French cosmetics giant L’Oréal said on Thursday, February 6, its profits rose last year despite the declining Chinese market and it made bullish statements about its hopes for 2025.
The company posted a net profit of 6.4 billion euros (USD 6.6 billion) for 2024, up 3.6 percent from 2023. Annual turnover increased 5.6 percent to total 43.48 billion euros.
Director general Nicolas Hieronimus told AFP the company was “overall very satisfied” with a record operating margin of 20 percent given the context of weak Asian demand.
China remains at a standstill
Hieronimus said the group was looking to a “phase of conquests” this year as it targeted progress in emerging countries — though “we are also going to invest a lot in the American consumer,” as well as increased market share in products for both men and the over 60s.
Given that Chinese demand had failed to rebound last year as hoped Hieronimus said the group had nonetheless performed well, enjoying good years in Europe and the United States.
Furthermore, Nicolas Hieronimus emphasized the rapid growth of sales in emerging countries, with these markets now accounting for nearly 17% of the group’s revenue — surpassing China.
Sales in North Asia fell by 3.4 percent year-on-year to 10.3 billion euros, but Europe saw an increase of 9.3 percent to 14.2 billion euros with North American sales up 5.9 percent to 11.8 billion euros.
Luxury brands including Lancôme, Yves Saint Laurent, Giorgio Armani saw increases of 4.5 percent to 15.59 billion euros, driven by North American demand.
Conquest phase
Regarding the year 2025, L’Oréal is “obviously considering it with caution, because there are still a lot of uncertainties. Every day new information comes in that forces us to redo scenarios,” said the CEO.
He estimates that in 2025, “the beauty market is expected to grow between 4% and 4.5% globally.” However, he adds, “We remain cautious, particularly at the start of the year, due to many uncertainties, including customs taxes and the economic situation in Europe and France.”
That being said, “we are in a conquest phase,” explained Nicolas Hieronimus. “Geographic” conquests first. L’Oréal “is banking heavily on emerging countries” but will also “invest heavily in the American consumer.”
However, the Chinese market will continue to receive proper attention from the group. “China is in a period of transition with a government that must find new ways to create the confidence of Chinese consumers,” emphasizes Hieronimus. “It is a market in which we believe. In which we have invested and created. This year we inaugurated an automated logistics center, which has an incredible capacity,” he emphasized.
