L’Oreal 2019 profit trimmed by one-off items

PARIS (AFP) – French cosmetics giant L’Oreal posted on Thursday strong growth in 2019 sales owing to consumers in the Asia Pacific region, while its net profit was hit by exceptional items.

The group’s profit declined by almost four percent to EUR3.75 billion (USD4.1 billion) in part owing to a first-half writedown related to the value of Clarisonic brand of skin-care products.

Annual sales grew by 10.9 per cent meanwhile, a L’Oreal statement said, to EUR29.8 billion, slightly higher than an average analyst forecast compiled by the data provider Factset.

High-end brands owned by L’Oreal include Lancome, Yves Saint Laurent, Giorgio Armani and Kiehls. On a like-for-like basis that takes account of changes in foreign exchange rates and the group’s various brands, sales grew by eight per cent, the best result since 2007, the statement said.

In terms of geographical results, “Asia Pacific became the group’s number one zone, with a remarkable end to the year in China, but also good growth in South Korea, India, Indonesia and Malaysia,” it added.

Sales in North America were “impacted by the poor performance in make-up” however.

L’Oreal also highlighted contributions from its E-commerce and Travel Retail units, with the former posting growth of 52.4 per cent to a level that now represents 15.6 per cent of the group’s total sales. Commenting on the coronavirus that is centred in China and affecting Southeast Asia in particular, the group said, “This context will have a temporary impact on the beauty market in the region and therefore on our business in China and Travel Retail Asia, even if it is too early to assess it.”