Innovation has been and remains the core of the L’Oréal model: the Group was born from a breakthrough innovation – safe hair dye invented by its founder Eugène Schueller. L’Oréal believes that beauty happens when science and creativity come together to meet the needs of consumers who expect new experiences over and above products and services. The discoveries of R&I, as well as the unique intuition and creativity of the marketing teams, mean that products are constantly evolving to meet consumers’ needs. Because L’Oréal records a significant share of its net sales with new products every year, the Group has a duty to be the champion of cosmetics innovation.
The beauty of the future is now focused on the Green Sciences programme on the one hand, which is based on four pillars: sustainable cultivation, biotechnology and fermentation, green chemistry and green extraction to give the Group’s products a competitive advantage, and on Beauty Tech on the other hand, to enhance science using cutting- edge technologies on a large scale and offer unparalleled beauty experiences. Innovation is at the heart of the model and, coupled with technology, is a driving force for growth and discovery of new areas of beauty. Data, artificial intelligence, robotics and nanotechnologies will strengthen and speed up the Group’s innovations to help make it a champion of Beauty Tech. L’Oréal also draws on some of the biggest strategic data partnerships, most notably with Bakar Labs, the biotechnology incubator of the University of California, Berkeley. In early 2024, scientists from L’Oréal Advanced Research and the University of Oregon pioneered the first successful development of a revolutionary artificial skin model that closely resembles natural human skin.
L’Oréal invents the beauty of the future while becoming the company of the future. See also the “Transformation to Beauty Tech to invent the beauty of the future” section in 1.3.3.
Over the next decade, the cosmetics market will become more digital and competitive, with the arrival of new players notably from new markets, from a host of local independent brands on social media (“indies”), or from other industries such as fashion, luxury and e-commerce. In this context, L’Oréal’s expertise and excellence in creating and developing major brands that are prized by consumers all over the world will be essential assets. L’Oréal has always been able to create star products, from brand new franchise launches to innovations that evolve into "icons" over time. The skills of the marketing departments for our brands and R&I laboratories are key assets in the collaborative, agile design of new products, services and unique consumer experiences.
L’Oréal’s global footprint enables it to optimise its growth by continuously adapting to the context it faces, seize opportunities as they arise and minimise exposure to areas where business is slower. In terms of Zones, Europe remains the historic cradle of the Group’s business, and the nerve centre of its operations. North America, currently the world’s largest beauty market, is boosted by its demographics, increasing ethnic diversity and therefore expectations of beauty, and the ongoing acceleration of e-commerce. In North Asia, China continues to suffer from challenging market conditions but will remain a major contributor to Group net sales, with its consumers representing a significant source of growth for the long term. Emerging markets, including Latin America, South-East Asia, India and the Middle East, represent a major accelerator for the Group, with a rapidly growing population and current trends of urbanisation, digitalisation and empowerment of women. L’Oréal continues to expand in Africa.
The Group’s four Divisions enable it to meet all consumer expectations. The Group’s primary Division, Consumer Products, aims to give the best of beauty a more premium feel while also making it accessible to more people. It is the Group’s main asset in its attempts to conquer the emerging markets. The Luxe Division responds to the desire for quality and experiences in the upper-middle classes. Dermatological Beauty meets increasingly high expectations in terms of skincare and remains the fastest-growing Division. Lastly, Professional Products enhances the sophistication of the market and the salon sector.
Economic and financial performance is not enough for L’Oréal. Because there will be no economic growth without sustainability in the future, L’Oréal has set itself the dual goal of excellence, in both the economic and societal domains. It will be the condition for its success and its long-term existence. Because L’Oréal is the global leader in beauty, it has the duty to contribute to the beauty of the planet and be a champion of CSR. And it is because L’Oréal is a social, environmental, societal and ethical leader that it will achieve greater performance in the future. The two performances go hand in hand and mutually enhance each other, as L’Oréal has demonstrated to date.
As the Group’s founder, Eugène Schueller, declared with conviction: "a company is not walls and machines, but people, people and more people." In keeping with the tradition of our founder, individuals and social harmony are at the heart of L’Oréal and must remain our priority in a climate where attracting talent is becoming increasingly complex. The Group’s values have always been humanist in nature. In entrepreneurial culture, passionate and committed teams are strategic intangible assets that always have and always will make all the difference.
L’Oréal’s human and social project constitutes both the strength and the appeal of its model in an ever-changing world. It is based around two priorities: the attention paid to developing each employee through ongoing learning, accelerated career paths or international careers; and a unique social model that combines competitive social performance and shared growth (profit-sharing, incentives, employee shareholding plan, etc.). Social innovation is at the heart of this approach, with the Share & Care programme being a notable example (see chapter 4).
For more than 20 years, L’Oréal has been committed to diversity, equity and inclusion and is recognised for its actions worldwide. The Group’s policy in this area is explained in greater detail in section 4.7.4.1.1.
