Organizational Strategy - Sustainable Development - L'Oréal

2 L’OréaL - GrI DaTa SHEETS 2011
DIVISION OF THE CAPITAL AS AT 31 DECEMBER 2011
Madame Bettencourt and her family
Nestlé
The public
(1) As required by law, acquired shares have no voting rights.
2.7
38.2%
1.4%
29.6%
30.8%
acquired shares (1)
For more than a hundred years, L’Oréal has been pushing back the frontiers of science to create beauty and offer men and women throughout the
world the best in cosmetics in terms of quality, effectiveness and safety. Give everyone access to beauty by offering products responding to needs,
culture and expectations in their infinite diversity. This is what L’Oréal is really about.
1/ A HISTORICAL PRESENCE IN DEVELOPED MARKETS
L’Oréal is present in 130 countries on five continents. Founded in France in 1909, the group developed rapidly in western Europe. In 2010, it achieved
39.6% of its cosmetic sales in this area, confirming the importance of this zone in overall turnover.
L’Oréal has had a foothold in North america since the first half of the twentieth century. Initially, the group entrusted the distribution of its products
to distribution companies, based around an exclusive agent, Cosmair, in 1953. Following the purchase of Cosmair in 1994, it is as a subsidiary that
the group has developed on the North american continent. The acquisition of brands such as MaybeLLine (1996) and Matrix (2000) has permanently
anchored the group in North america. In 2010, sales increased by 4.1% to reach 23.6% of global cosmetics sales.
Present in Japan for more than 30 years, the L’Oréal group has developed its penetration by selecting important brands for this very specific market:
Kérastase in hairdressing salons, LanCôMe in the luxe products and MaybeLLine in the mass market.
Despite the importance of the developed markets, their relative share of turnover for the group has fallen year on year in favour of the New Markets.
2/ RAPID DEVELOPMENT IN THE NEW MARKETS
In the 1970s, the Latin american zone was developed with a multi-divisional organization that the group would reproduce in the major regions of
the world.
The 1990s saw the opening of New Markets with the fall of the Berlin Wall, allowing its brands access to east European markets.
L’Oréal was the first foreign group to obtain authorisation from the Indian government in 1994 for the creation of a 100% owned subsidiary.
In 1997, the group created a large multi-divisional zone in asia under Jean-Paul agon, which opened new subsidiaries, in particular in China, where
L’Oréal holds 100% of the capital in its business.
africa and the Middle East where the group had a small presence is the new frontier for development in the New Markets: the number of subsidiaries
has grown from 5 to 9 over the last three years.
The middle of the last decade marked a turning point: strong acceleration in the development of the New Markets has resulted in the shifting of
the centre of gravity of the economic world.
In total, the proportion of turnover achieved by the group in the New Markets was 15.5% in 1995, 21.7% in 2006 and 36.8% in 2010. This growth is set
to continue.
3/ A DESIRE FOR SUSTAINABLE AND SHARED GROWTH
Careful to look after its future and put in place bases for continuing growth, L’Oréal is seeking to develop its presence in the New Markets by
applying the fundamental rules of good corporate citizenship:
• The products offered to consumers must meet the highest quality standards.
• The social policy followed by subsidiaries in the New Markets is the same as for all group entities.
• all its production sites follow the same rules for reducing discharges and its environmental footprint. Social audits are carried out at all suppliers
to its factories.
• Every subsidiary participates, so far as it is able, in the main sponsorship programmes of the L’Oréal Foundation, such as “For Women in Science”,
“Hairdressers against aIDS”. This overall approach is consistent with its ambition to be world leader in cosmetics products: making the world more
beautiful.
4/ VAST POTENTIAL FOR DEVELOPMENT
apart from the major so-called BrIMC countries (Brazil, russia, India, Mexico and China), L’Oréal has also identified “growth markets”: Poland,
Ukraine, argentina, Colombia, Indonesia, Thailand, Vietnam, the Philippines, Turkey, Egypt, Saudi arabia, Pakistan, Kazakhstan, South africa, Nigeria.
In each of these countries, the consumption of cosmetic products per inhabitant is 10 to 20 times less than in mature markets. Every year, several
million inhabitants access levels of income that allow them to become part of the “middle classes” and enable them to become consumers of
modern cosmetic products.
It marketing teams listen to these new consumers and it laboratories on every continent study their specific features. The group’s innovation policy
is based on accessibility and the adaptation of products to the beauty practices and rituals of all men and women in their infinite diversity. These
are the bases of the universalisation of beauty which is it strategy for succeeding in these New Markets.
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