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- [00:00]
4imprint Announcer
Whatever your goal, trade show giveaways, client gifts or team gear, 4imprint has the promo products to match. With thousands of options from apparel and drinkware to tech and totes, it's easy to find the right fit for your brand and budget. With standout choices at every price point and with their 360 degree guarantee, you can be four imprint certain your order will show up just right, right on time. Explore more@4imprint.com 4imprint for certain
- [00:30]
Nicolas Hieronimus
Bloomberg Audio
- [00:31]
Bloomberg Host
Studios Podcasts Radio News Nikolai, thank you so much for joining us on Bloomberg. When you look at the trends from now until the end of the year, what are you most excited about? I know you've worked on innovation. The economy is what it is. Do people buy beauty differently?
- [00:49]
Nicolas Hieronimus
Well, I think people buy beauty. Which is the most important thing for me is that beauty is a very dynamic category and it shows once again its resilience in times of trouble. We call it, whether you call it the lipstick effect or the dopamine effect of beauty. The market's growing, it has accelerated a bit in Q2 and people are going for new or innovation for quality. And that's probably the, the reason behind our, our great first half at plus 6.5%, way above the market growth is that we brought a lot of innovation and of superior quality into the markets.
- [01:24]
Bloomberg Host
Is there a section of the markets because you're really exposed to, you know, some of the very high end brands and some of the more mass market. Is there a section of those that are actually doing better than expected?
- [01:37]
Nicolas Hieronimus
Well, the, the overall what's, what's great this year is that that's probably the strength of our portfolio. The breadth of our portfolio which goes with from products at 4 or 5 Euros to product at 300, is that all our divisions and brands are contributing? If I look at my the top four brands that are contributing to my growth, you have l' Oreal Paris, you have Carristas, you have la Roche, Poseni, St. Laurent. So a luxury brand, a dome brand, a mass market brand and a professional brand. And that shows that you have to have beauty for everyone. Now if we look at the categories or the, or the type of products that are flying the most, you've got two categories that are really driving the growth is hair care and fragrance. And as far as markets is concerned, you continue to see the metallurgical beauty extremely dynamic because people want safe and efficacious product which is what we provide with brands like Larouche, Posay or Survey, which are doing phenomenal in the beginning of the year.
- [02:35]
Bloomberg Host
Is there anything actually underlying that is boosting that growth? I know we talk a lot about GLP1s. Whether that changes our taste, whether that changes our hair, or is it something more fundamental about beauty because of advertisement or influencers?
- [02:49]
Nicolas Hieronimus
Well, I think, you know, beauty has always been a quest and everybody is trying to find their own, their own ways. And as far as hair care is concerned, for example, you've got, you've got several driving forces. One you mentioned, it's not the major one, but it's an important one. One is the GLP1 effect, which has both an impact on people wanting to buy products that protect the hair or help the hair regrow because they have some hair losses, some experience this. You also have a boom in in skin care products that provide firmness. By the way, we are launching right now a new products on Kiehl's that's called Color Shot, that's particularly designed for GLP1 users. But there's a much bigger underlying trend on hair care is that hair is longer and more diverse, which means that people need more care, more detangling products and better products in general. That's why there's a booming professional hair care products which are growing even faster than the category. So it's part of demographics. And you're right, there are Trends such as GLP1 which are impacting consumers habits. The good thing for us is that people on the GLP1 buy more beauty than before. So that's great.
- [04:02]
Bloomberg Host
Do your customers spend differently in the US than they do in Europe, than they do in Asia?
- [04:08]
Nicolas Hieronimus
Well, the markets are different. Asia is a skin care market. And the good thing about Asia is that it confirms that China is back to positive territory and is driven by luxury. So there's, I would say a stronger appetite right now for premium in in China. And our loyal Luxe division is at at +10 after six months in China, which is very positive. So China is more about skin care. The US has always been a very strong makeup market and remains so. But it's true there's been really an acceleration of hair care a lot in the US Overall consumption is pretty good in the US Consumers are pretty resilient. And then we see all around the world the need for better skin care, for UV protection. And that's also an area where some of our brands thrive with just long service sun care, which is doing great too. But in the end, I think, I know you're trying to find differences, but there's an overarching trends that people want beauty and want innovation. And one of the things we've done at l' Oreal is that we've more than doubled the weight of innovation in our business between this first half and last year's first half, which is also why we are gaining market share because consumers are constantly tempted by new ideas, new products. And you're right to mention influencers that play a very important role in bringing these new products to Life on TikTok or other channels. And you have to be in that game and to be providing very exciting new products. And that's, that's true all across the world, whether Asia, North America or even the Middle East.
- [05:55]
Bloomberg Host
So how much is that innovation actually achieved through AI and is it through selling or is it actually the some of the textures that you find which is helped by AI in research and development?
- [06:06]
Nicolas Hieronimus
Well, what allows us to do is really to accelerate the pace of innovation. You know, sometimes I say that AI is accelerated innovation because it allows my researchers to really, they divide by for the time to bring to market a new molecule. We've more than doubled the number of molecules we can scan to find new products. So it's really that allows us, we have many brands, we have 40 brands. So we need to have somehow an R and D on steroids. And that's what AI allows us to do. We still have the know how the data, but is what really allows us to go faster in terms of, of
- [06:51]
Bloomberg Host
discoveries, as you mentioned, a good set of results. But there is a lot of pressure economically and on geopolitics. What's the hardest thing that you have to navigate either in terms of tariffs, inflation or trade in general?
- [07:05]
Nicolas Hieronimus
Well, it's, what's clear is that you have to be agile and you have to be able to adapt. Whether it's it's on tariffs, whether it's the price of oil, which has an impact on the cost of transportation, whether indeed it's the impact of, of the crisis in the Middle east on consumer behaviors as it relates to travel, retail, for example. So it's, it's a lot about agility. Of course, you know, currencies also have an impact and we are happy for l' Oreal that the dollar is a bit better than it used to be. So in the end, it's about seizing the ascending trends and trying to leverage. What I think is unique at l' Oreal is the fact that we are very, very spread. We call that a multip neutral. We are spread across regions and across price points and divisions. So whenever something is struggling a bit, we can Bounce back in another area. And if I take this first half, Middle east was below expectations, even though not as much as what we feared. But the fact that China, luxury in China is more positive kind of offsets it. So that's how we, that's how we navigate. And in the end, you know, going back to what I was saying earlier, I really see, it's not that I feel I can observe that when the world's getting tougher, people are really more inclined to indulge in pleasurable beauty products. There are people that want more indulgence, others that want more health related products, and we have both. So that's how we navigate this crazy world.
- [08:44]
Bloomberg Host
What's actually been the most surprising thing for you? Is it the way, you know, is it the way that people are interested in perfume or how tastes change or is it that they're quite resilient given everything that we're seeing on the economy?
- [08:57]
Nicolas Hieronimus
Well, as mentioned, the one thing that has surprised me the most over the last year is the appetite for sophisticated hair care. You know, our professional division, which is, is the smallest but was not the one that used to be the fastest growing, has been growing the fastest now for two years. And it's really driven by this number of consumers craving for deep treatments for their hair and high quality. Now there are lots of other surprising factors. A little anecdote which I read, and I don't totally know whether it's true, but some people are saying that there's an increase in consumption of sweets fragrances because people who are on GLP1 are deprived of sugar. So they like to buy whether it's a body care or fragrances that are sweeter. And it's true that we have, you know, we've launched Yslib or a Berry Crush and, and our La Vie Belle Vanilla and both are stunning successes. So it's possible that people that are deprived of sugar by their, you know, desire to lose weight are buying more sweet fragrances.
- [10:06]
Bloomberg Host
Yeah, less calories, I guess. In perfume. You have been very acquisitive over the last couple of years. Is there anything else that you want in the next six months or 12 months?
- [10:17]
Nicolas Hieronimus
Well, first of all, I'd like to celebrate what we've acquired. First of all, what we've acquired last year, if I take a brand like ESOP was 18 months ago, it's going double digits. We are just in the beginning of rolling out Dr. G. You know, there's a Korean beauty trend and Dr. G is the number one skin care brand, Korea. So we're rolling it out and we just made two big announcements. One is the anticipation by one year of the Gucci license. So it's a negotiation between Kering and Coty, which means that we'll start selling Gucci products from the 1st of July 27th. So it's very positive for our future growth. And we've just made this acquisition of Innovist in India which is both two brands and an E commerce platform. And one of the other factors that drives our growth is our E commerce domination. We are growing at +18 on E commerce so twice the market and innovation is going to be I think a great accelerator for us in India, which remains a small country for us in terms of weight of business, which, which is really accelerating right now. So these two acquisitions are already to be confirmed or to be closed if I may. And then as far as the future, we'll see, as always, we look at all opportunities. But I would say that we were beginning to have a pretty complete portfolio and a lot to do with it in India.
- [11:44]
Bloomberg Host
I know there's, there was a huge growth actually for some of the local brands because the Indian market like to buy Indian. Do you think that's changing?
- [11:53]
Nicolas Hieronimus
Well, you know we have strong positions for some of our brands in India but overall it was a small market for us and, and we've really accelerated with a company, a combination of of international brands. But that I would say that have been more localized culturally in terms of advertising, in terms of the beauty rituals we promote closer to the Indian original recipes. And we are adding this local acquisition and India has made it to the top 8 of our growth contributing country in the first half. We're growing at plus 20 in sellout in the market at plus 10. So it shows that. And that's without Innovist which will be part of L' Oreal only from Q3. So it means that with the right adaptation of our products we can win in India. But it's still a lot to do. It's one of the countries where we have the lowest share. So I'm not happy yet, but I'm excited about the future prospects.
- [12:52]
Bloomberg Host
Nicolas, thank you so much for joining us.
- [12:54]
4imprint Announcer
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