A sustainable business model

L’Oréal’s excellence is underpinned by a model that is stable, successful and bold. Read on for a closer look at this value-creating strategy.

Finance’s core business: creating value

Finance teams are a major strategic asset for the Group’s transformation. Their ability to anticipate the changes to be implemented within our ecosystem and value chain helps maintain L’Oréal’s momentum while guaranteeing growth that is both profitable and sustainable.

The Group’s achievements are clear proof of L’Oréal’s virtuous circle: improvement in our gross margin paired with rigorous cost control has allowed us to invest heavily in brand growth and increase profitability. 

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Value creation

Supporting Group growth through acquisitions

Over the course of its history, L’Oréal has consistently demonstrated its ability to identify promising projects and high-potential brands. We have secured success through a combination of smart strategic choices, the provision of relevant resources and appropriate means, and unique expertise. Acquisition-based expansion remains a powerful growth driver for the Group, empowering L’Oréal to meet all beauty aspirations across the globe. Each acquisition represents a new chapter, a new value chain and new expertise.

For example, the 2021 acquisition of Japanese brand Takami Co., which is based on clinical dermatological skincare expertise, gave L’Oréal an opportunity to explore a new model: subscription-based sales. These new capabilities strengthen the Group’s entrepreneurial spirit and complement its brand portfolio.

Each new acquisition brings an opportunity to innovate, develop new technologies, explore new distribution channels and test all-new growth models. Acquisitions also contribute to the Group’s future growth. 

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BOLD: investing in innovation for the beauty of tomorrow

L’Oréal also invests in the beauty of tomorrow by supporting high-potential startups via its Business Opportunities for L’Oréal Development (BOLD) investment fund. By acquiring minority shares in promising companies, the Group provides them with the means to develop unique innovations in line with L’Oréal’s purpose: creating the beauty that moves the world. This form of investment also preserves their independence.

For example, L’Oréal has invested in Carbios, a circular-economy pioneer that develops enzyme-based procedures to break down plastic; Sillages, a brand of personalised fragrances; and Gjosa, a startup that designed an innovative showerhead in 2021 able to rinse out shampoo with 2.4 litres of water instead of the usual 7. These investments in green chemistry, sustainable development and connected beauty are real opportunities for the future of beauty, which L’Oréal encourages and supports.