-4.1%, L'Oreal has not escaped a decline in 2020

L'Oréal Group released its 2020 annual report. The report shows that in the fourth quarter of 2020, L'Oréal Group sales increased by 4.8% year-on-year. For the whole year of 2020, L'Oréal Group recorded sales of 27.99 billion euros (approximately RMB 219.1 billion), down 4.1% year-on-year. It is worth mentioning that this is the first time that L'Oréal Group has seen a decline in sales in five years. Compared with 29.87 billion euros in 2019, L'Oréal's sales in 2020 will shrink by 1.88 billion euros (approximately RMB 14.7 billion).

Active health cosmetics department becomes the only positive growth department

The financial report shows that the active cosmetics division achieved a record growth of 18.9% for the second consecutive year, with sales exceeding 3 billion euros (approximately RMB 23.5 billion). Active cosmetics has also become the only one of L'Oréal's four major divisions to achieve positive growth in 2020 department. The financial report said that consumers' increased attention to health has helped accelerate the growth of sales in this sector. Sales in all regions have grown faster than the market, and North America and Asia performed particularly well. As far as brands are concerned, Seileskin, La Roche-Posay, and Xiulike have strong growth. Among them, the scale of Selocer has nearly doubled, and the sales of Xiulike and La Roche-Posay are ahead of the market in all regions.

In addition, mass cosmetics is still L'Oréal's largest revenue division. In 2020, sales of popular cosmetics fell by 4.7% to 11.7 billion euros (about 91.6 billion yuan). Driven by Garnier and L'Oréal Paris, sales in the mass cosmetics division restored balance in the second half of the year. Although the spread of the global epidemic has severely affected the cosmetics market, the L'Oréal Group still gained considerable market share in other categories such as hair care.

The high-end cosmetics department's full-year sales in 2020 fell 8.1% year-on-year, with final sales of 10.18 billion euros (approximately RMB 79.7 billion). At the same time, the financial report shows that the performance of this sector has returned to positive growth in the fourth quarter. Thanks to the growth in sales driven by brands such as Lancome and Kiehl's, the high-end cosmetics division performed significantly better than the market in the skin care category.

The professional products division's annual sales fell to 3.1 billion euros (approximately 24.3 billion yuan), a year-on-year decrease of 6.4%. The financial report shows that the department was significantly affected by the closure of beauty salons in the first half of the year, but in the second half of the year, it still achieved market share growth in all regions. L'Oréal said that the sector has grown very strongly in China, especially on the Tmall platform.

The only positive growth in the Asia-Pacific region, with a 27% increase in mainland China

In the Asia-Pacific market, L'Oréal's 2020 annual revenue reached 9.8 billion euros (approximately 76.7 billion yuan), accounting for the highest proportion of revenue in all regions. Moreover, the Asia-Pacific region is the only market that has achieved positive growth. Among them, Mainland China surged 27%.

The financial report also mentioned that L'Oréal China takes double-digit growth over the world. On the one hand, it is because Chinese consumers' pursuit of high-quality products has allowed the premium trend to continue, and on the other hand, because festivals and promotional activities have also promoted sales performance. growth of. In other parts of the Asia-Pacific market, the situation improved in the second half of the year. Although the cosmetics market remains sluggish, the hair care and skin care categories are experiencing steady growth.

In addition, due to the severe impact of the blockade measures, the Western European and North American markets fell 10.3% and 7.4%, respectively. The reduction of European flights and the significant decline in summer tourism have made makeup and sunscreen products the hardest hit. In North America, despite the spread of the epidemic and social turmoil, the L'Oréal Group has accelerated its progress in the e-commerce sector, almost doubled its e-commerce, and quickly adapted to the transition across distribution channels.

E-commerce surged 62%, accounting for an increase of over 10%

As a powerful growth engine of the L'Oréal Group, e-commerce will achieve a strong growth of 62% in 2020 and account for 26.6% of the group's total annual sales. In 2019, e-commerce business accounted for 15.6% of total sales. In the past year, the proportion of e-commerce business has achieved a growth of over 10%.

L'Oréal Chairman and Chief Executive Officer Jean-Paul Angon commented on the annual results, as L'Oréal's digital and e-commerce capabilities once again achieved substantial growth during the crisis, L'Oréal was able to maintain close relationships with all consumers. At the same time, this also largely made up for the performance gap caused by the closure of sales points.

L'Oréal said that although the beginning of the new year is still marked by the uncertainty of the evolution of the epidemic, because consumers still have a huge demand for beauty, L'Oréal is confident that it can outperform the market again this year and achieve sales and profit growth.