Intervention de Christophe Babule, Directeur Général Administration et Finances, L'Oréal

Good morning.

So I will reassure everyone listening. Indeed, L'Oréal is doing well, even very well. First, because we are carried by a market that is growing strongly this year, growth across all categories with strong growth in skincare, very strong growth in fragrance, and even for some categories we are above 2019 levels. In this context, we published sales at the end of September with strong growth of +10%, compared to a market we estimate growing around 10%, so we are on a very good trajectory. L'Oréal outperforms its market. We are also growing compared to 2019, up 9% if you compare sales at the end of September to 2019, which shows that the market has only partially recovered but we are well ahead. And of course, we are in a phase of strong investment to feed long-term growth and to continue offering the best of our innovations to all geographies.

Yes, it's very important to say it loud and clear. At L'Oréal, we consider that there is no economic performance without environmental, social, and governance performance. This is strongly embedded in our raison d'être. We have recurring recognition from specialists. For example, we were ranked number 1 by the extra-financial rating agency Vigeo Eiris, which allows us to be in the CAC 40 ESG. We were also recognized by the United Nations for the seventh consecutive year and received the Global Compact. We have our own trajectory and objectives. Recently, we succeeded in becoming carbon neutral across all of North America. And we have partnered with other major cosmetics companies, including Henkel and Unilever, to develop a scientific score for cosmetic products that will allow consumers to know the environmental impact of what they buy, similar to a Nutri-Score for cosmetics.

We adapted, but this transformation started well before COVID. L'Oréal has always known how to seize major shifts in its industry. From the early 2010s, we were already very committed to digital. So we were not caught off guard; we had leadership before COVID arrived. That allowed us to weather the crisis more easily because we were already well equipped in e-commerce, which is still growing nearly 30% this year and now represents over 26% of the group's sales. We also have a corporate culture of agility and reactivity.

The challenge is always innovation. L'Oréal was born in chemistry, so research is in our DNA. We invest nearly a billion euros each year in research with 4,000 researchers and 21 research centers. Innovation allows us to define new frontiers of beauty. We also do this through partnerships with startups and research institutes. For example, Carbios, a startup from Clermont-Ferrand, developed enzymes for plastic recycling, and we created the first bottle from that technology. Another startup, Gjosa, invented a water-saving shower head. And of course, sustainable development is a key challenge, mobilizing all our researchers to make products more environmentally friendly.

Exactly. With 13% market share, there is a lot to conquer. The beauty market itself grows 4–5% per year, and the quest for beauty is eternal. Demographics also drive demand. So there are still many market shares to capture. The L'Oréal method is a culture of entrepreneurs rooted in innovation. We have significant market shares in Europe, around 13% in North Asia, and huge potential in Africa and other regions, so between 13% and 25% there is plenty of room for growth.

The L'Oréal method is a culture of entrepreneurs driven by innovation. Research is at the core of our DNA, and that innovation fuels daily growth. We have solid market shares in Europe and other regions, but there is still much potential in Africa and elsewhere. So between 13% and 25% market share, the future holds significant growth.

That's a key asset. Research today is not just about formulations; technologies drive our relationship with consumers through digital and virtual reality. Technology also allows our research teams to formulate products faster using data. Mastering these technologies is crucial. We invest heavily in data to better understand customers and respond faster. With 30% of sales from e-commerce, consumers expect near-instant delivery, as in Shanghai where they expect delivery in under an hour.

Investment must reconcile financial and extra-financial performance. We have created two impact funds: one of 50 million euros focused on biodiversity, to regenerate ecosystems, and another on the circular economy. These are not philanthropy; they aim for both financial returns and positive impact. We started these over a year ago.

We have a very stable investor base, which gives us long-term stability. The stock performance reflects the relevance of our strategic choices. L'Oréal has strong long-term potential because we are in a growing market. Our growth outperforms the market year after year, and we have a resilient economic model with consistently increasing results. We also have a dynamic dividend policy that increases regularly. Additionally, our extra-financial performance in environment, social, and governance is recognized, including the Grand Prize for Governance from L'Agefi. These elements reassure shareholders that investing in L'Oréal is sound for the long term.

We have about 200,000 individual shareholders, including over 30,000 employee shareholders. About 50,000 are registered shareholders, who receive a 10% dividend bonus if they have held the shares for more than two years. We maintain communication through written updates, physical events like today, and increasingly digital meetings to reach shareholders across France.