L'Oréal - 2018 Registration Document

Parent company financial statements NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS

For French employees, free shares were offered upon subscription having regard to their personal contribution to the plan with a maximum of 4 shares offered for 10 shares subscribed. For employees in other countries, shares were offered under a free share plan with a condition of the continued employment of the employee and having regard to the personal

contribution to the plan with a maximum of 4 shares offered for 10 shares subscribed. The shares will be allocated to employees on 25 July 2023 provided they are still with the Group on that date. The capital was increased on 24 July 2018 by 455,613 shares and on 15 November 2018 by 6,524 shares.

Provisions for liabilities and charges NOTE 18

€ millions

Reversals (used)

Reversals (not used)

Charges

Other 31.12.2018

31.12.2016

31.12.2017

Provisions for litigation (1)

195.4

195.3

1.8

-1.3

-0.6

-

195.2

Provisions for foreign exchange losses

8.2

31.4

44.9 53.6 91.6

-31.4 -41.7 -23.5 -97.9

-

-

44.9 98.4

Provisions for expenses

107.3

124.6 115.0 466.3

-38.2

0.1 0.6 0.7

Other provisions for liabilities (2)

90.7

-6.2

177.5

TOTAL 516.0 L’Oréal SA was ordered to pay a fine of €189.5 million following the decision handed down in first instance by the French competition authority on 18 December 2014. (1) L’Oréal appealed against this decision. On 27 October 2016, the Paris Court of Appeal upheld the first instance decision. L’Oréal has lodged an appeal in cassation. The Court of Cassation is expected to hand down its decision in first half 2019. It should be noted that since the appeal did not entail a stay in the judgement, the fine provisioned at the end of 2014 was paid on 28 April 2015. The provision was maintained in liabilities and the payment recognised in “Other current assets” (see note 16). This section mainly includes provisions set aside to cover risks related to government bodies, commercial and financial risks, and personnel-related costs. (2) 401.6 191.9 -45.0

5

The changes in provisions for liabilities and charges impact the 2018 income statement as follow:

Reversals (used)

Reversals (not used)

Charges

€ millions

Operating profit

64.8 47.0 80.1

-45.1 -46.7

-5.0

Net financial income Exceptional items

-35.3

-6.1

-4.7

TOTAL

191.9

-97.9

-45.0

REGISTRATION DOCUMENT / L'ORÉAL 2018

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