Deutsche Bank - L'Oréal Investisseurs et MASS MARKET HAIR & BEAUTY SALONS HAIRCARE HAIR COLOR SKIN…

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  • Jean-Paul AGON Chairman and CEO

    Deutsche Bank JUNE 19th 2014

    1 // June 19th 2014

  • STRONG

    STRATEGIC

    CONTINUITY

    I

    2 // June 19th 2014

  • A PURE PLAYER IN BEAUTY FOR 105 YEARS

    3 // June 19th 2014

  • LORAL MEETS ALL BEAUTY NEEDS & ASPIRATIONS

    ACROSS ALL BEAUTY CATEGORIES

    ACROSS ALL DISTRIBUTION CHANNELS

    4 // June 19th 2014

    TRAVEL RETAIL

    BRANDED BOUTIQUES

    PHARMACIES DRUGSTORES MEDISPAS

    DEPARTMENT STORES PERFUMERIES

    MASS MARKET

    HAIR & BEAUTY SALONS

    MAKE-UP FRAGRANCES HAIR COLOR HAIRCARE SKIN CARE

  • 28.88

    20.70 20.08

    9.98 8.38 7.64

    6.73 6.16 5.87 5.33

    * WWD Estimates

    LORAL IS THE WORLD LEADER IN BEAUTY

    WWD BEAUTY BIZ RANKING AUGUST 2013

    BEAUTYS TOP 100

    2012 sales in billion US DOLLARS

    5 // June 19th 2014

  • RESEARCH & INNOVATION AT THE HEART OF OUR BUSINESS MODEL

    3.4% OF SALES

    R&I

    6 // June 19th 2014

    *

    * Pro-forma 2013 Galderma & Inneov consolidated under the equity method, in application of IFRS 11.

  • A UNIQUE PORTFOLIO OF COMPLEMENTARY BRANDS

    7 // June 19th 2014

  • 2 Bn

    300 m

    2013 1995

    530 m

    40 m

    2013 1999

    CAGR 21%

    CAGR 12%

    8 // June 19th 2014

  • SINCE ACQUISITION

    IN 2011

    x2.5 SALES

    ACQUISITION IN 2012 +42%

    SALES

    *2013 Like-for-like sales growth 9 // June 19th 2014

    *

  • WESTERN EUROPE

    35.1 %

    BREAKDOWN OF 2013 COSMETICS SALES BY REGION

    BALANCED GEOGRAPHIC POSITIONS

    NEW MARKETS

    39.8 %

    NORTH AMERICA

    25.1 %

    10 // June 19th 2014

  • 22.2% 18.7% 19.2%

    20.1%**

    Western Europe

    North America

    New Markets

    20.5% 19.9% 20.0% 21.2%

    20.1%**

    Professional Products

    Consumer Products

    LOral Luxe

    Active Cosmetics

    BY DIVISION* (as a % of sales)

    BALANCED OPERATING PROFIT

    BY REGION* (as a % of sales)

    * Before central group expenses, fundamental research expenses, stock-option & free grant of shares expenses and miscellaneous items as a % of total cosmetics sales ** Cosmetics divisions total

    11 // June 19th 2014

  • 2013 KEY FINANCIAL FIGURES IN MILLION EUROS

    % change

    2013 Reported At constant exchange rates***

    Consolidated sales 22 977 +2.3% +6.0%

    Operating profit 3 875 +4.8% +7.8%

    Net profit* 3 117 +4.9% +7.4%

    Earnings per share** (in euros) 5.13 +4.4% +7.0%

    Net operating cash flow 2 689 +4.4%

    *Excluding non-recurring items attributable to owners of the company **Diluted earnings per share based on net profit excluding non-recurring items, attributable to owners of the company *** 2013 figures at 2013 rates / 2012 figures at 2013 rates

    12 // June 19th 2014

  • CONTINUOUS PRODUCTIVITY & EFFICIENCY ENHANCEMENTS

    INTEGRATED ON/OFF LINE

    MEDIA STRATEGY

    ON-GOING OPTIMISATION

    OF OUR MEDIA BUYING

    ECONOMETRIC MODELING

    40 Cosmetics factories worldwide

    (excl. Dermatology)

    REENGINEERING OF OUR INDUSTRIAL FOOTPRINT & LOGISTICS NETWORK

    OPERATIONS GROWTH DRIVERS

    OPTIMISATION OF SUPPORT FUNCTIONS AND SYSTEMS

    ORGANISATIONS

    ON-GOING ASSESSMENT OF OUR PROCUREMENT PERFORMANCE

    13 // June 19th 2014

  • SOLID BALANCE SHEET IN BILLION EUROS

    ASSETS LIABILITIES

    1.8 2.6 6.2 6.3

    6.4 6.7 0.2 0.4

    21.3 21.9

    2.2 2.0

    20.9 22.6

    Non-current

    liabilities

    12.31.2012 12.31.2013 12.31.2012 12.31.2013

    Current liabilities

    Financial debt (current & non-current)

    Non-current

    assets

    Current

    assets

    Cash & cash

    equivalents

    Total Assets 29.5 31.3

    Shareholders

    equity

    Total Liabilities 29.5 31.3

    14 // June 19th 2014

  • OPERATIONAL & FINANCIAL ROBUSTNESS: A POWERFUL & LONG TERM BUSINESS MODEL

    0.008 0.025

    0.097

    0.44

    0.00

    0.50

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    1.50

    2.00

    2.50

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    2.50*

    1990

    1970

    2000

    1980

    2010

    1.80

    2.00

    2.30

    *Approved at the shareholders meeting held on April 17th, 2014

    2013 dividend per share

    2.30 2.50*

    2012 2013

    +8.7%

    15 // June 19th 2014

  • 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

    48.7%**

    30.2%

    31.6%

    33.6%

    35.7% 36.0% 36.6% 36.8%

    38.5%

    39.6%

    41.1% 41.3%

    43.9% 44.9%

    46.3%

    29.1%

    * Taking into account the Sanofi history with regards to the dividends. ** Based on the dividend approved at the AGM held on April 17th, 2014

    46.8%

    PAY-OUT RATIO: 1997-2013 AS A % OF NET PROFIT*

    16 // June 19th 2014

  • A NEW LORAL

    II

    17 // June 19th 2014

  • 1/ NEW STRATEGY

    2/ NEW INNOVATION FIREPOWER

    3/ RECENT ACQUISITIONS TO COMPLEMENT OUR PORTFOLIO

    4/ NEW GEOGRAPHICAL FOOTPRINT

    5/ NEW MARKETING MODEL

    6/ NEW SUSTAINABILITY COMMITMENTS

    7/ NEW SHAREHOLDING STRUCTURE

    18 // June 19th 2014

  • 1/ ACCELERATED EXPANSION OF THE MIDDLE CLASS

    LATIN AMERICA

    8%

    NORTH AMERICA

    10%

    EUROPE

    22%

    ASIA PACIFIC

    54%

    MIDDLE EAST AND

    NORTH AFRICA

    5%

    SUB SAHARAN

    AFRICA

    2%

    2020 2009

    1.8

    3.2

    GEOGRAPHICAL SPLIT OF THE GLOBAL MIDDLE CLASS 2020*

    GLOBAL MIDDLE CLASS*

    (IN BILLION)

    *OECD 2010. The emerging middle class in developing countries

    19 // June 19th 2014

  • 1/ OUR STRATEGY

    UNIVERSALIZATION

    OUR OBJECTIVE: 1 BILLION NEW CONSUMERS

    GLOBALIZING

    WHILE RESPECTING

    DIFFERENCES

    20 // June 19th 2014

  • 2/ A STRONG CORE AND FIVE REGIONAL R&I HUBS

    COUPLED WITH EXPERT MARKETING HUBS

    21 // June 19th 2014

  • Pro-Xylane

    2/ MAXIMISE OUR SCIENTIFIC BREAKTHROUGHS

    2006

    2013

    22 // June 19th 2014

  • 2/ LOCAL INNOVATIONS THAT TURN INTO WORLDWIDE BLOCKBUSTERS

    23 // June 19th 2014

  • 2/ SPOT, IMPROVE AND AMPLIFY EMERGING IDEAS

    Blur Oil BB Cream

    24 // June 19th 2014

  • 3/ BRANDS TO CAPTURE NEW CATEGORIES OPPORTUNITIES

    25 // June 19th 2014 25 // June 19th 2014

  • 3/ BRANDS TO STRENGTHEN OUR LOCAL / REGIONAL POSITIONS

    26 // June 19th 2014

  • 4/ STRATEGIC POSITIONS IN BRIMC COUNTRIES*

    No1

    MEXICO

    BRAZIL

    No4

    No2

    CHINA

    INDIA

    No3

    No1

    RUSSIA

    *Internal estimates 2013

    27 // June 19th 2014

  • No1

    NORTH AMERICA

    14.3%

    No4

    LATIN AMERICA

    8.5%

    No1

    WESTERN EUROPE

    19.3%

    No1

    EASTERN EUROPE

    11.8% No8

    JAPAN

    2.2% No2

    AFRICA MIDDLE EAST**

    10.2% (in the countries where

    LOral is present)

    No2

    ASIA PACIFIC

    10.5% (excl. Japan)

    4/ A LEADER WITH HIGH POTENTIAL

    LOREAL MARKET SHARE BY GEOGRAPHIC ZONE 2013*

    12.2%

    16.9%

    8.6%

    LORAL WORLD:

    MATURE MARKETS:

    NEW MARKETS: * Excluding soaps, razors and toothpastes LOral Estimates BMS ** Perimeter: countries where LOral is present 28 // June 19th 2014

  • NORTH AMERICA

    AFRICA MIDDLE EAST

    WESTERN EUROPE

    EASTERN EUROPE

    SOUTH ASIA PACIFIC

    4/ NEW ORGANIZATION 8 STRATEGIC REGIONS

    BRAZIL

    HISPANIC LATAM

    NORTH ASIA

    29 // June 19th 2014

  • 5/ DIGITAL REVOLUTION A HISTORIC OPPORTUNITY FOR BEAUTY

    RICH CONSUMER DIALOGUE PERSONALIZED SERVICES CONNECTED BEAUTY

    E-COMMERCE

    +20%* SALES

    DIGITAL MEDIA

    12% OF OUR NET MEDIA EXPENSES

    *2013

    30 // June 19th 2014

  • 31 // June 19th 2014

    THE ULTIMATE VIRTUAL BEAUTY ADVISOR

    5/ INVENTING A NEW ERA OF DIGITALLY-ENRICHED SERVICES

    NEW CONSUMER EXPERIENCES THROUGH VIRTUAL REALITY

  • SUSTAINABLE INNOVATION 100% of products will have an environmental or social benefit.

    SUSTAINABLE PRODUCTION Environmental footprint: -60% vs. 2005

    SUSTAINABLE CONSUMPTION Empowering LOral consumer to make sustainable consumption choices

    SUPPLIERS 100% of our strategic suppliers on our suppliers sustainability programme

    COMMUNITIES More than 100,000 people from underprivileged communities, will have access to work.

    EMPLOYEES Share & Care: By 2020, health care, social protection and training for all.

    32 // June 19th 2014

    6/ NEW SUSTAINABILITY COMMITMENTS

  • 7/ STRATEGIC TRANSACTION ANNOUNCED FEBRUARY 11th, 2014

    Nestl

    23.29%

    Others

    Bettencourt Meyers family

    Treasury shares

    * % of share capital based on a total number of shares of 605,901,887 as of 31/12/2013 ** % of share capital based on a total number of shares of 606,059,384 as of 31/01/2014 - after cancellation of the repurchased shares

    New shareholding structure** Buy-back of 6.0Bn LOral shares owned by Nestl

    48.5 million shares

    8.0% of LOrals share capital

    124.48/share

    (30.64%*)

    (29.44%*)

    33.31%

    (1.01%*)

    1.27%

    (38.91%*)

    42.13%

    BUYBACK Cancellation of the shares EPS enhancement impact: +5% full year est.

    33 // June 19th 2014

  • CONFIDENCE

    FOR THE

    FUTURE

    III

    34 // June 19th 2014

  • 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013E

    5.0%

    3.0%

    +3.5 - 4%

    2014 forecast:

    * LOral BMS estimates - excluding soap, toothpaste and razors. Net manufacturing price (sell-in) provisional estimate. Growth at constant exchange rate

    35 // June 19th 2014

    DYNAMIC & SUSTAINED MARKET GROWTH *

  • LORAL IS STEADILY OUTPERFORMING THE MARKET

    *excluding soaps, razors and toothpastes. 2013 provisional estimates

    Source: LOral estimates. Excluding exchange rate impact

    +5.6%

    +4.2%

    2010

    +5.0%

    +4.6%

    +5.5%

    +4.6%

    MARKET

    +5.2%

    +3.8%

    2011 2012 2013

    COSMETICS MARKET GROWTH* AND LORAL LIKE-FOR-LIKE

    COSMETICS SALES GROWTH

    36 // June 19th 2014

  • Like-for-like % change

    2013 Q1 2014

    Professional Products +2.1% +3.7%

    Consumer Products +4.9% +1.2%

    L'Oral Luxe +6.8% +7.2%

    Active Cosmetics +7.8% +8.7%

    Cosmetics Divisions +5.2% +3.7%

    The Body Shop +1.2% -3.4%

    Consolidated Total +5.1% +3.5%

    * From January 1st 2014, Galderma and Inneov, both 50% owned subsidiaries, will be consolidated under the equity method, in application of IFRS 11.

    Like-for-like % change

    2013 Q1 2014

    Western Europe +1.9% +2.8%

    North America +3.8% -0.6%

    New Markets +9.4% +7.5%

    of which:

    - Asia, Pacific +8.4% +6.8%

    - Latin America +11.5% +8.2%

    - Eastern Europe** +8.2% +6.3%

    - Africa, Middle East** +14.3% +14.9%

    Cosmetics Divisions +5.2% +3.7%

    ** As of July 1st, 2013, Turkey and Israel, which were previously included in the Africa, Middle East zone, were transferred to the Eastern Europe zone. All figures for earlier periods have been restated to allow for this change.

    AN ENCOURAGING & CONTRASTED FIRST QUARTER

    BY DIVISION* BY REGION*

    37 // June 19th 2014

  • 38 // June 19th 2014

    POWERFUL INNOVATION

  • HEALTHY MARKET GROWTH

    ENHANCED WORLDWIDE LEADERSHIP

    MARKET SHARE GAIN OPPORTUNITIES

    REGULAR PROFIT INCREASE

    DYNAMIC DIVIDEND POLICY

    SOLID PROSPECTS

    39 // June 19th 2014

  • -------------------------Avertissement / Disclaimer ------------------------- Ce document ne constitue pas une offre de vente ou la sollicitation dune offre dachat de titres LOral. Si vous souhaitez obtenir des informations plus compltes concernant LOral, nous vous invitons vous reporter aux documents publics dposs en France auprs de lAutorit des Marchs Financiers (galement disponibles en version anglaise sur notre site Internet www.loreal-finance.com).Ce document peut contenir certaines dclarations de nature prvisionnelle. Bien que la Socit estime que ces dclarations reposent sur des hypothses

    raisonnables la date de publication du prsent communiqu, elles sont par nature soumises des risques et incertitudes pouvant donner lieu un cart entre les chiffres rels et ceux

    indiqus ou induits dans ces dclarations.

    "This document does not constitute an offer to sell, or a solicitation of an offer to buy, LOral shares. If you wish to obtain more comprehensive information about LOral, please refer to the

    public documents registered in France with the Autorit des Marchs Financiers (which are also available in English on our Internet site: www.loreal-finance.com).This document 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."

    Franoise Lauvin

    Head of Investor Relations

    Tel. : + 33 1 47 56 86 82

    Fax : + 33 1 47 56 74 93

    email : francoise.lauvin@loreal.com

    Sophie Gasperment

    Group General Manager, Financial Communication

    Strategic Prospective

    Tel. : + 33 1 47 56 86 22

    Fax : + 33 1 47 56 74 93

    email : sophie.gasperment@loreal.com