The assets and liabilities of foreign subsidiaries are translated at closing exchange rates. Income statement items are translated at average exchange rates for the year.
The resulting translation difference attributable to the Group is entered directly under equity under the item Cumulative translation adjustments, while the translation difference attributable to non-controlling interests is recognised under the Non-controlling interests item.
Goodwill generated on foreign companies is considered to form part of the assets and liabilities of the foreign company, and is therefore expressed in the entity’s functional currency and translated using the closing exchange rates in effect at the closing date. Goodwill recorded before 1 January 2004 continues to be recorded in euros.
Takeovers
On 9 January 2024, L'Oréal announced the signing of an agreement to acquire the entire capital of Gjosa, the Swiss company pioneer in the development of water micronization technology. L’Oréal had already made a first minority investment in Gjosa in 2021 up to 15% via its venture capital fund, BOLD (Business Opportunities for L’Oréal Development).
The closing was finalized on 31 January 2024 and has been fully consolidated since that date.
L’Oréal completed on 31 October 2024 the finalisation of the acquisition of 70% of a group of 6 aesthetic clinics located in China. YesSkin is founded by Dr. Song, a renowned and influential dermatologist in China. The aesthetic clinics offer injectables and machine treatments to clients and generate a turnover of 126 million yuan (corresponding to €16 million) in 2023.
This acquisition is fully consolidated.
The cost of these new acquisitions represented €77.1 million. The total amount of goodwill and other intangible assets resulting from their acquisitions provisionally amounted to €90.3 million.
Equity-accounted investment
During the third quarter of 2024, L’Oréal completed the acquisition of a minority stake in Amouage SAOC, the Oman-based haute parfumerie house founded in 1983 and controlled by SABCO Group LLC.
Takeovers
On 3 April, L’Oréal announced that it had signed an agreement with Natura & Co to acquire Aēsop, the Australian luxury beauty brand, for $2.6 billion. Created in 1987, Aēsop is a global super brand known for its skin, hair and body products, available across luxury retail, beauty and hospitality locations around the world. Aēsop operates online and in around 400 exclusive points of sale across the Americas, Europe, Australia and Asia, with a nascent footprint in China where the first store opened in 2022.
This acquisition was completed on 30 August 2023 and has been fully consolidated since that date.
In 2023, this acquisition represented €557.5 million in full-year net sales and €13.1 million in full-year operating profit.
The final allocation of the purchase price led to the recognition of goodwill of €1,784.3 million and is as follows:
| € million | Fair value at the date of acquisition |
|---|---|
| Intangible assets(1) | Intangible assets (1)Fair value at the date of acquisition577.0 |
| Other assets | Other assets Fair value at the date of acquisition428.4 |
| Cash | Cash Fair value at the date of acquisition74.8 |
| Other liabilities | Other liabilities Fair value at the date of acquisition(513.4) |
| Aēsop net assets | Aēsop net assetsFair value at the date of acquisition566.8 |
| Goodwill | Goodwill Fair value at the date of acquisition1,784.3 |
| ACQUISITION PRICE | ACQUISITION PRICEFair value at the date of acquisition2,351.1 |
(1) Including €521.8 million of brand and €54.9 million of technological assets.
On 4 December 2023, L’Oréal completed the acquisition of Lactobio, a leading probiotic and microbiome research company based in Copenhagen (Denmark). The strategic acquisition builds on 20 years of advanced research by L’Oréal into the microbiome scientific territory, deepening its knowledge of the microorganisms that live on the skin’s surface and reinforcing the Group’s leadership in this field. The acquisition also opens up new scientific opportunities, including leveraging Lactobio’s microbiome expertise and significant IP portfolio to develop safe and effective new cosmetic solutions using live bacteria.
The cost of this new acquisition represented €2,401.5 million. The total amount of goodwill and other intangible assets resulting from its acquisition amounted to €2,411.9 million.
Takeover
On 23 September 2022, L’Oréal signed an agreement to acquire Skinbetter Science, a physician-dispensed American skincare brand backed by cutting-edge, dermatological science, combining patented efficacious ingredients with luxurious sensorial textures.
