L’Oréal CEO says Q3 slowdown in Asia is 'temporary'

By Michelle Yeomans contact

- Last updated on GMT

L’Oréal CEO says Q3 slowdown in Asia is 'temporary'

Related tags: Middle east

According to L’Oréal CEO Jean-Paul Agon; 'despite a global context that is still volatile’ the company remains confident in its third quarter results despite them revealing a slowdown for L’Oréal Luxe in Asia.

The L’Oréal chairman has stated that despite a market that slowed in the third quarter in Asia and in Travel Retail, L’Oréal Luxe has "strengthened its worldwide position with significant gains in Western Europe, in Asia, Pacific, in the Middle East and in Latin America."

His statement accompanies the release of the firm's nine-months sales results which reveal a temporary third quarter slowdown for L’Oréal Luxe in Asia; strong e-commerce sales (projected at +€1bn in 2015);​ a slowdown in travel retail; and ‘significant’ sales and profit growth.

According to Agon, despite these results, the 'Consumer Products Division' is performing well in India, Australia and Thailand. In China, growth at L’Oréal Paris is reportedly accelerating, while Magic is undergoing a transitional period.

Market 'turbulence' in Asia

The active cosmetics division is also said to be 'growing strongly', thanks to the success of La Roche-Posay.

Kiehl’s, Yves Saint Laurent and Giorgio Armani are contributing to the dynamism of L’Oréal Luxe, in a context of slower third-quarter growth in Hong Kong and Travel Retail Asia.

Roche-Posay is renewing its expert franchise for oily skin with the launch of Effaclar K(+). The company adds that the brand is continuing to post double-digit growth in all geographic Zones, with ‘outstanding performances’ in France, Brazil and China. The successful international roll-out of SkinCeuticals is continuing.

L’Oréal Luxe experienced a temporary slowdown as a result of market turbulence over the summer in Asia, in Hong Kong and in Travel Retail. By geographic zone, North America’s growth is gradually increasing and Western Europe confirms its positive trend. In the third quarter, the New Markets have been hampered by the difficult Brazilian market, market turbulence in Asia and the taking over of agents’ contracts in the Middle East. In China, sales growth is in line with earlier quarters​," says Agon. 

Finally, the chairman said that currency fluctuations actually had a positive impact of +8.3% and if September-end exchange rates (€1 at $1.12) are extrapolated up to December 31, then the impact of currency fluctuations would be +6.7% for the whole of 2015.

Related topics: Business & Financial

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