L’Oréal released its annual report for 2023, revealing that the group’s total sales reached 41.18 billion euros for the year. This marks the first time in L’Oréal’s history that sales have surpassed 40 billion euros, and it also represents the third consecutive year of double-digit like-for-like growth for the French beauty giant.
First breakthrough of €40 billion, setting a new record in performance
L’Oréal said that at the end of December 2023, sales reached €41.18 billion, representing a reported increase of 7.6%. When adjusted for comparable structure and exchange rates, sales grew by 11.0%. Changes in the scope of consolidation had a net impact of +1.6%. Growth at constant exchange rates stood at 12.6%.
In terms of business segments, The Professional Products division saw strong growth of 7.6% in like-for-like terms and 4.0% in reported figures. Haircare remained notably vibrant within the division, largely due to the continuous success of Kérastase, particularly its flagship Genesis and Chronologiste brands, as consumers continued to opt for higher-end haircare products. Growth was fueled by innovative breakthroughs from L’Oréal Professionnel, including Metal Detox and Absolut Repair Molecular. Positive momentum was observed across all regions, with China leading the way as the division’s second-largest market, alongside strong performance in emerging markets like India, now ranking fifth globally.
The Consumer Products division achieved its highest growth in over three decades, with a like-for-like increase of 12.6% and a reported growth of 8.2%. All four key brands experienced double-digit growth, with L’Oréal Paris surpassing the €7 billion mark. Strong growth was observed across all major categories, driven by innovative products executed with precision. Makeup led the Division’s growth, fueled by successful launches such as Surreal Mascara by Maybelline New York, Infallible Matte Resistance lipstick by L’Oréal Paris, and Fat Oil gloss by NYX Professional Makeup.
L’Oréal Luxe achieved like-for-like growth of 4.5% and reported growth of 2.0%, solidifying its position as the global leader in luxury beauty. Excluding North Asia, where the reset of Travel Retail and market softness in mainland China had an impact, L’Oréal Luxe experienced double-digit growth. Fragrances emerged as the standout performer, led by Yves Saint Laurent’s worldwide hit Libre and the successful introduction of MYSLF, along with releases like Born in Roma by Valentino, Paradoxe by Prada, Wanted by Azzaro, and Angel by Mugler.
The Dermatological Beauty division experienced remarkable growth of 28.4% in like-for-like terms and 25.5% in reported figures. It sustained its exceptional momentum, growing at twice the rate of the highly dynamic dermocosmetics market and achieving its sixth consecutive year of double-digit growth. Consequently, sales have more than doubled in just three years.
In terms of geographical regions, Sales in Europe experienced remarkable growth, with a like-for-like increase of 16.0% and a reported growth of 13.7%. North America also showed strong advancement, with a like-for-like growth of 11.8% and a reported growth of 9.7%. Conversely, sales in North Asia declined, with a like-for-like decrease of 0.9% and a reported decrease of 5.8%, mainly due to the ongoing impact of the Travel Retail reset following changes in daigou policies. In Mainland China, where the beauty market remained stagnant, L’Oréal achieved a growth of 5.4%, significantly solidifying its leadership position, driven by the company’s continued investment in the quality of offline distribution in a truly integrated offline and online market. Sales in SAPMENA-SSA demonstrated outstanding growth, with a like-for-like increase of 23.2% and a reported growth of 16.4%.
Using both acquisition and divestiture strategies simultaneously, invest in the Chinese fragrance brand To Summer
In 2023, L’Oréal’s acquisition of Aesop was one of the most notable transactions in the beauty industry.
Established in 1987, Aēsop has garnered international acclaim for its skincare, haircare, and body care products. Recognized for its distinctive amber packaging, use of plant-derived ingredients, commitment to sustainable vegan formulas, and personalized customer service, Aēsop has emerged as a global powerhouse present in upscale retail, beauty, and hospitality establishments worldwide.
Currently, Aēsop operates approximately 400 retail outlets across the Americas, Europe, Australia, New Zealand, and Asia, with an emerging presence in China where its inaugural store debuted in 2022. The brand achieved sales totaling USD 537 million in 2022.
L’Oréal also holds high hopes for this brand. Cyril Chapuy, President of L’Oréal Luxe, said, “My Team and I are thrilled to have Aēsop join the L’Oréal Luxe portfolio of iconic global brands. We have great confidence that Aēsop will join the L’Oréal Luxe Billionaire brands club and therefore contribute significantly to the growth of the Division in the years to come.”
Nicolas Hieronimus, Chief Executive Officer said, “Aēsop taps into all of today’s ascending currents and L’Oréal will contribute to unleashing its massive growth potential, notably in China and Travel retail.”
However, apart from Aesop, L’Oréal did not acquire any other beauty brands in 2023. Instead, it opted to divest two brands. In October, L’Oréal announced the sale of its organic cosmetics brand Sanaflore, while also discontinuing the production of its high-end spa brand Decléor. Both of these brands were under L’Oréal’s Dermatological Beauty division and had a history of over 60 years.
It is worth mentioning that in the financial report, L’Oréal also disclosed that by January 2024, L’Oréal’s venture capital arm BOLD finalized a minority investment in the upscale Chinese fragrance label, To Summer, aimed at broadening its presence in international markets and providing global customers with carefully curated scent journeys inspired by Eastern art, culture, philosophy, and landscapes.
L’Oréal stated that this investment further demonstrates its firm commitment and willingness to collaborate with Chinese beauty brands. Additionally, it represents the latest evidence of collaboration between L’Oréal’s headquarters and the Chinese market in shaping the future of beauty. Furthermore, it reaffirms the significant position of the Chinese market and Chinese beauty brands in L’Oréal’s global strategy.
