Unpredictable Euro confuses company results

Both L'Oréal and Clarins have been affected by exchange rate factors llinked to the performance of the euro. Clarins has seen first half 2008
 results sharply affected by currency trends as well as by the expiry of a 
perfumes licence while L'Oréal has noted that its positive double-digit
 earnings-per-share growth forecast for the full year assumes stable exchange 
rates. Yves Marcais, a share dealer with Global Equities in Paris, says 
that if exchange rate trends are taken into account, there is a slowdown.


L'Oréal's share price dipped 3.7% to €67.20 as investors reacted to the 
group's forecasts while the market as a whole went down only 0.33%. The
 company reported 6.6% growth in first half net profits as well as an
improvement in profitability. Analysts for one securities group said
 L'Oréal's targets were in line with market expectations and appeared achievable. However, Jean-Paul Agon, the group's director general, made it clear that the decision to base the 2008 growth forecast on stable exchange
rates had been made because it was completely impossible to forecast the future trend of the euro. 


Clarins meanwhile reported sales down 1.8% in the first six months at
 €485.7m with operating earnings down 32% to €27.8m. Net group
 profits dropped 34.6% to €24m. Discounting exchange rate factors, 
Clarins' sales actually expanded by 4.1%, helped by results in the
 beauty care products segment. The group has said its poor performance is
 due mainly to the costs of promotion, the relative weakness of the perfumes
 business, the creation of a new group structure and the ending of the Stella
 Cadente perfumes licence.

Clarins has maintained its forecasts for the full year with sales up 4%
 on the basis of stable euro and dollar rates, though the sluggishness of the
 cosmetics market and the global economic slowdown has continued to affect
 performance.