LOREAL_Registration_Document_2017

1 Presentation of the Group Integrated report THE L’ORÉAL GROUP: FUNDAMENTALS

THE L’ORÉAL GROUP: FUNDAMENTALS 1.1.

A CLEAR MISSION AND STRATEGY, 1.1.1. SUPPORTED BY STABLE GOVERNANCE For over 100 years, L’Oréal has devoted itself to one business : beauty, in which it is the world’s leading company. It is the Group’s raison d’être, because, far from being futile and superficial, cosmetics are full of meaning. They give everyone self-confidence, enable them to blossom and open up to others and contribute to individual and collective well-being. Boasting an international portfolio of 34 diverse and complementary brands, the Group responds to all beauty aspirations worldwide. Present in all distribution channels, L’Oréal generated sales of €26.02 billion in 2017 thanks to its 82,606 employees across the globe. The Group’s governance, the guarantee of stability in a changing world, makes it possible to work towards long-term objectives and to ensure regular growth.

A balanced and committed Board of Directors, which plays its role of reflection and strategic impetus to the full The Board of Directors determines L’Oréal’s strategic orientations and ensures their implementation. It oversees the management of both the financial and extra-financial aspects, and ensures the quality of the information provided to the shareholders and to the market. The structure of L’Oréal’s Board makes it possible to take into account the specificities of its shareholding structure while guaranteeing the interests of all its stakeholders. At 31 December 2017, there were 15 Board members : the Chairman and Chief Executive Officer, Mr Jean-Paul Agon, 5 Directors from the Group’s principal shareholders (the Bettencourt Meyers family with Mrs Françoise Bettencourt Meyers, Mr Jean-Pierre Meyers and Mr Jean-Victor Meyers, and Nestlé with Mr Paul Bulcke and Mrs Béatrice Guillaume-Grabisch), 7 independent Directors (Mrs Sophie Bellon, Mrs Belén Garijo, Mrs Virginie Morgon, Mrs Eileen Naughton, Mr Charles-Henri Filippi, Mr Xavier Fontanet and Mr Bernard Kasriel), and 2 Directors representing the employees (Mrs Ana Sofia Amaral and Mr Georges Liarokapis). All of them make sure that the Board’s work is carried out on a collective basis with the common objective of ensuring the Group’s long-term development. The Board takes steps to ensure that the Directors are from different backgrounds, and most of them have international experience acquired in groups with a global dimension, and complementary skills : industrial, financial, digital and above all entrepreneurial competencies. The diversity of skills and expertise on the Board enables it to understand rapidly and in detail the development issues facing L’Oréal, the leader on a highly competitive globalised cosmetics market, in a fast-changing world. L’Oréal is attentive to compliance with the principle of balanced gender representation on the Board : 46% of its members are women (excluding Directors representing employees), and 2 committees out of 4 are chaired by women, the Audit Committee and the Appointments and Governance Committee. Ethics, at the heart of Group governance and commitments L’Oréal has built up its business on the basis of strong Ethical Principles that guide its development and contribute to establishing its reputation : Integrity, Respect, Courage and Transparency. L’Oréal’s commitment to acting ethically and responsibly is summarised in a document called “The L’Oréal Spirit” accessible to everyone. These principles underpin the Group's culture and business model. They inform our compliance, responsible innovation, environment, corporate social responsibility and philanthropy policies. The L’Oréal code of Ethics is available in 45 languages and in Braille (in English and French). It is given to all employees around the world. Country Managers (or for Corporate or Zone staff, the members of the Group’s Executive Committee to whom they report) are responsible for ensuring compliance with the code.

Loyal shareholders, stable capital structure

THE SHAREHOLDERS AT 31 DECEMBER 2017

French institutional investors Individual shareholders Treasury stock Mrs Françoise Bettencourt Meyers and her family (1) Nestlé S.A. International institutional investors

33.13%

23.17% 29.28%

8.24%

4.74%

0.14% 1.30%

Employees (2)

Consisting of Mrs Françoise Bettencourt Meyers, Mr Jean-Pierre (1) Meyers, Mr Jean-Victor Meyers and Mr Nicolas Meyers, succeeding Mrs Liliane Bettencourt, and Téthys SAS. Concerns the employees and former employees of L’Oréal. Pursuant (2) to law No. 2015-990 of 6 August 2015 the percentage also includes, in 2017, bonus shares granted in accordance with Article L. 225-197-1 of the French Commercial Code. Of which 0.77% in the L’Oréal employee savings plan (PEE) as defined by Article L. 225-102 of the French Commercial Code.

REGISTRATION DOCUMENT / L'ORÉAL 2017

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