L'Oréal: News release: "2020 Half-Year Results"
Clichy, 30 July 2020 at 6.00 p.m.
2020 Half-Year Results
Resilient business and solid
results
- Sales: 13.07 billion euros
- -11.7% like-for-like 1 and based on reported figures
- Growth continues in China: +17.5% 1
- Strong growth in e-commerce: +64.6% 2
- Operating margin at 18%
- Earnings per share 3 at 3.82 euros
Commenting on these figures, Mr Jean-Paul Agon,
Chairman and Chief Executive Officer of L'Oréal, said:
“The L’Oréal group has shown great resilience
during this first half of 2020, marked by the crisis of the
Covid-19 pandemic.
The Group’s first priority during this period
was to ensure the health and welfare of its employees everywhere in
the world, to protect its small clients and suppliers with credit
and payment facilities, and to be in solidarity with healthcare
workers with the donation of more than 15 million units of hand
sanitiser gel and moisturising hand cream.
The consumption of beauty products over the
period was strongly impacted by the closure of millions of points
of sale (hair salons, perfumeries, department stores, airport
stores, etc.) which caused a real crisis of supply, rather than
demand, with consumers temporarily unable to purchase products and
services.
In these exceptionally difficult circumstances,
each Division of L’Oréal has demonstrated great business
resilience. The Active Cosmetics Division has managed to maintain
good growth. The Consumer Products Division limited the impact on
sales despite its heavy weight in makeup, which was the category
that slowed the most. The L’Oréal Luxe and Professional Products
Divisions were remarkably successful at maintaining relatively
solid activity, thanks to e-commerce, despite the closure of almost
all of their points of sale. As a result, the Group overall has
managed to outperform the beauty market over the period. It has
seen its activity accelerate month after month since April, and is
progressively returning to growth.
This business resilience was made possible by
several key strengths of the Group. First of all, our lead in the
field of digital and e-commerce, which proved to be crucial during
the crisis and is now even bigger, with e-commerce growing by
+64.6% 2 over the first half. L’Oréal's performance in mainland
China was also decisive, with growth in the second quarter of
+30% 1. Finally, the power of our brands and our major
products, which are a true refuge for consumers in these troubled
times. We must also underline the tremendous mobilisation and
remarkable agility of our teams throughout the world.
At the same time, the Group was able to deliver
results that demonstrate solid resistance: profitability at 18%
close to the annual level of 2019, limited decline in earnings per
share, and overall a very well preserved profit and loss account,
with a high gross margin, lower costs, and investment in research
and business drivers maintained in relative value.
We approach this second half with lucidity,
confidence and resolve. Lucidity because the global health crisis
is unfortunately not over. Confidence because consumers' appetite
for beauty is intact, access to points of sale should be easier
going forward, and e-commerce will continue to get stronger. And
finally resolve because in this second half of the year, we are
embarking on an aggressive plan of new product launches and
business drivers to stimulate, in partnership with our retail
partners, the return of the consumption of beauty products. We are
therefore determined to outperform the market, find again the path
to growth if the sanitary conditions allow it, and deliver solid
profitability.”
2020 Half-Year sales
Like-for-like, i.e. based on a comparable
structure and identical exchange rates, sales of the L’Oréal group
was at -11.7%.The net impact of changes in the scope of
consolidation was +0.3%.Evolution at constant
exchange rates amounted to -11.4%.Currency
fluctuations had a negative impact of -0.3%. If the exchange
rates at 30 June 2020, i.e. €1 = $1.121, are extrapolated until 31
December 2020, the impact of currency fluctuations on sales would
be approximately -1.5% for the whole of 2020.Based on reported
figures, the Group's sales at 30 June 2020 amounted to 13.07
billion euros, i.e. -11.7%.
Sales by Division and geographic Zone
|
2nd quarter 2020 |
1st half 2020 |
|
|
Growth |
|
Growth |
|
€m |
Like-for-like |
Reported |
€m |
Like-for-like |
Reported |
By Division |
|
|
|
|
|
|
Professional Products |
590.6 |
-31.7% |
-32.8% |
1,341.7 |
-21.3% |
-21.7% |
Consumer Products |
2,680.9 |
-15.2% |
- 17.4% |
5,850.7 |
-9.4% |
-10.4% |
L’Oréal Luxe |
1,917.7 |
-24.7% |
-22.4% |
4,382.2 |
-16.8% |
-14.9% |
Active Cosmetics |
662.0 |
+ 4.3% |
-0.6% |
1,501.9 |
+ 9.0% |
+ 6.0% |
Group total |
5,851.3 |
-18.8% |
-19.4% |
13,076.5 |
-11.7% |
-11.7% |
By geographic Zone |
|
|
|
|
|
|
Western Europe |
1,555.8 |
-24.8% |
-23.9% |
3,553.5 |
-16.1% |
-15.6% |
North America |
1,460.4 |
-25.4% |
-23.5% |
3,307.7 |
-15.2% |
-13.1% |
New Markets, of which: |
2,835.0 |
-11.0% |
-14.3% |
6,215.4 |
-6.9% |
-8.5% |
- Asia Pacific |
2,133.4 |
-4.1% |
-4.3% |
4,468.5 |
-3.9% |
-3.4% |
- Latin America |
264.4 |
-27.3% |
-42.1% |
659.2 |
-13.9% |
-25.0% |
- Eastern Europe |
319.3 |
-23.7% |
-28.7% |
798.9 |
-12.1% |
-14.2% |
- Africa, Middle East |
118.0 |
-30.0% |
-32.4% |
288.8 |
-17.4% |
-19.1% |
Group total |
5,851.3 |
-18.8% |
-19.4% |
13,076.5 |
-11.7% |
-11.7% |
Summary by Division
PROFESSIONAL PRODUCTS
At the end of June, the Professional Products
Division is at -21.3% like-for-like
and -21.7% reported.After a
good start to the year, particularly with its biggest brand,
L’Oréal Professionnel, the Professional Products Division saw its
activity penalised by the health crisis, with the sudden closure of
hair salons worldwide. Towards the end of the quarter, the
Division’s performance progressively improved. With the gradual
reopening of hair salons, many countries returned to growth,
particularly the United States, Germany and China. Kérastase
continued to outperform the market, thanks to the successful launch
of Genesis and its omni-channel development. E-commerce posted
record growth in the first half, confirming the acceleration of the
Division’s digital transformation. The support provided to
hairdressers during the crisis, by freezing debts, providing online
education and making masks and hand sanitiser gels available, has
strengthened L’Oréal’s position as both the market and industry
leader.
CONSUMER PRODUCTS
The Consumer Products Division is at -9.4%
like-for-like and -10.4% reported in the first half. The health
crisis triggered a sharp deceleration in the makeup market, with a
negative impact on the performance of Maybelline New York and NYX
Professional Makeup in particular. The Division’s business overall
is stable excluding makeup. In haircare, Fructis maintained its
strong growth thanks to Fructis Hair Food. In face care, L’Oréal
Paris continued to grow and outperformed the market, thanks to the
launch of serums in the Revitalift range. Furthermore, the Division
made market share gains in the highly dynamic home-use hair colour
market. The Division delivered an excellent performance in China,
particularly with 3CE Stylenanda in makeup, and made market share
gains in most of the major European countries. The good performance
in Brazil, which ended the first half in positive territory, is
also worth noting. The Group’s digital leadership has enabled it to
make the most of e-commerce all over the world, in China for
example, but also in the United States, where online sales more
than doubled in the first half. All the geographic Zones have drawn
up a powerful acceleration plan for the second half, focused on
three priorities: accelerating the pace of innovation, major “Back
to Beauty“ initiatives, and the intensification of media
investments to stimulate demand.
L’ORÉAL LUXE
The L’Oréal Luxe Division ended the first
half at -16.8% like-for-like and -14.9% reported, in a luxury
beauty market that contracted by some 23%. The Division
continued to make market share gains, harnessing the power of its
top brands, especially those with strong positions in skincare,
such as Kiehl’s, Lancôme and Helena Rubinstein. The latest
fragrance launches, such as Libre by Yves Saint Laurent, also
performed strongly, alongside the historic pillars. Makeup remains
the category most affected by the crisis. L’Oréal Luxe is making
market share gains across all Zones, with the sole exception of
North America. At the end of the first half, the first encouraging
signs of upturn were confirmed in the major luxury markets,
particularly in Asia and especially in China, where the Division
returned to growth of more than 30% 1. But this is also true of
Western Europe (France, Germany) where Mother’s Day and Father’s
Day triggered an upturn in consumption. The Division has continued
to see very strong growth in e-commerce, which worldwide has
increased by more than 65% 2. Travel Retail however continues to be
severely affected by the low level of air traffic.The gradual
reopening of brick-and-mortar outlets and the sustained plan of
major global launches in the second half should enable L’Oréal Luxe
to benefit from the rebound in business and to outperform the
market.
ACTIVE COSMETICS
In a sluggish dermocosmetics market, the
Active Cosmetics Division posted sustained growth at +9.0%
like-for-like and +6.0% reported, at the end of June. In the
second quarter, the Division produced a robust performance at +4.3%
1. This was the result of the strong mobilisation of the teams, who
used digital leverage to intensify brand activation and strengthen
relationships with prescribers and consumers. The Division
benefited from its expertise in e-commerce, which became the number
one growth driver in all Zones. The Division’s performance was
particularly strong in Asia and in North America, where CeraVe,
SkinCeuticals, and La Roche-Posay posted double-digit growth and
new market share gains. These same brands have also produced an
excellent performance on a global level. CeraVe, in particular, the
number one brand in terms of contribution to the Division’s growth,
posted double-digit growth in all Zones.
Summary by geographic Zone
WESTERN EUROPE
The Zone is at -16.1% like-for-like and -15.6%
reported. The market in Western Europe has been heavily impacted by
lockdown measures, and by the closure of hair salons, department
stores and perfumeries in almost all countries. Since mid-May, the
market has started to pick up, particularly in the haircare and
skincare categories. The upturn is however more gradual in makeup
and sun care. The southern countries, such as Spain and Italy, have
felt the strongest impact, because the lockdown there was longer
and e-commerce structurally less developed, while Germany, the
Netherlands, and the Scandinavian countries proved more
resilient.In this difficult context, the Consumer Products Division
doubled its online sales, and performed very strongly in home-use
hair colour. Garnier strengthened its positions, with a
particularly good start for the Fructis Hair Food line. L’Oréal
Luxe outperformed its market, especially in fragrances and in
skincare with Biotherm. At the end of June, the Active Cosmetics
Division posted growth for its brands La Roche-Posay and
SkinCeuticals. CeraVe accelerated very strongly, but Vichy has been
held back by a contraction in the anti-ageing market. The
Professional Products Division has been hit by hair salon closures,
but the recovery is encouraging. E-commerce was very dynamic in the
second quarter at +91% 2, even after lockdown measures were
eased.
NORTH AMERICA
The Zone is at -15.2% like-for-like and -13.1%
reported. The second quarter was severely impacted by lockdown
measures. If the market is showing encouraging signs of recovery
since the progressive re-opening of points of sale, uncertainty
remains due to a contrasted sanitary situation between different
States in the United States. The most notable achievement is the
considerable e-commerce acceleration in all Divisions that remains
very dynamic even after point of sales reopening.The Consumer
Products Division was penalised by its strong footprint in makeup.
It reinforced its leadership in hair colour and accelerated in
skincare thanks to L’Oréal Paris Revitalift Hyaluronic Acid Serum
and 10% Pure Glycolic Acid Serum. The Division had strong market
share gains online with triple digit growth. L’Oréal Luxe mitigated
the impact of store closures with an acceleration of its skincare,
thanks to Kiehl’s, Lancôme and IT Cosmetics, and e-commerce which
more than doubled in the second quarter. The Professional Products
Division suffered during April and May, but saw a rebound in June
with the reopening of the hair salons. The Division reinforced its
partnership with hair salons through financial support during the
crisis, especially through SalonCentric with double-digit growth in
June. The Active Cosmetics Division continued to record
double-digit growth and significant market share gains. CeraVe had
great momentum at more than 50%, supported by digital investment.
SkinCeuticals also posted double-digit growth.
NEW MARKETS
Asia Pacific: the Zone is at -3.9 % like-for-like and
-3.4 % reported, most countries still being impacted by the
pandemic during the second quarter.
Mainland China is at +17.5% like-for-like
and +16.2% reported. The Chinese beauty market rebounded into
positive territory in the second quarter. The appetite of Chinese
consumers for big brands, quality, and products they can trust,
remains very strong. Various shopping festivals, online and
offline, also helped to stimulate the rapid recovery of the market.
L’Oréal China accelerated its growth in the second quarter,
outperforming the market, and gained market shares in all Divisions
and in the skincare, makeup and haircare categories. Following
a strong first quarter, online sales remained dynamic. Since May,
sales in department stores and boutiques also returned to growth.
During the important online shopping festival on 18 June, L’Oréal
gained significant market share, thanks to its expertise in digital
activation. L’Oréal Paris and Lancôme took the top two positions in
the Tmall shopping day ranking.
In the rest of the Asia Pacific Zone, the
situation remains contrasted in most countries. The countries least
hit by the pandemic such as South Korea, Taiwan, Australia, New
Zealand and Vietnam, were back to growth in the month of June,
while Japan and South Asia were still affected by their high
exposure to the makeup category. Due to the total absence of
tourism, Hong Kong (SAR) remains significantly under the 2019
sales. The evolution of the pandemic in India remains progressive
and is affecting consumption significantly. Despite this overall
difficult situation, the L’Oréal Luxe and Active Cosmetics
Divisions gained market share in all major markets, especially in
the skincare category. E-commerce is, for all the Divisions
and markets, another strong growth driver achieving close to
60% 2 growth across the Zone.
Latin America: the Zone is at -13.9%
like-for-like and -25.0% reported, with contrasted situations by
country. It is worth noting the good performance of the Consumer
Products Division in Brazil, and the Active Cosmetics Division,
driven by CeraVe. After a widespread lockdown in April and May,
there were signs of recovery in all of the Zone’s markets in June.
This was driven by a gradual reopening of points of sale, but also
by the acceleration of e-commerce in the second quarter, which
posted triple-digit growth. Skincare growth was strong. Hair colour
recorded sustained growth in the Consumer Products Division, whilst
the Professional Products Division was held back by the closure of
hair salons in most countries throughout the second quarter. The
Active Cosmetics Division was stable. L’Oréal Luxe continued to
gain market shares in the Zone.
Eastern Europe: the Zone is at -12.1%
like-for-like and -14.2% reported. While the health situation is
improving in Central Europe, where most retail channels are open,
Russia, Turkey and Ukraine are still facing an acceleration of the
pandemic, and have threfore been more impacted by the crisis. Only
the Active Cosmetics Division posted growth in the second quarter,
while the other Divisions saw sales decrease, especially the
Professional Products Division following the closure of hair
salons. In June however, there were very encouraging signs of an
upturn, especially for the L’Oréal Luxe and Active Cosmetics
Divisions which both increased sales. E-commerce was dynamic,
accounting for more than 16% of sales.
Africa, Middle East: the Zone is at
-17.4% like-for-like and -19.1% reported. The Middle East continues
to be affected by the pandemic, particularly Saudi Arabia, Egypt
and Pakistan, where retail outlets have been facing recurring point
of sales closures. The pandemic started later in Sub-Saharan
Africa, but accelerated strongly in May and June. All the Divisions
are feeling its impact, with Active Cosmetics being the one least
affected.
Important events during the period 1/4/20 to
30/6/20
- On 14 May, L’Oréal announced the appointment of Myriam
Cohen-Welgryn, who joined the Group as President of the Active
Cosmetics Division and thus became a member of the Executive
Committee. She succeeds Brigitte Liberman, who elected to retire at
the end of the year, following 34 years within the
Group.
- On 18 June, L’Oréal announced the signing of an agreement to
acquire Thayers Natural Remedies, a US-based natural skincare
brand, from Henry Thayer Company. The brand will be integrated into
L’Oréal’s Consumer Products Division.
- On 25 June, L’Oréal launched its new sustainability programme
“L’Oréal for the Future”, laying down the Group’s latest set of
ambitions for 2030. In view of increasingly urgent environmental
and social challenges, L’Oréal is accelerating its transformation
in the fields of sustainability and inclusion.
- On 29 June, L’Oréal finalised the sale of the Roger &
Gallet brand to the French investment holding Impala, following the
announcement on 4 February 2020
- On 30 June, the Annual General Meeting of L’Oréal was held
behind closed doors. All the resolutions were approved, including
the dividend at 3.85 euros per share, the same as 2019.
2020 Half-Year results
The limited review procedures of the half-year consolidated
accounts have been completed. The limited review report is being
prepared by the Statutory Auditors.
Operating profitability at 18.0% of
sales
Consolidated profit and loss account: from sales
to operating profit.
In € million |
30/6/19 |
As % of sales |
31/12/19 |
As % of sales |
30/6/20 |
As % of sales |
ChangeH1-2020 vs. H1-2019 |
Sales |
14,811.5 |
100.0% |
29,873.6 |
100.0% |
13,076.5 |
100.0% |
-11.7% |
Cost of sales |
-3,988.5 |
26.9% |
-8,064.7 |
27.0% |
-3,512.3 |
26.9% |
|
Gross profit |
10,823.0 |
73.1% |
21,808.9 |
73.0% |
9,564.2 |
73.1% |
Stable |
R&D expenses |
-459.7 |
3.1% |
-985.3 |
3.3% |
-455.3 |
3.5% |
|
Advertising and promotion expenses |
-4,471.7 |
30.2% |
-9,207.8 |
30.8% |
-3,986.5 |
30.5% |
|
Selling, general and administrative expenses |
-3,003.3 |
20.3% |
-6,068.3 |
20.3% |
-2,765.2 |
21.1% |
|
Operating profit |
2,888.4 |
19.5% |
5,547.5 |
18.6% |
2,357.2 |
18.0% |
-150 bps |
Gross profit, at 9,564 million euros,
came out at 73.1% of sales, stable compared to the first half of
2019.
Research and Development expenses, at 455
million euros, came out at 3.5% of sales.
Advertising and promotion expenses came
out at 30.5% of sales, an increase of 30 basis points.
Selling, general and administrative
expenses, at 21.1% of sales, have increased by 80 basis points
compared to the 2019 first half.
Overall, operating profit came out at
2,357 million euros, an increase of 150 basis points compared to
the 2019 first half, at 18.0% of sales.
Operating profit by Division
|
30/6/19 |
31/12/19 |
30/6/20 |
|
€m |
% of sales |
€m |
% of sales |
€m |
% of sales |
By
Division |
|
|
|
|
|
|
Professional Products |
327.9 |
19.1% |
691.6 |
20.1% |
140.0 |
10.4% |
Consumer
Products |
1,351.1 |
20.7% |
2,574.6 |
20.2% |
1,243.7 |
21.3% |
L’Oréal
Luxe |
1,227.3 |
23.8% |
2,493.7 |
22.6% |
892.0 |
20.4% |
Active
Cosmetics |
376.1 |
26.5% |
620.8 |
23.3% |
433.8 |
28.9% |
Total
Divisionsbefore non-allocated |
3,282.3 |
22.2% |
6,380.7 |
21.4% |
2,709.5 |
20.7% |
Non-allocated 4 |
-393.9 |
-2.7% |
-833.2 |
-2.8% |
-352.3 |
-2.7% |
Group |
2,888.4 |
19.5% |
5,547.5 |
18.6% |
2,357.2 |
18.0% |
The L’Oréal group is managed on an annual basis.
This means that half-year operating profits cannot be extrapolated
for the whole year.
The profitability of the Professional
Products Division has gone from 19.1% to 10.4%.
The profitability of the Consumer Products
Division improved by 60 basis points at 21.3%.
L’Oréal Luxe posted a profitability of
20.4% compared to 23.8% in the first half of 2019.
The profitability of the Active Cosmetics
Division increased again to achieve a very high level at
28.9%.
Net profit excluding non-recurring
items
Consolidated profit and loss account: from
operating profit to net profit excluding non-recurring items.
In € million |
30/6/19 |
31/12/19 |
30/6/20 |
Change H1-2020 vs. H1-2019 |
Operating profit |
2,888.4 |
5,547.5 |
2,357.2 |
-18.4% |
Financial revenues and expenses excluding dividends received |
-30.2 |
-62.7 |
-36.5 |
|
Sanofi dividends |
363.0 |
363.0 |
372.4 |
|
Profit before tax and associates excluding non-recurring items |
3,221.1 |
5,847.9 |
2,693.0 |
-16.4% |
Income tax excluding non-recurring items |
-748.8 |
-1,486.7 |
-547.9 |
|
Net profit excluding non-recurring items of equity consolidated
companies |
0.0 |
+1.0 |
+0.7 |
|
Non-controlling interests |
-6.1 |
-5.4 |
-1.1 |
|
Net profit excluding non-recurring items, after non-controlling
interests 5 |
2,466.2 |
4,356.9 |
2,144.8 |
|
EPS 3 (€) |
4.38 |
7.74 |
3.82 |
-12.7% |
Diluted average number of shares |
563,247,153 |
562,813,129 |
561,233,745 |
|
Overall financial expenses came out at
36.5 million euros.
Sanofi dividends amounted to 372 million
euros.
Income tax excluding non-recurring items
came out at 547 million euros, i.e. a tax rate of 20.3%, lower than
the 2019 first half.
Net profit excluding non-recurring items
after non-controlling interests came out at 2,144 million
euros.
Earnings per share, at 3.82 euros, has
decreased by -12.7% compared with the first half of 2019.
Net profit
Consolidated profit and loss account: from net profit excluding
non-recurring items to net profit.
In € million |
30/6/19 |
31/12/19 |
30/6/20 |
Net profit excluding non-recurring items, after
non-controlling interests 5 |
2,466.2 |
4,356.9 |
2,144.8 |
Non-recurring items |
-139.5 |
-606.9 |
-322.3 |
of which: |
|
|
|
o other income and expenses |
-170.3 |
-436.5 |
-407.1 |
o tax effect |
+30.8 |
-170.4 |
+84.8 |
|
|
|
|
Net profit after non-controlling interests |
2,326.7 |
3,750.0 |
1,822.5 |
Non-recurring items amounted to 322 million
euros, net of tax, of which 407 million euros other income and
expenses, principally made of:
- Asset depreciation for 90 million euros,
- Restructuring charges of 133 million euros,
- And costs generated by the sanitary crisis for 140 million
euros, including health protection measures for employees and
expenses derived from the decisions made by the different
government authorities, to impose a sudden and total closing of
some of our businesses due to lockdown measures over a defined
period of time.
Operating cash flow and balance sheet
Gross cash flow amounted to 2,668 million
euros. Its evolution is in line with the net profit.
The change in working capital amounted to
889 million euros.
Investments, at 504 million euros,
represented 3.8% of sales.
Operating cash flow amounted to 1,274
million euros.
At 30 June 2020, after taking into account
finance lease liabilities for 1,858 million euros, net cash
amounted to 2,161 million euros.
“This news release 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, also available in English on our
Internet site www.loreal-finance.com.This news release 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.”
This is a free translation into English of the
2020 Half-Year Results news release issued in the French language
and is provided solely for the convenience of English-speaking
readers. In case of discrepancy, the French version prevails.
CONTACTS AT L'ORÉAL
Individual shareholders and market authorities Mr
Christian MUNICH Tel.: +33 1 47 56 72 06
christian.munich2@loreal.com
Financial analysts and Institutional investors Ms
Françoise LAUVIN Tel.: +33 1 47 56 86 82
francoise.lauvin@loreal.com
Journalists Ms Domitille FAFIN Tel.: +33 1 47 56 76
71 domitille.fafin@loreal.com
Switchboard: +33 1 47 56 70 00
For further information, please contact your
bank, stockbroker or financial institution (I.S.I.N. code:
FR0000120321), and consult your usual newspapers or magazines or
the Internet site for shareholders and investors,
www.loreal-finance.com,the L’Oréal Finance app or call the
toll-free number from France: 0 800 66 66 66.
Appendices
Appendix 1: L’Oréal group sales 2019/2020 (€ million)
|
2019 |
2020 |
First quarter |
7,550.5 |
7,225.2 |
Second quarter |
7,261.0 |
5,851.3 |
First half total |
14,811.5 |
13,076.5 |
Third quarter |
7,182.8 |
|
Nine months total |
21,994.3 |
|
Fourth quarter |
7,879.3 |
|
Full year total |
29,873.6 |
|
Appendix 2: compared consolidated income statements
€ millions |
1st half 2020 |
1st half 2019 |
2019 |
Net
sales |
13,076.5 |
14,811.5 |
29,873.6 |
Cost
of sales |
-3,512.3 |
-3,988.5 |
-8,064.7 |
Gross profit |
9,564.2 |
10,823.0 |
21,808.9 |
Research and innovation expenses |
-455.3 |
-459.7 |
-985.3 |
Advertising and promotion expenses |
-3,986.5 |
-4,471.7 |
-9,207.8 |
Selling, general and administrative expenses |
-2,765.2 |
-3,003.3 |
-6,068.3 |
Operating profit |
2,357.2 |
2,888.4 |
5,547.5 |
Other
income and expenses |
-407.1 |
-170.4 |
-436.5 |
Operational profit |
1,950.1 |
2,718.0 |
5,111.0 |
Finance costs on gross debt |
-33.3 |
-40.7 |
-75.4 |
Finance income on cash and cash equivalents |
10.6 |
18.3 |
28.7 |
Finance costs, net |
-22.7 |
-22.4 |
-46.7 |
Other
financial income and expenses |
-13.8 |
-7.8 |
-16.0 |
Sanofi
dividends |
372.4 |
363.0 |
363.0 |
Profit before tax and associates |
2,286.0 |
3,050.8 |
5,411.4 |
Income
tax |
-463.1 |
-718.1 |
-1,657.2 |
Share
of profit in associates |
0.7 |
- |
1.0 |
Net
profit |
1,823.6 |
2,332.7 |
3,755.2 |
Attributable to: |
|
|
|
•
owners of the company |
1,822.5 |
2,326.7 |
3,750.0 |
•
non-controlling interests |
1.1 |
6.0 |
5.2 |
Earnings per share attributable to owners of the company
(euros) |
3.26 |
4.15 |
6.70 |
Diluted earnings per share attributable to owners of the company
(euros) |
3.25 |
4.13 |
6.66 |
Earnings per share of continuing operations attributable to owners
of the company, excluding non-recurring items (euros) |
3.84 |
4.40 |
7.78 |
Diluted earnings per share of continuing operations attributable to
owners of the company, excluding non-recurring items (euros) |
3.82 |
4.38 |
7.74 |
Appendix 3: consolidated statement of comprehensive
income
€ millions |
1st half 2020 |
1st half 2019 |
2019 |
Consolidated net profit for the period |
1,823.6 |
2,332.7 |
3,755.2 |
Cash flow hedges |
106.6 |
-6.9 |
2.9 |
Cumulative translation adjustments |
-271.8 |
79.7 |
188.2 |
Income tax on items that may be reclassified to profit or loss
(1) |
-27.9 |
4.5 |
-1.9 |
Items that may be reclassified to profit or loss |
-193.1 |
77.3 |
189.2 |
Financial assets at fair value through profit or loss |
129.1 |
29.6 |
1,650.6 |
Actuarial gains and losses |
-159.2 |
-131.3 |
-327.7 |
Income tax on items that may not be reclassified to profit or loss
(1) |
36.5 |
33.0 |
29.7 |
Items that may not be reclassified to profit or loss |
6.4 |
-68.7 |
1,352.6 |
Other comprehensive income |
-186.7 |
8.6 |
1,541.8 |
Consolidated comprehensive income |
1,636.9 |
2,341.3 |
5,297.0 |
Attributable to: |
|
|
|
•
owners of the company |
1,635.8 |
2,335.4 |
5,291.9 |
•
non-controlling interests |
1.1 |
5.9 |
5.1 |
(1) The tax effect is as
follows:
€ millions |
1st half 2020 |
1st half 2019 |
2019 |
Cash flow hedges |
-27.9 |
4.5 |
-1.9 |
Items that may be reclassified to profit or loss |
-27.9 |
4.5 |
-1.9 |
Financial assets at fair value through profit or loss |
-3.4 |
-0.9 |
-51.7 |
Actuarial gains and losses |
39.9 |
33.9 |
81.4 |
Items that may not be reclassified
to profit or loss |
36.5 |
33.0 |
29.7 |
TOTAL |
8.6 |
37.5 |
27.8 |
Appendix 4: compared consolidated balance sheets
▌ ASSETS
€ millions |
30.06.2020 |
30.06.2019 |
31.12.2019 |
Non-current assets |
30,806.3 |
28,054.8 |
29,893.3 |
Goodwill |
10,856.5 |
9,571.1 |
9,585.6 |
Other
intangible assets |
3,066.7 |
3,014.1 |
3,163.8 |
Right-of-use assets |
1,723.7 |
2,009.9 |
1,892.3 |
Property, plant and equipment |
3,418.0 |
3,598.6 |
3,644.3 |
Non-current financial assets |
10,932.2 |
9,157.8 |
10,819.1 |
Investments in associates |
11.4 |
9.5 |
10.9 |
Deferred tax assets |
797.8 |
693.8 |
777.3 |
Current assets |
15,045.7 |
12,438.3 |
13,916.5 |
Inventories |
2,947.6 |
2,930.1 |
2,920.8 |
Trade
accounts receivable |
3,756.1 |
4,514.4 |
4,086.7 |
Other
current assets |
1,698.1 |
1,529.3 |
1,474.9 |
Current tax assets |
202.3 |
78.2 |
148.1 |
Cash
and cash equivalents |
6,441.6 |
3,386.3 |
5,286.0 |
TOTAL |
45,852.0 |
40,493.1 |
43,809.8 |
▌ EQUITY &
LIABILITIES
€ millions |
30.06.2020 |
30.06.2019 |
31.12.2019 |
Equity |
28,987.0 |
27,122.1 |
29,426.0 |
Share
capital |
111.9 |
112.3 |
111.6 |
Additional paid-in capital |
3,158.2 |
3,108.8 |
3,130.2 |
Other
reserves |
18,581.3 |
17,659.5 |
16,930.9 |
Other
comprehensive income |
5,680.9 |
4,171.0 |
5,595.8 |
Cumulative translation adjustments |
-371.0 |
-207.5 |
-99.2 |
Treasury shares |
- |
-56.5 |
- |
Net
profit attributable to owners of the company |
1,822.5 |
2,326.7 |
3,750.0 |
Equity attributable to owners of the company |
28,983.8 |
27,114.3 |
29,419.3 |
Non-controlling interests |
3.2 |
7.8 |
6.7 |
Non-current liabilities |
3,414.2 |
3,350.5 |
3,515.3 |
Provisions for employee retirement obligations and related
benefits |
941.4 |
552.5 |
772.9 |
Provisions for liabilities and charges and other non-current
liabilities |
308.7 |
354.1 |
367.1 |
Deferred tax liabilities |
693.8 |
685.7 |
737.7 |
Non-current borrowings and debt |
9.6 |
9.4 |
9.6 |
Non-current lease debt |
1,460.7 |
1,748.8 |
1,628.0 |
Current liabilities |
13,450.8 |
10,020.5 |
10,868.5 |
Trade
accounts payable |
4,124.6 |
4,498.8 |
4,658.4 |
Provisions for liabilities and charges |
1,029.6 |
1,016.9 |
1,117.8 |
Other
current liabilities |
5,160.1 |
2,767.7 |
3,508.5 |
Income
tax |
326.9 |
309.7 |
334.8 |
Current borrowings and debt |
2,411.5 |
1,025.2 |
841.2 |
Current lease debt |
398.1 |
402.2 |
407.9 |
TOTAL |
45,852.0 |
40,493.1 |
43,809.8 |
Appendix 5: consolidated statements of
changes in equity
€ millions |
Common shares outstanding |
Share capital |
Additional paid-in capital |
Retained earnings and net profit |
Other comprehensive income |
Treasury shares |
Cumulative translation adjustments |
Equity attributable to owners of the company |
Non- controlling interests |
Total equity |
At
31.12.2018 |
559,625,527 |
112.1 |
3,070.3 |
19,847.8 |
4,242.1 |
-56.5 |
-287.4 |
26,928.4 |
5.2 |
26,933.6 |
Change
in accounting policy at 01.01.2019 |
|
|
|
-81.5 |
|
|
|
-81.5 |
|
-81.5 |
At
01.01.2019 (1) |
559,625,527 |
112.1 |
3,070.3 |
19,766.3 |
4,242.1 |
-56.5 |
-287.4 |
26,847.0 |
5.2 |
26,852.2 |
Consolidated net profit for the period |
|
|
|
3,750.0 |
|
|
|
3,750.0 |
5.2 |
3,755.2 |
Cash flow hedges |
|
|
|
|
1.1 |
|
|
1.1 |
-0.1 |
1.0 |
Cumulative translation adjustments |
|
|
|
|
|
|
174.1 |
174.1 |
|
174.1 |
Hyperinflation |
|
|
|
|
|
|
14.1 |
14.1 |
0.0 |
14.1 |
Other comprehensive income that may be reclassified to
profit and loss |
|
|
|
|
1.1 |
|
188.2 |
189.3 |
-0.1 |
189.2 |
Financial assets at fair value through profit or loss |
|
|
|
|
1,598.9 |
|
|
1,598.9 |
|
1,598.9 |
Actuarial gains and losses |
|
|
|
|
-246.3 |
|
|
-246.3 |
|
-246.3 |
Other comprehensive income that may not be reclassified to
profit and loss |
|
|
|
|
1,352.6 |
|
|
1,352.6 |
|
1,352.6 |
Consolidated comprehensive income |
|
|
|
3,750.0 |
1,353.7 |
|
188.2 |
5,291.9 |
5.1 |
5,297.0 |
Capital increase |
1,491,678 |
0.3 |
59.9 |
-0.1 |
|
|
|
60.0 |
|
60.0 |
Cancellation of Treasury shares |
|
-0.8 |
|
-803.0 |
|
803.8 |
|
- |
|
- |
Dividends paid (not paid on Treasury shares) |
|
|
|
-2,176.7 |
|
|
|
-2,176.7 |
-3.6 |
-2,180.3 |
Share-based payment |
|
|
|
144.4 |
|
|
|
144.4 |
|
144.4 |
Net
changes in Treasury shares |
-3,000,000 |
|
|
|
|
-747.3 |
|
-747.3 |
|
-747.3 |
Changes in scope of consolidation |
|
|
|
|
|
|
|
- |
|
- |
Other
movements |
|
|
|
-0.1 |
|
|
|
-0.1 |
|
-0.1 |
At
31.12.2019 |
558,117,205 |
111.6 |
3,130.2 |
20,680.9 |
5,595.8 |
- |
-99.2 |
29,419.3 |
6.7 |
29,426.0 |
Consolidated net profit for the period |
|
|
|
1,822.5 |
|
|
|
1,822.5 |
1.1 |
1,823.6 |
Cash flow hedges |
|
|
|
|
78.7 |
|
|
78.7 |
|
78.7 |
Cumulative translation adjustments |
|
|
|
|
|
|
-276.8 |
-276.8 |
|
-276.8 |
Hyperinflation |
|
|
|
|
|
|
5.0 |
5.0 |
|
5.0 |
Other comprehensive income that may be reclassified to profit
and loss |
|
|
|
|
78.7 |
|
-271.8 |
-193.1 |
|
-193.1 |
Financial assets at fair value through profit or loss |
|
|
|
|
125.7 |
|
|
125.7 |
|
125.7 |
Actuarial gains and losses |
|
|
|
|
-119.3 |
|
|
-119.3 |
|
-119.3 |
Other comprehensive income that may not be reclassified to
profit and loss |
|
|
|
|
6.4 |
|
|
6.4 |
- |
6.4 |
Consolidated comprehensive income |
|
|
|
1,822.5 |
85.1 |
|
-271.8 |
1,635.8 |
1.1 |
1,636.9 |
Capital increase |
1,180,975 |
0.2 |
28.0 |
-0.2 |
|
|
|
28.1 |
|
28.1 |
Cancellation of Treasury shares |
|
|
|
|
|
|
|
- |
- |
- |
Dividends paid (not paid on Treasury shares) (2) |
|
|
|
-2,166.5 |
|
|
|
-2,166.5 |
-4.9 |
-2,171.3 |
Share-based payment |
|
|
|
67.3 |
|
|
|
67.3 |
|
67.3 |
Net
changes in Treasury shares |
|
|
|
|
|
|
|
- |
|
- |
Changes in scope of consolidation |
|
|
|
|
|
|
|
- |
0.3 |
0.3 |
Other movements |
|
|
|
-0.3 |
|
|
|
-0.3 |
|
-0.3 |
AT 30.06.2020 |
559,298,180 |
111.9 |
3,158.2 |
20,403.8 |
5,680.9 |
|
-371.0 |
28,983.8 |
3.2 |
28,987.0 |
(1) After taking into
account of the change in accounting policy pertaining to IFRS 16
“Leases”.
(2) As the Annual
General Meeting to approve the financial statements as at 31
December 2019 was held on 30 June 2020, the dividends for financial
year 2019 were not paid at 30 June 2020 and are presented on the
balance sheet in “Other current liabilities”.
CHANGES IN FIRST-HALF 2019
€ millions |
Common shares outstanding |
Share capital |
Additional paid-in capital |
Retained earnings and net profit |
Other comprehensive income |
Treasury shares |
Cumulative translation adjustments |
Equity attributable to owners of the company |
Non- controlling interests |
Total equity |
At
31.12.2018 |
559,625,527 |
112.1 |
3,070.3 |
19,847.8 |
4,242.1 |
-56.5 |
-287.4 |
26,928.4 |
5.2 |
26,933.6 |
Changes in accounting policy at 01.01.2019 |
|
|
|
-81.8 |
|
|
|
-81.8 |
|
-81.8 |
At
01.01.2019 (1) |
559,625,527 |
112.1 |
3,070.3 |
19,766.1 |
4,242.1 |
-56.5 |
-287.4 |
26,846.7 |
5.2 |
26,851.9 |
Consolidated net profit for the period |
|
|
|
2,326.7 |
|
|
|
2,326.7 |
6.0 |
2,332.7 |
Cash flow hedges |
|
|
|
|
-2.4 |
|
|
-2.4 |
|
-2.4 |
Cumulative translation adjustments |
|
|
|
|
|
|
67.8 |
67.8 |
-0.1 |
67.8 |
Hyperinflation |
|
|
|
|
|
|
12.0 |
12.0 |
|
12.0 |
Other comprehensive income that may be reclassified to profit
and loss |
|
|
|
|
-2.4 |
|
79.9 |
77.5 |
-0.1 |
77.4 |
Financial assets at fair value through profit or loss |
|
|
|
|
28.6 |
|
|
28.6 |
|
28.6 |
Actuarial gains and losses |
|
|
|
|
-97.4 |
|
|
-97.4 |
|
-97.4 |
Other comprehensive income that may not be reclassified to
profit and loss |
|
|
|
|
-68.8 |
|
|
-68.8 |
- |
-68.8 |
Consolidated comprehensive income |
|
|
|
2,326.7 |
-71.2 |
|
79.9 |
2,335.4 |
5.9 |
2,341.3 |
Capital increase |
1,226,092 |
0.2 |
38.5 |
-0.1 |
|
|
|
38.6 |
|
38.6 |
Cancellation of Treasury shares |
|
|
|
|
|
|
|
- |
|
- |
Dividends paid (not paid on Treasury shares) |
|
|
|
-2,176.7 |
|
|
|
-2,176.7 |
-3.6 |
-2,180.3 |
Share-based payment |
|
|
|
70.0 |
|
|
|
70.0 |
|
70.0 |
Net
changes in Treasury shares |
|
|
|
|
|
|
|
- |
|
- |
Changes in scope of consolidation |
|
|
|
|
|
|
|
- |
0.3 |
0.3 |
Other movements |
|
|
|
0.3 |
|
|
|
0.3 |
|
0.3 |
AT 30.06.2019 |
560,851,619 |
112.3 |
3,108.8 |
19,986.3 |
4,171.0 |
-56.5 |
-207.5 |
27,114.3 |
7.8 |
27,122.1 |
(1) After taking
into account of the change in accounting policy pertaining to IFRS
16 “Leases”.
Appendix 6: compared consolidated statements
of cash flows
€ millions |
1st half 2020 |
1st half 2019 |
2019 |
Cash
flows from operating activities |
|
|
|
Net
profit attributable to owners of the company |
1,822.5 |
2,326.7 |
3,750.0 |
Non-controlling interests |
1.1 |
6.0 |
5.2 |
Elimination of expenses and income with no impact on cash
flows: |
|
|
|
•
depreciation, amortisation, provisions and other non-current
liabilities |
787.4 |
923.8 |
1,958.3 |
•
changes in deferred taxes |
-16.3 |
-20.9 |
-42.5 |
•
share-based payment (including free shares) |
67.3 |
70.0 |
144.4 |
•
capital gains and losses on disposals of assets |
4.5 |
-1.9 |
-14.0 |
Other
non-cash transactions |
2.9 |
1.6 |
1.9 |
Share
of profit in associates net of dividends received |
-0.7 |
- |
-1.0 |
Gross cash flow |
2,668.6 |
3,305.3 |
5,802.3 |
Changes
in working capital |
-889.2 |
-813.0 |
460.5 |
Net
cash provided by operating activities (A) |
1,779.4 |
2,492.3 |
6,262.8 |
Cash
flows from investing activities |
|
|
|
Purchases of property, plant and equipment and intangible
assets |
-504.8 |
-559.8 |
-1,231.0 |
Disposals of property, plant and equipment and intangible
assets |
18.6 |
8.1 |
16.6 |
Changes
in other financial assets (including investments in
non-consolidated companies) |
6.6 |
-22.1 |
-65.9 |
Effect
of changes in the scope of consolidation |
-1,316.5 |
-7.2 |
-9.3 |
Net
cash from investing activities (B) |
-1,796.0 |
-581.0 |
-1,289.6 |
Cash
flows from financing activities |
|
|
|
Dividends paid |
-82.6 |
-2,198.2 |
-2,221.1 |
Capital
increase of the parent company |
28.1 |
38.6 |
60.0 |
Capital
increase of subsidiaries |
- |
- |
- |
Disposal (acquisition) of Treasury shares |
- |
- |
-747.3 |
Purchase of non-controlling interests |
- |
- |
- |
Issuance (repayment) of short-term loans |
1,509.3 |
-82.9 |
-354.9 |
Issuance of long-term borrowings |
- |
- |
- |
Repayment of long-term borrowings |
- |
-0.6 |
-0.6 |
Repayment of lease debt |
-219.7 |
-158.3 |
-425.8 |
Net
cash from financing activities (C) |
1,235.1 |
-2,401.4 |
-3,689.6 |
Net
effect of changes in exchange rates and fair value (D) |
-62.8 |
-115.6 |
10.5 |
Change in cash and cash equivalents (A+B+C+D) |
1,155.6 |
-605.7 |
1,294.0 |
Cash and cash equivalents at
beginning of the period (E) |
5,286.0 |
3,992.0 |
3,992.0 |
CASH AND CASH EQUIVALENTS AT THE END
OF THE PERIOD (A+B+C+D+E) |
6,441.6 |
3,386.3 |
5,286.0 |
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1 Like-for-like: based on a comparable structure
and identical exchange rates.2 Sales achieved on our brands’ own
websites + estimated sales achieved by our brands corresponding to
sales through our retailers’ e-commerce websites (non-audited
data).3 Diluted net earnings per share, excluding non-recurring
items, after non-controlling interests.4 Non-allocated expenses =
Central Group expenses, fundamental research expenses, stock
options and free grant of shares expenses and miscellaneous items.
As a % of total Divisions sales.5 Net profit excluding
non-recurring items, after non-controlling interests, excludes
mostly capital gains and losses on disposals of long-term assets,
impairment of assets, restructuring costs, tax effects and
non-controlling interests.
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