LOREAL_Registration_Document_2017

1 Presentation of the Group Integrated report AN ORGANISATION THAT SERVES THE GROUP’S DEVELOPMENT

AN ORGANISATION THAT SERVES THE GROUP’S 1.4. DEVELOPMENT

The Group’s organisation responds to a dual challenge: pursuing the strategy which has enabled L’Oréal to be successful over the last century and at the same time inventing the new L’Oréal of the 21 st century, perfectly matched to an ever-changing world.

L’ORÉAL S.A. 1.4.1. L’Oréal S.A. is a French company, with its head office in France. It performs a sales activity that is specific to France. L’Oréal parent company also functions as a holding company and has a role of strategic coordination as well as scientific, industrial and marketing coordination for the L’Oréal Group on a global basis. The Group’s subsidiaries develop the Group’s business in their respective territory. To do so, they define the strategy specific to their market, make the most suitable choices, and manufacture, directly or indirectly, and market the products they decide to sell on their market. Almost all of the subsidiaries are owned by L’Oréal S.A, which has a holding or control percentage equal or close to 100% (1) . The detailed list of these subsidiaries is set out in the notes to the consolidated and parent company financial statements. OPERATIONAL DIVISIONS 1.4.2. The Group's business activities are organised into four Operational Divisions. In its markets, each Operational Division develops and enhances a range of its own brand of consumer products. The Consumer Products Division's goal is to democratise s access to the best that the world of beauty has to offer. Growth in this Division is underpinned by four major global brands (L’Oréal Paris, Garnier, Maybelline New York and NYX Professional Makeup Professional Makeup), and by the deployment of its specialised and regional brands (Essie, Niely, Dark and Lovely, etc.). Across all Divisions and markets, digital resources are not only an opportunity to leverage the enormous growth acceleration potential inherent in e-commerce, but also a chance to optimise the Division's marketing models. L’Oréal Luxe creates exceptional experiences and products, s for the most demanding consumers in selective distribution. The Division has built a unique portfolio of prestigious brands including iconic mainstream, aspirational, alternative and specialist brands (Lancôme, Yves Saint Laurent Beauté, Giorgio Armani Beauty, Kiehl’s, Urban Decay, Biotherm, Ralph Lauren, IT Cosmetics).

Locally, digital resources mean we can offer L’Oréal Luxe customers an exceptional experience with inspiring content, the opportunity to establish a personalised, value-added relationship and an e-commerce strategy that encapsulates each brand's particular added value. The Professional Products Division provides expertise to s beauty professionals For over 100 years, this Division has acquired extensive knowledge of, and provided tailored support solutions for, the hairdressing sector. It has built up a unique brand portfolio which currently includes L'Oréal Professionnel, Kérastase, Redken, Matrix, BIolage, Pureology, Decléor and Carita. Digital resources are a powerful lever to reinvent the professional beauty world and help transform the industry by creating a direct and inspiring link between brands, professionals and their customers in each market. The Active Cosmetics Division's goal is to help everyone in s their quest to have healthy and beautiful skin. Its portfolio of highly complementary brands (Vichy, La Roche-Posay, SkinCeuticals, and Roger&Gallet) is designed to keep pace with major skincare trends and recommendations of healthcare professionals. The recent acquisition of the US brand CeraVe has recently added to this portfolio. In its markets, the Division is developing or reinventing dermocosmetics in all distribution channels, including pharmacies, drugstores, branded retail, and e-commerce sites. It is launching new products and services on the recommendation and advice of health and beauty opinion leaders and influencers, in retail outlets and on digital platforms. Travel Retail is a fast-growing channel that conveys the Company's image and is increasing in line with passenger numbers. By establishing the multi-Division Travel Retail department, the Group aims to develop this segment implementing a global shopper strategy: a bespoke approach tailored according to language, culture and beauty rituals, enabling the Group to respond to the aspirations of this new generation of travellers.

Furthermore, it is mentioned, pursuant to Article L. 232-1 of the French Commercial Code, that L’Oréal S.A. has branches. (1)

REGISTRATION DOCUMENT / L'ORÉAL 2017

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