PARIS, Feb. 21, 2002 (PRIMEZONE) -- L'Oreal (Paris Stock Exchange:OR):
Net profit before capital gains and losses and after minority interests (1), which is used to calculate earnings per share, reached E 1,229 million, an increase of 19.6%.
Mr. Lindsay Owen-Jones, L'Oreal's Chairman and Chief Executive Officer, said: "numerous brand-related initiatives combined with the strong momentum of international growth have compensated for the impact of world events. Robust internal growth, together with a further increase in profit margins, has enabled L'Oreal to enjoy a very good year in 2001 and to begin 2002 with confidence". Notable events in 2001
-- Numerous new initiatives to drive forward internal growth
-- Accelerated progress in key countries responsible for driving
growth
-- Rapid integration of acquisitions
-- A further improvement in margins
-- Excellent contribution from Sanofi-Synthelabo
Numerous new initiatives to drive forward internal growth
L'Oreal's major strategic brands continued to improve their positions, gaining market share in the group's core business segments. Thanks to their constant innovation they were able to:
-- attract new customers, among younger consumers (Lumia colourant
by Garnier, White by Giorgio Armani) and mature consumers
(Absolue by Lancome, Elseve Regenium by L'Oreal Paris) as well as
men (Vichy and Biotherm ranges for men, Miracle Homme by Lancome);
-- establish a presence in new market segments such as mass market
bodycare - notably with Plenitude Body Expertise by
L'Oreal Paris;
-- develop targeted products meeting local needs (Bi White by Vichy)
and adapt their technologies to the needs of consumers in
different countries (Age Fitness by Biotherm);
-- strengthen their partnership with their customers by means of
new services and products (Oleo-Relax by Kerastase).
Accelerated progress in key countries responsible for driving growth
The group's brands continued to expand in key countries responsible for driving growth, where L'Oreal now achieves nearly one fifth of consolidated sales.
-- Sales in China grew by 26% in 2001, representing total growth of
228% in this market since 1997. Launches by Garnier, Helena
Rubinstein, Biotherm and La Roche-Posay successfully consolidated
the group's presence and in particular the market leadership
positions of L'Oreal Paris in colourants, Maybelline in mass
market make-up, Vichy in pharmacies and Lancome in the main
department stores.
-- In Russia, following growth of 47% in 2000, sales saw a further
very strong increase in 2001 (52%), exceeding the E 100 million
mark for the first time.
-- The group also achieved significant advances in South Africa
(+27%), Thailand (+26%), India (+21%) and Mexico (+20%).
(1) Provisional results
Rapid Integration of Acquisitions
The companies acquired in 2000, mainly Matrix, Carson and Kiehl's, were very swiftly integrated into their respective divisions. Those brands represented sales of 523 million, in line with group forecasts.
From 2001, their level of adjusted operating profit approached that of cosmetics as a whole.
Given the financial expenses, the impact of these acquisitions is positive, ahead of our objectives.
A Further Improvement in Margins
Adjusted operating profit(2) increased by 12.7% to E 1,669 million, representing 12.1% of consolidated sales, compared with 11.7% in 2000.
This further improvement in margins reflects the group's concentration on the international expansion of strategic brands - an expansion that continues to generate substantial economies of scale - and on controlling industrial costs (value analysis, reorganization of plants, efficient purchasing strategies). It also reflects a further significant improvement in profit margins in the group's new markets, building on a trend that began in 2000.
Adjusted operating profit(1) (2)by branch
At December 31, 2001 As % of sales
Cosmetics E1,604.2 m 12.0%
Dermatology (3) E 61.8 m 21.2%
Consolidated total E 1,669.0 m 12.1%
(1) Provisional results.
(2) i.e. including exchange rate gains and losses.
(3) Group share, i.e. 50%.
Net financial expenses (excluding exchange rate gains and losses) amounted to E 167.3 million, as compared with E 159.3 million in 2000.
Consequently the pre-tax profit of fully consolidated companies increased by 13.6% to E 1,501.7 million.
Corporate taxes at group level increased by 9.7% to E 535.9 million.
Net profit (before capital gains and losses) of fully consolidated companies was E 965.9 million, increasing by 15.9%.
Excellent contribution from SANOFI-SYNTHELABO
The group share of net profit from equity affiliates amounted to E 269.7 million. SANOFI-SYNTHELABO's contribution to consolidated profit was 268.8 million, an increase of 43.7%.
An Even Stronger Balance Sheet
The cash flow generated in 2001 enabled group debt levels to be reduced. Net financial debt as a proportion of shareholders' funds fell from 28.4% at the end of 2000 to 12.6% the end of 2001.
Main annual indicators(1)
At 31st At 31st Growth
December 2000 December 2001 in %
in E million in E million
Consolidated sales 12,671.2 13,740.4 +8.4%
Operating profit 1,540.8 1,626.0 +5.5%
Adjusted operating 1,481.3 1,669.0 +12.7%
profit(2)
Pre-tax profit of fully 1,322.1 1,501.7 +13.6%
consolidated companies
Net profit (before
capital gains 833.5 965.9 +15.9%
and losses) of fully
consolidated
companies
Group share of net profit
of equity affiliates 199.9 269.7 +34.9%
Net profit before
capital gains 1,027.8 1,229.0 +19.6%
and losses and after
minority
interests
Earnings per share (in E) 1.52 1.82 +19.6%
(1) Provisional results.
(2) i.e. including exchange rate gains and losses.
The Board of Directors examined these provisional results on 20th February 2002, in conjunction with the Statutory Auditors, and they will be approved on 26th March 2002.
For more information, please consult your bank, stockbroker or financial institution, your usual newspapers or the following websites: http://www.loreal-finance.com and http://loreal-shareholder.com. Alternatively, call the following number (from within France): +33 1 58 13 51 36 . L'Oreal - 41 rue Martre - 92117 CLICHY-France.