L'Oreal posts 21st year of annual profit increases

16th February 2006, Comments 0 comments

PARIS, Feb 16, 2006 (AFP) - French cosmetics group L'Oréal, a world-leading maker of skincare, make-up and hair products, reported on Thursday a sharp rise in underlying net profit in 2005 owing to expansion in emerging markets and North America.

PARIS, Feb 16, 2006 (AFP) - French cosmetics group L'Oréal, a world-leading maker of skincare, make-up and hair products, reported on Thursday a sharp rise in underlying net profit in 2005 owing to expansion in emerging markets and North America.

The group said that the results marked 21 years of annual profit increases of 10 percent or more, saying net profit had risen by 37 percent on a comparable basis to EUR 1.972 billion and signalled that it was looking for acquisitions.

"Growth in sales combined with strict cost control has enabled us once again to improve profitability and achieve double-digit earnings growth," said chief executive Lindsay Owen-Jones.

L'Oréal, which owns the brands Lancôme, Garnier and Maybelline lipsticks, prides itself on a record of increasing net profit by at least 10 percent every year for the 20 years up to 2005.

This was achieved in 2005, the company said. However, the claim required some accounting modifications and adjustments to the figure for 2004.

Net profit in 2004 had been EUR 3.970 billion, but this figure included a number of one-off items that L'Oréal excluded when making a comparison with the results for 2005.

In 2005, sales totalled EUR 14.53 billion, an increase of 6.5 percent compared with 2004, and rose by 12.2 percent in the fourth quarter.

Sales in western Europe rose by 0.1 percent to EUR 6.742 billion, in North America by 8.3 percent to EUR 3.868 billion and in Asia by 10.6 pecent to EUR 1.375 billion.

The company also made in-roads into Latin American, where sales increased by 23.5 percent to EUR 861 million.

"Growth was driven by good performance in North America and new breakthroughs in emerging markets, while the rates of increase were more modest in western Europe," said Owen-Jones, who is to leave the company in the first half of this year.

Growth of sales in India had measured 46 percent, the company said, "largely due to the outstanding success of Garnier Light facial skincare products, Color Natural hair colourants and Fructis shampoos by the same brand".

Giving a forecast for 2006, he added: "We are confident about the outlook for 2006 in view of the faster growth in western Europe at the end of last year and the strong international momentum".

On the Paris stock exchange in midday trading, the price of shares in L'Oreal rose 1.60 percent to EUR 70, reversing an earlier fall, in a broadly higher market.

In a signal that the company was preparing to expand aggressively in 2006, the successor to chief executive Owen-Jones, Jean-Paul Agon, told a press conference that L'Oréal was considering acquisitions.

Copyright AFP

Subject: French news

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