Registering its third year in a row of double-digit growth in like-for-like terms, the world’s biggest beauty company surpassed €40 billion in sales for the first time in 2023.
Despite inflation and an extremely disruptive year for the Chinese beauty ecosystem, L’Oréal reported its volume sales grew — which was not the case for many of its peers — and said that it continued to recruit new consumers. Unit sales gained 4%.
Among the biggest news of the year was the purchase of Aēsop from Natura&Co., which valued the Australian luxury beauty brand at more than $2.5 billion and was L’Oréal’s largest-ever acquisition. Aēsop had 2022 sales of $537 million. The agreement was signed in April, and closed in August, with the brand integrated into the L’Oréal Luxe division. Aēsop has around 400 boutiques worldwide, and recently under Natura introduced its first stores in China as well as launching its first fragrances.
As to performance, the Consumer Products mass-market division registered its best growth in more than three decades, at 12.6% like-for-like, driven by makeup as well as business in Europe and emerging markets. Its four main brands registered double-digit growth and L’Oréal Paris exceeded €7 billion in sales.
Dermatological Beauty saw its sixth consecutive year of double-digit gains, growing twice as fast as the dermocosmetics category, according to L’Oréal. La Roche-Posay was the biggest contributor to gains, while CeraVe continued to perform well and Vichy saw its strongest growth in 18 years.
L’Oréal Luxe reportedly outpaced the selective market threefold and grew its prestige market share to a record 31.8%. Excluding North Asia, the division grew double digits, driven notably by fragrances under Yves Saint Laurent, Valentino and Prada. Makeup, particularly the couture brands, accelerated in the second half.
Helena Rubinstein, which L’Oréal acquired in 1984 and has built into a leading ultra-premium skin care player in Asia over the past decade, joined the ranks of L’Oréal’s “billionaire brands,” surpassing the threshold of €1 billion in revenues for the first time.
L’Oréal’s Professional Products division also gained market share, accounting for 25% of the total market worldwide, according to the company, and benefiting from strong demand for premium hair care innovations. China and India both contributed to growth for the division, as did its focus on omnichannel.
In terms of geographies, emerging markets contributed to 30% of growth and accounted for 15% of group sales, and Europe saw its first year of double-digit gains in more than two decades. Sales accelerated in North America, and crossed the €10 billion milestone.
L’Oréal was not immune to the challenges — in China, where the beauty market overall was slower to recover due to subdued consumer sentiment and a weak labor market, as well as the restructuring of the travel-retail ecosystem as the Chinese government cracked down on “daigou” trade and retailers reined in their inventory. Still, L’Oréal continued to grow its market share there, by 80 basis points, attributing its success to having been more focused on the Chinese domestic market, rather than travel retail, compared with some of its competitors. In North Asia, sales fell 5.8% in reported terms and 0.9% like-for-like, but it performed better than the market overall, it said.
Broken down by category, fragrance sales grew 16.9% to €5.2 billion; hair care increased 15.3% to €6.3 billion; skin care gained 10.4% to €16.4 billion, and makeup, with sales of €8.1 billion, was up 10%.
Prada, which has done well since L’Oréal acquired the license in 2021, notably thanks to the launch of the Prada Paradoxe women’s scent, introduced makeup and skin care in August. This February, L’Oréal announced it had signed a global licensing agreement with Prada SpA for fragrance and beauty under Miu Miu, with the first products to launch in 2025. The Miu Miu license was previously held by Coty.
There were also brand exits, as L’Oréal announced plans to wind down Decléor, bought from Shiseido in 2014 alongside Carita — which it recently relaunched with a more premium positioning under L’Oréal Luxe. The company also sold green beauty brand Sanoflore to investment fund Ekkio Capital and management. Both brands sat within the Dermatological Beauty division.
On the personnel front, Fabrice Megarbane, previously president of the North Asia zone and CEO of L’Oréal China, where sales doubled under his leadership since 2019, was named chief global growth officer. He replaced Frédéric Rosé, who has retired. Vincent Boinay, previously general manager for travel-retail worldwide, stepped into Megarbane’s former position this February.
Among other news, L’Oréal leaned heavily, and broadly, into technology, especially biotechnology. It snapped up Denmark-based Lactobio, a leading company in precision probiotics and microbiome research. Through its BOLD venture capital fund, it also purchased a stake in Genomatica Inc., which develops, produces and commercializes biotech-based alternatives to key beauty ingredients, bought into Chinese supramolecular chemistry specialist Shinehigh Innovation and led a funding round for “cell-free” biotech firm Debut, whose technology reproduces at scale ingredients that are only found in trace amounts in nature.
For the fragrance category, L’Oréal inked an exclusive partnership for green-science-based ingredient extraction with Cosmo International Fragrances as the industry seeks solutions to improve the sustainability footprint of fragrance and replace ingredients of concern in the perfumer’s palette. It also announced a partnership with the University of California Berkeley’s biotech incubator Bakar Labs.
Investments continued in early 2024, with BOLD taking a stake in Swiss longevity biotech company Timeline. This year, BOLD acquired environmental water-tech start-up Gjosa, with which it had been partnering since 2015.
Also in early 2024, L’Oréal announced it had made a minority investment in Chinese luxury fragrance brand To Summer through its Shanghai Meicifang Investment vehicle with support from BOLD. It follows the 2022 investment in Documents, another growing Chinese scent label.
Chief corporate responsibility officer Alexandra Palt, who has been instrumental in the company’s ambitious sustainability roadmap during her 12 years in the role, announced plans to step down as of April 1 this year, with Ezgi Barcenas taking on the role.
