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Frédéric Rozé, President L’Oréal USA
International Financial Analysts May 10, 2012
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HISTORY OF L’ORÉAL USA
L’ORÉAL USA TODAY
L’ORÉAL USA TOMORROW
AGENDA
L'Oréal USA Investor Days - May 2012
1 HISTORY OF L’ORÉAL USA
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AT THE BEGINNING…… They were 25
L'Oréal USA Investor Days - May 2012
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1953: Cosmair, Inc. becomes the exclusive licensing agent to import and sell L’Oréal hair color in the United States
1994: Cosmair, Inc. becomes 100% owned subsidiary of L’Oréal SA
2000: Cosmair, Inc. changes its name to L’Oréal USA
2011: L’Oréal USA represents approximately 20% of L’Oréal’s worldwide cosmetic sales
L’ORÉAL USA’S HISTORY
L'Oréal USA Investor Days - May 2012
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PROFESSIONAL CONSUMER LUXE ACTIVE
1954
1993
1998
2000
2007
2007‐2011
1966 / 1983
1996
1998‐2000
2000
2011
1974
1983
1984
2000
2005
2007
2008
2011
2000
2000
2005
2005
BRAND BUILDING FOR L’ORÉAL USAAPPROXIMATELY 40% US BRANDS
L'Oréal USA Investor Days - May 2012
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L’ORÉAL USA’S HISTORY
Creative hub for US global brands:
Matrix
Redken
Pureology
Mizani
Maybelline
SoftSheen Carson
Essie
Ralph Lauren
Kiehl’s Since 1851
Skinceuticals
Clarisonic
US hubs drive 20% of L’Oreal
worldwide consolidated
sales.
L'Oréal USA Investor Days - May 2012
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DRIVING ORGANIC GROWTH A U.S. WAY OF BEING SUCCESSFUL
MAYBELLINE#1 Cosmetics brand
REDKEN#1 Salon Hair Care brand in US grew 3X since ’98
ESSIE3X growth since acquisition
PUREOLOGY#1 Color Care Brand in the U.S., +60% since L’Oreal acquisition
KIEHL’S4x in 10 years and becoming a global phenomenon
SKINCEUTICALSGrowing 2X since acquisition in 2005
MATRIX#2 U.S. Professional Salon Brand, reaching over 100K community salons
CLARISONICL’Oreal enters the fast growing beauty devices category.
L'Oréal USA Investor Days - May 2012
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Sales Published – Pre and Post IFRS Post IFRS
L’ORÉAL USA HAS GROWN3.5 TIMES IN 15 YEARS
$MM
+7.7%
L'Oréal USA Investor Days - May 2012
2 L’ORÉAL USA TODAY
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69%
49.6%
32%
50.4%
28%
13% 12%
4% 7%3% 4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2000 2010 2015 2020 2025 2030 2035 2040
Caucasian
Total Multi‐Cultural
Hispanic
Black
Asian
All Other
THE US --- A GROWING ENVIRONMENT
Real GDP
Population (m)
Diversity
2000 2010 2020 2030Male 138 152 165 179Female 144 157 171 185Total 282 309 336 364
2009 2010 2011 2012 2013 2015 2015-3.5% 3.2% 1.7% 2.1% 2.3% 3.4% 3.2% Moderate growth.
Significant growth
+55m +18%next 20 yrs.
Rapid change.
Sources: US Bureau of Economic Affairs, Global Insight, US Census Bureau
% Population by Race
L'Oréal USA Investor Days - May 2012
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BEAUTY BOUNCES BACK AFTER A DIP IN 2008/2009, REACHING 4.5% IN 2011 $38B MARKET
‐2
‐1
0
1
2
3
4
5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Cha
nge,
%
Source: Growth, Kline , excluding soaps, razors, blades, oral care; market size from internal Beauty Market Survey.
L'Oréal USA Investor Days - May 2012
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Skincare continues to be the largest category, while makeup is the fastest growing
Sales by Product Category, 2011 Growth by Product Category, 2011
Source: Kline excluding soaps, razors/blades and oral care.
0.0% 2.0% 4.0% 6.0% 8.0%
Haircare
Toiletries
Skincare
Fragrance
Makeup
L'Oréal USA Investor Days - May 2012
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BEAUTY DISTRIBUTION IN THE USA
Food Drug Mass28.5%
Walmart13.8%
Warehouse Clubs 2.4% Dollar Stores 2.6%Other Mass 2.0%
Hair Salon7.0%
Spa/Medical 2.0% Nail Salon 0.7%
Dept Stores14.4%
Spec. Cosm. Stores4.2%
ManufacturersStores 2.1%
DRTV4.6%
e‐tailing 1.5%Vertically
Integrated 7.8%
Person to Person 6.4%
49.3%+2.3%
9.7%+0.4%
26.8%+10.6%
14.2%+1.9%
Mass Professional
Selective Direct
Weight & EvolutionWeight
L'Oréal USA Investor Days - May 2012
Source: L’Oreal Beauty Market Survey
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BEAUTY AND TOILETRIES MARKET SHARE EVOLUTIONTOP 10 BEAUTY COMPANIES
Company 2011
Procter & Gamble 14.2%
L'Oréal 13.6%
Estée Lauder 7.8%
Unilever 7.4%
Limited Brands 4.6%
Johnson & Johnson 4.5%
Coty 3.3%
Mary Kay 3.1%
Avon 3.0%
Revlon 2.3%
Private label 1.8%
Source: Growth, Kline , excluding soaps, razors/blades, oral care, at manufacturers net.
L'Oréal USA Investor Days - May 2012
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CPD COMBINED SHARE EVOLUTION MAKE-UP, HAIR CARE/STYLING, HAIR COLOR, FACIAL SKIN CARE
23,5
26,3
28,6
25,1
15,0
17,0
19,0
21,0
23,0
25,0
27,0
29,0
31,0
2007 2008 2009 2010 2011 YTD '12
Competitor #1 = 25.1%
Source: extracted from US IRI for Food Drug Mass, and L’Oreal estimates for Walmart based on IRI Total RetailView panel data
L’Oréal CPD = 26.3%L’Oréal CPD = 26.3%
L'Oréal USA Investor Days - May 2012
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0
5
10
15
20
25
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Share
L’ORÉAL PARIS VERSUS REVLON DOLLAR SHARE OF COSMETICS THROUGH Q1 2012
Revlon = 12.4%
L’Oréal Paris = 15.8%L’Oréal Paris = 15.8%
Data Source: 2003 and forward: Extracted from US IRI for Food Drug Mass, without Walmart1995-1998: Nielsen including Wal-martNielsen Data reported historical through 2002
L'Oréal USA Investor Days - May 2012
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MAYBELLINE VERSUS COVER GIRLDOLLAR SHARES OF COSMETICS THROUGH Q1 2012
Cover Girl = 16.8%Cover Girl = 16.8%
Maybelline = 20.5%
10.0
12.0
14.0
16.0
18.0
20.0
22.0
24.0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Share
Data Source: 2003 and forward: Extracted from US IRI for Food Drug Mass IRI without Walmart1995-1998: Nielsen including Wal-martNielsen Data reported historical through 2002
L'Oréal USA Investor Days - May 2012
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0
10
20
30
40
50
60
70
1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Share
* L’Oreal CPD figures include Soft Sheen Carson for 2001 forward onlyData Source: Extracted from US IRI for Food Drug Mass IRI FDM without Walmart from 2003 forward1995 through 1998 Nielsen Including Wal-MartNielsen data reported historical through 2002
USA: DOLLAR SHARE OF WOMEN’S HAIR COLOUR THROUGH Q1 2012
P&G = 27.2%
L’Oréal CPD* = 55.2%
L'Oréal USA Investor Days - May 2012
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L’Oréal USA #1 with 36% Market Share
3 x P&G
5 x Estee Lauder
#1 IN SALON HAIR MARKET
Source: Market size and L’Oreal USA share is from Professional Beauty Association survey; competitive shares are internal estimates.
L'Oréal USA Investor Days - May 2012
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L’OREAL LUXE #2 IN LUXURY
Estee Lauder #1 38%, L’Oréal Luxe 16%
Clarisonic fastest growing major brand in luxury skincare +144%.
Kiehl’s rapid growth +20%
YSL Signature +15%
Kiehl’s Signature +20%
Giorgio Armani Signature +11%
Victor & Rolf +22%
.
L'Oréal USA Investor Days - May 2012
Source: NPD 2011
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THE BODY SHOP TURNING AROUND
Distribution Modernization– Free Standing Stores 253 -9% from prior year
New Pulse Boutiques introduced– Sephora in JC Penney 300 doors – Ulta 450 doors– e-Commerce 16% of total sales, +28% in Q1
Brand Refresh (with pulse Boutiques) – “Beauty with Heart” With new visuals, packaging– Chocomania Sensorial body care– Drop-of-Youth Plant stem cell skin care
Results– +6.6% comp door in 2011 and similar in Q1 2012
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L’OREAL USA #1 BEAUTY ADVERTISER IN THE US
L'Oréal USA Investor Days - May 2012
$ (000s) 2009 2010 2011
Total Media Spend $853 $1,118 $1314Advertiser Ranking (all advertisers) #15 #10 #6
Source: Kantar Measured Media ,
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BEAUTY SHARE OF VOICE
L'Oréal USA Investor Days - May 2012
2009 2010 2011
L’Oreal USA 22.2% 26.0% 27.8%
P&G 26.5% 23.6% 23.5%
J&J 10.2% 9.2% 7.9%
Estee Lauder 3.7% 4.6% 5.8%
Coty 3.1% 5.8% 5.5%
Source: Kantar Measured Media , beauty categories excluding toiletries, soaps, razors/blades and oral products.
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COLORADOAurora
ARKANSASNorth Little Rock
ILLINOISInstitute for Ethnic Hair & Skin (Chicago)
NEW YORKL'Oréal USA Headquarters
NEW JERSEY
Clark, Franklin, Piscataway
Cranbury, South Brunswick,Burlington, Dayton
Clark
KENTUCKYFlorence
OHIOSolon Streetsboro
POWERFUL NETWORK OF LABS & PLANTS
6 Manufacturing Plants
10 Distribution/Assembly Centers
3 Research & Development Sites
Note: Solon and Clark scheduled to close in 2015
TEXASGarland
Washington
Redmond
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LEVERAGING SUSTAINABILITY
Focus Areas for L’Oréal USA:
Behaving ethically and responsibly in the communities where we operate
– Annual Citizens Day- engaging employees in local volunteer projects
• Reducing impacts from our operations– Investing in renewable sources of energy: Franklin,
Piscataway, Berkeley Heights, North Little Rock– USGB LEED certifications: Franklin, Berkley Heights, Clark R&I pending– Wall-to-Wall: In-house component supply – Committing to aggressive footprint reduction targets
– -50% Greenhouse Gases– -50% Water consumption per unit of finished product– -50% Waste per unit of finished product
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A COMPANY OF TALENT
10,518 Employees of which 93% are Americans.
Embracing Diversity:
Our recruitment of diverse profiles pushes our business forward and drives innovation and creativity across all our teams
In our Research & Innovation labs, our scientists represent more than 43different countries of origin (120 company-wide)
Exporting US Talents:
2009: 10 US expats
2011: 29 US expats
2012 goal: Over 50 US expats
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The BEAUTY SHAKER AWARDS
The initiative was launched in 2010 as one event and 2 awards open to all L’Oréal USA employees to recognize teams that excel in their jobs and incent individuals to think out of the box, dare, be creative.
1. The Excellence award for teams or projects that have demonstrated excellence in an initiative in the last 12 months
2. The Out of the Box award for individuals or teams that demonstrated “Out of the box” thinking in a concept/solution or for new breakthrough ideas that can shake the way we work or the Beauty World.
3. In 2011, the Digital Category was added.
Approximately 2000 employees participated each year resulting in dozens of projects being implemented across all Divisions and Functions of the company.
L'Oréal USA Investor Days - May 2012
3 L’ORÉAL USA TOMORROW
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THERE IS STILL OPPORTUNITY AHEAD
Source: For the US Kline, excluding soaps, razors/blades, oral care.
L’Oréal Share Of Market
Total Beauty
13.6%
18.5% 19.6%
L'Oréal USA Investor Days - May 2012
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TOP 5 GROWTH CONTRIBUTORS TO THE GOAL OF WINNING 1 BILLION NEW CONSUMERS
Source: L’Oreal estimates –Strategic Prospective – December 2010
ChinaIndiaUS 70MMBrazilPakistan
L'Oréal USA Investor Days - May 2012
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GEOGRAPHIC PENETRATION OPPORTUNITY
L'Oréal USA Investor Days - May 2012
L’Oréal
North East 79.5%
Mid West 73.3%
South 82.1%
West 77.0%
Source: Target Research Group 8/2010. Females 13+ who use any beauty product form selected manufacturers.
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Used Any L’Oréal
% Consumers
Total Age 13+ 62.3% 159.4MM
Females 78.6% 100.9MM
Males 45.9% 58.5MM
Non-Users 97MM
100MM NON-USERS OF L’ORÉAL PRODUCTS IN THE USA
LUSA Research Study 2010: consumers who used any brand in past 12 monthsL'Oréal USA Investor Days - May 2012
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CATEGORY OPPORTUNITIES
Source: Kline excluding soaps, razors/blades and oral care.
L’Oreal #1 22.3%Nail #3
L’Oreal #3 8.3%Hand & Body #11 Facial skincare #2 Sun care #5
L’Oreal #3 10.6%Men’s #1Women’s #4
L’Oreal #2 20.8%Shampoo #3Conditioner #3
L’Oreal #20
L'Oréal USA Investor Days - May 2012
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ENGINES OF GROWTH
Under Weighted Categories
Facial Skincare
Hand and Body
Women’s Fragrances
Haircare
Under Weighted Distribution
E-Commerce
Free Standing Stores
DRTV
Demographics
Under Served Consumers Groups
US Population Growth
Product Innovation
Digital Focus
Selective Acquisitions
L'Oréal USA Investor Days - May 2012
Thank you!
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"This document does not constitute an offer to sell, or a solicitation of an offer to buy, L’Oréal shares. If you wish to obtain more comprehensive information about L’Oréal,please refer to the public documents registered in France with the Autorité des Marchés Financiers (which are also available in English on our Internet site: www.loreal-finance.com).This document may contain some forward-looking statements. Although the Company considers that these statements are based on reasonable hypotheses atthe date of publication of this release, they are by their nature subject to risks and uncertainties which could cause actual results to differ materially from those indicated orprojected in these statements."