforce our confidence in our ability to once
again outperform the cosmetics market in 2018, and to achieve
significant like-for-like [1] sales
growth and an increase in our profitability."
First-half 2018 sales
Like-for-like, i.e. based on a comparable structure and
identical exchange rates, sales growth of the L'Oréal group was
+6.6%.
The net impact of changes in the scope of
consolidation was +0.4%.
Currency fluctuations had a negative impact of
-7.2%. If the exchange rates at 30 June 2018, i.e.
€1 = $1.164, are extrapolated until 31 December 2018, the impact of
currency fluctuations on sales would be approximately -4.3% for the
whole of 2018.
Based on reported figures, the Group's sales
at 30 June 2018 amounted to 13.39 billion euros, i.e. -0.2%.
Sales by operational Division and geographic
Zone
| |
2nd quarter
2018 |
1st half
2018 |
| |
|
Growth |
|
Growth |
| |
€m |
Like-for-like |
Reported |
€m |
Like-for-like |
Reported |
| By operational Division |
|
|
|
|
|
|
|
Professional Products |
834.2 |
+1.4% |
-5.3% |
1,631.5 |
+1.6% |
-6.2% |
| Consumer
Products |
3,066.4 |
+2.3% |
-3.0% |
6,136.8 |
+2.5% |
-4.0% |
| L'Oréal
Luxe |
2,138.9 |
+13.0% |
+7.4% |
4,391.4 |
+13.5% |
+5.9% |
| Active
Cosmetics |
572.6 |
+12.9% |
+7.7% |
1,231.0 |
+11.4% |
+8.5% |
| Group total |
6,612.1 |
+6.3% |
+0.7% |
13,390.7 |
+6.6% |
-0.2% |
| By geographic Zone |
|
|
|
|
|
|
| Western
Europe |
2,009.3 |
-2.0% |
-2.8% |
4,134.1 |
-0.8% |
-1.6% |
| North
America |
1,828.7 |
+3.5% |
-4.1% |
3,564.4 |
+3.0% |
-6.8% |
| New
Markets, of which: |
2,774.1 |
+15.4% |
+7.1% |
5,692.2 |
+15.2% |
+5.7% |
| - Asia, Pacific |
1,709.6 |
+22.9% |
+16.8% |
3,548.1 |
+22.0% |
+13.2% |
| - Latin America |
456.1 |
+1.0% |
-10.6% |
882.7 |
+0.6% |
-10.4% |
| - Eastern Europe |
421.9 |
+9.7% |
-1.2% |
899.4 |
+8.1% |
-1.0% |
| - Africa, Middle East [4] |
186.5 |
+6.8% |
-1.2% |
362.1 |
+12.2% |
+1.9% |
| Group total |
6,612.1 |
+6.3% |
+0.7% |
13,390.7 |
+6.6% |
-0.2% |
PROFESSIONAL
PRODUCTS
At the end of
June, the Professional Products Division posted +1.6% like-for-like
growth and -6.2% based on reported figures.
All the geographic Zones are growing, except for Western Europe,
still impacted by the sluggishness of some markets. The United
States and the Asia Pacific Zone continue to grow, while Latin
America is maintaining its good growth rate.
Hair colour is benefiting from the strong growth of Shades EQ at Redken and the
dynamic contribution of SoColor by Matrix and Dialight by L'Oréal Professionnel. In haircare, Kérastase is being boosted by the new Résistance Extentioniste line and the continuing
success of Fusio-Dose, the customised in-salon
haircare treatment. At L'Oréal Professionnel,
the Source Essentielle natural haircare range
has made a promising start.
CONSUMER PRODUCTS
In the first
half, the Division posted growth of +2.5% like-for-like, and -4.0%
based on reported figures.
L'Oréal Paris is maintaining its growth
momentum, thanks to the good performance in facial skincare and
particularly its Revitalift anti-ageing
franchise, but also the success of new launches such as Dream Lengths in haircare and Color
Riche Shine in makeup. Maybelline New York
is posting good growth thanks to its foundations and especially
Fit me, but also to the strong success of
Superstay Matte Ink lipstick and the new
Total Temptation mascara.
The Division is still facing difficulties in France - where the
market trend is negative - and in Brazil, while growth has edged
down in the United Kingdom. It is growing in the other regions,
thanks to dynamic performances in Asia, especially in China and
India, and in Eastern Europe.
E-commerce sales are growing strongly.
L'ORÉAL LUXE
At the end of
June, L'Oréal Luxe posted growth of +13.5% like-for-like and +5.9%
based on reported figures, maintaining the dynamism it achieved at
the start of the year.
The Division's top four brands have all recorded double-digit
growth. Lancôme, thanks especially to
Génifique, and Kiehl's
with Line-Reducing Concentrate and the
Midnight Recovery range in particular, are
benefiting from accelerating skincare sales and the excellent
performance of their star franchises across all regions. Giorgio Armani is accelerating in fragrances, with the
success of Sì Passione following that of
Emporio You and Acqua di Giò
Absolu. Yves Saint Laurent is building up
its long-lasting product range in foundations with All Hours and in lip makeup with Tatouage Couture.
The Division is strengthening its positions worldwide, thanks to
strong growth in Asia, especially in China where L'Oréal Luxe is
confirming its leadership. The Division is also benefiting from the
fast growing pace of Travel Retail, and a solid performance in
Europe where it is also winning market share. The Division's
e-commerce is accelerating, with the successful launch of its
Yves Saint Laurent and Giorgio Armani brands on Tmall.
ACTIVE COSMETICS
The Active
Cosmetics Division continued to accelerate in the first half, with
growth of +11.4% like-for-like and +8.5% based on reported
figures.
All the major brands are contributing to the Division's growth.
La Roche-Posay remains very dynamic with
double-digit first-half growth, and excellent performances across
all Zones. The innovative Hyalu B5 and
Anthelios lines are the leading contributors
to this success story. Vichy is maintaining a
good growth rate, thanks to the acceleration of Minéral 89, now launched across all Zones, and the
excellent start in Asia. SkinCeuticals is
continuing its worldwide acceleration. CeraVe
is now a significant contributor to the Division's growth, thanks
to its excellent performance on its original home market, the
United States, and the start of its internationalisation drive in
25 countries.
The Division is growing and winning market share across all Zones.
The e-commerce distribution channel is continuing to grow very
strongly.
Summary by geographic Zone WESTERN
EUROPE
Western Europe posted growth of
-0.8% like-for-like and -1.6% based on reported figures. It is
being held back by the slowdown in the United Kingdom market and by
persistent difficulties in France. L'Oréal Luxe is winning market
share thanks to Kiehl's facial skincare and
Giorgio Armani fragrances. The Active
Cosmetics Division is also outperforming its market, with La Roche-Posay proving extremely dynamic. In a sluggish
mass market sector, the Consumer Products Division saw its skincare
market share edge slightly down in the first half, but is
strengthening its position as the makeup leader and posting very
promising results for the key haircare launches of Elsève Dream Lengths by L'Oréal
Paris and Fructis Hair Food by Garnier.
NORTH AMERICA
The Zone recorded growth of +3.0%
like-for-like and -6.8% based on reported figures. While the mass
market sector posted moderate growth, the Consumer Products
Division increased its market share in makeup, hair colour and
haircare, thanks to flagship brands L'Oréal
Paris and Maybelline New York. L'Oréal
Luxe is continuing to accelerate in skincare, thanks to Kiehl's and Lancôme in particular.
The men's fragrances of Yves Saint Laurent and
Giorgio Armani are outperforming the market.
Professional Products Division sales are growing, driven by a good
performance in hair colour. The Active Cosmetics Division is
continuing to record outstanding growth, with double-digit
increases for the CeraVe, SkinCeuticals, La
Roche-Posay and Vichy brands.
NEW MARKETS
Asia,
Pacific: Growth in this Zone came out at +22.0% like-for-like
and +13.2% based on reported figures. This strong growth is being
boosted by Chinese consumers, as reflected in the growth in China
and Hong Kong across all Divisions, especially for premium brands.
E-commerce and Travel Retail accelerated in the first half.
Southern Asia is extremely dynamic, with market share gains
particularly in India and Malaysia.
Latin
America: The Zone recorded growth of +0.6% like-for-like and
-10.4% based on reported figures. In Brazil, the Consumer Products
Division is continuing to face difficulties, whilst the other
Divisions are back to a good level of growth. In the rest of the
Zone, the Active Cosmetics Division has accelerated, particularly
thanks to Vichy and the launch of the
CeraVe brand. L'Oréal Luxe is continuing to
expand in Mexico and Chile. The Professional Products Division is
posting good performances, particularly in Argentina.
Eastern
Europe: In this Zone growth amounted to +8.1% like-for-like and
-1.0% based on reported figures. Growth is being driven by
Turkey and the countries of Central Europe, especially Ukraine and
Romania. Among the Divisions, Active Cosmetics posted strong
growth, thanks to the robust health of the La
Roche-Posay brand. L'Oréal Luxe and the Consumer Products
Division are growing.
So is e-commerce, which remains very dynamic.
Africa, Middle
East: The Zone recorded growth of +12.2% like-for-like
4 and +1.9%
based on reported figures. The Gulf states are growing, even
though the market contexts remain difficult. Trends are very
positive in Egypt and South Africa. The Consumer Products and
Active Cosmetics Divisions are driving growth in this
Zone.
Important events during the period 1/4/18 to
30/6/18 and post-closing events
-
On 17 April 2018, the L'Oréal Board of Directors
decided, in application of the authorisation approved by the Annual
General Meeting of 20 April 2017, to buy back L'Oréal shares for a
maximum amount of 500 million euros in the second quarter of
2018. 2,497,814 shares were bought back from 23 April to 29
May 2018. They were cancelled by the Board of Directors on 26 July
2018.
-
On 2 May 2018, L'Oréal announced the acquisition
of 100% of Nanda Co. Ltd., the Korean lifestyle makeup company
founded by Mrs Kim So-Hee in Seoul in 2004. The acquisition was
finalised on 20 June 2018.
-
On 15 May 2018, L'Oréal announced the launch of
its first Employee Share Ownership Plan, rolled out in 52
countries, representing a maximum of 500,000 shares. The scheme has
proven extremely successful, and gave rise to a capital increase on
24 July 2018.
-
On 25 May 2018, L'Oréal finalised the
acquisition of professional hair colour brand Pulp Riot, which,
under the leadership of its two founders David and Alexis Thurston,
has been creating industry-leading content and using social media
to inspire stylists.
-
On 28 May 2018, L'Oréal and Valentino announced
the signature of a long-term licence agreement for the creation,
development and distribution of fine fragrances and luxury beauty
products under the Valentino brand.
-
On 13 June 2018, L'Oréal acquired a stake of 49%
in the Tunisian company LiPP-Distribution which distributes the
Group's brands in Tunisia.
-
At 26 July 2018 and after allowing for the two
operations mentioned above, the share capital of L'Oréal amounts to
112,016,437.40 euros, divided into 560,082,187 shares, each with a
par value of 0.20 euros.
First-half 2018 results
The limited review procedures of the half-year
consolidated accounts have been completed. The limited review
report is being prepared by the Statutory Auditors.
Operating profitability at 19.2% of sales
Consolidated profit and loss
account: from sales to operating profit.
| In € million |
30/6/17 |
As % of sales |
31/12/17 |
As % of sales |
30/6/18 |
As % of sales |
Change
H1-2018 vs. H1-2017 |
| Sales |
13,411.9 |
100.0% |
26,023.7 |
100.0% |
13,390.7 |
100.0% |
-0.2% |
| Cost of sales |
-3,780.5 |
28.2% |
-7,359.2 |
28.3% |
-3,598.3 |
26.9% |
|
| Gross profit |
9,631.4 |
71.8% |
18,664.5 |
71.7% |
9,792.4 |
73.1% |
+1.7% |
| R&D expenses |
-425.1 |
3.2% |
-877.1 |
3.4% |
-447.2 |
3.3% |
|
| Advertising and promotion expenses |
-3,913.5 |
29.2% |
-7,650.6 |
29.4% |
-4,018.3 |
30.0% |
|
| Selling, general and administrative expenses |
-2,762.4 |
20.6% |
-5,460.5 |
21.0% |
-2,751.0 |
20.5% |
|
| Operating profit |
2,530.4 |
18.9% |
4,676.3 |
18.0% |
2,575.9 |
19.2% |
+1.8% |
Gross profit,
at 9,792 million euros, came out at 73.1% of sales, a strong
improvement of 130 basis points.
Research and
Development expenses, at 447 million euros, have risen by
+5.2%. Their relative level is slightly growing at 3.3% of
sales.
Advertising and
promotional expenses came out at 30.0% of sales, an increase of
80 basis points, demonstrating the support provided for our
brands.
Selling, general
and administrative expenses, at 20.5% of sales, have decreased
slightly by 10 basis points.
Overall, operating profit, at 2,575 million euros, amounted to
19.2% of sales, an increase of 30 basis points.
Operating profit by operational Division
|
|
30/6/17 |
31/12/17 |
30/6/18 |
|
|
€m |
% of sales |
€m |
% of sales |
€m |
% of sales |
| By operational Division |
|
|
|
|
|
|
|
Professional Products |
319.9 |
18.4% |
669.4 |
20.0% |
313.4 |
19.2% |
| Consumer
Products |
1,267.5 |
19.8% |
2,419.0 |
20.0% |
1,275.4 |
20.8% |
| L'Oréal
Luxe |
970.2 |
23.4% |
1,855.8 |
21.9% |
1,026.7 |
23.4% |
| Active
Cosmetics |
303.5 |
26.7% |
471.2 |
22.6% |
326.2 |
26.5% |
Total Divisions
before non-allocated |
2,861.1 |
21.3% |
5,415.4 |
20.8% |
2,941.7 |
22.0% |
| Non-allocated [5] |
-330.7 |
-2.5% |
-739.1 |
-2.8% |
-365.7 |
-2.7% |
| Group |
2,530.4 |
18.9% |
4,676.3 |
18.0% |
2,575.9 |
19.2% |
The L'Oréal group is managed on an
annual basis. This means that half-year operating profits cannot be
extrapolated for the whole year.
The profitability of the Professional Products Division increased from 18.4% to
19.2%.
The Consumer
Products Division's profitability went from 19.8% to 20.8%.
L'Oréal Luxe
maintained its profitability at 23.4%.
The Active
Cosmetics Division remains at a very high profitability level
at 26.5%, compared with 26.7% in the first half of 2017.
Net profit excluding non-recurring items
Consolidated profit and loss
account: from operating profit to net profit excluding
non-recurring items.
| In € million |
30/6/17 |
31/12/17 |
30/6/18 |
Change
H1-2018 vs. H1-2017 |
| Operating profit |
2,530.4 |
4,676.3 |
2,575.9 |
+1.8% |
Financial revenues and expenses
excluding dividends received |
-9.9 |
-22.9 |
+14.5 |
|
| Sanofi
dividends |
350.0 |
350.0 |
358.3 |
|
Profit
before tax and associates
excluding non-recurring items |
2,870.5 |
5,003.3 |
2,948.7 |
+2.7% |
| Income tax excluding non-recurring items |
-687.5 |
-1,250.5 |
-646.7 |
|
Net profit excluding non-recurring items
of equity consolidated companies |
- |
-0.1 |
-0.1 |
|
| Non-controlling interests |
2.8 |
- 3.9 |
-1.4 |
|
Net profit excluding non-recurring items,
after non-controlling interests [6] |
2,185.8 [7] |
3,748.7 7 |
2,300.6 |
+5.2% |
| EPS [8]
(€) |
3.88 |
6.65 |
4.08 |
|
| Diluted average number of shares |
563,423,701 |
563,528,502 |
563,242,060 |
|
Overall financial
revenues are positive at 14.5 million euros.
Sanofi
dividends amounted to 358 million euros.
Income tax
excluding non-recurring items came out at 646 million euros,
i.e. a tax rate of 22%, below that of the first half of 2017, which
was 24%.
Net profit
excluding non-recurring items after non-controlling interests
came out at 2,300 million euros, an increase of +5.2% compared with
the net profit of continuing operations excluding non-recurring
items reported on 30 June 2017.
Earnings per
share, at 4.08 euros, has risen by +5.3% compared with the
first half of 2017.
Net profit
Consolidated profit and loss account: from net
profit excluding non-recurring items to net profit.
| In € million |
30/06/17 7 |
31/12/17 7 |
30/06/18 |
Change
H1-2018 vs. H1-2017 |
Net profit excluding non-recurring items,
after non-controlling interests 6 |
2,185.8 |
3,748.7 |
2,300.6 |
+5.2% |
| Non-recurring items |
-148.3 |
-167.2 |
-25.4 |
|
Of
which:
- Impact of applying the IFRS 5 accounting rule relating to
discontinued operations on net profit after non-controlling
interests
- Other non-recurring items |
-29.1
|
-240.1 |
- |
|
|
|
-96.2 |
-276.3 |
-40.4 |
|
|
|
-22.8 |
+349.2 |
+15.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Net profit after non-controlling interests |
2,037.5 |
3,581.4 |
2,275.2 |
+11.7% |
Operating cash
flow and balance sheet
Gross cash
flow amounted to 2,779 million euros, up by +5.5% compared with
the first half of 2017.
The change in
working capital amounted to 431 million euros. As in the first
half every year, it increased noticeably, particularly because of
the impact of the seasonality of part of our business on trade
receivables.
Investments,
at 780 million euros, represented 5.8% of sales.
Operating cash
flow amounted to 1,568 million euros, that is -3.7%.
After payment of the dividend,
share buybacks and the costs of acquisitions, the residual cash flow came out at -1,490 million
euros.
At 30 June 2018, net cash amounted to 362 million euros, compared with a
net debt of 1,492 million euros at 30 June 2017.
"This news
release does not constitute an offer to sell, or a solicitation of
an offer to buy L'Oréal shares. If you wish to obtain more
comprehensive information about L'Oréal, please refer to the public
documents registered in France with the Autorité des Marchés
Financiers, also available in English on our Internet site
www.loreal-finance.com.
This news release may contain some forward-looking
statements. Although the Company considers that these statements
are based on reasonable hypotheses at the date of publication of
this release, they are by their nature subject to risks and
uncertainties which could cause actual results to differ materially
from those indicated or projected in these statements."
This a free
translation into English of the First-half 2018 results news
release issued in the French language and is provided solely for
the convenience of English-speaking readers. In case of
discrepancy, the French version prevails.
Contacts at L'ORÉAL
(Switchboard: +33 1 47 56 70 00)
Individual shareholders and
market authorities
Mr Jean Régis CAROF
Tel: +33 1 47 56 83 02
jean-regis.carof@loreal.com
Financial analysts and
Institutional investors
Mrs Françoise LAUVIN
Tel: +33 1 47 56 86 82
francoise.lauvin@loreal.com
Journalists
Mrs Stephanie CARSON-PARKER
Tel: +33 1 47 56 76 71
stephanie.carsonparker@loreal.com
For more information, please
contact your bank, broker or financial institution (I.S.I.N. code:
FR0000120321), and consult your usual newspapers, and the Internet
site for shareholders and investors, www.loreal-finance.com or the
L'Oréal Finance app, alternatively, call +33 1 40 14 80 50.
Appendices
Appendix 1: L'Oréal group sales
2017/2018 (€ million)
| |
2017 [9] |
2018 |
| First
quarter: |
|
|
|
Operational Divisions |
6,847.8 |
6,778.6 |
| The Body
Shop |
197.2 |
|
| First quarter total |
7,045.0 |
6,778.6 |
| Second
quarter: |
|
|
|
Operational Divisions |
6,564.2 |
6,612.1 |
| The Body
Shop |
|
|
| Second quarter total |
6,564.2 |
6,612.1 |
| First
half: |
|
|
|
Operational Divisions |
13,411.9 |
13,390.7 |
| The Body
Shop |
|
|
| First half total |
13,411.9 |
13,390.7 |
| Third
quarter: |
|
|
|
Operational Divisions |
6,097.9 |
|
| The Body
Shop |
|
|
| Third quarter total |
6,097.9 |
|
| Nine
months: |
|
|
|
Operational Divisions |
19,509.9 |
|
| The Body
Shop |
|
|
| Nine months total |
19,509.9 |
|
| Fourth
quarter: |
|
|
|
Operational Divisions |
6,513.8 |
|
| The Body
Shop |
|
|
| Fourth quarter total |
6,513.8 |
|
| Full
year: |
|
|
|
Operational Divisions |
26,023.7 |
|
| The Body
Shop |
|
|
| Full year total |
26,023.7 |
|
Appendix 2: compared consolidated
income statements
| € millions |
1st
half 2018 |
1st half
2017 |
2017 |
| Net sales |
13,390.7 |
13,411.9 |
26,023.7 |
| Cost of
sales |
-3,598.3 |
-3,780.5 |
-7,359.2 |
| Gross profit |
9,792.4 |
9,631.4 |
18,664.5 |
| Research
and development |
-447.2 |
-425.1 |
-877.1 |
| Advertising
and promotion |
-4,018.3 |
-3,913.5 |
-7,650.6 |
| Selling,
general and administrative expenses |
-2,751.0 |
-2,762.4 |
-5,460.5 |
| Operating profit |
2,575.9 |
2,530.4 |
4,676.3 |
| Other
income and expenses |
-40.4 |
-96.2 |
-276.3 |
| Operational profit |
2,535.5 |
2,434.2 |
4,400.0 |
| Finance
costs on gross debt |
-11.3 |
-18.1 |
-35.5 |
| Finance
income on cash and cash equivalents |
33.5 |
21.3 |
38.5 |
| Finance costs, net |
22.2 |
3.2 |
3.1 |
| Other
financial income (expenses) |
-7.7 |
-13.1 |
-26.0 |
| Sanofi
dividends |
358.3 |
350.0 |
350.0 |
| Profit before tax and
associates |
2,908.3 |
2,774.3 |
4,727.0 |
| Income
tax |
-631.6 |
-710.3 |
-901.3 |
| Share of
profit in associates |
-0.1 |
-0.2 |
-0.1 |
| Net profit from continuing
operations |
2,276.6 |
2,063.8 |
3,825.6 |
| Net profit from discontinued
operations |
|
-29.1 |
-240.1 |
| Net profit |
2,276.6 |
2,034.7 |
3,585.5 |
|
Attributable to: |
|
|
|
|
- owners of the company |
2,275.2 |
2,037.5 |
3,581.4 |
|
- non-controlling interests |
1.4 |
-2.8 |
4.1 |
| Earnings
per share attributable to owners of the company (euros) |
4.07 |
3.65 |
6.40 |
| Diluted
earnings per share attributable to owners of the company (euros) |
4.04 |
3.62 |
6.36 |
Earnings
per share of continuing operations attributable to owners
of the company (euros) |
4.07 |
3.70 |
6.83 |
Diluted
earnings per share of continuing operations attributable
to owners of the company (euros) |
4.04 |
3.67 |
6.78 |
Earnings
per share of continuing operations attributable to owners
of the company, excluding non-recurring items (euros) |
4.11 |
3.91 |
6.70 |
Diluted
earnings per share of continuing operations attributable
to owners of the company, excluding non-recurring items (euros) |
4.08 |
3.88 |
6.65 |
Appendix 3: consolidated
statement of comprehensive income
| € millions |
1st half
2018 |
1st half
2017* |
2017** |
| Consolidated net profit for the period |
2,276.6 |
2,034.7 |
3,585.5 |
| Financial assets available-for-sale |
- |
811.0 |
-597.1 |
| Cash flow hedges |
-6.6 |
83.6 |
88.9 |
| Cumulative translation adjustments |
46.8 |
-653.4 |
-824.8 |
| Income tax on items that may be reclassified to profit or
loss (1) |
1.0 |
-57.8 |
4.5 |
| Items that may be reclassified to profit or loss |
41.2 |
183.4 |
-1,328.5 |
| Financial assets at fair value through profit or
loss |
-378.3 |
- |
- |
| Actuarial gains and losses |
- |
139.6 |
280.0 |
| Income tax on items that may not be reclassified to profit
or loss (1)
(2) |
10.8 |
-40.4 |
-107.9 |
| Items that may not be reclassified to profit or
loss |
-367.5 |
99.2 |
172.1 |
| Other comprehensive income |
-326.3 |
282.6 |
-1,156.5 |
| Consolidated comprehensive income |
1,950.3 |
2,317.2 |
2,428.9 |
|
Attributable to: |
|
|
|
|
- owners of the company |
1,948.9 |
2,319.6 |
2,424.8 |
|
- non-controlling interests |
1.4 |
-2.4 |
4.1 |
*
Half-year 2017 as reported including The Body Shop.
** Including The Body Shop over
eight months in 2017.
(1) Including, in 2017, €20.4 million
and - €21.5 million respectively from the revaluation of deferred
tax in France following the change in the tax rate by 2022, and
deferred tax in the USA following the change in the tax rate at 1
January 2018.
(2) The tax effect is as
follows:
| € millions |
1st half
2018 |
1st half
2017 |
2017 |
| Financial assets available-for-sale |
- |
-28.1 |
37.3 |
| Cash flow hedges |
1.0 |
-29.7 |
-32.8 |
| Items that may be reclassified to profit or loss |
1.0 |
-57.8 |
4.5 |
| Financial assets at fair value through profit or
loss |
11.8 |
- |
- |
| Actuarial gains and losses |
-1.0 |
-40.4 |
-107.9 |
| Items that may not be reclassified to profit or
loss |
10.8 |
-40.4 |
-107.9 |
| TOTAL |
11.8 |
-98.2 |
-103.4 |
Appendix 4:
compared consolidated balance sheets
| € millions |
30.06.2018 |
30.06.2017
(1) |
31.12.2017
(1) |
| Non-current assets |
24,981.3 |
26,010.1 |
24,320.1 |
|
Goodwill |
9,551.0 |
9,064.4 |
8,872.3 |
| Other
intangible assets |
2,884.8 |
2,694.4 |
2,579.1 |
| Property,
plant and equipment |
3,582.0 |
3,591.8 |
3,571.1 |
| Non-current
financial assets |
8,390.3 |
10,128.4 |
8,766.2 |
| Investments
in associates |
9.9 |
1.0 |
1.1 |
| Deferred
tax assets |
563.3 |
530.1 |
530.3 |
| Current assets |
10,506.9 |
11,271.8 |
11,019.0 |
| Current assets excluding assets held for sale |
10,506.9 |
9,994.6 |
11,019.0 |
|
Inventories |
2,689.4 |
2,638.4 |
2,494.6 |
| Trade
accounts receivable |
4,334.4 |
4,237.8 |
3,923.4 |
| Other
current assets |
1,400.6 |
1,381.5 |
1,393.8 |
| Current tax
assets |
69.0 |
50.9 |
160.6 |
| Cash and
cash equivalents |
2,013.5 |
1,686.0 |
3,046.6 |
| Assets held for sale |
- |
1,277 |
- |
| TOTAL |
35,488.2 |
37,281.9 |
35,339.1 |
| € millions |
30.06.2018 |
30.06.2017
(1) |
31.12.2017
(1) |
| Equity |
24,349.8 |
24,594.5 |
24,818.5 |
| Share
capital |
112.4 |
112.0 |
112.1 |
| Additional
paid-in capital |
2,977.7 |
2,889.4 |
2,935.3 |
| Other
reserves |
16,382.4 |
14,684.8 |
14,752.2 |
| Other
comprehensive income |
3,521.9 |
5,173.3 |
3,904.7 |
| Cumulative
translation adjustments |
-366.9 |
-242.7 |
-413.5 |
| Treasury
stock |
-555.9 |
-56.4 |
-56.5 |
| Net profit
attributable to owners of the company |
2,275.2 |
2,037.5 |
3,581.4 |
| Equity attributable to owners of the company |
24,346.9 |
24,597.9 |
24,815.7 |
|
Non-controlling interests |
2.9 |
-3.4 |
2.8 |
| Non-current liabilities |
1,219.6 |
1,682.7 |
1,347.2 |
| Provisions
for employee retirement obligations and related benefits |
327.4 |
544.4 |
301.9 |
| Provisions
for liabilities and charges |
295.8 |
367.8 |
434.9 |
| Deferred
tax liabilities |
583.5 |
756.0 |
597.0 |
| Non-current
borrowings and debt |
12.9 |
14.5 |
13.4 |
| Current liabilities |
9,918.8 |
11,004.7 |
9,173.4 |
| Current liabilities excluding liabilities relating to
assets held for sale |
9,918.8 |
10,759.3 |
9,173.4 |
| Trade
accounts payable |
4,396.7 |
3,996.8 |
4,140.8 |
| Provisions
for liabilities and charges |
948.5 |
816.5 |
889.2 |
| Other
current liabilities |
2,682.0 |
2,543.9 |
2,823.9 |
| Income
tax |
254.0 |
238.6 |
158.5 |
| Current
borrowings and debt |
1,637.6 |
3,163.5 |
1,161.0 |
| Liabilities relating to assets held for sale |
- |
245.4 |
- |
| TOTAL |
35,488.2 |
37,281.9 |
35,339.1 |
(1)
The balance sheets at 30 June 2017 and 31 December 2017 have been
restated to reflect the change in accounting policies resulting
from the application of IFRS 9 "Financial
Instruments".
Appendix 5: consolidated statements of changes in
equity
| € millions |
Common shares
outstanding |
Share capital |
Additional paid-in capital |
Retained
earnings
and net
profit |
Other
compre-
hensive
income |
Treasury stock |
Cumulative translation adjustments |
Equity
attributable
to owners
of the
company |
Non-controlling interests |
Total
equity |
| At 31.12.2016 |
560,098,396 |
112.4 |
2,817.3 |
17,057.3 |
4,237.6 |
-133.6 |
410.9 |
24,501.9 |
2.1 |
24,504.0 |
| Changes in
accounting policies at 01.01.2017 |
|
|
|
10.3 |
-10.3 |
|
|
- |
|
- |
| At 01.01.2017 (1) |
560,098,396 |
112.4 |
2,817.3 |
17,067.6 |
4,227.3 |
-133.6 |
410.9 |
24,501.9 |
2.1 |
24,504.0 |
|
Consolidated net profit for the period |
|
|
|
3,581.4 |
|
|
|
3,581.4 |
4.1 |
3,585.5 |
| Financial assets available-for-sale |
|
|
|
|
-559.7 |
|
|
-559.7 |
|
-559.7 |
| Cash flow hedges |
|
|
|
|
55.5 |
|
|
55.5 |
0.4 |
55.9 |
| Cumulative translation adjustments |
|
|
|
|
|
|
-824.5 |
-824.5 |
-0.3 |
-824.8 |
Other comprehensive income that may
be reclassified to profit and loss |
|
|
|
|
-504.2 |
|
-824.5 |
-1,328.7 |
0.1 |
-1,328.6 |
| Actuarial gains and losses |
|
|
|
|
172.1 |
|
|
172.1 |
|
172.1 |
Other comprehensive income that may
not be reclassified to profit and loss |
|
|
|
|
172.1 |
|
|
172.1 |
- |
172.1 |
| Consolidated comprehensive income |
|
|
|
3,581.4 |
-332.2 |
|
-824.5 |
2,424.8 |
4.1 |
2,428.9 |
| Capital
increase |
1,509,951 |
0.3 |
118.0 |
|
|
|
|
118.3 |
|
118.3 |
|
Cancellation of Treasury stock |
|
-0.6 |
|
-498.6 |
|
499.2 |
|
- |
|
- |
| Dividends
paid (not paid on Treasury stock) |
|
|
|
-1,857.7 |
|
|
|
-1,857.7 |
-3.5 |
-1,861.2 |
| Share-based
payment |
|
|
|
128.8 |
|
|
|
128.8 |
|
128.8 |
| Net changes
in Treasury stock |
-1,860,384 |
|
|
-77.2 |
|
-422.0 |
|
-499.2 |
|
-499.2 |
| Purchase
commitments for non-controlling interests |
|
|
|
|
|
|
|
- |
|
- |
| Changes in
scope of consolidation |
|
|
|
-1.3 |
|
|
|
-1.3 |
|
-1.3 |
| Other
movements |
|
|
|
0.3 |
|
|
|
0.2 |
|
0.2 |
| At 31.12.2017 (1) |
559,747,963 |
112.1 |
2,935.3 |
18,343.3 |
3,895.0 |
-56.5 |
-413.5 |
24,815.7 |
2.8 |
24,818.5 |
| Changes in
accounting policies at 01.01.2018 |
|
|
|
-11.6 |
|
|
|
-11.6 |
-0.8 |
-12.4 |
| At 01.01.2018 (2) |
559,747,963 |
112.1 |
2,935.3 |
18,331.7 |
3,895.0 |
-56.5 |
-413.5 |
24,804.1 |
2.0 |
24,806.1 |
|
Consolidated net profit for the period |
|
|
|
2,275.2 |
|
|
|
2,275.2 |
1.4 |
2,276.6 |
| Cash flow hedges |
|
|
|
|
-5.4 |
|
|
-5.4 |
-0.2 |
-5.6 |
| Cumulative translation adjustments |
|
|
|
|
|
|
46.6 |
46.6 |
0.2 |
46.8 |
Other comprehensive income that may
be reclassified to profit and loss |
|
|
|
|
-5.4 |
|
46.6 |
41.2 |
- |
41.2 |
| Financial assets at fair value through profit or
loss |
|
|
|
|
-366.6 |
|
|
-366.6 |
|
-366.6 |
| Actuarial gains and losses |
|
|
|
|
-0.9 |
|
|
-0.9 |
|
-0.9 |
Other comprehensive income that may
not be reclassified to profit and loss |
|
|
|
|
-367.5 |
|
|
-367.5 |
- |
-367.5 |
| Consolidated comprehensive income |
|
|
|
2,275.2 |
-372.9 |
|
46.6 |
1,948.9 |
1.4 |
1,950.3 |
| Capital
increase |
1,582,725 |
0.3 |
42.4 |
-0.2 |
|
|
|
42.5 |
|
42.5 |
|
Cancellation of Treasury stock |
|
|
|
|
|
|
|
- |
|
- |
| Dividends
paid (not paid on Treasury stock) |
|
|
|
-2,006.6 |
|
|
|
-2,006.6 |
-3.7 |
-2,010.3 |
| Share-based
payment |
|
|
|
57.6 |
|
|
|
57.6 |
|
57.6 |
| Net changes
in Treasury stock |
-2,497,814 |
|
|
|
|
-499.4 |
|
-499.4 |
|
-499.4 |
| Purchase
commitments for non-controlling interests |
|
|
|
|
|
|
|
- |
0.3 |
0.3 |
| Changes in
scope of consolidation |
|
|
|
-2.9 |
|
|
|
-2.9 |
2.9 |
- |
| Other
movements |
|
|
|
2.8 |
-0.2 |
|
|
2.6 |
|
2.6 |
| AT 30.06.2018 |
558,832,874 |
112.4 |
2,977.7 |
18,657.6 |
3,521.9 |
-555.9 |
-366.9 |
24,346.9 |
2.9 |
24,349.8 |
(1)
Taking into account the change in accounting policies resulting
from the application of IFRS 9 "Financial
Instruments".
(2) Taking into account the change in
accounting policies resulting from the application of IFRS 15
"Revenue from contracts with customers".
CHANGES IN FIRST-HALF 2017
| € millions |
Common shares
outstanding |
Share capital |
Additional paid-in capital |
Retained
earnings
and net
profit |
Other
compre-
hensive
income |
Treasury stock |
Cumulative translation adjustments |
Equity
attributable
to owners
of the
company |
Non-controlling interests |
Total
equity |
| At 31.12.2016 |
560,098,396 |
112.4 |
2,817.3 |
17,057.3 |
4,237.6 |
-133.6 |
410.9 |
24,501.9 |
2.1 |
24,504.0 |
| Changes in
accounting policies at 01.01.2017 |
|
|
|
10.3 |
-10.3 |
|
|
- |
|
- |
| At 01.01.2017 (1) |
560,098,396 |
112.4 |
2,817.3 |
17,067.6 |
4,227.3 |
-133.6 |
410.9 |
24,501.9 |
2.1 |
24,504.0 |
|
Consolidated net profit for the period |
|
|
|
2,037.5 |
|
|
|
2,037.5 |
-2.8 |
2,034.7 |
| Financial assets available-for-sale |
|
|
|
|
782.9 |
|
|
782.9 |
|
782.9 |
| Cash flow hedges |
|
|
|
|
53.6 |
|
|
53.6 |
0.3 |
53.9 |
| Cumulative translation adjustments |
|
|
|
|
|
|
-653.6 |
-653.6 |
0.2 |
-653.4 |
Other comprehensive income that may
be reclassified to profit and loss |
|
|
|
|
836.5 |
|
-653.6 |
182.9 |
0.5 |
183.4 |
| Actuarial gains and losses |
|
|
|
|
99.2 |
|
|
99.2 |
|
99.2 |
Other comprehensive income that may
not be reclassified to profit and loss |
|
|
|
|
99.2 |
|
|
99.2 |
- |
99.2 |
| Consolidated comprehensive income |
|
|
|
2,037.5 |
935.7 |
|
-653.6 |
2,319.6 |
-2.4 |
2,317.2 |
| Capital
increase |
958,123 |
0.2 |
72.1 |
|
|
|
|
72.3 |
|
72.3 |
|
Cancellation of Treasury stock |
|
-0.6 |
|
-498.8 |
|
499.4 |
|
- |
|
- |
| Dividends
paid (not paid on Treasury stock) |
|
|
|
-1,857.7 |
|
|
|
-1,857.7 |
-3.3 |
-1,861.0 |
| Share-based
payment |
|
|
|
63.6 |
|
|
|
63.6 |
|
63.6 |
| Net changes
in Treasury stock |
-1,860,384 |
|
|
-77.2 |
|
-422.2 |
|
-499.4 |
|
-499.4 |
| Purchase
commitments for non-controlling interests |
|
|
|
|
|
|
|
- |
0.2 |
0.2 |
| Changes in
scope of consolidation |
|
|
|
-1.3 |
|
|
|
-1.3 |
|
-1.3 |
| Other
movements |
|
|
|
-1.1 |
|
|
|
-1.1 |
|
-1.1 |
| AT 30.06.2017 (1) |
559,196,135 |
112.0 |
2,889.4 |
16,732.6 |
5,162.9 |
-56.4 |
-242.7 |
24,597.9 |
-3.4 |
24,594.5 |
(1)
Taking into account the change in accounting policies resulting
from the application of IFRS 9 "Financial Instruments".
Appendix 6:
compared consolidated statements of cash flows
| € millions |
1st half
2018 |
1st half
2017 |
2017 |
| Cash flows from operating activities |
|
|
|
| Net profit
attributable to owners of the company |
2,275.2 |
2,037.5 |
3,581.4 |
|
Non-controlling interests |
1.4 |
-2.8 |
4.1 |
| Elimination
of expenses and income with no impact on cash flows: |
|
|
|
|
- depreciation, amortisation and provisions |
467.3 |
556.9 |
1,218.5 |
|
- changes in deferred taxes |
-22.0 |
-46.9 |
-194.8 |
|
- share-based payment (including free shares) |
57.6 |
61.1 |
126.7 |
|
- capital gains and losses on disposals of assets |
0.1 |
-0.8 |
-3.9 |
| Net profit
from discontinued operations |
- |
29.1 |
240.1 |
| Share of
profit in associates net of dividends received |
0.1 |
0.2 |
0.1 |
| Gross cash flow |
2,779.7 |
2,634.3 |
4,972.2 |
| Changes in
working capital |
-431.2 |
-362.8 |
261.1 |
| Net cash
provided by discontinued operations activities |
- |
-24.9 |
-36.7 |
| Net cash provided by operating activities (A) |
2,348.5 |
2,246.6 |
5,196.6 |
| Cash flows from investing activities |
|
|
|
| Purchases
of property, plant and equipment and intangible assets |
-780.0 |
-641.9 |
-1,263.5 |
| Disposals
of property, plant and equipment and intangible assets |
1.8 |
2.6 |
8.2 |
| Changes in
other financial assets (including investments in non-consolidated
companies) |
-15.3 |
-18.0 |
-70.7 |
| Effect of
changes in the scope of consolidation |
-553.0 |
-1,240.0 |
-166.5 |
| Net cash
(used in) from investing activities from discontinued
operations |
- |
-18.4 |
-24.4 |
| Net cash (used in) from investing activities (B) |
-1,346.5 |
-1,915.7 |
-1,516.9 |
| Cash flows from financing activities |
|
|
|
| Dividends
paid |
-2,035.4 |
-1,899.7 |
-1,870.7 |
| Capital
increase of the parent company |
42.5 |
72.3 |
118.3 |
| Disposal
(acquisition) of Treasury stock |
-499.4 |
-499.4 |
-499.2 |
| Purchase of
non-controlling interests |
|
-1.9 |
-2.0 |
| Issuance
(repayment) of short-term loans |
457.5 |
1,980.1 |
-86.6 |
| Repayment
of long-term borrowings |
-2.1 |
-4.3 |
-7.0 |
| Net cash (used in)
from financing activities from discontinued operations |
- |
35.2 |
71.5 |
| Net cash (used in) from financing activities (C) |
-2,036.9 |
-317.7 |
-2,275.7 |
| Net effect
of changes in exchange rates and fair value (D) |
1.8 |
-52.2 |
-65.3 |
| Change in cash and cash equivalents (A+B+C+D) |
-1,033.1 |
-39.0 |
1,338.7 |
| Cash and cash equivalents at beginning of the period
(E) |
3,046.6 |
1,746.0 |
1,746.0 |
| Net effect
of changes in cash and cash equivalents of discontinued operations
(F) |
- |
-21.0 |
-38.1 |
| CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
(A+B+C+D+E+F) |
2,013.5 |
1,686.0 |
3,046.6 |
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[1] Like-for-like: based on a comparable structure and
identical exchange rates.
[2] Sales achieved on our brands' websites + estimated sales
achieved by our brands corresponding to sales through our
retailers' websites (non-audited data); like-for-like
growth.
[3] Diluted net profit per share of continuing operations,
excluding non-recurring items, after non-controlling
interests.
[4] The application of the IFRS 15 accounting rule from 1
January 2018 has resulted in the restatement of sales with
distributors when they operate as agents and not on their own
behalf. The impact of this restatement amounted to 11.6 million
euros on the sales of the Africa, Middle East Zone in the
2nd quarter and
the 1st half of
2018. The effect of this new accounting method on the profit and
loss account and the balance sheet is not material.
[5] Non-allocated expenses = Central Group expenses,
fundamental research expenses, stock options and free grant of
shares expenses and miscellaneous items. As a % of total Divisions
sales.
[6] Net profit excluding non-recurring items after
non-controlling interests, does not include capital gains and
losses on disposals of long-term assets, impairment of assets,
restructuring costs, tax effects and non-controlling
interests.
[7] Net profit from continuing operations, excluding
non-recurring items, after non-controlling interests.
[8] Diluted net profit per share of continuing operations,
excluding non-recurring items, after non-controlling
interests.
[9] In the first quarter 2017, reported Group sales included
The Body Shop sales, which amounted to 197.2 million euros.
![](http://thomsonreuterscorporategroup.122.2o7.net/b/ss/trcgclientrs514/1/H.22.1--NS/0?pageName=L'Or%C3%A9al:%20News%20Release:%20"First-half%202018%20results"&c1=2207412&c2=D=Referer)
Read the news release of 26 July
2018
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: L'ORÉAL via Globenewswire
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