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CAPITAL MARKET DAYS L`ORÉAL BRAZIL
CAPITAL MARKET DAYS L’ORÉAL BRAZIL Didier Tisserand President L’Oréal Brazil September 10th-11th, 2014 L'Oréal CMD Brazil, 10-12th Sept. 2014 1 Agenda A SNAPSHOT OF BRAZIL THE BRAZILIAN BEAUTY MARKET L’ORÉAL BRASIL L'Oréal CMD Brazil, 10-12th Sept. 2014 2 Agenda A SNAPSHOT OF BRAZIL THE BRAZILIAN BEAUTY MARKET L’ORÉAL BRASIL L'Oréal CMD Brazil, 10-12th Sept. 2014 3 Agenda BRAZIL EUROPE Area 8,5 M Km2 Area 10,2 M Km2 Population 202 M Population 742 M Source: IBGE (Brazilian Institute of Geography and Statistics) L'Oréal CMD Brazil, 10-12th Sept. 2014 4 Many different countries into one NORTH THE LARGEST AREA Area: 45,3% NORTHEAST GDP: 5,0% THE MOST VARIED Pop: 7,9% Area: 18,2% GDP per Capita: R$ 9.135 GDP: 13,1% Forests, vegetal extraction Pop: 28,0% GDP per Capita: R$ 6.749 Tourism, sugar, cacao, oil CENTER-WEST COUNTRY CAPITAL Area: 18,9% GDP: 8,9% Pop: 7,2% GDP per Capita: R$ 17.844 SOUTH Forests, cattle raIsing ADVANCED LIFE QUALITY Area: 6,75% SOUTHEAST GDP: 16,6% BIGGEST ECONOMY Pop: 14,5% Area: 10,8% GDP per Capita: R$ 16.564 GDP: 56,5% European immigration, vineyards, farming Pop: 42,3% GDP per Capita: R$ 19.277 Financial, industries, oil Source: IBGE (Brazilian Institute of Geography and Statistics) - Census 2010); GDP: Folha de São Paulo. L'Oréal CMD Brazil, 10-12th Sept. 2014 5 Many different countries into one NORTH THE LARGEST AREA NORTHEAST Area: 45,3% GDP: 5,0% THE MOST VARIED Pop: 7,9% Area: 18,2% GDP per Capita: R$ 9.135 GDP: 13,1% Forests, vegetal extraction Pop: 28,0% GDP per Capita: R$ 6.749 Tourism, sugar, cacao and oil CENTER-WEST COUNTRY CAPITAL Area: 18,9% GDP: 8,9% Pop: 7,2% GDP per Capita: R$ 17.844 SOUTH Forests, cattle raIsing ADVANCED LIFE QUALITY Area: 6,75% SOUTHEAST GDP: 16,6% BIGGEST ECONOMY Pop: 14,5% Area: 10,8% GDP per Capita: R$ 16.564 GDP: 56,5% European immigration, vineyards, farming Pop: 42,3% GDP per Capita: R$ 19.277 Financial, industries, oil Source: IBGE (Brazilian Institute of Geography and Statistics) - Census 2010); GDP: Folha de São Paulo. L'Oréal CMD Brazil, 10-12th Sept. 2014 6 Many different countries into one NORTH THE LARGEST AREA Area: 45,3% NORTHEAST GDP: 5,0% THE MOST VARIED Pop: 7,9% Area: 18,2% GDP per Capita: R$ 9.135 GDP: 13,1% Forests, vegetal extraction Pop: 28,0% GDP per Capita: R$ 6.749 Tourism, sugar, cacao, oil CENTER-WEST COUNTRY CAPITAL Area: 18,9% GDP: 8,9% Pop: 7,2% GDP per Capita: R$ 17.844 SOUTH Forests, cattle raIsing ADVANCED LIFE QUALITY SOUTHEAST Area: 6,75% BIGGEST ECONOMY GDP: 16,6% Area: 10,8% Pop: 14,5% GDP: 56,5% GDP per Capita: R$ 16.564 Pop: 42,3% European immigration, vineyards, farming GDP per Capita: R$ 19.277 Financial, industries, oil Source: IBGE (Brazilian Institute of Geography and Statistics) - Census 2010); GDP: Folha de São Paulo. L'Oréal CMD Brazil, 10-12th Sept. 2014 7 Many different countries into one NORTH THE LARGEST AREA Area: 45,3% NORTHEAST GDP: 5,0% THE MOST VARIED Pop: 7,9% Area: 18,2% GDP per Capita: R$ 9.135 GDP: 13,1% Forests, vegetal extraction Pop: 28,0% GDP per Capita: R$ 6.749 Tourism, sugar, cacao, oil CENTER-WEST COUNTRY CAPITAL Area: 18,9% GDP: 8,9% SOUTH Pop: 7,2% GDP per Capita: R$ 17.844 ADVANCED LIFE QUALITY Forests, cattle raIsing Area: 6,75% SOUTHEAST GDP: 16,6% BIGGEST ECONOMY Pop: 14,5% Area: 10,8% GDP per Capita: R$ 16.564 GDP: 56,5% European immigration, vineyards, farming GDP per Capita: R$ 19.277 Pop: 42,3% Financial, industries, oil Source: IBGE (Brazilian Institute of Geography and Statistics) - Census 2010); GDP: Folha de São Paulo. L'Oréal CMD Brazil, 10-12th Sept. 2014 8 Many different countries into one NORTH THE LARGEST AREA Area: 45,3% NORTHEAST GDP: 5,0% THE MOST VARIED Pop: 7,9% Area: 18,2% GDP per Capita: R$ 9.135 GDP: 13,1% Forests, vegetal extraction Pop: 28,0% GDP per Capita: R$ 6.749 Tourism, sugar, cacao and oil CENTER-WEST COUNTRY CAPITAL Area: 18,9% GDP: 8,9% Pop: 7,2% SOUTH GDP per Capita: R$ 17.844 ADVANCED LIFE QUALITY Forests, cattle raIsing Area: 6,75% SOUTHEAST GDP: 16,6% BIGGEST ECONOMY Pop: 14,5% Area: 10,8% GDP per Capita: R$ 16.564 GDP: 56,5% European immigration, vineyards, farming Pop: 42,3% GDP per Capita: R$ 19.277 Financial, industries, oil Source: IBGE (Brazilian Institute of Geography and Statistics) - Census 2010); GDP: Folha de São Paulo. L'Oréal CMD Brazil, 10-12th Sept. 2014 9 Many different countries into one NORTH THE LARGEST AREA NORTHEAST Area: 45,3% THE MOST VARIED GDP: 5,0% Area: 18,2% Pop: 7,9% GDP: 13,1% GDP per Capita: R$ 9.135 Pop: 28,0% Forests, vegetal extraction GDP per Capita: R$ 6.749 Tourism, sugar, cacao, oil CENTER-WEST COUNTRY CAPITAL Area: 18,9% GDP: 8,9% Pop: 7,2% GDP per Capita: R$ 17.844 SOUTH Forests, cattle raIsing ADVANCED LIFE QUALITY Area: 6,75% SOUTHEAST GDP: 16,6% BIGGEST ECONOMY Pop: 14,5% Area: 10,8% GDP per Capita: R$ 16.564 GDP: 56,5% European immigration, vineyards, farming Pop: 42,3% GDP per Capita: R$ 19.277 Financial, industries, oil Source: IBGE (Brazilian Institute of Geography and Statistics) - Census 2010); GDP: Folha de São Paulo. L'Oréal CMD Brazil, 10-12th Sept. 2014 10 Many different countries into one 85% OF BRAZILIAN POPULATION NORTH THE LARGEST AREA Area: 45,3% NORTHEAST GDP: 5,0% THE MOST VARIED Pop: 7,9% Area: 18,2% GDP per Capita: R$ 9.135 GDP: 13,1% Forests, vegetal extraction Pop: 28,0% GDP per Capita: R$ 6.749 Tourism, sugar, cacao and oil CENTER-WEST COUNTRY CAPITAL Area: 18,9% GDP: 8,9% Pop: 7,2% GDP per Capita: R$ 17.844 SOUTH Forests, cattle raIsing ADVANCED LIFE QUALITY Area: 6,75% SOUTHEAST GDP: 16,6% BIGGEST ECONOMY Pop: 14,5% Area: 10,8% GDP per Capita: R$ 16.564 GDP: 56,5% European immigration, vineyards, farming Pop: 42,3% GDP per Capita: R$ 19.277 Financial, industries, oil Source: IBGE (Brazilian Institute of Geography and Statistics) - Census 2010); GDP: Folha de São Paulo. L'Oréal CMD Brazil, 10-12th Sept. 2014 11 One country, many faces... AFRO-IBERO ROOTS From 1550 to 1850 about 4 million Africans were brought to Brazil to work as slaves. Together with Natives, Portuguese and Spanish people, they built the foundation of a nation MASSIVE MIGRATION From 1882 to 1934 about 4.5 million foreigners, mainly from Europe (i.e. Spain, Italy, Germany, Poland, Japan) arrived in Brazil. 2.3 million in São Paulo alone (Southeast) Tarsila do Amaral - Operários de 1933 (oil on canvas) Sources: UNESCO 2000. Slave Route Project L'Oréal CMD Brazil, 10-12th Sept. 2014 12 Strong disparities: ethnicity & social classes by regions NORTHEAST NORTH SALVADOR / N-EAST AMAZONIA / NORTH White 40% Recife Metis ++49% %ABC: 52% Black 11% %A/B: 18% CENTER-WEST BRASILIA / CENTRAL SOUTH SOUTHEAST CURITIBA / SOUTH SÃO PAULO / S-EAST White ++78% Metis 12% Black 10% Porto Alegre %ABC: 80% %A/B: 34% White 58% Metis 32% Black 10% Sources: Population (Census 2010); GDP: Folha de São Paulo; SEL (Critério Brasil), QT Access Consos LRP – 2010 - Cocédal L'Oréal CMD Brazil, 10-12th Sept. 2014 13 São Paulo %ABC: 79% %A/B: 35% Strong disparities: ethnicity & social classes by regions NORTH NORTHEAST AMAZONIA / NORTH SALVADOR / N-EAST White 40% Metis ++49% Black 11% Recife %ABC: 52% %A/B: 18% CENTER-WEST BRASILIA / CENTRAL SOUTH SOUTHEAST CURITIBA / SOUTH SÃO PAULO / S-EAST White ++78% Metis 12% Black 10% White 58% Metis 32% Black 10% Porto Alegre %ABC: 80% %A/B: 34% Sources: Population (Census 2010); GDP: Folha de São Paulo; SEL (Critério Brasil), QT Access Consos LRP – 2010 - Cocédal L'Oréal CMD Brazil, 10-12th Sept. 2014 14 São Paulo %ABC: 79% %A/B: 35% Strong disparities: ethnicity & social classes by regions NORTHEAST NORTH SALVADOR / N-EAST AMAZONIA / NORTH White 40% Metis ++49% Black 11% Recife %ABC: 52% %A/B: 18% CENTER-WEST BRASILIA / CENTRAL SOUTH SOUTHEAST CURITIBA / SOUTH SÃO PAULO / S-EAST White ++78% Metis 12% Black 10% Porto Alegre %ABC: 80% %A/B: 34% White 58% Metis 32% Black 10% Sources: Population (Census 2010); GDP: Folha de São Paulo; SEL (Critério Brasil), QT Access Consos LRP – 2010 - Cocédal L'Oréal CMD Brazil, 10-12th Sept. 2014 15 São Paulo %ABC: 79% %A/B: 35% Strong disparities: ethnicity & social classes by regions NORTHEAST NORTH SALVADOR / N-EAST AMAZONIA / NORTH White 40% Metis ++49% Black 11% Recife %ABC: 52% %A/B: 18% CENTER-WEST BRASILIA / CENTRAL SOUTHEAST SOUTH SÃO PAULO / S-EAST CURITIBA / SOUTH White ++78% Metis 12% Black 10% White 58% Metis 32% Black 10% Porto Alegre %ABC: 80% %A/B: 34% Sources: Population (Census 2010); GDP: Folha de São Paulo; SEL (Critério Brasil), QT Access Consos LRP – 2010 - Cocédal L'Oréal CMD Brazil, 10-12th Sept. 2014 16 São Paulo %ABC: 79% %A/B: 35% Typical life in Brazil... Tudo bom? IPANEMA BEACH - RJ MORUMBI - SP TRAFFIC JAMS IN SP ...NOT SUCH AN EASY LIFE! L'Oréal CMD Brazil, 10-12th Sept. 2014 17 An example of lack of infrastructure NEW YORK 20 M inhab, 4,5 M users, 368km TOKYO 32 M inhab, 8,5 M users, 304km L'Oréal CMD Brazil, 10-12th Sept. 2014 SÃO PAULO PARIS 20 M inhab, 2,4 M users, 74km 12 M inhab, 4,2 M users, 218km RIO DE JANEIRO LONDRES 12 M inhab, 0,6 M users, 42km 18 14 M inhab, 3,2 M users, 402km Agenda A SNAPSHOT OF BRAZIL THE BRAZILIAN BEAUTY MARKET L’ORÉAL BRASIL L'Oréal CMD Brazil, 10-12th Sept. 2014 19 The Brazilian woman: the Brazilian hybrid beauty AN INCREDIBLE MIX… Diversity of ethnicities: European, African, Indian, Japanese, Lebanese… in terms of both hair types and skin THE BRAZILIAN WOMAN IS Natural Sensual Self confident Young mindset Active Open minded Optimistic Hair & Body obsession Source: IBGE (Brazilian Institute of Geography and Statistics) - Census 2010; U&A Hair 2013; U&A Skin Care 2010. L'Oréal CMD Brazil, 10-12th Sept. 2014 20 Celebrities drive beauty aspirations EURO Raquel Zimmerman Alinne Moraes Isabelli Fontana Ellen Jabour ELEGANCE Grazi Massafera Gisele Bundchen Paola Oliveira L'Oréal CMD Brazil, 10-12th Sept. 2014 Fernanda Lima 21 Celebrities drive beauty aspirations Daniella Sarahyba MIXED Carol Castro SENSUALITY Raica Oliveira Camila Pitanga Alessandra Ambrosio L'Oréal CMD Brazil, 10-12th Sept. 2014 Debora Nascimento Ilde Silva 22 Celebrities drive beauty aspirations AFRO Sheron Menezes IDENTITY Juliana Alves Lucy Ramos Taís Araújo Luciana Melo L'Oréal CMD Brazil, 10-12th Sept. 2014 Negra Li 23 Celebrities drive beauty aspirations Paloma Bernardi Grazi Massafera Marília Gabriela Glória Pires Christiane Torloni Tônia Carrero Beatriz Segal Suzana Vieira L'Oréal CMD Brazil, 10-12th Sept. 2014 When it comes to beauty, there is no shame in showing how hard you’ve worked… 24 Whatever the archetype, beauty is a social norm! A vision of beauty with socially agreed attributes Aspiring to physical perfection Open to more radical transformation in order to reach goals L'Oréal CMD Brazil, 10-12th Sept. 2014 25 A service industry DERMATOLOGIST 2nd Dermato population world wide = 7.500 SALONS MANICURIST 500.000+ Manicurists 190.000 Salons 100% Esthetic services Beauty coach 99% Esthetic procedures Source: Dermatologist Barometer 2012 Enfoque Pesquisa, ISAPS - International Society of Aesthetic Plastic Surgery (top 10 2013 Rank) L'Oréal CMD Brazil, 10-12th Sept. 2014 26 PLASTIC SURGERY Nº 1 WW Hair: the main beauty concern in brasil USA 2 CH 3 4 HAIRFACEBODY IND BZL 5 2 5 4 5 5 3 4 1 Face & body first Face first Hair first 1 HAIR Damaged and dry hair 5 FACE Acne, breakouts 2 BODY Visible effects on body skin 6 HAIR Problems in humid conditions 3 HAIR Loss and breakage 7 HAIR Perspiration of hair 4 BODY Overweight/fat problems 8 BODY Problems with circulation Source: QT TOP 10 conducted France-USA-China-Brasil-India-Japan TNS 2011 (FW France, USA, Brasil, China 2009, India 2010, Japan 2011) L'Oréal CMD Brazil, 10-12th Sept. 2014 27 9 HAIR Unmanageable hair and no bounce 10 FACE Sensitive skin The Brazilian health & beauty market: key categories TOTAL MARKET 33.816MR$ 4º WW Market BRAZIL CAGR 2008/2013 Brazil on Global Rank FRAGRANCES 14,3% 2º WW HAIR CARE 8,4% 4º WW DEODORANT 11,9% 2º WW MAKE UP 13,2% 4º WW FACE CARE 10,0% 10º WW COLORATION 10,6% 3º WW BODY CARE 12,4% 3º WW SUN CARE 13,2% 2º WW NAIL POLISH 18,6% 2º WW Source: BMS full 2013 L'Oréal CMD Brazil, 10-12th Sept. 2014 +11,7% 28 A positive demographic evolution for our market DEMOGRAPHIC CHANGES AGE PYRAMID BRAZIL 2010 MEN AGE PYRAMID BRAZIL 2050 WOMEN MEN BIRTH RATE 2000 2010 2020 2,3 1,8 1,5 Source: IBGE (Brazilian Institute of Geography and Statistics) L'Oréal CMD Brazil, 10-12th Sept. 2014 29 WOMEN A positive demographic evolution for our market: social classes 19% In 2020, C SEL* will be 68% 68% 13% 2002 2009 2014 AB C 2020 DE *SEL: Social Economic Level index Income in Minimum Wages Women C Class – 15-59 yr 45 MM in 2010* 73 MM in 2020 +40% *20 MM in 2002 Source: FGV (Fundação Getúlio Vargas) L'Oréal CMD Brazil, 10-12th Sept. 2014 30 SEL Minimum Wages Family Income (Average) A above 20 MW R$13.560 or above B 10 – 20 MW from R$6.780,00 to R$13.559,99 C 4 – 10 MW from R$2.712,00 to R$ 6.779,99 DE up to 4MW up to R$ 2.711,99 Brazilian Minimun Wage Value in US$ 2003 R$ 260 USD 91 2009 R$ 465 USD 234 2014 R$ 724 USD 299 The Brazilian health & beauty market: channel split (in # of POS) MONO BRANDED RETAILERS 6.000 MASS PERFUMERIES 19.097 GMMP 747 LUXE PERFUMERIES 650 Mass: Food + Drugstores + GMMP + Perfumeries 565.621 POS DRUGSTORES 69.285 Professional: Salons + Perfumeries 189.837 POS Dermo-Cosmetics: Drugstores 69.285 POS SALONS FOOD 170.740 476.492 Selective: Luxe Perfumeries 650 POS Mono Branded Retailers: 6.000 POS Door to Door *: 2.4 MM resellers Source: : H&B Sell-out Estimations July 2013 L'Oréal CMD Brazil, 10-12th Sept. 2014 31 The Brazilian health & beauty market: channel split (in value) 2013 X 2012 (%) WEIGHT (%) 4,4% 4,2% 2,3% DOOR TO DOOR: 42,1% +5,1% MASS: 35,7% +8,2% 11,2% MONO BRANDED RETAILERS: 11,2% +12,7% 42,1% DERMO-COMESTICS: 4,4% +13,5% PROFESSIONAL: 4,2% +5,0% SELECTIVE: 35,7% 2,3% +17,6% Source: BMS full 2013 L'Oréal CMD Brazil, 10-12th Sept. 2014 32 Agenda A SNAPSHOT OF BRAZIL THE BRAZILIAN BEAUTY MARKET L’ORÉAL BRASIL L'Oréal CMD Brazil, 10-12th Sept. 2014 33 Years of continuous growth 2013 vs 2008: +87% CAGR +13,3% L'Oréal CMD Brazil, 10-12th Sept. 2014 34 L'Oréal Brazil in 2013 2 Factories (RJ, SP) 2.700 People 1 R&I Center 2,21 BR$ +13,3% L'Oréal CMD Brazil, 10-12th Sept. 2014 4 Divisions, 24 Brands HQ in Rio de Janeiro 35 2 Distribution Centers L'Oréal Brazil sales split SPLIT IN VALUE / FULL 2013 LL 4% PPD 14% ACD 16% L'Oréal CMD Brazil, 10-12th Sept. 2014 CPD 66% 36 Industrial foot print 95% Local production 476 Millions units produced in 2013 RIO DE JANEIRO SÃO PAULO 45.000 m² 43.000 m² Hair Care CPD Hair Color CPD, PPD Make Up CPD Hair Care PPD 276 Millions units produced Skincare Deodorants 200 Millions units produced L'Oréal CMD Brazil, 10-12th Sept. 2014 37 L'Oréal Brazil: a source of inspiration & innovation 80% of films with local spokesperson CPD PPD ACD R&I: 4 main focus A team of 100 people Hair Hygiene & Perfume Climate & Sun Biodiversity 3 Marketing HUBs 80% of local innovations inspiring other markets L'Oréal CMD Brazil, 10-12th Sept. 2014 38 The Brazilian health & beauty market: our positions MASS 35,7% +8,2% WEIGHT COMPETITOR A L’ORÉAL COMPETITOR B COMPETITOR C 25,6% 11,6% 6,9% 5,4% DOOR TO DOOR CHANGE 2013 COMPETITOR A COMPETITOR B +13,1% # 1 DERMO-COSMETICS 4,4% +13,5% L’ORÉAL COMPETITOR A COMPETITOR B COMPETITOR C WEIGHT 24,7% 11,4% 10,8% 10,0% # 1 PROFESSIONAL L’ORÉAL COMPETITOR A WEIGHT 22,2% 10,4% 42,1% +5,1% WEIGHT 48,3% 19,80% MONO BRANDED CHANGE 2013 +15,8% COMPETITOR A L’ORÉAL WEIGHT 82,9% 0,2% TOTAL 4,2% +5,0% L’ORÉAL COMPETITOR A COMPETITOR B WEIGHT 15,4% 15,3% 11,7% 11,2% +12,7% CHANGE 2013 +7,9% CHANGE 2013 +12,7% WEIGHT # 1 - SELECTIVE CHANGE 2013 2,3% +17,6% CHANGE 2013 +19,2% Source: BMS full 2013 L'Oréal CMD Brazil, 10-12th Sept. 2014 39 #1 COMPETITOR A 17,5% #2 COMPETITOR B 12,2% #3 COMPETITOR C 10,9% #4 L’ORÉAL GROUP 7,1% #5 COMPETITOR D 7,0% #6 COMPETITOR E 3,3% #7 COMPETITOR F 2,3% CHANGE 2013 +14,4% The Brazilian health & beauty market: L’Oréal Brazil PROFESSIONAL L’ORÉAL – Nº 1 MASS MARKET L’ORÉAL – Nº 2 Nº 1 – Hair Color Nº 1 – Face Cair Nº 2 – Hair Care Nº 2 – Make up Nº 2 – Nails Nº 1 – Hair Care Nº 2 – Hair Color ACD L’ORÉAL – Nº 1 LUXURY L’ORÉAL – Nº 1 Nº 1 – Sun Care Nº 1 – Face Care Source: H&B Sell-out Estimations FULL 13 L'Oréal CMD Brazil, 10-12th Sept. 2014 40 Category split: L'Oréal Brazil SPLIT IN VALUE SELL- IN / FULL 2013 L'Oréal Brazil Split OTHERS SUN CARE HAIR CARE Large opportunities in: Skincare, Make up, Deo COLORATION DEODORANT FACE CARE MAKE UP & NAILS L'Oréal CMD Brazil, 10-12th Sept. 2014 41 Categories opportunities: present category channel split 2013 MASS DERMOCOSMETICS PROF SELECTIVE DTD MONOBRANDED RETAILERS HAIR CARE 74,6% 2,3% 10,7% 0% 11,3% 1,0% DEODORANTS 64,6% 0,2% 30,7% 5,6% HAIR COLOR 77,5% NAILS 77,2% SUN CARE 39,1% 32,6% BODY CARE 14,5% 10,5% FACE CARE 3,1% 17,0% MAKE UP 11,7% 0% FRAGRANCES 6,2% 1 19,3% 2 1,0% 3,2% 0,8% 21,1% 0,7% 0,4% 25,9% 2,0% 0,7% 53,5% 20,6% 4,2% 66,8% 7,8% 2,7% 77,1% 8,5% 6,1% 61,2% 26,6% 3 Source: H&B Sell-out Estimations FULL 13 L'Oréal CMD Brazil, 10-12th Sept. 2014 42 Strategic priorities Reinforce our leadership in Hair Care / Hair Color Seek and maximize the historic opportunity in Skin Care / Make up Leverage Brazil going digital L'Oréal CMD Brazil, 10-12th Sept. 2014 43 Develop retail to attract new consumers A strategic acquisition: Niely HAIR COLOR L'Oréal CMD Brazil, 10-12th Sept. 2014 HAIR CARE 44 Niely: a success story 11,2 PDM COR&TON 12 10 CAGR 2006/2013 Val +24% 8 6 4,6 4 2 0 2006 2007 2008 2009 2010 2011 2012 2013 PDM HAIRCARE NIELY Cor&Ton PDM Val L'Oréal CMD Brazil, 10-12th Sept. 2014 5 3,7 4 CAGR 2006/2013 Val +25% 3 2 1,3 1 0 2006 2007 2008 2009 2010 2011 Niely Haircare PDM Val 45 2012 2013 Brand complementarity R$ 8,20 R$ 13,30 Source: public price Nielsen YTD 2014 L'Oréal CMD Brazil, 10-12th Sept. 2014 46 R$ 18,00 NIELY: Nova Iguaçu logistics/industrial site L'Oréal CMD Brazil, 10-12th Sept. 2014 47 Strategic priorities Reinforce our leadership in Hair Care / Hair Color Seek and maximize the historic opportunity in Skin Care / Make up Leverage Brazil going digital L'Oréal CMD Brazil, 10-12th Sept. 2014 48 Develop retail to attract new consumers Building new categories 2012-2014 Growth 45% 19% 12% MAKE UP 13% MAKE UP DEODORANTS 27% 31% SKIN CARE SKIN CARE 2012 2014 Figures in BRL M’s L'Oréal CMD Brazil, 10-12th Sept. 2014 DEODORANTS 49 Developing retail L'Oréal CMD Brazil, 10-12th Sept. 2014 50 The Body Shop Brazil The Body Shop acquired a 51% stake in the Empório Body Store in Jan 2014: 92 stores and 33 kiosks 40% in São Paulo area L'Oréal CMD Brazil, 10-12th Sept. 2014 51 The Body Shop Brazil The Body Shop redesigned Empório Body Store to capture The Body Store global principles with Empório Body Store equity Launching The Body Shop ranges in stages to optimize mix New stores launch in Q/2014 First stage in Q4 2014 Stores and kiosks converting to new format in 2015 Complete roll-out in 2015 L'Oréal CMD Brazil, 10-12th Sept. 2014 52 The Body Shop Brazil L'Oréal CMD Brazil, 10-12th Sept. 2014 53 L’Oréal retail presence in Brazil January 2012: September 2014: 11 Kiehl’s 60 Maybelline 125 EBS/TBS 26 NYX 222 kiosks and shops 1 Kiehl’s L'Oréal CMD Brazil, 10-12th Sept. 2014 54 Building new L'Oréal Brazil L'Oréal CMD Brazil, 10-12th Sept. 2014 55 Building new L'Oréal Brazil Distribution Center: 2014 38.000m2 Industrial Equipment: Elseve 400 Lip/Lipstick R&I 2016 L'Oréal CMD Brazil, 10-12th Sept. 2014 56 Mascara A sustainable model Leading Country in Sustainably L'Oréal CMD Brazil, 10-12th Sept. 2014 Creation of a multidivisional and multifunctional committee 57 Sharing beauty with all: key initiatives SOURCING BIODIVERSITY PRODUCING LIVING 2005-2014 YTD AMBIENTAL / SOURCING INDICATORS SHARING INCLUSIVE BUSINESS MODEL -30% WASTE vs. -31% GROUP YTD Brazilian natural actives: Murumuru, Pracaxi, Babassu (fair trade) -34% WATER vs. -32% GROUP YTD Empowerment of communities: partnership GIZ - BERACA ORGANIC Soy oil: organic familiar agriculture, traditional methods, fair price L'Oréal CMD Brazil, 10-12th Sept. 2014 -66% CO2 EMISSION vs. -38% GROUP YTD -40% ENERGY CONSUMPTION 50 Matrix micro distributors +5000 education contacts 58 Sharing beauty with all: a collective project 2012: 882 projects 2013: 801 projects Lot’s of energy and team engagement! 38 WINNING PROJECTS ON ITS WAY Excellence Innovation Sustainability Innovation Projects on its way to be launched: 38 from 2013 Beauty Shaker’s edition L'Oréal CMD Brazil, 10-12th Sept. 2014 59 Conclusion: Key messages 4th Beauty Market: Central aspiration for Brazilian women A source of inspiration: Local innovation which inspires other markets Gaining share and a new strategic ambition: Developing categories and expanding distribution Building a new L’Oréal Brazil L'Oréal CMD Brazil, 10-12th Sept. 2014 60 -------------------------Avertissement / Disclaimer ------------------------« Ce document ne constitue pas une offre de vente ou la sollicitation d’une offre d’achat de titres L’Oréal. Si vous souhaitez obtenir des informations plus complètes concernant L’Oréal, nous vous invitons à vous reporter aux documents publics déposés en France auprès de l’Autorité des Marchés Financiers (également disponibles en version anglaise sur notre site Internet www.loreal-finance.com).Ce document peut contenir certaines déclarations de nature prévisionnelle. Bien que la Société estime que ces déclarations reposent sur des hypothèses raisonnables à la date de publication du présent communiqué, elles sont par nature soumises à des risques et incertitudes pouvant donner lieu à un écart entre les chiffres réels et ceux indiqués ou induits dans ces déclarations.» "This document does not constitute an offer to sell, or a solicitation of an offer to buy, L’Oréal shares. If you wish to obtain more comprehensive information about L’Oréal, please refer to the public documents registered in France with the Autorité des Marchés Financiers (which are also available in English on our Internet site: www.loreal-finance.com).This document may contain some forward-looking statements. Although the Company considers that these statements are based on reasonable hypotheses at the date of publication of this release, they are by their nature subject to risks and uncertainties which could cause actual results to differ materially from those indicated or projected in these statements." L'Oréal CMD Brazil, 10-12th Sept. 2014 61
