PARIS — The magnificence market is bouncing again worldwide, with estimated gross sales development of 11 % in the primary half of 2021, versus the identical prior-year interval.
That’s in accordance to L’Oréal, which on Friday morning held a digital convention with monetary analysts and journalists to talk about the group’s outcomes this yr.
For the primary time, the assembly was led by Nicolas Hieronimus, who grew to become L’Oréal’s chief government officer on May 1.
As reported, the maker of Lancôme, Kiehl’s and L’Oréal Paris merchandise on Thursday night reported it had returned to pre-pandemic development in the six months ended June, with an acceleration of 8.4 % in the second quarter in contrast to second-quarter 2019.
In the April-to-June interval this yr, firm gross sales elevated 29.6 % in reported phrases to 7.58 billion euros. On a like-for-like foundation, gross sales rose 33.5 %, outpacing analysts’ expectations.
“We are witnessing the restoration of the sweetness market to virtually pre-COVID-19 ranges,” mentioned Hieronimus, including the tempo of that is still contrasted, nevertheless.
By geographic zone, L’Oréal estimates the sweetness market in the primary half rose about 16 % in North America, 14 % in North Asia, 9 % in each Latin America and the SAPMENA-SSA (or South Asia Pacific, Middle East, North Africa and Sub-Saharan Africa) zone, and 5 % in Europe.
In the primary half, L’Oréal redefined its geographic zones.
“With development of 20 %, the Chinese market is scorching once more, with an ever-growing urge for food for magnificence, particularly luxurious,” mentioned Hieronimus. “Online stays robust as extra platforms are getting into the sport, hanging a brand new steadiness with the brick-and-mortar retail community, which is choosing up the O-plus-O — on-line plus offline — ecosystem now totally embraced by shoppers.”
He famous: “In the USA, the market is recovering strongly, significantly in the second quarter, with brick-and-mortar choosing up, whereas e-commerce continues exhibiting regular development versus 2019.”
L’Oréal estimates that market development in the U.S. in the course of the first half stood at 17 %.
Meanwhile, there was a slower bounce-back in Europe, with a 5 % gross sales enhance, due to intermittent lockdowns.
“But it’s getting nearer to 2019, with the U.Ok. paving the way in which to the full-speed restoration,” mentioned Hieronimus. “In basic, the market state of affairs is correlated to the sanitary state of affairs, and markets like South Asia, Japan and a few Latin America international locations are nonetheless extra unsure.”
The government mentioned magnificence product classes, as effectively.
“The long-awaited rebound of the make-up class initiated in China is spreading in the U.S. and in Europe, though nonetheless beneath the 2019 ranges,” mentioned Hieronimus of the section, with gross sales rising an estimated 8 % in the half.
“Skin care continues to thrive, and hair merchandise are benefiting from the reopening of salons all around the world and a rising curiosity for hair routines,” he continued, referring to the classes registering 13 % and eight % positive aspects, respectively.
Fragrance noticed the most important surge in gross sales development, posting a 24 % rise in the half.
By retail channel, e-commerce gross sales for magnificence have been up an estimated 24 %.
“E-commerce continues to develop, albeit at a slower tempo in the second half, dealing with final yr’s enormous acceleration and as distribution is being rebalanced by the opening of retail,” mentioned Hieronimus.
Concurrently, journey retail gross sales superior an estimated 17 %.
“Travel retail remains to be being fueled by the robust development of Hainan, the slight air-traffic rebound and the favorable comparatives in Europe,” he mentioned. “However, it’s nonetheless very a lot beneath the 2019 ranges, as journey restrictions apply across the globe.
“Within this context, L’Oréal delivered an distinctive outperformance at twice the market tempo and has returned to a pre-COVID-19 development rhythm,” mentioned Hieronimus of the group’s enterprise total. “With all divisions and areas profitable share with out exception, this has been an ideal Grand Slam for us.”
Hieronimus mentioned L’Oréal’s product divisions and geographic zones. Among the callouts was the U.S. exercise.
“The nice information of the quarter is the comeback of L’Oréal USA,” he mentioned, explaining the nation’s gross sales strongly accelerated in the primary six months, and particularly in the course of the second quarter, when revenues grew 47 %.
“L’Oréal USA beat the market in all 4 divisions,” mentioned Hieronimus. “The rebalancing of classes, notably between skincare and make-up; of channels, between brick-and-mortar and e-commerce, and the success of a few of our launches and their digital activations are paying off and giving us confidence for the long run,” he continued.
Hieronimus mentioned the primary half was additionally distinctive for the corporate in phrases of revenue and earnings per share. In the interval, working profitability was at 19.7 % of gross sales, and the EPS elevated 21.1 % at 4.63 euros.
“The robust set of outcomes come from the mix of our robust top-line development, favorable class and channel combine results, and SG&A [or selling, general and administrative expenses], which have remained rigorously managed and contained by the absence of journey and occasions,” mentioned Hieronimus. “This distinctive alignment of planets has allowed us to make investments strongly in our manufacturers to reinforce their desirability, whereas delivering strong revenue development. After this primary a part of the yr, we are able to say that L’Oréal has offset the enterprise losses of the COVID-19 disaster and returns to its cruising pace.
“Despite the uncertainties associated to the sanitary situations, we’re assured for the short- and long-term efficiency of the corporate,” he continued.
Hieronimus mentioned L’Oréal will leverage six dynamics, together with the market development, enterprise footprint, digital, concentrate on innovation, manufacturers’ power and the group’s profit-and-loss mannequin.
“In the second half, we shall be evaluating to a constructive development in 2020, however our ambition is to proceed to speed up versus 2019,” mentioned Hieronimus. “We may also proceed to make investments strongly behind our manufacturers and launches, and hope to resume some touring and occasions in individual.
“All in all, and pending the evolution of the pandemic, we’re assured in our capability to as soon as once more outperform the sweetness market and to ship one other yr of development in gross sales and income,” he mentioned.
For extra, see:
L’Oréal Returns to Pre-COVID-19 Growth in H1
French Chanteuse Yseult on Why Her L’Oréal Ambassadorship Is a Big Deal
L’Oréal Luxe Italia to Launch Initiative to Support Local Perfumeries