🔴 Suivez l’interview du patron de L’Oréal, Jean-Paul Agon, et de son successeur Nicolas Hieronimus

Yes, by definition very rare. A CEO every 25 years or so. It's typical of L'Oréal, a sign of strategic continuity and management continuity linked to shareholder continuity. L'Oréal is a long, calm story that works very well. It's very organized, and that allows the continuity which is one of the key success factors.

No, it's not the first time. When I was appointed CEO, Lindsay Owen-Jones, my predecessor, was Chairman, and you became CEO. It's optimal transitions, not a question of time, but a good method to accompany the new CEO and also a distribution of roles. Today the role of the Chairman is more important because governance has become more important.

Well, at the beginning there was some anxiety, especially because I've lived through many crises in my career, but this was the first that endangered the health of our employees. The absolute priority was to protect them. The second thing we are proud of is protecting our ecosystem. We froze credit for 200,000 clients and paid our small suppliers immediately. It was an investment of several hundred million euros that allowed the whole sector to pass the crisis almost intact. We also helped hairdressers prepare their reopening with hand sanitizer and health protocols. That's the duty of a leader like L'Oréal.

None in France. Elsewhere it was different because measures varied. We never closed a factory, not even for 24 hours. I pay tribute to our employees worldwide who went to work. We put no one on partial unemployment in France. We continued recruiting, increasing our workforce. So we didn't stop at all from a social and human standpoint.

That was part of the criteria, but there were others. And to be frank, Nicolas looks very young — I used a product on him — and he is especially young in his head because he has always been modern and in tune with the times. So age doesn't matter. The important thing is to sense the mood, the trends, the new aspirations of consumers and influencers.

We consider ourselves a digital-first company. Digital is now two-thirds of our media investments. E-commerce is already 27% of group sales and growing fast. I'm proud that with Nicolas and the teams, we were the first company to see it coming. In 2010 we declared the year of digital at L'Oréal, well before it became mainstream. That sparked the digital revolution at L'Oréal.

I think three things clearly: first, Asia — I had the chance to start in Asia in 1997 and it became the group's number one zone, and China will soon be the first country. Second, the digital and digital revolution. Third, the societal and environmental revolution. We started that among the first and completely transformed the company, changing the paradigm. We are known as one of the most advanced companies in this area.

I'll start with the current situation, then Nicolas will talk about the future. The beauty market has resisted remarkably well. It only fell 8% last year and already in Q1 2021 it's positive, almost at 2019 levels. This shows that beauty is very important. Consumers don't abandon their beauty rituals. I have great respect for all the women who, despite not going out, still wore makeup, even lipstick. The market did not collapse. We are convinced that...

I have a question... I had asked the bosses of France about the controversy when they decided to remove the word 'whitening'. Don't you regret that? Isn't that giving in to pressure? No, absolutely not. That's absurd. What is absurd is that people completely misunderstood the announcement. We didn't remove anything from our products in France. It only concerned products sold in Southeast Asian countries that protect the skin from the browning effects of the sun. The word 'whitening' was not appropriate. For years, consumers had been asking for that change. And apart from France, where it was a storm in a teacup, it was extremely well received worldwide as a gesture of sincerity, modernity, and even ethics.

Of course, of course. Social media is a very important energy source. First, I'm very happy you mentioned that slogan, because it celebrated its 50th anniversary this year. It hasn't aged a bit; it's incredibly relevant today. Yes, totally. It's a slogan of female empowerment. When you see on social media some of our ambassadors explaining what it means to be 'worth it', it's extremely moving. Now, as you said, social media is a new communication channel. What's great about social media is that consumers express themselves on our products. They vote every day by giving stars and talking about them. When you put quality at the heart of your business model like L'Oréal, when you invest a billion euros in research to make products that are better than others, it generally shows up in the stars consumers give. And it's no coincidence that despite the multiplication of brands, our big brands are growing faster than the market. And you know, on the contrary, I think that in this era where diversity, inclusion, ethics, and values are more important than ever, that's precisely where our slogan takes on its full meaning. Because that's the true meaning of 'Because you're worth it': the value of each individual. 'Because you're worth it' is the value of every being. And it's more modern than ever, not only in developed countries but even more so in emerging countries. We were in India recently, and it's a country that is awakening to this consciousness of value. So on the contrary, I think this slogan will be the slogan of the 21st century.

No, but you know the saying in English: 'The best is yet to come.' I consider that L'Oréal's adventure still has extraordinary potential. What is it? 60 billion humans in 2029? In eight years? Well, yes, why not or more, we'll see. And you know, the beauty market is enormous. You saw the report about Africa. Let me say a word. The demand of African women for beauty products is immense. In China, it's immense; we still only reach less than 10% of the population. Same in India, same in all Southeast Asian countries. So the potential for a company like L'Oréal, given the demand and appetite for beauty worldwide, is absolutely immense.

No, not at all. First, the destiny of the company... the statutes of L'Oréal provided for it. Many companies have that, but precisely, we have always respected our statutes in history, and it was good to continue doing so. I think it's very good that a new CEO takes over after a crisis, because the next ten years will be very different from the previous ten. So it's a new chapter opening. It's good that someone takes over.

Are you going to... I still want to keep a little what I wanted: acquisitions, new acquisitions, new brands, simplification of brands. Attention, it's Nicolas who will handle that now. So it's him who can answer. So acquisitions, obviously I won't talk about acquisitions we might want to make, but what is certain is that today we have a very beautiful portfolio of brands, with several multi-billion euro brands and others that are small and will become big. Some are developing very quickly. I think of an acquisition we made two years ago, a skincare brand that doubled its revenue and continues. We made two acquisitions during the crisis in 2020: we bought a US skincare brand, Thayers, and a Japanese skincare brand, Takami, which will be developed in China and Japan. So as always, we constantly look at the market. If there are brands that present complementarity in our portfolio and can be developed globally, we look at them, of course. Jean-Paul Agon, you are the one who developed China. You arrived at the beginning of the crisis, and that's why they called you 'black cat' because wherever you arrived, a major event happened. There was a dramatic crisis in China. What did that allow you today? China represents almost 25% for L'Oréal. And it's restarting spectacularly. It didn't stop, to be frank, it stopped for three months and then started again very quickly. Yes, because you have to understand that the scale of the country is colossal. In L'Oréal's history, we had the experience of developing in Europe, in America, but the scale is much larger. So the simple fact of being able to serve hundreds of millions of Chinese consumers who love quality, brands, innovation, is exactly what suits us. So for us, the potential in China is still absolutely immense. There is the number, the scale, and the per capita beauty spending of Chinese consumers is one-sixth of the US or Japan. So enormous growth potential still.

No, but you know, the market in Africa hasn't really awakened yet. To use the famous phrase 'When China awakens'—well, on the cosmetics market, it awakened in the 1990s and 2000s. So we arrived at the right time and surfed on the enormous development of the Chinese market. To be honest, the African market hasn't awakened yet. It's still very complicated, very fragmented, with very low prices, a very scattered market. It will come, it will come. It's a question of purchasing power, ambition, associations, and potential. It will come. And importantly, to be frank, I don't regret that we are not more developed in Africa today, because all our efforts, energy, and money we put into China and Asia, and that has been extremely rewarding. But the day will come when we will also ride the wave of Africa, and that will also be a very big potential. Is it a priority for you? L'Oréal? Africa is part of the priorities, but it's not the first. The major geographical priorities are first to continue the Chinese dynamic. There we have years of growth potential. China will become the number one beauty market in a few years, and since we are number one in China with a very good market share, that's very promising for us. We must continue to accelerate in the United States, and we have perhaps the new frontier in emerging countries, which is more likely Southeast Asian countries. Today we are still under-represented there, even if some of our brands like Garnier do very well.

Of course, no, no, but Nicolas is right. You know, the principle of the L'Oréal model is to buy small brands that we know we can turn into big brands. That's what nourishes it. That's the clever thing. We buy small brands, and that external growth then feeds internal growth. And that will continue for a very long time.

Effectively, it's not simple. But listen, first, we are lucky. I think the shareholding of L'Oréal is a chance rather than a complication. First, we have the luck of having a family that has accompanied us for 112 years. It's not that long ago that it was a bit complicated at times, but nonetheless, the family is there, engaged generation after generation. Today it's Madame Bettencourt Meyers and her husband; tomorrow it will be her two sons, who are already on the board. So having a family that owns a third of the capital and supports the company, allowing management to have a long-term strategic vision and not be obsessed with the next quarter, that's fundamental and very reassuring. It allows us to work optimally. Secondly, we need to put things in perspective. Nestlé has been a very good shareholder of L'Oréal for more than 50 years. Nestlé is a solid, faithful, loyal shareholder. We'll see for the future.

You say, 'Go ahead, listen.' Frankly, I hesitate between the three I told you about. The adventure in China, the personal, the people. Nobody has listened? It was a very beautiful adventure. I would be very happy with these fifteen years. It was formidable. It's also a team. The best memory is the team, because we did all that with the L'Oréal team. And I am very happy that Nicolas can have this team for the next adventure.