L'Oréal S.A. (LRLCF) 9-Month Sales Call Transcript

Company and Industry Overview * Company: L'Oréal S.A. (OTCPK:LRLCF) * Industry: Beauty and Personal Care * Timeframe: 9-Month Sales Conference Call, October 22, 2024 Key Points Overall Performance * Like-for-like growth: +6% for the first 9 months of 2024, outperforming the global beauty market. * External challenges: Multiple external factors impacted the third quarter, including normalization of beauty market growth in Europe and North America, and negative trends in North Asia, particularly in China. * Bright spots: Robust underlying growth trends in Europe, North America, and emerging markets; strong performance in fragrance and hair care; gradual recovery in makeup. Divisional Performance * Fragrance and Hair Care: Strong growth across all regions, with hair care performing exceptionally well. * Makeup: Gradual recovery, fueled by new product launches. * Dermatological Beauty: Growth slowed in the third quarter due to factors like realignment between sell-in and sell-out, sun care effect, and lack of innovation on certain brands. * Mass Market: L'Oréal Paris performed well, maintaining its position as the number one beauty brand in China. Market Outlook * Global beauty market: Expected to grow at pre-COVID levels in 2025. * Beauty stimulus plan: L'Oréal is preparing a plan to stimulate demand through innovation and creativity. * Emerging markets: Remain a significant growth driver, with strong performance in Latin America, SAPMENA, and SSA. Other Important Points * Luxury market: L'Oréal Luxe outperformed the luxury market globally, with strong performance in Europe, Latin America, and Japan. * China: The Chinese market remains challenging, with negative trends in luxury and travel retail. L'Oréal is gaining share in certain divisions and channels. * U.S. market: The market is normalizing, with mid-single-digit growth. L'Oréal is confident in its ability to navigate the evolving landscape. * Amazon: L'Oréal has successfully launched luxury brands on Amazon, with positive results in terms of brand exposure and consumer acquisition. * French tax: L'Oréal expects an additional tax burden of €250 million in 2024 due to proposed changes to the French tax regime.