Record sales of Active Cosmetics division bolsters L'Oréal's year-end performance

By Becky Bargh 12-Feb-2021

The French beauty giant behind Maybelline and Urban Decay reported a 13% uptick in growth for the category with sales exceeding €3bn for the first time

L’Oréal, the world’s largest beauty company, has reported higher than expected sales in Q4 boosted by record growth in its Active Cosmetics division and new markets.

Driven by growth across all markets, the French beauty giant’s Active Cosmetics arm expanded by 13%, with sales exceeding €3bn for the first time in 2020.

Dermocosmetic brands La Roche-Posay and SkinCeuticals were among the best performing companies in the category, led by CeraVe, which saw exponential growth in the US market.

The conglomerate behind beauty brands Maybelline and Urban Decay benefited from the significant recovery of the Chinese market in the second half of the year – described by CEO Jean-Paul Agon as “spectacular” – earning a 27% growth for 2020.

Reportedly figures in China were driven by demand in the market for better performing products, while various festivals and promotional campaigns strengthened the group’s growth.

Meanwhile, a quarter of sales were achieved through the 62% hike in online revenues while non-essential retailers remain closed as countries worldwide grapple with the Covid-19 pandemic.

“After demonstrating its resistance over the first half of the year, the group engaged the second half with a determined and virtuous dynamic: launching major innovations, reinvesting in business drivers leading to a return to growth like-for-like, with flexibility and rigorous cost control allowing for an improvement in profitability,” said Agon.

“Over the year as a whole, and in spite of the crisis, L’Oréal maintained an operating margin of 18.6%, and generated strong operating cash flow.”

From October to December, L’Oréal sales reached €7.88bn, a flat performance on its results in 2019, but a rise of almost 5% like-for-like.

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L’Oréal’s Luxe category was its most disappointing, with at-year-end sales down around 14% in what was described as “an extremely difficult context” due to the reduction in air travel and closure of many points of sale.