L'Oréal (OR) H1 2024 earnings summary

Executive summary

• Achieved strong H1 2024 results with like-for-like sales growth of 7.3% and net profit up 8.8% to €3.66 billion, outpacing the global beauty market estimated at 5-6% growth.

• Growth was balanced between value and volume, with value up 4.7% and volume up 2.6%; all divisions and most regions contributed.

• Dermatological Beauty and Consumer Products led divisional growth, with all divisions showing positive momentum.

• Europe, North America, and emerging markets delivered robust or double-digit growth, offsetting weakness in North Asia.

• CEO remains optimistic for continued sales and profit growth despite economic and geopolitical tensions.

Financial highlights

• Sales reached €22.12 billion, up 7.5% reported and 7.3% like-for-like year-over-year.

• Net profit rose 8.8% to €3.66 billion; EPS increased to €6.98 (+3.7%).

• Operating profit was €4.60 billion (+8.0%); operating margin hit 20.8% (+10 bps); gross margin reached 74.8% (+50 bps).

• Net profit excluding non-recurring items was €3.74 billion; non-recurring items net of tax were -€89 million.

• Operating cash flow exceeded €1.99 billion; net debt at end of June was €6.46 billion; gearing ratio 21.8%, financial leverage 1.2x.

Outlook and guidance

• Expects global beauty market to grow about 4.5% in 2024, slightly above long-term average, with continued outperformance and long-term growth targeted.

• North Asia expected to remain slightly negative in H2; travel retail to gradually improve.

• Emerging markets to maintain double-digit growth; Europe to normalize with less value growth.

• Currency fluctuations projected to have a -1.1% impact on full-year 2024 sales if current rates persist.

• Confident in targeting 2 billion consumers by 2030 and delivering strong full-year results.