Intervention de Christophe Babule, L'Oréal.

Hello Laurent. We haven't forgotten, we were of course at Investir Day, and we will also list for you today all the reasons – they are quite convincing, you'll see – why it is interesting today to invest in L'Oréal stock. But before we start, we wanted to share with you L'Oréal's identity video. It lasts 2 minutes and sums up very nicely the positioning, the businesses, the ambitions of the group with this stated purpose: 'Create the beauty that moves the world.' Let's go, see you in a moment.

Absolutely, Laurent. I will try to convert this audience, which looks very male, to the world of beauty. There are L'Oréal products for men. What must first be recalled to understand the specificity of our market is that beauty is an absolutely essential need since antiquity, since the origin of humanity. Beauty is a universal quest. I invite you to go across to the Louvre Museum and you will see that in many rooms, beauty is expressed through all cultures. Ultimately, it is a social need that gives a sense of belonging to a community. Beauty also plays a very important role in self-affirmation, and we see that today among young people. Finally, beauty has always been a reflection of changes in society. In short, we are fortunate to operate in a market that has been constantly growing for the past 20 years. Growth has always been 3 to 5%, so it's an extremely resilient market. Even recently, growth in 2022 was 6%, and this year through September it is 9%. This growth will be driven further by the growth of the middle class, as it is estimated that about 800 million people will have the ability to enter the beauty market in the coming years. Those are the main characteristics of this market, and the sector leader is L'Oréal.

Well, you've almost said it all. Indeed, the revenue you see on the slide is €38 billion, 7 billion products sold in 2022. So we are also a large industrial company, you should know. And as you can see, nearly 88,000 employees to date. What's interesting is that the company is organized into four major divisions. The two most important are the Luxe division and the Consumer Products division, each doing about €14 billion. The other two, Dermatological Beauty and Professional Products, each do about €5 billion. So the group is built on four solid divisions and also on a geographic balance. Today we have three major zones: Europe, North America, and North Asia, each representing about €10 billion in revenue. So it's a very balanced group. And little by little, emerging countries are taking on more importance. This group, L'Oréal, is based on six pillars that are the constituents of its success yesterday, today, and tomorrow. First, research is at the heart of the group's DNA. We were born in research because the founder was a chemist. Today, there are over 4,000 researchers – beauty is science – and an annual investment of about €1 billion, roughly 3% of sales. The second success factor is the unique brand portfolio. You see some on screen; we have a portfolio of 37 international brands. Among these 37 brands, 11 already generate more than €1 billion globally, so they are very big brands. The third pillar is the group's digital strength, seen through e-commerce. Today, more than 28% of revenue is generated through e-commerce, which is colossal. We are also number one in market share and influence in our market. It's an industrial group, with 38 factories and 150 distribution centers globally. A key success factor is the virtuous management of the operating account. And finally, one of the most important elements, though not always very visible, is the unique culture and strong values of a group like L'Oréal. We have highly engaged teams – we measure that at 79% each year – and as you know, many people want to join us. Last year we received 13 million application letters. So you see the group's strengths: diversification, balance.

Listen, it's thanks to the factors I mentioned earlier. And it's true that we have an entrepreneurial culture. Just because we're a large French group doesn't mean we should lose that entrepreneurial spirit. That's what drives us. Because you'll see that we still have a lot of room to gain. The group worldwide has about 14-15% market share, so there is plenty of space. That's why we always aim to outperform the market. You see here, last year in 2022 we reported 18% growth as published, and this year again, through September, we were at around 9% growth. What we aim for each time, as we are sports-minded, is what we call the 'Grand Slam' – trying to do better than the market in each of our divisions, in each of our zones, and in each of our categories. In 2022, we achieved the Grand Slam, meaning we outperformed our competitors across all territories and divisions. That's why L'Oréal has this champion culture. The objective is to renew this performance each year and to be on the highest step of the podium.

Listen, L'Oréal stock already has a dividend, as you showed on the previous slide, a dividend that has been increasing strongly for a long time. But what also makes the group's strength is that we believe, and I myself believe, that financial performance can only go hand in hand with extra-financial performance. Often people say, 'That's nice, but it's just greenwashing, just PR.' No, it's not at all PR because we measure it and monitor consumer attitudes across all geographies. There is a real awareness of the climate urgency. It may not always translate into reasoned or reasonable purchasing behavior, but it is a direction we cannot ignore. So L'Oréal, strong in its financial performance, also wants to be a leader in sustainability. We have already made some headway. We receive many environmental awards. Nearly two-thirds of our sites already use 100% renewable energy – two-thirds of our industrial sites, which is significant – and the goal is to reach 100% by 2025. When we think about petrochemical chemistry, we want to move away from chemistry derived from petroleum. We have shifted to green sciences, bio-based ingredients. The goal is to renew all our formulas with ingredients that are all bio-based eventually. To date, I think over 61% of ingredients are bio-based, and the target is 95% by 2030. So we invest heavily in research, working with biotechs. Another very important area is plastics. Today, 26% of all plastics used worldwide for our products come from bio-based or recycled materials. That covers the environmental pillar.

Well, you know, we have a long tradition of social performance. And in that line, we continue. I'll just cite a few examples you see on screen. First, regarding youth employment, which was extremely penalized during the COVID years. We made strong commitments this year: we set a target of offering 25,000 job opportunities to people under 30, through internships, jobs, apprenticeship programs – that's worldwide, not just in France. Second, we are also very committed through funds to help populations in precarious situations. In 2020, we created a philanthropic endowment fund for women. We also help disadvantaged populations through our sourcing program, with more than 21,000 people from those communities today. And I think we had 2.5 million people who benefited in 2022 from L'Oréal's societal engagement programs. That's an impressive number.

Listen, I think it's very important, especially for shareholders, to ensure that there is good governance in place in a group like ours. Here too, each year we receive quite significant distinctions in this area. First, in terms of environmental performance, we have the Platinum medal from EcoVadis. When I think of diversity and inclusion, we were ranked the 3rd best group among the top 25 by Refinitiv. And then a subject close to my heart is ethics: L'Oréal has been recognized for the 14th time as one of the world's most ethical companies. And you know that ethics is the foundation of good governance in any organization, and therefore within L'Oréal.

Well, confidence is there for several reasons. First, it's very important for you to know that unlike other industries, the beauty market is extremely resilient. Each year, regularly, for over 20 years, the market has been growing. Only one year it didn't – obviously the COVID year. So the resilience of the beauty market is a guarantee for future growth. And even during COVID, it showed incredible resilience that we might not have expected. That proves that the desire for beauty is first very resilient and insatiable. Secondly, in a growing market, L'Oréal has a great tradition of outperformance. Systematically each year, when the market grows by 100, we grow by 120, 140, 160 – it varies by year. And what we have verified through the group's history is that we are generally even better when times are tough. It is in periods of crisis that the group gains the most market share. And as I said earlier, we are by far the largest leader in the beauty market, but with only 14 or 15% market share. So there is 85% of the market to go after. That means there are many opportunities. I also think we need to project into the future. When we see the world becoming more multipolar, L'Oréal's strength at the industrial level and its ability to be present through its supply chain across all geographies allows us, depending on market conditions, to offset markets that are a bit weaker. This year, China is a bit weaker, while Europe is growing like an emerging country with nearly 18% growth. So that allows us to compensate. And beauty in the 21st century – how do we combine beauty and digitalization? I really like the visual you see on screen. You should know that more and more we are relying on technologies. Even with your iPhone today, it can identify the state of your skin and make recommendations. We have many other tools available, not all for the general public yet, but many already for beauty experts. We are investing in artificial intelligence and data. You should know that a group like L'Oréal already manages 10 terabytes of data to accelerate our research, to be more efficient in logistics and production. So AI is also L'Oréal.

Well, first, just a little anecdote. In 2023, we are celebrating the 60th anniversary of L'Oréal's IPO. Happy birthday! When you look at L'Oréal's stock market performance over these 60 years, I think no one would complain. What you need to remember is the continuous market growth – we are riding a wave that is always present. We talked about governance: strong governance stability allows us management to project ourselves long term. We are not managing the business month by month; we always project 3 to 5 years ahead. That's very important. It's also a growth stock but very resilient. Revenue growth is very regular, and so is dividend growth. Dividends have been increasing continuously since 1973, except during COVID in 2019 when they were stable. So for 50 years, the dividend has always increased in absolute value. And for shareholders, the total shareholder return (TSR) over 5 years is 16% on average per year, combining stock price increase and dividends. Over 10 years, it's almost 14% growth, 13.8% to be precise. These are very factual figures that should pique investors' curiosity.

That's a subject I like to bring up – cock-a-doodle-doo, we are French and proud of it. We have a very strong French roots. We have a colossal international presence – 95% of our revenue is generated internationally – but France remains the third largest country for the group, with nearly €2 billion in revenue, close to 15,000 jobs in France. That's about 17% of the group's employees still based in France. We are also very proud of our industrial roots: of the 38 factories I mentioned earlier, 11 are in France. We are running the industrial capacity and the entire ecosystem at full speed. And through our presence in France, 38,000 hairdressers and 2,000 pharmacies – you can imagine that we create significant indirect jobs in France. Not to mention the trade balance: L'Oréal alone contributes positively €4 billion annually to France's trade balance.

Okay, my three favorites: first, a leader who is even stronger in times of crisis – that's good to know. Second, a market that is continually growing. And third, what for me is a guarantee for the future: we are committed not only to financial performance but also to extra-financial performance. For those projecting 10, 20, 30 years ahead, I think it's very important to be aware of this value of double materiality. L'Oréal stock is both a financial value and, as you said, values. We try to carry these values to the ends of the group. We are very proud of that, and I think we also have a model role for other companies and our suppliers. We want to lead them in this direction, as they accompany us daily in the group's growth.