What Are L’Oreal’s Key Sources Of Revenue?

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L'Oreal
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L’Oreal’s (OTCMKTS: LRLCY) revenue has gradually increased over the years, primarily driven by strong performance in the Active cosmetic division and L’Oreal Luxe segments. L’Oreal recently reported better-than-expected growth in sales for H1 2018, growing by a 6.6% rise to $13.39 Billion euros.

L’Oreal’s premium ‘Luxe’ brands, as expected, earned the company higher profit margins. L’Oreal’s Luxe Segment delivered a strong 13.5% growth in H1 2018 with its revenue reporting at $4.3 Bn , driven by makeup and facial skincare sales in the Asia-Pacific region, especially China and Hong Kong, and by Travel Retail. L’Oréal Luxe has made a solid start to the year in Western Europe, particularly in Spain. The division is continuing to perform well in e-commerce and is outpacing growth in the mass beauty segment.

L’Oreal’s Active Cosmetics revenues rose to $1.2 Bn (+ 11.4% y-o-y) in H1 2018, primarily with La Roche-Posay (launching Hyalu B5), Vichy, CeraVe, and Skinceuticals reporting as the best selling brands. L’Oreal is one of the leading names in the active cosmetics market. In an effort to further grow this segment, L’Oreal’s newly acquired skincare brands, CeraVe, AcneFree, and Ambi have been performing well, too. L’Oreal has the leading market position in Asia and North America, the fastest growing geographies for active cosmetics. This segment had also achieved more than 2 billion euros of sales for the first time in the annual 2017 earnings.

For the H2 2018, L’Oreal’s growth drivers and aggressive growth strategies will help it in maintaining its dominance in the beauty market. Its strategic acquisition skills, its digital initiatives (where it is the industry leader), and the Asia Pacific market, especially China’s healthy demand for its beauty products, will help it grow stronger in the coming years.

We have created an interactive dashboard What Are L’Oreal’s Key Sources of Revenues that shows L’Oreal’s key revenue sources and the expected  performance in 2018. You can adjust the revenues to see the impact on earnings.

 

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