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's 5–6% growth.

• Growth was balanced between value and volume, with online channels expanding faster than offline, especially in emerging markets.

• All divisions contributed to growth, led by Dermatological Beauty and Consumer Products, with double-digit gains in Europe and emerging markets, offsetting North Asia softness.

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

Financial highlights

• Sales reached €22.12 billion (+7.3% like-for-like, +7.5% reported); gross margin hit a record 74.8% (+50 bps); operating margin 20.8% (+10 bps); operating profit €4.60 billion (+8.0%).

• Net profit attributable to owners was €3.66 billion (+8.8%); EPS €6.98 (+3.7%).

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

• Gross cash flow increased 3.1% to €4.5 billion; net 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 growth of ~4.5% for 2024 and through 2030, above long-term average.

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

• Emerging markets expected to maintain double-digit growth; Europe and US to normalize.

• Management confident in continued outperformance and long-term growth, targeting 2 billion consumers in the next decade.

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