| Contents | 2 |
| 1. Presentation of the Group Integrated report | 7 |
| 1.1. THE L’ORÉAL GROUP: FUNDAMENTALS | 8 |
| 1.1.1. A CLEAR MISSION AND STRATEGY, SUPPORTED BY STABLE GOVERNANCE | 8 |
| 1.2 BUSINESS MODEL - A DEVELOPMENT MODEL SERVING A CLEAR MISSION: BEAUTY FOR ALL | 12 |
| 1.2.1 L’ORÉAL GROUP PROFILE | 12 |
| 1.2.2. KEY FIGURES | 14 |
| 1.2.3. AN AMBITION: UNIVERSALISATION, TO MEET GLOBAL DEMAND FOR BEAUTY | 16 |
| 1.2.4. AN INTERNATIONAL PRESENCE | 16 |
| 1.2.5. THE BEAUTY MARKET, HUGE DEVELOPMENT POTENTIAL | 19 |
| 1.2.6. A PORTFOLIO OF DIVERSE AND COMPLEMENTARY BRANDS | 21 |
| 1.2.7. OPEN AND SUSTAINABLE RESEARCH & INNOVATION | 21 |
| 1.2.8. OPERATIONS, EXPERTISE AND SERVICES CLOSE TO CONSUMERS | 24 |
| 1.3. GOOD GROWTH MOMENTUM FOR SHARED, LASTING DEVELOPMENT | 29 |
| 1.3.1. 2018 RESULTS | 29 |
| 1.3.2. CORPORATE SOCIAL RESPONSIBILITY (CSR): SHARED, LASTING GROWTH | 40 |
| 1.4. AN ORGANISATION THAT SERVES THE GROUP’S DEVELOPMENT | 46 |
| 1.4.1. L’ORÉAL S.A. | 46 |
| 1.4.2. OPERATIONAL DIVISIONS | 46 |
| 1.4.3. GEOGRAPHIC ZONE | 46 |
| 1.4.4. SUPPORT DEPARTMENTS | 46 |
| 1.5. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM | 47 |
| 2. Corporate Governance | 49 |
| 2.1. FRAMEWORK FOR THE IMPLEMENTATION OF CORPORATE GOVERNANCE PRINCIPLES | 50 |
| 2.1.1. AFEP-MEDEF CODE: THE REFERENCE CODE | 50 |
| 2.1.2. THE BALANCE OF POWERS ON THE BOARD | 51 |
| 2.2. COMPOSITION OF THE BOARD OF DIRECTORS | 53 |
| 2.2.1 THE GUIDING PRINCIPLES | 54 |
| 2.2.2 LIST OF CORPORATE OFFICES AND DIRECTORSHIPS OF THE DIRECTORS EXERCISED AT 31 DECEMBER 2018 | 59 |
| 2.2.3. CHANGES IN CORPORATE OFFICES AND DIRECTORSHIPS OF THE DIRECTORS | 71 |
| 2.3. ORGANISATION AND MODUS OPERANDI OF THE BOARD OF DIRECTORS | 72 |
| 2.3.1. GENERAL INFORMATION ON THE MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES IN 2018 | 72 |
| 2.3.2. THE ACTIVITIES OF THE BOARD OF DIRECTORS | 73 |
| 2.3.4. SELF-EVALUATION BY THE BOARD OF DIRECTORS | 79 |
| 2.3.5 APPENDIX: COMPLETE TEXT OF THE INTERNAL RULES OF THE BOARD OF DIRECTORS | 80 |
| 2.4. REMUNERATION OF THE MEMBERS OF THE BOARD OF DIRECTORS | 90 |
| 2.4.1. RULES FOR ALLOCATION IN RESPECT OF THE 2018 FINANCIAL YEAR | 90 |
| 2.4.2. AMOUNTS PAID IN RESPECT OF THE 2018 FINANCIAL YEAR | 90 |
| 2.4.3. RULES FOR ALLOCATION IN RESPECT OF THE 2019 FINANCIAL YEAR | 91 |
| 2.5. REMUNERATION OF THE EXECUTIVE OFFICERS | 92 |
| 2.5.1. REPORT ON THE PRINCIPLES AND CRITERIA FOR THE DETERMINATION, ALLOCATION AND DISTRIBUTION OF THE REMUNERATION APPLICABLE TO THE EXECUTIVE OFFICERS, IN RESPECT OF THEIR OFFICE, AS PROVIDED FOR BY ARTICLE L. 225-37-2 OF THE FRENCH COMMERCIAL CODE | 92 |
| 2.5.2. TERMINATION INDEMNITIES AND PENSION SCHEME | 98 |
| 2.5.3. PROCEDURE FOR SETTING THE REMUNERATION OF THE EXECUTIVE OFFICER | 101 |
| 2.5.4. REMUNERATION OF THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER DUE OR ALLOCATED WITH RESPECT TO 2018 | 104 |
| 2.6. SUMMARY TABLE OF THE RECOMMENDATIONS OF THE AFEP-MEDEF CODE WHICH HAVE NOT BEEN APPLIED | 110 |
| 2.7. SUMMARY STATEMENT OF TRADING BY THE CORPORATE OFFICERS IN L’ORÉAL SHARES IN 2018 | 111 |
| 2.8. RISK FACTORS AND CONTROL ENVIRONMENT | 111 |
| 2.8.1. DEFINITION AND OBJECTIVES OF INTERNAL CONTROL | 111 |
| 2.8.2. COMPONENTS OF THE INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM | 112 |
| 2.8.3. SYSTEM RELATING TO THE PREPARATION AND PROCESSING OF FINANCIAL AND ACCOUNTING INFORMATION | 117 |
| 2.8.4. VIGILANCE PLAN | 119 |
| 2.8.5. RISK FACTORS AND RISK MANAGEMENT | 128 |
| 2.9. STATUTORY AUDITORS’ REPORT | 143 |
| 3. L’Oréal’s corporate social, environmental and societal responsibility | 145 |
| 3.1. INTRODUCTION | 146 |
| 3.1.1. A GROUP WITH A LONGSTANDING COMMITMENT | 148 |
| 3.1.2. CONSTANT DIALOGUE WITH STAKEHOLDERS | 149 |
| 3.2. MAIN NON-FINANCIAL RISKS | 152 |
| 3.2.1. RISK IDENTIFICATION PROCESS | 152 |
| 3.2.2. MAIN RISKS IN RESPECT OF SOCIAL AND ENVIRONMENTAL RESPONSIBILITY, HUMAN RIGHTS AND CORRUPTION | 152 |
| 3.3. POLICIES, PERFOR MANCE INDICATORS AND RESULTS | 155 |
| 3.3.1. ENVIRONMENTAL POLICY | 155 |
| 3.3.2. HUMAN RESSOURCES POLICY | 190 |
| 3.3.3. HUMAN RIGHTS POLICY | 210 |
| 3.3.4. POLICY TO PREVENT CORRUPTION | 219 |
| 3.4. SHARING BEAUTY WITH ALL: 2018 RESULTS | 221 |
| 3.5. METHODOLOGICAL NOTES | 223 |
| 3.5.1. SOCIAL DATA | 223 |
| 3.5.2. HEALTH AND SAFETY DATA | 223 |
| 3.5.3. ENVIRONMENTAL DATA | 224 |
| 3.5.4. HUMAN RIGHTS DATA | 225 |
| 3.5.5. INNOVATING SUSTAINABLY DATA | 225 |
| 3.6. CROSS-REFERENCE TABLES | 227 |
| 3.6.1. TABLE OF CONCORDANCE IN RESPECT OF SOCIAL, ENVIRONMENTAL AND SOCIETAL MATTERS | 227 |
| 3.6.2. GRI STANDARDS CONTENT INDEX | 229 |
| 3.7. STATUTORY AUDITORS’ REPORTS | 233 |
| 3.7.1 REPORT BY ONE OF THE STATUTORY AUDITORS, APPOINTED AS AN INDEPENDENT THIRD PARTY, ON THE CONSOLIDATED NON-FINANCIAL INFORMATION STATEMENT INCLUDED IN THE GROUP MANAGEMENT REPORT | 233 |
| 3.7.2. REASONABLE ASSURANCE REPORT OF THE STATUTORY AUDITORS ON A SELECTION OF CONSOLIDATED NON-FINANCIAL INFORMATION PUBLISHED IN THE GROUP MANAGEMENT REPORT | 235 |
| 4. 2018 Consolidated Financial Statements | 237 |
| 4.1. COMPARED CONSOLIDATED INCOME STATEMENTS | 239 |
| 4.2. CONSOLIDATED STATEMENT OF COMPREHENSIVE | 240 |
| 4.3. BILANS CONSOLIDÉS COMPARÉS | 241 |
| 4.4. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | 242 |
| 4.5. COMPARED CONSOLIDATED STATEMENTS OF CASH FLOWS | 244 |
| 4.6. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 245 |
| NOTE 2. Accounting principles | 245 |
| NOTE 2. Main events of the period | 247 |
| NOTE 3. Operating items – Segment information | 250 |
| NOTE 4. Other operational income and expenses | 258 |
| NOTE 5. Number of employees, personnel costs and employee benefits | 259 |
| NOTE 6. Income tax | 267 |
| NOTE 7. Intangible assets | 269 |
| NOTE 8. Investments in associates | 278 |
| NOTE 9. Financial assets and liabilities – Cost of debt | 279 |
| NOTE 10. Derivatives and exposure to market risks | 283 |
| NOTE 11. Equity – Earnings per share | 288 |
| NOTE 12. Provisions for liabilities and charges – Contingent liabilities and material ongoing disputes | 293 |
| NOTE 13. Off-balance sheet commitments | 296 |
| NOTE 14. Transactions with related parties | 297 |
| NOTE 15. Fees accruing to auditors and members of their networks payable by the Group | 298 |
| NOTE 16. Subsequent events | 298 |
| 4.7. CONSOLIDATED COMPANIES AT 31 DECEMBER 2018 | 299 |
| 4.7.1. FULLY CONSOLIDATED COMPANIES | 299 |
| 4.7.2. EQUITY-ACCOUNTED COMPANIES | 302 |
| 4.8. STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS | 302 |
| 5. Parent company financial statements | 307 |
| 5.1. COMPARED INCOME STATEMENTS | 308 |
| 5.2. COMPARED BALANCE SHEETS | 309 |
| 5.3. CHANGES IN SHAREHOLDERS' EQUITY | 310 |
| 5.4. STATEMENTS OF CASH FLOWS | 311 |
| 5.5. NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS | 312 |
| NOTE 1. Accounting principles | 313 |
| NOTE 2. Sales | 316 |
| NOTE 3. Other revenue | 316 |
| NOTE 4. Average headcount | 316 |
| NOTE 5. Depreciation, amortisation and charges to provisions | 317 |
| NOTE 6. Net financial income | 317 |
| NOTE 7. Exceptional items | 317 |
| NOTE 8. Income tax | 318 |
| NOTE 9. Increases or reductions in future tax liabilities | 318 |
| NOTE 10. Research costs | 318 |
| NOTE 11. Intangible assets | 319 |
| NOTE 12. Tangible assets | 319 |
| NOTE 13. Non-current assets held under finance leases | 320 |
| NOTE 14. Financial assets | 320 |
| NOTE 15. Marketable securities | 321 |
| NOTE 16. Maturity of receivables | 321 |
| NOTE 17. Stock purchase or subscription options – Free shares | 322 |
| NOTE 18. Provisions for liabilities and charges | 323 |
| NOTE 19. Borrowings and debt | 324 |
| NOTE 20. Maturity of payables | 325 |
| NOTE 21. Unrealised exchange gains and losses | 325 |
| NOTE 22. Derivative financial instruments | 326 |
| NOTE 23. Transactions and balances with related entities and parties | 327 |
| NOTE 24. Off-balance sheet commitments | 327 |
| NOTE 25. Changes in working capital | 328 |
| NOTE 26. Changes in other financial assets | 328 |
| NOTE 27. Cash and cash equivalents at the end of the year | 328 |
| NOTE 28. Disclosures | 328 |
| NOTE 29. Subsequent events | 328 |
| NOTE 30. Table of subsidiaries and holdings | 329 |
| 5.6. OTHER INFORMATION RELATING TO THE FINANCIAL STATEMENTS OF L’ORÉAL PARENT COMPANY | 332 |
| 5.6.1. EXPENSES AND CHARGES FALLING UNDER ARTICLE 223 QUATER OF THE FRENCH TAX CODE | 332 |
| 5.6.2. INVOICES ISSUED AND RECEIVED NOT PAID AT THE END OF THE FINANCIAL YEAR AND IN ARREARS | 333 |
| 5.6.3. NET SALES (EXCLUDING TAXES) | 334 |
| 5.7. FIVE-YEAR FINANCIAL SUMMARY | 334 |
| 5.8. INVESTMENTS (MAIN CHANGES INCLUDING SHAREHOLDING THRESHOLD CHANGES) | 335 |
| 5.9. STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS | 335 |
| 6. Stock Market Information Share capital | 341 |
| 6.1. INFORMATION RELATING TO THE COMPANY | 342 |
| 6.1.1. LEGAL FORM | 342 |
| 6.1.2. LAW GOVERNING THE ISSUER | 342 |
| 6.1.3. BUSINESS ACTIVITY | 342 |
| 6.1.4. DATE OF INCORPORATION AND TERM OF THE COMPANY (ARTICLE 5 OF THE ARTICLES OF ASSOCIATION) | 342 |
| 6.1.5. PURPOSE OF THE COMPANY (EXTRACTS FROM ARTICLE 2 OF THE ARTICLES OF ASSOCIATION) | 342 |
| 6.1.6. COMPANY REGISTRATION NUMBER | 342 |
| 6.1.7. CONSULTATION OF DOCUMENTS RELATING TO THE COMPANY | 343 |
| 6.1.8. GENERAL MANAGEMENT (ARTICLE 11 OF THE ARTICLES OF ASSOCIATION) | 343 |
| 6.1.9. FINANCIAL YEAR (ARTICLE 14 OF THE ARTICLES OF ASSOCIATION) | 343 |
| 6.1.10. STATUTORY DISTRIBUTION OF PROFITS (ARTICLE 15 OF THE ARTICLES OF ASSOCIATION) | 343 |
| 6.1.11. ANNUAL GENERAL MEETING | 344 |
| 6.1.12. STATUTORY SHARE OWNERSHIP THRESHOLD (EXTRACTS FROM ARTICLE 7 OF THE ARTICLES OF ASSOCIATION) | 344 |
| 6.2. INFORMATION CONCERNING THE SHARE CAPITAL | 344 |
| 6.2.1. STATUTORY REQUIREMENTS GOVERNING CHANGES IN THE SHARE CAPITAL AND SHAREHOLDERS’ RIGHTS | 344 |
| 6.2.2. ISSUED SHARE CAPITAL AND AUTHORISED UNISSUED SHARE CAPITAL | 344 |
| 6.2.3. CHANGES IN THE SHARE CAPITAL OVER THE LAST FIVE YEARS | 346 |
| 6.3. SHAREHOLDER STRUCTURE | 347 |
| 6.3.1. LEGAL ENTITIES OR INDIVIDUALS ACTING IN CONCERT OVER THE COMPANY TO THE COMPANY’S KNOWLEDGE | 347 |
| 6.3.2. CHANGES IN ALLOCATION OF THE SHARE CAPITAL AND VOTING RIGHTS OVER THE LAST THREE YEARS | 347 |
| 6.3.3. EMPLOYEE SHARE OWNERSHIP | 348 |
| 6.3.4. DISCLOSURES TO THE COMPANY OF LEGAL THRESHOLDS CROSSED DURING THE FINANCIAL YEAR | 348 |
| 6.3.5. SHAREHOLDERS’ AGREEMENTS RELATING TO SHARES IN THE COMPANY’S SHARE CAPITAL | 348 |
| 6.3.6. BUYBACK BY THE COMPANY OF ITS OWN SHARES | 349 |
| 6.4. LONG-TERM INCENTIVE PLANS | 350 |
| 6.4.1. PRESENTATION OF THE STOCK OPTION PLANS FOR THE PURCHASE OR SUBSCRIPTION OF SHARES AND PLANS FOR THE CONDITIONAL GRANTS OF SHARES TO EMPLOYEES (ACAS) | 350 |
| 6.4.2. STOCK OPTION PLANS FOR THE SUBSCRIPTION AND PURCHASE OF L’ORÉAL PARENT COMPANY SHARES | 351 |
| 6.4.3. PLANS FOR THE CONDITIONAL GRANTS OF SHARES (ACAS) | 352 |
| 6.5. THE L’ORÉAL SHARE/L’ORÉAL SHARE MARKET | 355 |
| 6.5.1. L’ORÉAL SHARE | 355 |
| 6.5.2. L'ORÉAL SHARE MARKET | 356 |
| 6.6. INFORMATION POLICY | 361 |
| 6.6.1. COMPLEMENTARY COMMUNICATIONS MEDIA | 361 |
| 6.6.2. A LARGE NUMBER OF SHAREHOLDER EVENTS FOR A REGULAR AND DETAILED DIALOGUE | 361 |
| 6.6.3. FINANCIAL CALENDAR FOR 2019 | 362 |
| 6.6.4. FINANCIAL NEW RELEASES IN 2018 | 362 |
| 7. Annual General Meeting | 363 |
| 7.1. DRAFT RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS EXPLANATORY STATEMENT) TO THE ORDINARY AND EXTRAORDINARY GENERAL MEETING TO BE HELD ON 18 APRIL 2019 (ADOPTED ON 7 FEBRUARY 2019) | 364 |
| 7.1.1. ORDINARY PART | 365 |
| 7.1.2. EXTRAORDINARY PART | 373 |
| 7.2. STATUTORY AUDITORS' REPORTS | 379 |
| 7.2.1. STATUTORY AUDITORS’ REPORT ON THE ISSUE OF SHARES AND SECURITIES GIVING ACCESS TO THE COMPANY’S SHARE CAPITAL RESERVED FOR MEMBERS OF AN EMPLOYEE SAVINGS SCHEME | 379 |
| 7.2.2. STATUTORY AUDITORS’ REPORT ON THE ISSUE OF SHARES AND SECURITIES GIVING ACCESS TO THE COMPANY’S SHARE CAPITAL RESERVED FOR CATEGORIES OF BENEFICIARIES CONSISTING OF EMPLOYEES OF FOREIGN SUBSIDIARIES WITHIN THE SCOPE OF AN EMPLOYEE SHARE OWNERSHIP PROGRAM | 380 |
| Appendices | 381 |
| 8.1. STATUTORY AUDITORS | 382 |
| 8.1.1. STATUTORY AUDITORS | 382 |
| 8.1.2. FEES ACCRUING TO AUDITORS AND MEMBERS OF THEIR NETWORKS PAYABLE BY THE GROUP | 382 |
| 8.2. HISTORICAL FINANCIAL INFORMATION INCLUDED BY REFERENCE | 382 |
| 8.3. PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND THE ANNUAL FINANCIAL REPORT | 383 |
| 8.4. DECLARATION BY THE PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND THE ANNUAL FINANCIAL REPORT | 383 |
| 8.5. CROSS-REFERENCE TABLE WITH THE REGISTRATION DOCUMENT | 384 |
| 8.6. ANNUAL FINANCIAL REPORT CROSS-REFERENCE TABLE | 386 |
| 8.7. CROSS-REFERENCE TABLE WITH THE AMF TABLES ON THE REMUNERATION OF CORPORATE OFFICERS | 386 |
| 8.8. MANAGEMENT REPORT CROSS-REFERENCE TABLE | 387 |