Business Description

L’Oréal SA is involved in the production and sale of hair and beauty products. The company sells eye care products through Lancome and The Body Shop, including gel, cream, and masks. It operates in the following segments: Consumer Products, Professional Products, L’Oréal Luxe, and Active Cosmetics. Products manufactured by the Professional Products segment are sold in hair salons.

Active Cosmetics sells dermo-cosmetic skin products in drugstores and specialty sections. Eugene Schueller founded the company in 1909, located in Clichy, France. The Consumer Products segment sells beauty and care products that are mass-market. L’Oréal Luxe sells high-end skincare and beauty products in select retail outlets, such as department stores and perfumeries

Key Financials

Revenue (US$ Mn):

• US$ 37,897 Mn was the annual revenue generated by L’Oréal SA in 2021
• L’Oréal SA ‘s annual revenue for 2020 was US$ 34,102 Mn, a 2.97% increase from 2019
• From 2018’s annual revenues, L’Oréal SA registered a 7.84% increase in 2019, amounting to US$ 33,119 Mn
• A total revenue of US$ 30,711 Mn was generated in 2018 by L’Oréal SA

Operating Income (US$ Mn):

• L’Oréal SA ‘s operating income for 2021 was US$ 7,230 Mn, a 13.93% increase from 2020
• The operating income generated by L’Oréal SA in 2020 was US$ 6,346 Mn
• At a 9.59% increase, L’Oréal SA’s operating income of US$ 6,150 Mn was indexed in 2019
• L’Oréal SA generated an operating income of US$ 5,612 Mn in 2018

Net Income (US$ Mn):

• US$ 5,395 Mn was L’Oréal SA ‘s net income in 2021, a 24.29% increase from 2020 figures
• L’Oréal SA indexed a -10.12% decrease in net incomes from 2019, amounting to US$ 4,341 Mn in 2020
• L’Oréal SA generated a net income of US$ 4,829 Mn in 2019
• A net income of US$ 4,547 Mn was indexed by L’Oréal SA in 2018

Operating Margin %:

• 19% was the operating margin generated by L’Oréal SA in 2021
• L’Oréal SA’s operating margin for 2020 was 19%, a 0% decrease from 2019
• From 2018’s operating margins, L’Oréal SA registered a 1.64% increase in 2019, amounting to 19%
• An operating margin of 18% was generated in 2018 by L’Oréal SA

Gross Margin %:

• L’Oréal SA’s gross margin for 2021 was 74%, a 1.09% increase from 2020
• The gross margin generated by L’Oréal SA in 2020 was 73%
• At a 0.27% increase, L’Oréal SA’s gross margin of 73% was indexed in 2019
• L’Oréal SA generated a gross margin of 73% in 2018

SWOT Analysis

Strengths

Market Position

L’Oréal’s strong position in the market has helped to build its brand equity. It also helped establish itself as a leader in the cosmetics market. The company’s strong market position helps it attract more customers and improve its bottom-line performance. It has a strong brand portfolio that includes 36 international brands.

L’Oreal and Matrix are just a few of the brands it has. These brands are available through a variety of distribution channels ranging from mass market retailers to selective distribution, including hair salons, pharmacies/drugstores, and a network of directly-owned stores and franchisees.

L’Oreal’s Professional Products division, for example, distributes its products at beauty salons around the globe. The Consumer Products division sells products through all major mass-market retailing channels. Luxury Products brands are sold in select retail outlets like department stores, perfumeries, and travel retail outlets.

The company also has its own boutiques. The Active Cosmetics Division sells its products in all health channels, including pharmacies, drugstores, and medi-spas. L’Oreal’s strong market presence and brand portfolio allow for greater visibility and presence across all distribution channels, which allows it to reach large customer bases and increase its market penetration.

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