Specialist
Former executive at L'Oréal SA
Agenda
- L’Oréal’s (PAR: OR) strategic positioning in the European beauty market across mass market, luxe and active cosmetics
- Competitive landscape update, highlighting challenges in mass market innovation across manufacturers
- Route-to-market and channel mix evolution across segments
- Supply chain challenges and margin implication outlook, highlighting inflationary pressures and price increases
Questions
1.
Could you outline the likely rationale behind L’Oréal’s portfolio rebalancing strategy? What needed to be done? How do you assess the current positioning?
2.
Do you think L’Oréal still needs to do anything, especially as we face a tougher consumer or macro environment, particularly in Europe and the US?
3.
You mentioned China’s explosive growth and L’Oréal seems to be trying to reposition away from its reliance on China today. What’s your growth outlook for China, especially under zero-COVID-19 policies and so on? How should we think about this for L’Oréal?
4.
What are your thoughts on a market such as India? Could we think about India as the new China for L’Oréal? I appreciate your comments around the Brazil market.
5.
Regarding the European market, you mentioned around 7% growth is expected for 2023, mainly driven by inflation. Could you outline the current shape or size of the European beauty market and how it compares to pre-pandemic?
6.
How should we think about growth? You mentioned 7%, so would this be applicable to L’Oréal? How would you expect the company to perform in 2023?
7.
Could the European mass market benefit from any downtrading from luxury or higher-end propositions as consumers have less disposable income? When you talk about the mass market, obviously the big question is on price.
8.
Would you expect the pressure on prices to potentially apply to active cosmetics? You mentioned active cosmetics is the most profitable division, but what’s the dynamic here? In 2008-09 the category was very much in its infancy, so what pricing pressure would you expect for active cosmetics?
9.
You mentioned potential trade-down not from luxury to mass market, but to doctor brands. Does this mean that active cosmetics has the opportunity, sitting in the mid-tier of pricing, to capture some luxury cosmetic customers?
10.
You noted the many challenges of the mass market, including the limited negotiation power with mass retailers across Europe. What innovation might be possible for the mass market in terms of route-to-market and reaching the consumer to bypass this challenge, if at all?
11.
How do you think L’Oréal could tackle the mass market challenges? Are there any brands out there that you think are interesting, or any brand concept or ideas that you think would complement the company’s mass portfolio?
12.
How do you think L’Oréal’s online penetration in the market is playing out in the sense of helping mass premiumisation? Is there an additional route-to-market that the company could lever in online?
13.
You mentioned that e-commerce is less developed in continental Europe. Would you say this is due to any sort of lag in consumer preferences? Is there a structural issue regarding e-commerce penetration?
14.
Could you outline the cost headwinds faced by manufacturers today? What is your outlook here? Could you discuss the price inflation by division?
15.
Do you think the moderate price increases or better position than peers could help L’Oréal gain market share throughout an economic downturn, not only in Europe but globally?
16.
Is there any white space that you think might be left by other players that are facing increased headwinds, as you mentioned, because of less balance? Is there an opportunity for L’Oréal to capture share from other manufacturers? Is there any white space in different geographies?
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