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L’ORÉAL
CLICHY, FRANCE
2014 BEAUTY SALES:
$29.94 BILLION
€22.53 BILLION
+1.8% V. ’13
2UNILEVER
LONDON/ROTTERDAM,
THE NETHERLANDS
2014 BEAUTY SALES:
$21.66 BILLION (EST.)
€16.3 BILLION (EST.)
+1.5% V. ’13 (EST.)
3PROCTER &
GAMBLE
CINCINNATI, OHIO
2014 BEAUTY SALES:
$19.8 BILLION (EST.)
-3.4% V. ’13 (EST.)
+ + -
SUBSIDIARIES + MAIN BRANDS: CONSUMER PRODUCTS:
L’Oréal Paris, Garnier, Maybelline New York, SoftSheen Carson,
Essie, Magic, NYX Cosmetics, Carol’s Daughter. PROFESSIONAL
PRODUCTS: L’Oréal Professionnel, Kérastase, Redken, Matrix,
Decléor, Carita. L’ORÉAL LUXE: Lancôme, Giorgio Armani, Yves
Saint Laurent, Kiehl’s, Biotherm, Ralph Lauren Fragrances,
Clarisonic, Shu Uemura, Urban Decay, Diesel, Helena Rubinstein,
Cacharel, Viktor & Rolf. ACTIVE COSMETICS: Vichy, La Roche-
Posay, SkinCeuticals, Roger&Gallet. THE BODY SHOP.
YEAR IN REVIEW: 2014 was a year marked by an acceleration
of acquisition activity for the world’s largest beauty company, which
registered strong performance for its Active Cosmetics and L’Oréal
Luxe divisions and stepped up its digital transformation with the
appointment of Lubomira Rochet as chief digital officer. The firm
acquired California-based makeup brand NYX Cosmetics and finalized
its purchase of Decléor and Carita, which will allow it to expand in the
professional beauty channel. It also acquired Magic Holdings and Niely
Cosmeticos to help it to continue expanding in emerging markets.
Further acquisitions included the U.S. brands Sayuki Custom Cosmetics
and Carol’s Daughter. Company revenues rose 3.7% on a like-for-like
basis year-on-year. Net profits increased 66% to €4.91 billion, due
largely to the disposal of its half of Galderma, resulting in a capital gain
of €2.1 billion, or $2.79 billion. The transaction was part of a buyback of
8% of L’Oréal shares held by Nestlé. 2013 revenues were also restated
to class Galderma as a discontinued operation for that period. Every
division except the Consumer Products division posted sales increases.
This included 5.7% growth to €6.2 billion for L’Oréal Luxe, which saw
an acceleration in sales in the fourth quarter and outperformed the selective
market, buoyed by the dynamic makeup category and fragrances
including Yves Saint Laurent’s Black Opium, Armani’s Sí and Lancôme’s
La Vie est Belle. The Active Cosmetics division’s 5.3% gain to €1.66
billion was lifted by strong performance on every continent as well as by
core brands Vichy and La Roche-Posay, while SkinCeuticals performed
well in the U.S. and expanded to new geographies. The Professional
Products division was boosted by innovation in a market that remained
difficult, growing 2% to €3.03 million. Sales for the Consumer Products
division contracted 1% to €10.77 billion, although they picked up
towards the end of the year, rising 3% in the fourth quarter. The Body
Shop returned to revenue growth, gaining 4.6% to €873.8 million
as the decision to hone in on the skin-care category continued to pay
off. In a flat Western European market, L’Oréal saw a 3.1% increase
in sales to €7.7 billion, with an acceleration in the fourth quarter and
strong growth in Germany, the U.K. and Spain. In North America, sales
rose 0.6% to €5.39 billion, hampered by weakness for the Consumer
Products division. The New Markets zone, including the Asia-Pacific
region, Eastern Europe, Latin America plus the Africa and Middle East
zone, grew 1.3% to €8.6 billion, strongly impacted by currency effects
—growth was 6.9% like-for-like—especially in Latin America and
Eastern Europe. Sales in Africa and the Middle East grew 12.5% while
Asian revenues gained 4.1%. The company also announced the end of
its joint venture with Nestlé for the Innéov supplement brand and the
acquisition of a business license for Episkin reconstructed skin models
in China. Vichy, La Roche-Posay and Kérastase launched in Asian travel
retail, and L’Oréal Paris launched the Makeup Genius app. Following its
transaction with Nestlé, the Bettencourt Meyers family upped its stake
in L’Oréal to 33.31%, while Nestlé’s stake was reduced to 23.29%.
SUBSIDIARIES + MAIN BRANDS: PERSONAL CARE: Axe/
Lynx, Rexona/Sure/Degree, Clear Scalp & Hair Beauty Therapy,
TRESemmé, Sunsilk/Seda/Sedal, Timotei, Motions, Nexxus,
Mods, Alberto V05 (except in the U.S. and Puerto Rico), Tigi,
Brylcreem, Dove, Lux, Pond’s, Suave, Vaseline, Monsavon, Radox,
Duschdas, Black Pearl, Pure Line, 100 Recipes of Beauty, Silky
Hands, St. Ives, Lifebuoy, Noxzema (except in Western Europe),
Just for Me, Simple, Impulse, Camay, Zest (except North America
and the Caribbean).
YEAR IN REVIEW: At Unilever, 2014 brought a change of
leadership at the Personal Care division as Dave Lewis, who had
been with Unilever since 1987, left the firm in August to take on the
role of chief executive officer at the embattled British supermarket
chain Tesco. Lewis had been head of Personal Care since 2011. During
WWD’s Beauty CEO Summit in May 2014, Lewis had outlined the
firm’s ambitions to grow its premium product offering alongside its
core mass products, through launches such as a higher-end Dove
line called Dove Derma Series, and Toni & Guy and Tigi hair care.
Alan Jope, who was formerly president of Unilever Russia, Africa
and Middle East, replaced Lewis as president of Unilever’s Personal
Care business in September. The year also saw the personal-care
giant acquire a number of brands—among them Camay and Zest
from P&G—alongside driving innovation in its existing product lines.
That innovation, the firm said, helped its personal-care category see
underlying sales growth of 3.5% in 2014, stripping out the negative
impact of exchange rates, with the category as a whole, including oral
care, achieving sales of €17.74 billion in the year ended Dec. 31. But
taking into account currency effects, Unilever’s personal-care turnover
fell 1.8% year-on-year. Reporting its full-year results in January, the
company flagged weaker consumer demand in emerging markets,
where growth slowed to 5.7%, and a decline of 0.8% in sales in
its developed markets, with a “modest” rise in North America’s
performance offsetting a contraction in Europe. Personal Care was
particularly affected by the weaker demand, the firm said, with “competitive
intensity” also high across the regions. Among the launches
that helped Unilever mitigate the effects of that weaker demand were
Baby Dove in Brazil, Dove Advanced Hair Series’ Oxygen Moisture
range in North America and Europe and Clear Scalp & Hair in Japan.
Unilever also launched spray deodorants in the U.S. in late 2014.
Unilever said Dove, its biggest personal-care brand, saw double-digit
growth in the deodorant category and “consistent” performance
in skin cleansing. Paul Polman, Unilever’s ceo, said in January that
the company does “not plan on significant improvement in market
conditions in 2015,” forecasting that its full-year 2015 performance
will be similar to that seen in 2014. In December the firm acquired
the Camay soap business and the Zest soap business (outside of
North America and the Caribbean), a deal that included the Talisman
bar soap–manufacturing facility in Mexico. The sale is expected to
close during the first half of 2015. Jope said the acquisition would
make Unilever “one of the market leaders in skin cleansing in Mexico,
a priority for Unilever and one of the largest markets in the world.”
Unilever’s acquisition streak continued into March 2015, when the
firm announced an agreement to buy the niche British brand Ren
Skincare. Financial terms were not disclosed. In early 2015, Unilever
said that its hair-care line Nexxus would re-brand, with new product
formulations, as Nexxus New York Salon Care.
SUBSIDIARIES + MAIN BRANDS: Pantene, Head
& Shoulders, Clairol, Herbal Essences, Wella, Vidal
Sassoon, Aussie, Rejoice, Frédéric Fekkai (hair care).
Cover Girl, Max Factor (makeup). Hugo Boss, Lacoste,
Escada, Christina Aguilera, Rochas, Bruno Banani,
Mexx, 007, Stella McCartney (fragrance). Gucci (makeup
and fragrance). Dolce & Gabbana (skin care, fragrance,
makeup). Olay, SK-II, Gillette, The Art of Shaving (skin
care). Natural Instincts, Nice ’n Easy (hair color). Olay,
Safeguard, Gillette, Old Spice, Venus, Camay (body
care). Secret, Old Spice (deodorant). Wella Professional,
Sebastian Professional, Nioxin, Sassoon Professional,
Clairol Professional (professional hair care).
YEAR IN REVIEW: P&G’s beauty woes continued
in 2014 as sales dropped 3.4%. In February 2015, the
company reorganized its senior management in beauty.
David Taylor was named group president of global beauty,
grooming and health care, making him the front-runner
in the race to succeed A.G. Lafley as P&G’s chairman,
president and ceo. Patrice Louvet was named group president
of global beauty, overseeing the hair care, cosmetics,
prestige and salon professional divisions. Former group
president Deb Henretta was reassigned to group president,
global e-business. A question lingering over beauty now
is how many beauty properties P&G may divest as part of
its company-wide sweeping realignment to focus on the
80 or so brands that contribute the majority of its sales.
In March 2015, it signed an agreement to sell the Rochas
fashion and fragrance business to Inter Parfums SA and
last year sold DDF to Designer Parfums. The company
expects to announce details of its divestment plans, or at
least the largest components, by this summer, with completion
by June 2016. In the company’s fiscal year 2014,
beauty, excluding shave products, accounted for 24% of
P&G’s business. Company-wide, P&G’s largest market
during this time continued to be North America with 39%
of sales, followed by Europe with 28% and Asia with 16%.
In calendar year 2014, hair care, deodorants and personal
cleansing sales grew, while there was an overall decline in
the salon professional, prestige and skin-care categories. In
recent years, P&G has struggled to restore declining sales
of its billion-dollar brands Olay and Pantene, particularly
in the U.S. In 2014, it signed actress Katie Holmes as the
global face of Olay, while a new Pantene collection featuring
proprietary technology that conditions hair from root
to tip is now shipping. Gucci cosmetics launched and Dolce
& Gabbana introduced its first skin-care range. In Europe,
Max Factor tapped Gwyneth Paltrow for the promotional
campaign 100 Years of Iconic Glamorous Looks. Head
& Shoulders, the world’s largest shampoo brand, was
boosted with spokeswoman Sofia Vergara in the U.S. and
a tie-in with the television show Glee in China. Other product
news included the launch of Safeguard DermaGuard+
in Asia, the Refresh body spray from Old Spice and Katy
Perry’s InstaGlam collection from Cover Girl. SK-II introduced
DNA counseling at Asian beauty counters.
OUR METHODOLOGY: The WWD Beauty Inc Top 100 ranks the world’s largest beauty
manufacturers. Firms are arranged by their beauty sales for the 2014 calendar year. For
those companies whose fiscal year did not run from Jan. 1, 2014 to Dec. 31, 2014, estimates
were calculated. All sales figures were either obtained from the companies or generated
with the help of industry sources.
For this list, “beauty” includes fragrance, makeup, skin care, body care, sun care, hair
care, deodorant, plus cellulite and shaving products. It does not take into account bar
soaps, razors, toothpastes, food and diet foods, medicines, vitamins or detergents. The
revenues only include sales of beauty products each firm manufactures and do not include
business from private-label lines or products distributed for other companies. Information
in the subsidiaries and main brands section reflects each company’s holdings in 2014.
Year-on-year percentage changes are in reported terms, not on a like-for-like or constantcurrency
basis. Non-U.S.-based firms’ sales are converted into dollars according to the
2014 average yearly exchange rate.*
*CURRENCY CONVERSIONS: Sales figures in non-U.S. currencies were converted to the dollar using the following 2014 average exchange rates from Oanda.com:
€1=$1.3291; ¥1=$0.0095; £1=$1.6486; 1 KRW=$0.0010; 1 Ruble=$0.0266; R$1=$0.4270; CNY 1=$0.1627; 1 Rupee=$0.0164; 1 SFr=$1.0944; 1 HK$=$0.1290; 1 SEK=$0.149
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