MIRA
INFORM REPORT
|
Report Date : |
24.05.2008 |
IDENTIFICATION
DETAILS
|
Name : |
LOREAL INDIA PRIVATE LIMITED |
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Registered Office : |
2nd Floor, Peninsula Corporate Park, Ganpatrao Kadam Marg, Lowerparel,
Mumbai- 400013, Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.12.2006 |
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Year of Establishment : |
19.02.1991 |
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Com. Reg. No.: |
11-60363 |
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CIN No.: [Company
Identification No.] |
U85190MH1991PTC060363 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUML01908E |
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PAN No.: [Permanent
Account No.] |
AAACC0738K |
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Legal Form : |
Private Limited
Liability Company Subject is a wholly
owned subsidiary of L’Oreal S. A., France |
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Line of Business : |
Manufacturing,
importing and exporting of cosmetics, toiletries, personal and healthcare
products such as hair shampoos, hair dyes, face creams, etc. |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 4330000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow but Correct |
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Litigation : |
Clear |
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Comments : |
The company is
engaged in manufacturing and marketing of Hair Shampoos, Hair Dyes and Face Creams.
It has some accumulated losses. Trade relations are reported as fair.
Payments are reported as slow but correct. However, the
company can be considered normal for business dealings at usual trade terms
and conditions. |
LOCATIONS
|
Registered
Office : |
2nd Floor, Peninsula Corporate Park, Ganpatrao Kadam Marg,
Lowerparel, Mumbai- 400013, Maharashtra |
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Tel. No.: |
91-22-24935398 /
24983000 |
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Fax No.: |
91-22-24933283 /
24953798 |
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E-Mail : |
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Website : |
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Administrative Office: |
2nd Floor,
Peninsula Park , Ganpatrao Kadam Marg, lower parel, Mumbai – 400 013,
Maharashtra |
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Tel. No.: |
91-22 - 24983000 |
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Fax No.: |
91-22-24953798 |
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E Mail: |
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Factory 1 : |
Umbergaon,
Gujarat |
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Factory 2 : |
Gut No. 426,
Chakan Talegaon Road, Mahalunge Ingle, Pune – 410 501, Maharashtra |
DIRECTORS
|
Name |
Mr. Didier F.
Villamyeus (Foreign) |
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Designation |
Managing Director |
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Address |
Malabar Court, 3rd
Floor, 14, BG Kher Marg, Mumbai – 400026, Maharashtra, India |
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Date of Birth
: |
23.06.1964 |
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Date of
Appointment |
08-06-2001 |
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DIN / PAN No.
: |
00502625 |
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Name |
Mr. Dinesh Dayal |
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Designation |
Wholetime
Director |
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Address |
73, Maker Tower
'A’ Cuffee Parade, Mumbai – 400 005, Maharashtra |
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Date of
Appointment |
08-06-2001 |
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Date of
Ceasing |
12-06-2002 |
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Name |
Mr. Abhey Yograj |
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Designation |
Director |
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Address |
N-94, Panchsheel
Park, New Delhi – 110 017, India |
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Date of
Appointment |
17-03-1995 |
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Name |
Mr. Husson Claude
(Foreign) |
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Designation |
Director |
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Address |
104, Rue D. Aguesseau
92100, Boulogue |
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Date of
Appointment |
27-09-1996 |
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Date of
Ceasing |
30.05.2005 |
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Name |
Mr. Evard Alain
(Foreign) |
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Designation |
Chairman cum
Director |
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Address |
6, Hemeau Du Golf 78590, Noisy Le R 01, France
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Date of Appointment |
31-12-1997 |
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Name |
Mr. Eric Delamare
(Foreign) |
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Designation |
Managing Director |
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Address |
24, Rue Agrippa
D’Aubigne 80 000, Amines, France |
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Date of
Ceasing |
31-05-2001 |
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|
Name |
Mr. Laurent Henri
Schmitt |
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Designation |
Director |
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Address |
11 BD, Du
General, Koenig, Neuilly – 92200 |
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Date of
Appointment: |
30.05.2005 |
KEY EXECUTIVES
|
Name : |
Mr. Padmalochan
Mishra |
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Designation : |
Secretary |
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Address : |
EMP 1 / 403
Sector –I, moon Co –op-housing society, Thakur Village, Kandivali (East),
Mumbai – 400 001 |
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Date of Appointment : |
01.02.2003 |
MAJOR SHAREHOLDERS
/ SHAREHOLDING PATTERN
|
Names
of Shareholders |
No. of Shares |
|
Mr. Loreal SA Body
Corporate |
229500050 |
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Laboratories
Garnier (ET CIE) |
50 |
Equity Shares Breakup (Percentage of Total Equity):
|
Sr No. |
Category |
Percentage |
|
1 |
Foreign holdings (Foreign Institutional investor(s),
foreign Companie(s), foreign financial institution(s), Non – resident (s) or
Overseas corporate bodies or others. |
100.00 |
BUSINESS DETAILS
|
Line of
Business : |
Manufacturing, importing
and exporting of cosmetics, toiletries, personal and healthcare products such
as hair shampoos, hair dyes, face creams, etc. |
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Products : |
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Brand Names : |
L'Oreal Paris, Garnier
and Maybelline New York |
GENERAL
INFORMATION
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No. of Employees : |
300 |
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Bankers : |
NA |
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Banking
Relations : |
- |
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Auditors : |
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Name : |
Lovelock & Lewes Chartered
Accountant |
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Address : |
1104, Raheja Chambers,
Nariman Point, Mumbai – 400 021, Maharashtra |
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Tel. No.: |
91-22-22824242 /
22834646 |
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Subsidiaries : |
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Associates : |
Vichy Laboratories |
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Parents Company : |
L’Oreal S. A., France |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
230000000 |
Equity shares |
Rs. 10/- each |
Rs. 2300.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
229500100 |
Equity shares |
Rs.10/- each |
Rs. 2295.001
millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
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|
SHAREHOLDERS FUNDS |
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1] Share Capital |
2295.001 |
2295.001 |
2295.001 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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|
3] Reserves & Surplus |
0.000 |
0.000 |
0.000 |
|
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4] (Accumulated Losses) |
[1211.357] |
[1436.637] |
(1458.595) |
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NETWORTH |
1083.644 |
858.364 |
836.406 |
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LOAN FUNDS |
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1] Secured Loans |
0.000 |
0.000 |
0.000 |
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2] Unsecured Loans |
84.000 |
34.000 |
0.000 |
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TOTAL BORROWING |
84.000 |
34.000 |
0.000 |
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
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TOTAL |
1167.644 |
892.364 |
836.406 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
810.565 |
653.738 |
558.298 |
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Capital work-in-progress |
149.509 |
97.852 |
63.165 |
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INVESTMENT |
0.000 |
0.000 |
0.000 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
937.201
|
551.226 |
380.544 |
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Sundry Debtors |
91.673
|
40.340 |
20.720 |
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Cash & Bank Balances |
47.414
|
143.533 |
168.800 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
|
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Loans & Advances |
207.673
|
215.848 |
138.022 |
|
Total
Current Assets |
1283.961
|
950.947 |
708.086 |
|
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Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
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Current Liabilities |
1058.636
|
801.325 |
487.527 |
|
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Provisions |
17.755
|
8.848 |
5.616 |
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Total
Current Liabilities |
1076.391
|
810.173 |
493.143 |
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Net Current Assets |
207.570
|
140.774 |
214.943 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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|
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TOTAL |
1167.644 |
892.364 |
836.406 |
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PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.12.2006 |
31.12.2005 |
31.12.2004 |
|
Sales Turnover
|
5084.703 |
3648.558 |
2251.472 |
|
|
Other Income |
0.000 |
0.000 |
0.000 |
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Total Income |
5084.703 |
3648.558 |
2251.472 |
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|
|
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|
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Profit/(Loss) Before Tax
|
1195.831 |
721.085 |
19.871 |
|
Provision for Taxation
|
-- |
-- |
-- |
|
Profit/(Loss) After Tax
|
1195.831 |
721.085 |
19.871 |
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|
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Export Value
|
- |
- |
61.036 |
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|
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Import Value
|
|
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|
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Raw Material and Packing Materials
|
NA
|
NA
|
197.394 |
|
|
Finished Goods
|
NA |
NA |
102.921 |
|
|
Capital Goods
|
NA
|
NA
|
6.481 |
Total Import
|
NA |
NA |
306.796 |
|
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Expenditure :
|
|
|
|
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Interest
|
0.260 |
0.000 |
0.000 |
|
Depreciation
|
111.404 |
79.052 |
0.000 |
|
Other Expenditure
|
3777.208 |
2848.421 |
2231.601 |
|
Total Expenditure
|
3888.872 |
2927.473 |
2231.601 |
|
KEY RATIOS
|
PARTICULARS |
|
31.12.2006 |
31.12.2005 |
31.12.2004 |
|
PAT / Total Income |
(%) |
23.51
|
19.76
|
0.88
|
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Net Profit Margin (PBT/Sales) |
(%) |
23.51
|
19.76
|
0.88
|
|
|
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Return on Total Assets (PBT/Total Assets} |
(%) |
57.09
|
44.93
|
1.57
|
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
1.10
|
0.84
|
0.02
|
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.07
|
0.98
|
1.59
|
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.19
|
1.17
|
1.44
|
LOCAL AGENCY
FURTHER INFORMATION
HISTORY
The name of the company was changed to Indelor India Private Limited
with effect from 4th July, 1996.
Again, the name of the company was changed to the present with effect
from 4th July, 2000.
In 1907, a young French chemist, Eugene Schueller, created an innovative
and safe hair colour formula. With
this, the first principle of safe innovation in the interest of beauty was set
and the story of L'Oreal began. Two
years later, Mr. Eugene Schuller registered his company, later to be named
L'Oreal. Subsequently, L'Oreal products
were launched across Europe, thus beginning the worldwide expansion of the
L'Oreal group, now present in over 150 countries.
FIXED
ASSETS
The company’s valuable fixed assets include Land, Factory Building,
Plant and Machinery, Furniture And Fixtures, Vehicles, Leasehold Improvements,
Intangible Assets.
MILESTONES
|
1991 |
L'Oreal begins business in India with the launch of the Ultra Doux
range by Laboratories Garnier, through an agent. |
|
1994 |
Creation of Laboratories Garnier India, a 100% owned L'Oreal
Subsidiary |
|
1995 |
Laboratories Garnier introduced its first skincare product, Synergie,
with the first anti-wrinkle cream on the Indian market. |
|
1996 |
L'Oreal entered the haircolour market with Excellence Crème, the first
brand signed L'Oreal Paris |
|
1997 |
Creation of the Professional Products Division. Set up of two technical centers in New
Delhi and Mumbai. Launch of Majirel
Hair Colour |
|
1998 |
Launch of Casting, Diacolor and Dulcia |
|
1999 |
Launch of L'Oreal Paris make-up and skin care at select outlets |
|
2000 |
(Subsidiary) company changed name from Indelor India to L'Oreal
India. Launch of Nutrisse Hair Colour
by Laboratories Garnier. |
|
2001 |
Launch of Series Expert Hair care by L'Oreal Professional. |
|
2002 |
Launch of Active Cosmetics Department, with VICHY. |
WEBSTIE DETAILS
L’Oreal For Young
Women In Science Scholarship Programme Opening the doors of higher education for
girls
Mumbai, January 9th, 2008: L’Oreal, under the aegis of the “For Young
Women In India Scholarship” programme had, today, organised a Seminar-cum-Panel
Discussion about “The Role of Women In Science” and “Career Options for Women
in Science” at the Ramnarain Ruia College auditorium.
‘L’Oréal India For
Young Women in Science Scholarships’ were instituted by L’Oréal in 2003 to
encourage young women to pursue scientific education. By fostering the
education of young women, the programme helps reinforce the role of women in
scientific disciplines.
The objective of the programme is to provide financial assistance to
meritorious students in science for a period of four years of study in their
chosen scientific field, at a recognised Indian University.
These scholarships are open to women under 19, who have passed the
H.S.C. examination from Maharashtra in the academic year ending March 2008,
with a minimum of 85% in PCM/PCB.
Each year, a scholarship of Rs. 250,000/- is granted to 5 promising young
women from the state of Maharashtra. Candidates are short listed based on their
marks in class 12 and on written essays about what they plan to do with their
scholarships. They are then interviewed by a jury comprising of academicians
and scientific personalities such as Prof Indira Nath, Dr. Snehalata Deshmukh,
Prof Kavita Rege, to name a few.
Senior and recognised speakers from the field of science like Dr. K T
Dinshaw, Dr. Indira Nath, Dr. Snehlata Deshmukh, Dr. Bhaktaver Mahajan and
Prof. Prabhu-Gaunkar spoke to the junior college girls and also to a few
parents who attended the seminar. While Dr. Dinshaw and Dr. Deshmukh spoke
extensively about role of women in science and career options for women, Dr.
Bhaktaver Mahajan and Prof. Prabhu-Gaunkar shared their views on the role of
women in science with respect to their specific field of specialization.
Speaking at the occasion, Padma Shri Dr. K T Dinshaw, Director, Tata
Memorial Centre said, “While women have been making their mark in the field of
science for a long time now their numbers are still small. It is critical for
all of us, especially parents, to encourage girls to achieve their dreams and
support them in every way. We today have amongst us some of the girls who are
on their way to achieving their dreams, thanks to the “L’Oreal Scholarship
Programme. I am extremely proud of their achievements in the face of extreme
adversities. They are the perfect role models for their generation and for the
generations to follow.”
Padma Shri Dr. Indira Nath, Director of the Lepra BP Research Centre at
Hyderabad said, “The L’Oréal Scholarship programme for girl students makes
possible for some of the brightest girls from the lower socio economic strata
to fulfill their dreams in becoming an engineer, doctor or a scientist. As a
member of the selection team I am always humbled as well as excited by the
girls and parents who have a clear vision of the future but are constrained due
to lack of funds. L’Oréal is playing a small but important part to seeing that
at least some dreams are fulfilled and the country gains another person to
drive it forward.'
The students attending the seminar also got a chance to interact with
some of the girls who are currently pursuing their studies under the
scholarship programme.
Mr. Dinesh Dayal, COO, L’Oreal India Private Limited, “L'Oréal operates
16 research centres and 13 evaluation centres across the world and 55% of the
3000 researchers at L'Oréal are women. L’Oreal is committed to a research based
approach for all its products. A testimony to this is the fact that L'Oréal
designed and patented 120 molecules over the last 40 years and develops close
to 4,000 formulas every year. L'Oréal, in the year 2006, filed over 550
patents.”
Mr. Dayal further added, “This scholarship programme was created under
the framework of the “L’OREAL–UNESCO For Women in Science” international
partnership which aims to promote women in scientific research by recognizing
outstanding women researchers who have contributed to scientific progress across
five continents: Africa, Asia-Pacific, Europe, Latin America and North
America.”
The programme came to close with a felicitation ceremony of past scholarship winners who shared their experiences and thoughts.
The L'Oreal Group is also
active in luxury goods and in the dermatological and pharmaceutical fields.
Clichy, Wednesday February 13th 2008
Strong growth in
2007 annual results
Substantial improvement in operating profit: +11.3%
Strong growth in net earnings per share (1): +13%
Exceptional rise in net profit after minority interests: +28.9%
Strong increase in dividend (2): +16.9%
- The Board of Directors of L'Oréal met on February 13th
2008 under the chairmanship of Sir Lindsay Owen-Jones and in the presence of
the Statutory Auditors. The Board closed the consolidated financial statements
and the financial statements of the L'Oréal parent company for 2007.
Commenting on the annual results, Mr Jean-Paul Agon, Chief Executive Officer of
L'Oréal, said:
"The Group's sales growth accelerated
significantly in 2007 to reach +8% like-for-like, clearly faster than the
growth of the worldwide cosmetics market; all divisions gained market share and
the Group improved its positions on all continents.
The Group's results have once again advanced substantially and are of a very
high quality.
Based on a comparable structure(3), operating profit grew by 90 basis points,
thanks to an improvement in gross profit and strict cost control.
All divisions and zones contributed to this achievement. The profitability of
the “Rest of the World” zone has increased considerably; in absolute value, it
is at the same level as North America.
Despite the negative impact of currency fluctuations, which was more pronounced
in the 4th quarter, net earnings per share growth was very strong at +13%.
Based on identical exchange rates, this growth rate would have reached +15.9%.
As for 2008, we are optimistic despite the uncertainties of the economic
environment. In fact, our business has always proven extremely resilient during
periods of crisis, we intend to continue strengthening our positions and
growing faster than the market, and the large proportion of our sales now made
in new and very fast-growing markets is providing a powerful relay for our
global growth. We are confident therefore about our ability in 2008 to once
again achieve sales growth in our target range of +6% to +8 %, like-for-like."
- Furthermore, the Board of Directors has decided to propose to the Annual
General Meeting on April 22nd 2008 the payment of a dividend of €1.38 per
share, an increase of +16,9% compared with 2006.
At the end of the board meeting, Sir Lindsay Owen-Jones said: "2007 marks a further very strong increase in
the Group's results, reflecting the quality of the management of Jean-Paul Agon
and his teams.
The level of results achieved enables us to propose another substantial
increase in dividend to the Annual General Meeting; in the space of five years,
the dividend has more than doubled. This is further proof of the Group's
confidence for the coming year".
(1) Diluted net earnings per share
based on net profit excluding non-recurrent items after minority interests.
(2) Dividend to be proposed to the Annual General Meeting of Shareholders on
April 22nd 2008.
(3) Comparable structure basis: excluding The Body Shop, and excluding
professional distribution to the hair salons in the United States.
-
L'Oréal group sales at December 31st 2007 amounted to € 17.1
billion, up by +8.1% based on reported figures.
-
Like-for-like (i.e. based on a comparable structure and identical exchange
rates), the increase in the group's sales amounted to +8.0%.
The net impact of changes in consolidation, as a result of the acquisitions of The Body Shop, Sanoflore, Beauty Alliance, PureOlogy
and Maly’s West amounted to
+3.6%. The negative impact of currency fluctuations amounted to -3.5% over the
full-year 2007. Growth excluding currency fluctuations amounted to +11.6%.
- The news release of January 24th 2008 sets out in detail the activity of the
cosmetics divisions and the geographic zones for 2007. This news release is
available on the site www.loreal-finance.com and can be downloaded.
- The table of sales by branch, division and geographic zone is provided in the
appendix I.
Strong improvement
in operating profit on a comparable structure basis
The group consolidated for the first time in 2007, over a
full year, The Body Shop, together with the distributors of professional
products to American hair salons. In the interest of visibility and
comparability of the performance of the group, the table below sets out the
consolidated profit and loss account excluding The Body Shop and excluding
professional product distributors. In fact, these two businesses have an
operating account structure which is different from that of the L'Oréal group.
Consolidated
profit and loss account excluding The Body Shop and excluding professional
distributors in the U.S.A.
|
€M |
12.31.2006 |
As % of sales |
12.31.2007 |
As % of sales |
|
|
Sales |
15,355 |
100 % |
16,110 |
100 % |
|
|
Cost of sales |
- 4,414 |
28.7 % |
-4,592 |
28.5 % |
|
|
Gross profit |
10,941 |
71.3 % |
11,518 |
71.5 % |
+ 20 basis points |
|
Research and development expenses |
- 531 |
3.5 % |
-557 |
3.5 % |
|
|
Advertising and promotion expenses |
- 4,718 |
30.7 % |
-4,950 |
30.7 % |
|
|
Selling, general and administrative expenses |
- 3,153 |
20.5 % |
-3,259 |
20.2 % |
|
|
Foreign exchange gains and losses |
- 56 |
0.4% |
10 |
0.1 % |
|
|
Operating profit |
2,483 |
16.2% |
2,762 |
17.1 % |
+ 90 basis points |
Excluding The Body Shop and excluding professional distribution in the
USA, sales amounted to € 16,110m.
Gross profit represented 71.5% of sales, an increase of 20 basis points compared
with 2006. This improvement becomes even more clearly visible if the
corresponding proportion of exchange gains and losses is allocated to gross
profit in 2007 and 2006, that is 78% of the total. Adjusted for this factor,
gross margin advanced by 50 basis points compared with 2006, reflecting the
continuous striving to enhance product value, constant efforts to improve plant
productivity, and control of ingredient purchasing and packaging costs.
Research and development expenses remained stable as a percentage of sales at
3.5%. Advertising and promotion expenses represented 30.7% of sales in 2007, a
level equivalent to 2006. This stability reflects an increase in volumes
invested, improved cost management and more favourable media purchasing conditions.
Selling, general and administrative expenses represented 20.2% of sales,
compared with 20.5% in 2006. This further improvement has been achieved through
determined efforts in organisation, cost reduction and purchasing optimisation.
Operating profit amounted to € 2,762m, an increase of 11.3%. This represents
17.1% of sales, reflecting a further strong improvement in profitability.
2007 consolidated profit and loss account
From sales to operating profit
(including The Body Shop in 2006 and 2007 and professional distribution
in the USA in 2007).
|
€M |
12.31.2006 |
As % of sales |
12.31.2007 |
As % of sales |
Change |
|
Sales |
15,790 |
100% |
17,063 |
100% |
+8.1% |
|
Cost of sales |
- 4,569 |
28.9% |
-4,941 |
29.0% |
+8.1% |
|
Gross profit |
11,221 |
71.1% |
12,122 |
71.0% |
+8.0% |
|
Research and
development expenses |
- 533 |
3.4% |
-560 |
3.3% |
+5.1% |
|
Advertising and
promotion expenses |
- 4,783 |
30.3% |
-5,127 |
30.0% |
+7.2% |
|
Selling,
general and administrative expenses |
- 3,309 |
21.0% |
-3,618 |
21.2% |
+9.3% |
|
Foreign
exchange gains and losses |
- 55 |
0.3% |
+10 |
0.1% |
ns |
|
Operating profit |
2,541 |
16.1% |
2,827 |
16.6% |
+11.3% |
Overall, the group's operating items, including The Body Shop and professional distribution in the USA can be summed up as follows:
- Sales amounted to €17,063m, up by +8.1%.
- Gross profit amounted to €12,122m, representing an increase of +8.0%.
- Operating profit, at 16.6% of sales in 2007, has increased by 11.3%, representing a strong improvement of 50 basis points.
Good contribution
from all cosmetics divisions
Operating profit by branch and division
|
|
€M 2006 |
% of sales 2006 |
€M 2007 |
% of sales 2007 |
|
By operational division |
|
|
|
|
|
Professional Products |
443 |
20.8 % |
502 |
21.0 % |
|
Consumer Products |
1,421 |
18.0 % |
1,582 |
19.1 % |
|
Luxury Products |
776 |
20.6 % |
844 |
21.5 % |
|
Active Cosmetics |
221 |
19.6 % |
256 |
20.5 % |
|
Cosmetics divisions total |
2,860 |
19.1 % |
3,180 |
20.0 % |
|
Non-allocated(1) |
- 437 |
2.9 % |
-479 |
3.0 % |
|
Cosmetics branch total |
2,423 |
16.1 % |
2,701 |
17.0 % |
|
The Body Shop |
58 |
13.4 % |
64 |
8.1 % |
|
Dermatology branch(2) |
59 |
17.3 % |
62 |
16.9 % |
|
Group |
2,541 |
16.1 % |
2,827 |
16.6 % |
(1) Non-allocated = Central group expenses, fundamental research expenses, stock option expenses and miscellaneous items. As % of total sales.
(2) Group share, i.e. 50%
The profitability of each cosmetic Division grew substantially in 2007:
The profitability of The Body Shop is not comparable year-on-year, because this
business was only consolidated in the second half of 2006; and each year almost
all the profit is made in the second half.
The profitability of the dermatology branch, Galderma, edged down slightly to
16.9% of sales, as a result of research investment decisions in the first half
of 2007.
Strong increase in operating profitability in all geographic zones,
particularly in the Rest of the World
Cosmetics Branch:
Operating profit of geographic zones
|
|
Operating profit |
Operating profit |
Operating profit |
Operating profit |
|
Western Europe |
1,527 |
21.8 % |
1,633 |
22.5 % |
|
North America |
744 |
18.8 % |
773 |
19.3 % |
|
Rest of the world |
589 |
14.5 % |
774 |
16.6 % |
|
Cosmetics zones total |
2,860 |
19.1 % |
3,180 |
20.0 % |
Profitability clearly increased in each geographic zone in 2007,
particularly in the "Rest of the World" zone.
The contribution of this zone, in absolute value, reached the same level as
North America.
Strong growth in net earnings per share: +13.0%
Consolidated profit and loss account
From operating profit to net profit excluding non-recurrent items
|
12.31.2006 |
12.31.2007 |
Change |
|
|
Operating profit |
2,541 |
2,827 |
+11.3 % |
|
Financial expense and income |
- 120 |
- 182 |
|
|
Sanofi-Aventis dividends |
218 |
250 |
|
|
Share in net profit (loss) of equity affiliates |
- 1 |
- |
|
|
Pre-tax profit excluding non-recurrent items |
2,638 |
2,896 |
+9.8 % |
|
Income tax excluding non-recurrent items |
- 803 |
- 856 |
|
|
Minority interests |
- 1 |
- 1 |
|
|
Net profit excluding non-recurrent items after minority interests (1) |
1,833 |
2,039 |
+ 11.2 % |
|
EPS (2) (in euros) |
2.98 |
3.36 |
+13.0 % |
|
Net profit after minority interests |
2,061 |
2,656 |
+28.9 % |
|
Diluted net profit per share (group share) (€) |
3.35 |
4.38 |
+30.9% |
|
Diluted average number of shares |
615,723,220 |
606,012,471 |
|
(1) Net profit excluding non-recurrent items after minority interests does
not include capital gains and losses on disposals of long-term assets,
impairment of assets, restructuring costs, associated tax effects or minority
interests.
(2) Diluted net earnings per share excluding non-recurrent items, after
minority interests.
Finance costs increased from € 116m to € 174m in 2007. This reflects the
cost of financing acquisitions, rising interest rates in the United States and
Europe, and the continuation of the share buyback programme.
The dividends received from Sanofi-Aventis amounted to € 250m, an increase of
15% compared with 2006.
Tax amounted to € 856m.The tax rate in 2007 amounted to 29.5%, lower than in
2006 when the rate was 30.4%.
Overall, net profit excluding non-recurrent items after minority interests at €
2,039m, up by 11.2%.
After allowing for the positive effect of share buybacks, net earnings per
share amounted to €3.36, up by +13.0%.
Exchange rate Impact : On an identical exchange rate translation basis,
i.e. by applying the exchange rates recorded in 2007 to the 2006 figures, net
earnings per share growth would have been +15.9%. This calculation shows the
significant impact on the group's earnings of the strong currency fluctuations
of 2007.
Exceptional growth in net profit after minority interests: +28.9%
Consolidated profit and loss account
From net profit excluding non-recurrent items to net profit
|
31.12.2006 |
31.12.2007 |
Growth |
|
|
Net profit excluding non-recurrent items after minority interests |
1,833 |
2,039 |
+11.2 % |
|
Non-recurrent items |
228 |
617 |
N.C. |
|
Net profit after minority interests |
2,061 |
2,656 |
+28.9 % |
|
Diluted earnings per share (€) |
3.35 |
4.38 |
+30.9 % |
After allowing for non-recurrent items, primarily the capital gain on the disposal of Sanofi-Aventis shares on November 14th 2007, net profit after minority interests amounted to € 2,656m, representing growth of approximately 29%.
Strong
growth in cash flow : +12.9%
Cash flow at December 31st 2007 amounted to € 2,720m, up by some 13%. Working capital requirement remained well under control at € 76m. Capital expenditure at € 776m decreased slightly as a percentage of sales to 4.5% compared with 4.7% in 2006.
Net debt, at December 31st 2007, amounted to € 2,373m, some € 1 billion
lower than on December 31st 2006. Gearing has been reduced significantly and is
now 17.4%.
Proposed dividend
increased by +16.9%
The Board of Directors has decided to propose that the Annual General Meeting of Shareholders of April 22nd 2008 should approve a dividend of €1.38 per share, representing an increase of +16.9% compared with the dividend paid in 2007.
Important
events during the period
Disposal of 1.8% stake in Sanofi-Aventis:
- On November 14th 2007, L’Oréal sold a stake of 1.8% in the capital of Sanofi-Aventis,
representing approximately 25 million shares. The proceeds from this disposal,
following which the group holds an 8.7% stake in Sanofi-Aventis,
amounted to € 1.5 billion.
Acquisitions during the period:
- On April 12th 2007, the group subsidiary L’Oréal USA acquired 100% of Beauty
Alliance, in which it had held a 30% minority share since July 2006. Beauty
Alliance is one of the foremost American distributors of professional
products to hair salons.
- On May 9th 2007, the group subsidiary L’Oréal USA acquired PureOlogy
Research, a U.S. premium professional haircare brand.
- On July 11th 2007, the group subsidiary L’Oréal USA acquired 100% of Maly’s
West, the number three U.S. distributor of professional products to hair
salons.
- On November 15th 2007, L’Oréal concluded an agreement for the acquisition of
100% of Canan, a Turkish haircare products company. (This acquisition
was concluded on January 25th 2008).
- On December 12th 2007, L’Oréal signed a collaboration agreement with the U.S.
company Light Bio Science, in order to develop photomodulation
appliances for skincare applications.
Share buybacks in 2007:
Pursuant to the authorisations approved by the Annual General Meetings of April
25th 2006 and April 24th 2007, the group bought back, from January 1st to
December 31st 2007, 15.4 million of its own shares for a total of € 1.34
billion.
Research activities are focused on three subjects: skin,
hair and color.
In the depth of skin
L'Oreal
searches for the most innovative ways of providing skin with the elements
essential to its equilibrium. Preserving the skin health, preventing the
chronological aging and photoaging due to UV rays, transport active compounds
in situ,so many areas of L'Oreal research.
Here are some examples of means employed to achieve these objectives:
Human Skin Models: L'Oreal Research teams have developed these
three-dimensional cultures by introducing skin cell types such as
keratinocytes, melanocytes and Langerhans cells.
Vectorisation:
from liposomes to nanocapsules, these nanometric vectors improve the efficacy
of care products.
Skin imaging: L'Oreal has improved imaging techniques over the last 30 years to
enable the study of the skin and assess the effects of care products. Confocal
microscopy, ultrasonic imaging and Magnetic Resonance Imaging (MRI) are a few
of the methods used by L'Oreal.
A
pioneer in the field of hair study
For L'Oreal,
hair is a real scientific adventure. Worldwide, its laboratories are engaged in
research on the subject. Whether Caucasian, African or Asian hair, biologists
are interested in the living follicle, while biophysicists and chemists are
concerned by the fiber. Several generations of researchers have now gained
unique scientific knowledge on hair and haircare products. Insight into how the
hair is constituted has resulted in the development of :
· longer-lasting hair color,
· biomimetic molecules such as certain ceramides which ensure hair surface cells cohesion,
· softer cleansing agents in shampoos and conditioners in the form of lacquer or gel
Studying the different intimate components of the hair follicle, by cultivating
hair in vitro, is one of the aims of "hair biology" teams.
Color
Working at the cutting-edge of technology, L'Oreal Research is today
investigating new make-up effects such as transforming colors by "trompe
l'œil" optic phenomena.
In the field of haircolor, L'Oreal now uses an exclusive collection of 13,000
colorants.
Nature provides a valuable inspiration for finding new pigments using
biotechnology.
Manufacturing
Production
Policy
With 42 plants
worldwide, more than 14,000 employees in manufacturing sites and over 3,9
billion units produced, the industrial organisation of L’Oréal is a dynamic
contributor to the group's growth with a key role in ensuring sustainable
development.
Control of supply chain : raw materials are developed and patented by L'Oréal
Research, then analyzed and certified before utilization. Flexibility : new
facilities, innovative systems and "just-in-time" production.
L'Oréal industry : a culture of quality
Concern for the well-being of personnel and their safety.
The company has
three divisions such as:
· L'Oreal Consumer Products Division
· L'Oreal Professional Products Division
· Active Cosmetics Department
The Consumer
Products Division houses the 3 leading international signatures - L'Oreal
Paris, Garnier and Maybelline New York.
This division offers consumers high technology global brands, sold at
competitive prices through retail markets.
It markets large product categories of hair care, hair colourants,
skincare and make-up.
In India, the
consumer division has been a pioneer in both products and merchandising by:
Launching the first
ever Garnier Synergie Anti Wrinkle Cream, Eye Contour Gel and L'Oreal
Excellence Hair Colour and the Maybelline Non Transfer Lipsticks.
The Professional
Products Division is the world leader in its market. It offers a range of haircare and haircolour products used by
professional hairdressers and sold to consumers exclusively in salons.
The Active
Cosmetics Department develops dermo-cosmetic healthcare brands for sale through
pharmacies and specialist pharmacy outlets.
Pursuant to the
provisions of Section 43A (2A) of the Companies Act, 1956 and Companies
(Amendment) Act, 2000, the status of the company has been changed to private
limited company with effect from 29th January, 2001.
The company has 5
International brands in the Hair Care, Hair Colour, Skin Care and Make Up
categories.
Company’s fixed
assets of important value includes plant & machinery, furniture &
fixture, vehicles, leasehold improvements and distribution rights.
Consumer
Products
The Consumer Products Division is dedicated to offering all consumers its high technology products at competitive prices through mass-market retailing channels. The Division’s brands develop haircare, skincare, make-up and perfume products that meet the aspirations of all of its customers.
The Division's 5 international brands are L'Oréal Paris, Garnier, Maybelline
New York, Softsheen. Carson and Le Club des Créateurs de Beauté.
Professional
Products
The Professional Products Division is at the service of hairdressers worldwide. Their complementary brands meet the requirements of salon professionals in colorants, hair care, texturing and styling formulas and provide salon customers with a wide range of innovative, high-performance products. The Professional Products Division of L’Oréal is made up of ftheir different brands: L'Oréal Professionnel, Kérastase, Redken 5th Avenue NYC and Matrix.
Luxury
Products
The
prestigious brands of the Luxury Products Division offer consumers top of the
range products. Clients of selective retail outlets (department stores, perfumeries,
travel retail outlets, and the brands own boutiques) receive personalized
advice at the point of sale, enabling them to choose the products best suited
to their needs.
Lancôme, Helena Rubinstein, Biotherm, shu uemura and Kiehl’s offer premium products
known for their innovation, performance and quality. The Luxury Products
division houses also some of the world's top perfume brands: Giorgio Armani,
Ralph Lauren, Cacharel, Paloma Picasso and Guy Laroche.
Active
Cosmetics
The Active Cosmetics Department designs and markets dermo-cosmetic skin care products that are sold in pharmacies and specialist retailers. These products offer consumers proven safety and effectiveness supported by advice from pharmacists and dermatologists.
The Department’s three brands, Vichy, La Roche Posay and innéov, offer skin
care, sun care, hair care and make-up products.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws, regulations
or policies that prohibit, restrict or otherwise affect the terms and
conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.42.84 |
|
UK Pound |
1 |
Rs.84.78 |
|
Euro |
1 |
Rs.67.32 |
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|