L'Oréal (OR) H1 2024 earnings summary

Executive summary

• Sales reached €22.12 billion in H1 2024, up 7.3% like-for-like and 7.5% reported, outpacing the global beauty market's 5–6% growth.

• Net profit rose 8.8% year-over-year to €3.66 billion; operating profit increased 8% to €4.60 billion, with operating margin at 20.8%.

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

• Europe, North America, and emerging markets delivered robust, often double-digit growth, offsetting weakness in North Asia due to China.

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

Financial highlights

• Consolidated sales reached €22.12 billion, up 7.5% reported and 7.3% like-for-like; gross margin improved to 74.8% (+50 bps); operating margin at 20.8% (+10 bps).

• Net profit attributable to owners was €3.66 billion (+8.8% YoY); EPS (excluding non-recurring items) rose 3.7% to €6.98.

• Operating profit increased to €4.60 billion (+8.0% YoY); gross cash flow was €4.5 billion (+3.1%).

• Net debt at end of June was €6.46 billion; gearing ratio 21.8%, financial leverage 1.2x.

• Operating cash flow reached €1.99 billion; investments totaled €781 million (3.5% of sales).

Outlook and guidance

• Management expects to continue outperforming the global beauty market and achieve another year of sales and profit growth.

• Beauty market expected to grow by ~4.5% annually through 2030; currency fluctuations projected to have a -1.1% impact on full-year 2024 sales if current rates persist.

• 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.

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