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by Ralf Witzler, Euro am Sonntag
L.Long-awaited, hairdressing salons in Germany will be able to reopen at the beginning of March. Not only the hairdressing trade suffered from the closings and, for some contemporaries, the splendor of the hair that was trimmed in person. The business of manufacturers of hair care products with professional customers also came to a standstill at times. At cosmetics manufacturer L’Oréal, sales in the corresponding segment fell by 6.4 percent last year. The French will also benefit from the return to normal. But even so, the group got through the crisis year lightly. The good fourth quarter in particular surprised even experts. The share is now back in the positive long-term trend and is already trading a good 30 percent above the pre-crisis level.
The French have more than 25 brands, 17 of them worldwide. These include such illustrious names as Lancôme, Yves Saint Laurent and Giorgio Armani, who attract customers everywhere.
In Asia, and especially in China, business went splendidly over the year. L’Oréal products were so popular that the decline in sales in North America and Western Europe was largely offset. While comparable sales in Asia increased by more than twelve percent, in the Middle Kingdom they even rose by more than a quarter. The success in Asia proves the strong presence of the French in this growing market that will become more important in the future.
Resistant online trading
The company was also very successful in another future field. Online trade rose by a whopping 62 percent over the course of the year. Especially in the Corona crisis, in which the stationary trade was closed in many countries and the business with high-priced cosmetics at airports almost came to a standstill, L’Oréal showed itself to be flexible and resistant to excessive drops in sales, especially thanks to e-commerce.
“Thanks to the strengths in the digitalization and in e-commerce, L’Oréal was able to maintain its customer relationships and largely offset the closure of many stores, “said CEO Jean-Paul Agon.
It was also an advantage for the French that they have so-called active cosmetics, such as medical skin care products, in their product portfolio. They are sold through pharmacies that were not affected by the lockdowns. The same applies to the pure consumer brands, which in many places were consistently sold at least in drug stores.
The annual turnover of 28 billion euros was, as expected, slightly below the result of 2019. However, the operating result of 5.2 billion euros was significantly better than what experts had on the slip. Above all, the stable operating margin of 18.6 percent was a positive surprise.
More generous dividend
Both L’Oréal management and analysts are confident about the current year as well. The experts expect organic sales growth of around ten percent. The profit should also go up on a similar scale. For 2020, the management plans to propose a dividend of four euros per share to the annual general meeting on April 20. That would be an increase in the distribution of almost four percent compared to the previous year.
Eye catcher: The group benefits from strong global brands, Customers also buy online. The Growth should increase.
More news about L’Oréal S.A. (L’Oreal, L Oreal)
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