2009 Executive Summary - L'Oréal

2009 Executive Summary

Contents
Messages from senior managers 02
L’Oréal financial highlights 04
Businesses 06
Professional Products 08
Consumer Products 10
Luxury Products 12
Active Cosmetics 14
The Body Shop 16
Galderma 17
International 18
Research and Innovation 20
Corporate Responsibility 22
Human Resources 26
Operations 28
The Indian actress Freida Pinto has become
a L’OréaL Paris ambassador. A rising young star
in India, Freida became known for her role in
Slumdog Millionaire, the eight Oscar-winning
film directed by Danny Boyle. The film launched
her on the international film scene, where she has
embarked on a very promising career.
Freida has joined the brand’s other
spokespeople, embodying the diversity of
beauty worldwide.
FIND OUT MORE ABOUT THE 2009 HIGHLIGHTS AT www.loreal2009.com
L’Oréal invites you to discover the highlights of 2009 in pictures and films.
Take a world tour of its brands in their distribution channels,
the major Research innovations and the group’s tangible advances in
the field of sustainable development…
Continue the L’Oréal adventure by following the pictograph:

1 st cosmetics
group
worldwide
making beauty
universal
L’Oréal is entering its second century of beauty with an even stronger belief in its
mission: to offer populations all over the world products attuned to their needs,
their cultures and their aspirations. Products based on respect for consumers
and the environment. Products which enable the widest range of people to
enjoy the fundamental right to beauty. A challenge made possible by the cultural
richness of the group’s teams, its knowledge of beauty rituals all over the world,
and a portfolio of international brands available through a range of distribution
channels.
L’Oréal’s long-standing determination to build its success on cutting-edge
research means it is always pushing back the boundaries of cosmetics. Mastery of
the latest scientific and technological advances opens up immense perspectives
for the beauty professions. The ability of researchers to anticipate consumer
expectations has made L’Oréal’s laboratories the most powerful and innovative
in the cosmetics industry.
Economic success also stems from an ethical approach shared by everyone.
The men and women of L’Oréal focus all their efforts on making their company
an emblematic model of responsible citizenship. A company which extends its
solidarity to local communities, and is alert to the major issues of its time, with
the aim of making the world more beautiful.
For everyone, the whole world over, L’Oréal is making beauty universal.
23 international
brands (1)
(1) International brands with annual sales of more than 50 million euros.
17.5 billion euros of
sales in 2009
64,600
employees
130
countries
674 patents
registered in
2009

MESSAGES FROM SENIOR MANAGERS
“We have paved
the way for the
l’Oréal of tomorrow.”
Stronger global leadership
In many ways, 2009 will remain a defining
moment for us. We celebrated the L’Oréal centenary
and faced the worst economic crisis
the world has known for a long time. We have
emerged from it stronger and transformed,
paving the way for the L’Oréal of tomorrow.
In 2009, the group managed to weather the
storm by virtue of the commitment and talent of
all our teams, and I am immensely grateful to
them. We increased our global leadership in an
02
extremely resilient cosmetics market. We
achieved high-quality results, and our financial
situation is remarkably healthy.
We also readied ourselves for the future through
three major strategic changes: broadening our
customer base worldwide, transforming the
company in-depth to make it stronger and more
flexible, and stepping up our investments in
research and advertising and promotion to drive
future growth.
Accelerating innovation and
new markets
One of the highlights of the year for L’Oréal was
the speed at which we delivered innovative products.
2009 will go down as a vintage year, with
such examples as Inoa from L’OréaL PrOfessiOnneL,
Génifique and Absolue Precious Cells from
Lancôme, all of which were immediate global successes,
like all products that are both ahead of
“I am convinced
we are at the dawn
of a new phase
of expansion
for L’Oréal.”
Jean-Paul Agon, Chief Executive Officer
loreal2009.com
See Jean-Paul Agon’s
video message.
their time and target real needs. They underscore
L’Oréal’s fundamental decision to leverage
the outcomes of very advanced research.
The second highlight was the steady return to
strong growth in the Rest of the World zone. This
group of countries that is home to more than 85%
of the world population already accounts for 50%
of the global cosmetics market, and has doubled
its percentage in our sales every decade. In 2009
it accounted for 33%, and is set to reach 50% in
less than ten years.
This marks a fundamental change in the history
of our company. The emergence of markets such
as China, India and Brazil opens up a tremendous
reservoir of growth. We have set ourselves the
goal of attracting and retaining a billion new consumers
in these countries over the next decade,
and doubling the number of women and men
who use our brands. I am convinced we are
at the dawn of a new phase of expansion
for L’Oréal.

A model of corporate citizenship
Yet one of the most exciting challenges over the
next few years will be to transform L’Oréal into a
model corporate citizen. Once again, we intensified
our efforts in 2009 by actively involving all
employees. We are already acknowledged as
one of the most advanced global companies in
such areas as sustainable innovation, diversity
and ethics. Our environmental requirements and
standards have always been ahead of their time,
and we have just made a formal commitment to
go even further and halve our CO 2 emissions,
water consumption and waste production
between 2005 and 2015.
We also want to set an example in every dimension
of socially responsible behaviour. This commitment
was reflected in the way we chose to
celebrate our centenary—by encouraging each
of our subsidiaries to support a worthy outreach
project. Overall, 100 projects involving employees
throughout the world were launched to help and
support disadvantaged communities in a useful,
tangible way. A further instance of this commitment
was the support given by our Foundation to
the publication of a major reference work on the
history of beauty, 100,000 Years of Beauty, amply
demonstrating the decisive role played by personal
enhancement in civilisations throughout
history. And further proof that our key market—
human beauty—will be sustainable over the very
long term.
The beginning of a new adventure
In 2010, we shall embark on a new stage of
L’Oréal’s expansion by embracing this historic
opportunity to extend the cosmetics market to
new countries. We are perfectly resourced to
succeed in this new adventure by counting on
the industry’s leading research facility and the
finest portfolio of global brands. We have also
adapted and transformed ourselves to address
this momentous shift in our strategy, and are
ready to tackle this challenge with renewed
energy and ambition. The year 2010 will be the
first year in our new century for putting these
ambitions to the test.
The particularly difficult economic context has enabled L’Oréal to gauge its strengths, and
to reassert its ownership of the founding values of the company, such as a quest for excellence
and an appetite for challenges, combined with pragmatism and imagination. L’Oréal is an
imaginative company full of resources, which is flexible in adapting to change. These are
unquestionable advantages when weathering any storm. The huge efforts everyone has
made to successfully overcome a year of great uncertainty have been combined with
transformations that ensure we are fully prepared for the future. I would like to thank all
L’Oréal’s teams for their exemplary commitment and solidarity.
Today, L’Oréal is ready to push back all boundaries: to win a further one billion new consumers
throughout the world, and open up new horizons through science. We are well prepared:
our governance is strong and vigilant, our teams are solid and resolute, and our research is
anticipating tomorrow’s beauty in all its diversity.
More than ever before, L’Oréal is asserting its life force.
“On the threshold
of its second century,
L’Oréal is ready to push
back all boundaries.”
Sir Lindsay Owen-Jones, Chairman
L’ORÉAL hAs shOwn its AbiLity
tO Renew itseLf And tO bOunce bAck
loreal2009.com
See Sir Lindsay Owen-Jones’
video message.
03

L’ORÉAL FINANCIAL HIGHLIGHTS
Consolidated sales
(e millions)
17,542 17,473
15,790 17,063
14,533
04
2005
2006
2007
2008
2009
Consolidated sales by branch (2) in 2009
e millions
Growth
Like-for-like Published figures
Cosmetics 16,257 –1.5% –0.6%
The Body Shop 726 +0.7% –3.9%
Dermatology (3) 489 +10.8% +14.6%
breakdown of shareholding structure at
December 31 st , 2009
31.0%
Mrs Bettencourt
and her family
29.8%
Nestlé
net profit excluding non-recurrent items after
minority interests (4)
(e millions)
1,639
2005
1,833
2006
2,039
2007
2,064
(1) In accordance with the law, treasury stock carries no voting rights.
(2) The group’s business is composed of the cosmetics and dermatology branches and of The Body Shop.
(3) Group share, i.e. 50%.
(4) Non-recurrent items include capital gains and losses on long-term asset disposals, depreciation of long-term assets and restructuring costs.
2008
1,997
2009
36.8%
Public
2.4%
Treasury stock (1)

2009 Consolidated sales of the cosmetics branch
By division
e millions
Growth
Like-for-like Published figures
Professional Products 2,388 –3.3% –3.4%
Consumer Products 8,555 +3.2% +1.5%
Luxury Products 4,080 –9.0% –2.2%
Active Cosmetics 1,234 –1.5% –4.3%
Total cosmetics sales 16,257 –1.5% –0.6%
By business segment
e millions
Growth
Like-for-like Published figures
Skincare 4,381 +2.5% +2.0%
Haircare 3,692 –1.0% –2.6%
Make-up 3,421 –2.2% +1.4%
Hair colourants 2,429 +1.4% –0.9%
Perfumes 1,713 –14.9% –7.3%
Other (1) 620 +5.4% +3.4%
Total cosmetics sales 16,257 –1.5% –0.6%
By geographic zone
e millions
Growth
Like-for-like Published figures
Western Europe 7,036 –6.3% –4.7%
North America 3,802 –3.4% +1.7%
Rest of the World, of which: 5,419 +7.2% +3.4%
Asia 2,148 +8.3% +16.5%
Eastern Europe 1,213 +3.3% –12.1%
Latin America 1,138 +11.2% –1.1%
Africa, Orient, Pacific 920 +5.0% +6.7%
Total cosmetics sales 16,257 –1.5% –0.6%
(1) “Other” includes sales made by American distributors with brands outside of the group.
Divisions weight
7.6%
Active
Cosmetics
25.1%
Luxury
Products
Business segments weight
3.8%
Other (1)
10.5%
Perfumes
15.0%
Hair colourants
21.0%
Make-up
Geographic zones weight
33.3%
Rest of
the World
23.4%
North
America
14.7%
Professional
Products
52.6%
Consumer
Products
27.0%
Skincare
22.7%
Haircare
43.3%
Western
Europe
05

BUSINESSES
OFFering
tHe best OF
beauty in all
DistributiOn
CHannels
Thanks to our exceptional spectrum of international brands
and our presence in all distribution channels, we are the
only cosmetics group able to meet all beauty expectations,
at all prices, for all lifestyles, in all regions of the world.
In 2009, L’Oréal confirmed its position as the world leader
in beauty.
06
In hAIr SALOnS
As a privileged partner of hairdressers, the Professional Products
Division distributes its products in hair salons all over the world. It
supports hairdressers in every facet of their development and offers
them high-level education. Its portfolio of differentiated brands meets
the needs of all kinds of salons.
In mASS mArket OutLetS
The Consumer Products Division offers the best in cosmetics
innovation at accessible prices in all mass-market retailing channels
(hypermarkets, supermarkets and drugstores) on every continent.
In PerfumerIeS And dePArtment StOreS
The Luxury Products Division brings together a unique set of brands,
focusing mainly on three major business segments: skincare, make-up
and fragrances. Its brands are sold through selective distribution
not only in department stores, perfumeries, and travel retail outlets,
but also in free standing stores and through e-commerce websites.
thrOugh PhArmAcIeS And dermAtOLOgIStS
The Active Cosmetics Division distributes its products worldwide in all
types of health channel, primarily through pharmacies, drugstores,
medi-spas, and in some countries, dermatologists. It draws on its
unique portfolio of five brands and its privileged partnership with
health professionals.
In the BOdy ShOP StOreS
Founded in 1976 in the United Kingdom by Dame Anita Roddick, The
Body Shop is well known for its strong ethical commitment and its
products based on natural ingredients. More than 65% of them
contain Community Trade ingredients. The Body Shop has a network
of 2,550 stores in 63 countries.

prOFessiOnal
prODuCts (1)
• L’OréaL PrOfessIOnneL • redken •
• kérastase • MatrIx •
COnsumer
prODuCts (1)
• L’OréaL ParIs • GarnIer • MaybeLLIne new yOrk •
• sOftsheen·CarsOn •
luxury
prODuCts (1)
• LanCôMe • GIOrGIO arManI •
• yves saInt Laurent • bIOtherM •
• raLPh Lauren • kIehL’s • shu ueMura •
• heLena rubInsteIn • CaChareL • dIeseL •
aCtive COsmetiCs (1)
• vIChy • La rOChe-POsay •
• InnéOv • skInCeutICaLs •
tHe bODy sHOp (1)
(1) International brands with annual sales of more than 50 million euros.
07

• L’OréaL PrOfessIOnneL • redken • kérastase • MatrIx • PureOLOGy •
• shu ueMura art Of haIr • MIzanI • kéraskIn esthetICs •
Historic year for
salon gains and
innovation
Faced with an exceptional
contraction in its market,
the Professional Products Division
actively stepped up its initiatives.
A record year for conquering new
hair salons, 2009 demonstrated the
validity of the division’s worldwide
leadership strategy based on its
portfolio of highly complementary
brands, the force of its innovations
and hairdresser training.
08
In a hairdressing market which was strongly impacted
by the economic context, the Professional Products
Division significantly strengthened its number 1 position.
The many initiatives introduced enabled the
conquest of a record number of 25,000 hair salons for
the division’s brands, placing it in a position of
strength for an upturn in sales. The division implemented
an unprecedented innovation programme,
particularly for Inoa, which was the first ammonia-free
permanent hair colorant to feature ODS, and was the
flagship launch of the year in Europe.
In Western Europe, the division won market share in
many countries. In North America, sales were
affected by a sharp decline in the market, but the
division accentuated its leadership, thanks in particular
to Redken. The Rest of the World zone maintained
its dynamism with real success stories in Brazil,
India and China, where the division stepped up its
educational efforts to build the professional markets
of the future.
prOFessiOnal
prODuCts
–3.3%
Sales growth
2009/2008 (1)
e2,388 million
Sales in 2009
• Brazil, India and China were the three
main growth drivers.
• The acquisition of three distributors in
the United States means that the division
now covers 80% of the United States
under the SalonCentric brand.
• Launch in Europe of Pureology,
Californian zero sulfate haircare brand for
colour-treated hair.
(1) Like-for-like.

1 2
3
l’Oréal professionnel
Creativity and innovation
L’OréaL PrOfessiOnneL continued its conquest in
terms of both market share and new salons. In
hair colorants, the year was dominated by September’s
strategic launch of Inoa (see box).
In haircare, Série Expert increased its worldwide
market share thanks to the launch of Force Vector,
a range of reinforcing care for brittle hair,
while Série Nature continued its breakthrough
with Pureté Naturelle, one of the very first
organic professional shampoos to be certified
by Ecocert. In styling, Texture Expert took
advantage of the growing trend for blow-dry
styling and for longer hair observed around the
world.
At the Inspiration Paris symposium in June,
L’OréaL PrOfessiOnneL was able to share its vision
for the future of professional beauty with some
4,000 hairdressers.
matrix
Out to conquer the world
matrix accelerated its international expansion.
Biolage confirmed its global success with the
launch of Rejuvatherapie for mature hair, and
Delicate Care for sensitised hair. Hair colorant
sales rose, thanks to the relaunch of SoColor in
North America and the continuing growth of
Wonderbrown in Asia, India and the Middle East.
In styling, the new Design Pulse range was very
successful, as was multi-dose Opti-Straight
sachets in Asia. The brand’s new slogan—
“Matrix, Imagine All You Can Be”—has been
adopted by hairdressers all over the world.
kérastase
High performance and tailor-made
Thanks largely to the weight and dynamism of
markets outside of Europe, particularly in Asia and
South America, Kérastase strengthened its position
as the leader in professional haircare by combining
service and performance. Launches such
as Volumorphose, which injects texture inside the
fibre of fine hair, and Oleo-Slim, which reduces the
volume of hard-to-manage hair, again proved the
brand’s ability to create high performance products
exclusively for salon use. A tailor-made
response became available for the buoyant seniors
market with the Age Premium range, which
combines calcium derivatives and hyaluronic acid
to nourish and strengthen mature hair.
4
The year’s major launches
1 _ Force Vector, L’Oréal Professionnel.
2 _ SOCOLOR.beauty, Matrix.
3 _ Age Premium, Kérastase.
4 _ Color Extend, Redken.
A new eRA in hAiR cOLOuR with inOA
To offer women a new level of comfort and greater respect for
hair fibre, while ensuring optimal colour quality,
L’Oréal researchers rethought their formulation approach and
invented a new process: the Oil Delivery System.
A new oil-rich base drives the active colour ingredients into
the core of the hair fibre. The innovative formulation system
uses an active alkaline ingredient instead of ammonia,
offering unprecedented lightening performances at
this level of concentration. Inoa was launched
worldwide from September 2009.
The outstanding start it made in Western Europe
enabled L’OréaL PrOfessiOnneL to win over
many new salons.
loreal2009.com
Professional Products Section
redken
At the cutting edge of trends
redKen won market share around the world by
stepping up its programmes to train hairdressers
and by launching new technical in-salon services:
the oxidation colorant Cover Fusion which delivers
100% grey hair coverage, Chemistry System
professional haircare and the Color Extend haircare
range. redKen’s partnership with studio stylist
Guido Palau put the brand at the heart of
international fashion shows with cutting-edge
styling products.
09

• L’OréaL ParIs • GarnIer • MaybeLLIne new yOrk •
• sOftsheen·CarsOn • CLub des Créateurs de beauté •
accessible
innovation for
everyone
In a context of markets that were
resilient but growing at a slower
rate, the Consumer Products
Division stepped up its innovation
effort, developed new product
categories, offered ranges which
were even more accessible, and
accelerated its moves into new
markets. A strategy which allowed it
to grow quicker than the market and
to improve its global positions.
10
The Consumer Products Division ended the year
with sales growth of +3.2% (1) .
It recorded growth in traditional segments, particularly
skincare which was boosted by good
performances in Asia and North America, as
well as haircare and hair colourants. The division
also consolidated its positions in the product categories
it entered more recently, such as men’s
skincare, and also moved into in a new market,
deodorants, with Garnier, in Latin America and
Eastern Europe. The year was marked by strong
growth in new markets: in Eastern Europe, where
the division’s dynamism returned at the end of
the year; in Latin America, where it recorded
substantial sales growth, thanks in particular
to haircare and deodorants, and in Asia, where
results were particularly impressive in China
and India with growth of +23.9% (1) and +32.7% (1)
respectively.
COnsumer
prODuCts
+3.2%
Sales growth
2009/2008 (1)
e8,555 million
Sales in 2009
• L’OréaL Paris launched several high-tech
products in the haircare segment, such as
Ever Pure, the first ever sulphate-free
shampoo, in the United States.
• Garnier chose India to launch its first ever
men’s skincare line. Success was immediate.
• Success of Garnier Mineral Deodorants
in Eastern Europe.
(1) Like-for-like.

1 2 3
4
l’Oréal paris
A force for global innovation
The brand felt the impact of the economic environment
in the first half, but recovered in the
second half thanks to a strong programme of
innovations in all categories. It recorded major
successes in emerging countries, particularly in
China (+25.5% (1) ) and Brazil (+16.6% (1) ). Boosted
by its success in Latin America, the haircare Total
Repair 5 range was rolled out in Western Europe.
In China, L’OréaL Paris launched a full range of
haircare products tailored for Chinese hair, and
initial results were promising. In terms of facial
skincare, Revitalift, the world’s number one antiwrinkle
skincare range, posted spectacular
growth thanks to the launch of Face Contours
and Neck in Europe and Deep-set Wrinkles in the
United States. L’OréaL Paris recorded its strongest
growth in Asia, particularly in China, which
became the brand’s number one country for
skincare thanks in particular to Men Expert.
garnier
Strengthened accessibility
Garnier, an accessible brand inspired by nature,
gained market share all over the world in skincare
and progressed very quickly in new markets,
where its growth potential remained strong. In
skincare, where the brand recorded double-digit
growth, the success of Caffeine Eye Roll-on was
confirmed all over the world. The brand per-
formed well in Asia with Aqua Defense and Garnier
Light. In India, Garnier achieved instant success
with its first ever men’s skincare range,
Garnier Men, which has already been extended
to the Asian continent. Another growth driver
was the brand’s entry into the deodorant market.
After launching its bí-o range in Latin America in
2008, Garnier moved into Eastern Europe by
launching Garnier Mineral, which rose to the
top 5 in sales terms in several countries in just
10 months.
maybelline new york
Creativity on every front
The world number 1 in make-up grew all over the
world. In the United States, its traditional market,
the new lipstick Color Sensational was a runaway
success, just like SuperStay foundation and Lash
Stiletto mascara. In Japan, the brand bolstered
its leadership in the eye segment. In China, the
The year’s major launches
1 _ True Match Roll’on, L’Oréal Paris.
2 _ HerbaShine, Garnier.
3 _ Color Sensational, Maybelline New York.
4 _ Elsève Total Repair 5, L’Oréal Paris.
fROm hAiR tO LAshes
The knowledge gained in haircare enabled
L’Oréal Research to decode the life cycle of eyelashes,
and to invent a new kind of product in the form of
a renewal serum providing the energy necessary for
everyday lash care. A fully-fledged care product,
the serum’s formula is composed of a cocktail of benchmark
active ingredients, including arginine, an amino acid used in
haircare and anti-hairloss products. Right from the first
month, the lash line seems thicker and the lashes stronger.
Renewal Lash Serum by L’OréaL Paris is available on its own or
as part of a double-wanded mascara with Double Extension
mascara, it has a dual role—lash repair and a make-up base.
loreal2009.com
Consumer Products Section
brand was successfully launched in the skincare
market. In Eastern Europe, the brand’s market
share progressed with Pulse Perfection vibrating
mascara which performed well. maybeLLine new
yOrK strengthened its trendy image everywhere,
by linking up with fashion-related events.
softsheen·Carson
The brand confirmed its position as number 1 in
the ethnic haircare products market and set out
to conquer the skincare market in South Africa
with Dark and Lovely Body, a line of body milks.
Club des Créateurs de beauté
It was a very successful year for CCB, which
reported growth of +9.3% (1) . Internet was at the
heart of CCB’s new business model and proved
highly effective.
(1) Like-for-like.
11

• LanCôMe • GIOrGIO arManI • yves saInt Laurent • bIOtherM • raLPh Lauren • kIehL’s •
• shu ueMura • heLena rubInsteIn • CaChareL • dIeseL • vIktOr & rOLf • rOGer & GaLLet •
• bOuCherOn • yue saI • steLLa MC Cartney • erMeneGILdO zeGna •
a year of
strategic
developments
In 2009, the Luxury Products
Division laid the foundations for
its future development by
focusing on key brands, stepping up
its capacity for scientific innovation,
fast-tracking the growth of Yves
saint L aurent, rolling out tomorrow’s
luxury brands such as KiehL’s and
DieseL, and implementing an
active policy to win over consumers
through alternative channels.
12
The combination of a contracting market—especially
in fragrances—and exceptional inventory
adjustments by distributors around the world
negatively impacted the division’s activities, which
ended the year with a decrease of –9.0% on a likefor-like
basis and –2.2% on published data, with
the consolidation of YSL Beauté. However, the division
maintained its position as world leader in the
luxury beauty market (1) . The Rest of the World zone
drove sales, especially in Asia where the division
grew nearly twice as fast as the market due to
Lancôme, GiOrGiO armani and KiehL’s, and the recovery
in the travel retail business. In Western Europe,
sales accelerated in the north, while the south was
severely impacted by distributors’ inventory reductions.
In North America, the division gained market
share in skincare and make-up (2) in a falling market.
(1) Sell-out. Retail sales.
(2) Source: NPD USA, Retail panel, 2009 market-share value.
(3) Like-for-like.
luxury
prODuCts
–9.0%
Sales growth
2009/2008 (3)
e4,080 million
Sales in 2009
• The division strengthened its position in
the global men’s fragrance market as a result
of its product launches and the acquisition of
YSL Beauté.
• Yves saint Laurent picked up in the United
States with a +17.1% rise in sales (3) .
• With new products well positioned in pricing,
small formats in fragrances, and entry-level
prices for skincare, the Division demonstrated
its commitment to accessible innovation.

1 2 3 4
lancôme
High-performance beauty
Number 1 worldwide in the selective beauty segment,
Lancôme continued to expand, with strong
growth in Asia and the launch of major innovations.
Génifique Youth Activator (see box) sold
more than two million units worldwide in 2009.
Another major innovation, Absolue Precious
Cells drew on 20 years of stem cell research, while
in make-up, Ôscillation Powerbooster in the
United States, and Hypnôse Drama mascara in
Europe both delivered good results.
yves saint laurent
The scent of success
yves saint L aurent strengthened its position as a
global brand. Two high value-added launches
confirmed its position as a major fragrance
player: La Nuit de L’Homme and Parisienne,
embodied by Kate Moss, which was number 1 in
the sales rankings in France in September and
made the top 10 in several European countries
one month later. In make-up, the brand chose a
new visual identity, and strengthened its positions
thanks to major new products such as Teint
Resist, winner of the Prix d’Excellence Marie-
Claire 2010, and Gloss Volupté, the first gloss
lipstick with tangy colours and a super-smooth
texture. Finally, the skincare range refocused on
its two core products: Temps Majeur, the premium
line, and Top Secrets, directly inspired by
the techniques of professional make-up artists.
(1) Source: NPD United States, 2009 value.
(2) Like-for-like.
(3) Source: NPD USA, Retail panel 2009 market share-value.
(4) Source: NPD UK, Retail panel 2009 market share-value.
giorgio armani
charms women
The world leader in men’s fragrances strengthened
its presence in women’s fragrances with the launch
of Idole, which made the top 10 in women’s fragrance
sales in several West European countries
on its launch, and was number 2 in new products
in October in the United States (1) . 2009 also saw the
rise of Giorgio Armani Beauty in make-up, with
strong advances in Asia, particularly with the opening
of counters in Greater China and South Korea.
kiehl’s
KiehL’s since 1851 confirmed its role as a growth
catalyst and entry-level brand for the selective
channel, with a sales increase of +27.8% (2) and the
opening of more than 70 sales outlets in 2009.
The brand is now present in 34 countries.
The year’s major launches
1 _ Parisienne, Yves Saint Laurent.
2 _ Only The Brave, Diesel.
3 _ Absolue Precious Cells, Lancôme.
4 _ Açaí Damage-Repairing, Kiehl’s.
the pOweR Of genes
fOR futuRistic skincARe
Génifique Youth Activator, the result of ten years of research,
was an instant hit with women all over the world.
Since its launch in March 2009, it has been selling
at a rate of four units every minute. L’Oréal laboratories
have demonstrated that gene activity changes with age,
and identified the proteomic signatures of young and
mature skin, and the dynamics of their responses to
aggression. These discoveries led to the invention of
a resolutely innovative skincare line, protected by
seven patents. Génifique modifies the expression of
certain genes, and stimulates the production of
proteins typical of young skin. This innovation was awarded
the Marie-Claire Prix d’Excellence de la Beauté
for 2010.
loreal2009.com
Luxury Products Section
Diesel
In 2009, dieseL launched Only the Brave, with the
aim of remaining the most alternative, innovative
and entertaining brand on the market. Ranked
among the four best-selling fragrances in the
United States upon its launch (3) , Only the Brave
went on to become market leader in the United
Kingdom (4) .
biotherm
In 2009, biOtherm strengthened its historic mainstays,
with notable successes in the moisturising
and slimming segments. In Asia, the brand confirmed
its positions in lightening products.
Among new innovations, its Skin Vivo anti-ageing
care line marked biOtherm’s entry into the
field of DNA and genomics.
13

• vIChy • La rOChe-POsay • InnéOv • skInCeutICaLs • sanOfLOre •
Closer links with
health
In 2009, the Active Cosmetics
Division reinforced its world
leadership thanks to a portfolio of
highly complementary beauty/
health brands and to innovations
across all product categories and
prices. With even stronger
commitment to pharmacists and
dermatologists, the Division
is building on a health trend with
strong potential.
14
The Active Cosmetics Division ended the year
with negative growth of –1.5% (1) in a context of
slower growth across all zones. Sales trends in
Western Europe reflected inventory reductions
by wholesalers and parapharmacies, and the
drop in sales of seasonal products for vichy and
innéOv. In North America, the division made a
significant advance due to the resilience shown
by sKinceuticaLs in a recession-hit professional
market, and the growing reputation of vichy and
La rOche-POsay in American drugstores. In the
Rest of the World zone, Latin America achieved
double-digit growth and made significant
gains in market share. Driven by strong product
initiatives in 2010, Roger & Gallet joined the
Division to further bolster a brand portfolio
combining beauty with health.
aCtive
COsmetiCs
–1.5%
Sales growth
2009/2008 (1)
e1,234 million
Sales in 2009
• The Division gained market share in
Latin America with vichY and La rOche-POsaY,
and also through innéOv’s successful entry
into the Brazilian and later Mexican markets.
• Winning innovations for vichY substantiated
its position as the leading anti-ageing
product in pharmacies.
(1) Like-for-like.

1
vichy
Robust growth
for the world number 1
2
As market leader in the anti-ageing segment,
vichy continued to grow, especially through the
relaunching of Novadiol as Neovadiol Gf (see box)
and the launch of LiftActiv Retinol HA day and eye
creams. This new generation of active textures
with an immediate and lasting anti-wrinkle effect
was enhanced by highly innovative packaging
using an ultra-protective diffusion system. In Asia,
the Bi-White Reveal range of lightening products
continued to bolster the brand. The outstanding
efficacy of its star product Essence and the launch
in October of day and night creams generated
strong sales from the first month in China. The new
vichy entry-level range Essentielles, with its five
hypoallergenic paraben-free products for the face
and body under 10 euros, received a particularly
enthusiastic welcome from pharmacists and consumers
with lower income levels.
la roche-posay
The success of a committed brand
Supported by more than 25,000 dermatologists in
some 60 countries, and by proactive advice in pharmacies,
the brand recorded dynamic growth again
in 2009 in all regions of the world: Western Europe
(+2.3% (1) ), Asia (+16.9% (1) ), Latin America (+9.2% (1) ),
and North America (+7.1% (1) ). Sales accelerated
particularly strongly in the second half following the
launch of three major innovations: Effaclar Duo, a
corrective and unclogging anti-imperfection care;
3
skincARe inspiRed by tissue engineeRing
For some thirty years, L’Oréal researchers have been working to
reproduce in the laboratory the biological tissue that we know as skin,
using human cells. As a result of this tissue engineering expertise,
insight has been gained into the key role played by the skin’s natural factors in
its renewal process, and an active ingredient has been identified
that encourages their synthesis and storage in cutaneous tissues.
This ingredient has now been formulated in Vichy’s new skincare product,
Neovadiol Gf which primarily targets menopausal women
whose skin tends to slacken and lose its density.
Derm Aox, a multi-corrective day care to smooth
away wrinkles and generate new-found radiance;
and Lipikar Baume AP, a lipid-replenishing antiirritation
body balm for very dry skin with atopic
tendencies. La rOche-POsay also entered into a
commitment with dermatologists’ associations in
22 countries to carry out national campaigns to
promote education, awareness-raising and screening
for skin melanomas and cancers. More than
68,000 screenings were performed and 3,900 skin
cancers were identified, helping to protect the lives
of a large number of people.
innéov
innéOv energised the market in Europe with
strong growth in the anti-hair loss segment and
the launch of Imperfections D-tox in September.
In Latin America, the brand made a successful
4
The year’s major launches
1 _ Effaclar duo, La Roche-Posay.
2 _ LiftActiv Rétinol HA, Vichy.
3 _ Imperfections D-tox, Innéov.
4 _ Anti-ageing Elixir Care, Sanoflore.
After ten days of treatment cheekbones appear to be
resculpted, the neck seems firmer and
the facial contours redefined.
loreal2009.com
Active Cosmetics Section
entry into the Mexican market after that of Brazil,
and reached the number 1 position in nutritional
supplements for beautiful hair.
skinCeuticals
The pioneering cosmeceutical brand had a good
year in 2009, thanks to strong acceleration in
Europe, and growth in an American market that
had been weakened by the crisis affecting premium
spas and cosmetic physicians.
sanoflore
In Europe, the brand grew faster than the market
in the pharmacy segment, due to a new generation
of organic cosmetics products which combine
proven efficacy, attractive textures and
fragrances, and respect for sensitive skin.
(1) Like-for-like.
15

tHe bODy ODy OD sHOp s sHOp
ethical
innovation
In 2009, The Body Shop proved
resilient in a difficult environment.
To win over an ever-wider range of
customers, the brand pursued
its highly dynamic innovations
policy and introduced a growing
number of ethical initiatives.
At the same time, The Body Shop
reorganised its operations to
boost its responsiveness and
agility, and ensure sustainable growth.
16
+0.7%
Sales growth
2009/2008 (1)
2,550
stores in 63 countries
In a retail market severely affected by the economic
crisis, The Body Shop resisted well, with
an increase in sales of +0.7% (1) . The brand posted
solid growth in most of Asia, the Middle East and
mainland Europe, particularly in Sweden, Denmark,
Portugal and France, but the economic
climate continued to hamper customer footfall
in the United Kingdom and North America. The
brand also moved into new distribution channels
for the first time, with 24 retail points opened in
airports in Asia, Europe and Latin America, and
introduced a selection of products aboard more
than thirty airlines.
The year’s
major
launches
The Body Shop also carried out a thorough reorganisation
to boost its dynamism and efficiency,
which delivered significant profitability gains in
2009.
A year of major innovations
To boost its visibility and attract new customers,
The Body Shop implemented a policy of major
product launches on a global scale. The highlight
of the year was Nutriganics , the first-ever
organic skincare range for The Body Shop. The
seven products in this high performance skincare
regime contain 95% ingredients of natural
origin, including 15 active organic ingredients,
such as Community Trade virgin cold-pressed
coconut oil from Samoa and Community Trade
babassu oil from Brazil. The Originals is a collection
of eleven iconic The Body Shop products
sold in 100%-recycled plastic bottles at attractive
prices. The third major innovation, Love
Etc… was the first fragrance marketed internationally
to include Community Trade alcohol
made from organic sugar cane. Love Etc… became the brand’s number 1 fragrance in several
countries.
Reasserting ethical leadership
As a long-standing campaigner for human rights
issues, The Body Shop launched a major new
campaign to “Stop Sex Trafficking of Children
and Young People”, together with NGO partner
End Child Prostitution and Trafficking (ECPAT).
The campaign product “Soft Hands Kind Heart”
is a protective hand cream, for which all after-tax
profits will go to ECPAT and its partner organisations.
(1) Like-for-like.
1

2
loreal2009.com
The Body Shop Section
1 _ Nutriganics .
2 _ Love Etc… .
the cOmmunity tRAde
pROgRAmme gAtheRs
mOmentum
The Community Trade programme
is constantly expanding. To date,
some 30 suppliers in 22 countries across
four continents participate in
this programme, which helps improve
the living conditions of more than
25,000 people worldwide. In 2009,
The Body Shop introduced new Community
Trade ingredients in its products:
high-grade cold-pressed virgin coconut oil,
made by the Samoan cooperative WIBDI
(Women In Business Development Inc.),
and tea tree oil from Kenya, hand-harvested
by members of the Kenya Organic Oil
Farmers Co-operative Association.
galDerma
Defining the future of dermatology
Galderma is a leading global speciality
pharmaceutical company focused
exclusively on dermatology. With Epiduo
and Oracea ® , two of the top four fastest
growing products in dermatology in 2009,
Galderma recorded the highest growth in
terms of value in the dermatology industry.
1 2 3 4
Building on strong progress in the United
States and double digit growth elsewhere,
Galderma had an excellent year. In Western
Europe, sales grew by +11.3% (1) with strong
performances from France, the United Kingdom
and Germany. Sales rose +11.5% (1) in
Latin America with significant contributions
from Brazil, Venezuela and Mexico. In Asia,
sales increased by +23.1% (1) , with noteworthy
growth in South Korea and Japan.
Although adjustments in American distributor
inventories impacted sales in the third
quarter, demand in the United States
remained strong. Over the year, sales in
North America increased by +9.5% (1) .
Reference products
The acne treatment Epiduo was ranked the
fastest growing dermatology product in
2009. The adapalene compound, a discovery
from Galderma’s laboratories, forms the
foundation for Epiduo and Differin ® , and
continued to expand market share world-
+10.8%
Sales growth 2009/2008 (1)
e978 million
Sales in 2009
The year’s
major launches
1 _ Epiduo .
2 _ Oracea ® .
3 _ Azzalure ® .
4 _ Vectical ® .
wide as the global reference treatment for
acne. Oracea ® (oral treatment for rosacea)
ranked the fourth fastest-growing product
in the global dermatology market (2) , and was
approved in Europe, together with Clobex ®
Shampoo (treatment of scalp psoriasis), and
Azzalure ® (botulinum toxin Type A for the
improvement of glabellar lines). Vectical ® ,
marketed under the Silkis ® brand name elsewhere,
was approved in the United States
and rapidly adopted as a key component in
the treatment of psoriasis. 2009 was also a
year of major advances for Galderma
research. The company invested 20.8% of its
sales in developing new treatments and
acquiring innovative technologies. Galderma
filed a record number of nearly
60 patents to protect its discoveries.
(1) Like-for-like.
(2) Source IMS at end December 2009 – MAT data –
class D + J1A class oral antibiotics used for
acne and rosacea + J2A class oral antifungals for
the treatment of onychomycosis.
17

INTERNATIONAL
DOubling
Our
COnsumer
base
18
nOrtH ameriCa
e3,801.9 million of consolidated cosmetics sales
15.8% market share (1)
23.4% of group cosmetics sales
Western eurOpe
e7,036.6 million of consolidated cosmetics sales
20.7% market share (1)
43.3% of group cosmetics sales
latin ameriCa
e1,138.4 million of consolidated cosmetics sales
10.5% market share (1)
7.0% of group cosmetics sales
The globalisation of the cosmetics market is only just beginning.
Although L’Oréal is already present on every continent, the
group is still only reaching one-fifth of the world’s population.
By accelerating the globalisation of the company and the
conquest of new markets, the aim is to double L’Oréal’s
consumer base.
(1) Excluding soap, toothpaste and razors. 2009 provisional estimates. Based on estimates of the worldwide cosmetics market updated in 2009. Source: L’Oréal estimates.

Significant launches in each region of the world
1
2
3
asia
4 5
6
eastern eurOpe
e1,212.8 million of consolidated cosmetics sales
12.7% market share (1)
7.5% of group cosmetics sales
e2,147.8 million of consolidated cosmetics sales
6.8% market share (1)
13.2% of group cosmetics sales
aFriCa, Orient, paCiFiC
e919.7 million of consolidated cosmetics sales
12.8% market share (1)
5.7% of group cosmetics sales
1 _ North America
Ôscillation Powerfoundation, Lancôme.
2 _ Western Europe
Elvive Full Restore 5, L’OréaL Paris.
3 _ Latin America
Innéov Solar, innéOv.
4 _ Eastern Europe
Garnier Mineral, Garnier.
5 _ Asia
Men Expert, L’OréaL Paris.
6 _ Africa, Orient, Pacific
Garnier Men PowerLight, Garnier.
19

esearCH anD innOvatiOn
Opening up
a new cosmetics
era
In 2009, L’Oréal Research innovated
across the board, inspired by
advances in biology and
bioinformatics, the geographical
diversity of consumers, and
environmental and ethical agendas.
Two major innovations, Inoa and
Génifique, opened up a new era for
beauty science with an unlimited
potential for discovery.
20
A new general of
anti-ageing skincare
More than 10 years ago, together with nine internationally
renowned teams, L’Oréal’s Advanced
Research laboratories set out to understand the
role of stem cells in the renewal of skin and hair.
In 2009, they announced a major new discovery:
epidermic stem cells do not diminish with age, it
is their environment and hence their functionality
which changes. This discovery led to the
invention of Absolue Precious Cells by Lancôme,
a new skincare line which protects the stem cells’
environment.
Another promising research area is the study of
gene expression in young and mature skin, and
the dynamics of gene responses to different
stress factors. Results of this research have
shown that it is possible to characterise specific
proteins of young and mature skin on the skin’s
surface, and select active ingredients capable of
changing these signatures. The first product to
benefit from these advances was Génifique by
Lancôme.
Questioning established ways
Also in 2009, research made a major scientific
advance in hair colourants. Breaking with their
customary ways of thinking, L’Oréal’s researchers
re-examined the science of emulsions, and
developed ODS, an Oil Delivery System which
modifies the ratio between the oil and water
phases, enabling the replacement of ammonia
by another alkaline ingredient which is odourfree,
without losing any of the colorant’s habitual
properties. Seven years of research were
required to develop hundreds of formulas, file
patents, evaluate harmlessness and efficacy by

means of thousands of head tests with hundreds
of hairdressers, and finally to industrialise the
new process. Inoa from L’OréaL PrOfessiOnneL was
the first hair colorant to benefit from this technological
boost.
Evaluation, the mirror image of
product performance
As the world leader in cosmetics, it is our duty to
offer high quality products which are safe and
effective. The evaluation of a product’s efficacy
must be thought of as the mirror image of its performance—the
way the customer perceives it.
This challenge requires batteries of tests. First in
vitro tests on cell cultures, reconstructed skin or
hair in test tubes, and then in vivo tests, using
objective instrumental methods such as imaging
and tests on heads. For the first time in 2009,
researchers at L’Oréal used two-photon microscopy
to demonstrate the effectiveness of an
active anti-aging product by making it possible
to see tissue organisation (including collagen
and elastin) in vivo. This is rather like performing
a virtual skin biopsy. The third type of test
involved clinical studies carried out under der-
The latest scientific progress
1_ Major discovery of the role of stem cells.
2_ The very first genomics-based products.
3_ Over 100 researchers joined forces to
develop the Inoa ammonia-free colourant.
matological control. In this field, the more global
our business grows, the more we need to take
account of the diversity of the subjective dimensions
of sensoriality.
Inventing 21st century toxicology
At the 7th World Congress of Alternative Methods
in Rome in September 2009, L’Oréal unveiled
its evaluation strategy based on predictive
methods. Twenty years of investment and
research in partnership with all sectors of industry
(including chemicals, pharmaceuticals and
food) have led to the invention of 21st century
toxicology. The basic principle is to leverage the
cosmetic performance potential of ingredients
selected on the basis of comprehensive safety
data. Strategies of this type are essential if we
wish to continue to innovate under the strictest
safety conditions, while keeping experiments on
animal to a minimum. Over 20 years, the group
has invested 600 million euros in developing
alternatives to animal testing. Since 2006, more
than 12,000 ingredients have been evaluated
using reconstructed tissues.
At the Rio research centre, scientists are developing products adapted to the specific properties of Brazilian hair.
e609 million
Research budget
674
patents filed
RegiOnALised
ReseARch
With 18 research centres and
13 evaluation centres on all continents,
the group has developed a fully-fledged
science of observing beauty rituals and
customs around the world.
This geo-cosmetics approach
ensures that products perfectly
match consumers’ expectations and
sometimes even inspires new products.
In China, at the Pudong research centre,
for example, three years of detailed
study of Chinese hair, together with
the analysis and interpretation of
a local custom of using dry
wash shampoo, led to the creation of
a range of shampoos and haircare
products optimally suited to the local
hair types and cultural traditions.
21

COrpOrate respOnsibility
For a more
beautiful world
From the outset, L’Oréal has been
committed to its core values:
a rigorous scientific approach,
a constant quest for innovation, and
commitment to ethical practices,
diversity and the environment.
A century later, these values still
form the foundation of the group’s
sustainable development strategy,
to which all employees
are committed on a daily basis.
22
For L’Oréal, the challenge is to create a model
capable of ensuring over the long term an equitable
balance between business targets and
social commitment that also creates added value
for all stakeholders.
In environmental matters, the group’s requirements
and standards have always been ahead of
their time, and in 2009 L’Oréal went that one step
further by setting itself a number of highly challenging
new targets to reduce its environmental
footprint.
The group also reasserted its ambition to be a
model corporate citizen, by setting an example
in all areas of socially responsible behaviour.
L’Oréal is a company that makes a real contribution
to the world by showing solidarity with the
human communities it is involved with and being
alert to the problems of its time.
100 years, 100 projects
To mark its centenary,
L’Oréal asked each of its subsidiaries
to support a citizen project.
One hundred projects, involving
employees all over the world, are now
assisting disadvantaged communities
in a tangible and effective way.
–50%
greenhouse gas emissions (1)
–50%
water consumption per finished product (1)
–50%
waste generated per finished product (1)
(1) These reductions will be calculated on a like-for-like basis for
the 2005-2015 period.

Recognised achievements in 2009
1 _ L’Oréal was ranked among the top 100 most sustainable corporations in the Corporate Knights review.
And also in the top 10 companies that are most committed to fighting against climate change according to Climate Counts.
2 _ L’Oréal was awarded the title of “Leader in the Personal and Household Goods sector” by
the Forest Footprint Disclosure Project (FFD Project) for its role in the responsible use of wood fibre.
3 _ Through its efforts to reduce greenhouse gas emissions, the group featured in the top 3 of
the Brand Emissions Ratings established by the University of Edinburgh.
L’Oréal commitments
L’Oréal’s Board of Directors attaches great
importance to the quality of corporate governance,
closely monitors changes in best practices
in this field, and strives to achieve constant
progress.
As an international group, L’Oréal is committed
to delivering value-creating growth for the largest
possible number of stakeholders who participate
in its success.
L’Oréal is committed to reducing its environmental
footprint and its use of natural resources
through greater eco-efficiency, and where possible,
to achieving an absolute reduction in its
impact, while maintaining health and safety in
the workplace.
L’Oréal promotes sustainable innovation by
incorporating the principles of sustainable
development into its core Research and Development
activities.
The group wishes to nurture the personal fulfilment
of its employees within a stimulating, multicultural
community enjoying a wealth of diversity
and talents, where everyone contributes with
creativity and enthusiasm. A number of initiatives
for promoting diversity and solidarity are given
on page 27.
L’Oréal undertakes to create long-term partnerships
with its suppliers built on mutual respect,
transparency, regular communication and high
standards.
L’Oréal is committed to providing innovative
products, guaranteeing the excellence of its
entire portfolio of products, services and advice
to consumers, and marketing its products
responsibly.
L’Oréal is dedicated to acting as an exemplary
and responsible corporate citizen.
The Parbel duty-free distribution centre in Miami (Florida, United States)
won the 2009 EH&S excellence award for dispatching centre.
ethics At the heARt Of
L’ORÉAL cOmmitments
In 2009, L’Oréal continued to
implement its ethics programme.
Two ethical practices—
”Act/Lead with human sensitivity” and
“Obtain results with integrity”—
are now part of the process for
evaluating all employees worldwide.
On Ethics Day, all group employees
were able to discuss the Code of
Business Ethics online with
L’Oréal’s Chief Executive Officer.
There were around 10,000 connections
and a total of nearly 900 questions.
Eighteen Ethics correspondents
were appointed in the group’s
main countries.
Unique in Europe, the excellence
bursary “L’Oréal for Ethics”
is awarded to students who
have chosen to include
the study of business ethics in
their vocational training.
The Ethics Division received
ISO 9001 certification for
its compliance with
the international system of
quality management.
FIND OUR MORE
Every year in June, L’Oréal publishes
its Sustainable Development Report
online at www.loreal.com
loreal2009.com
Sustainable Development Section
23

24
Biodiversity:
a group priority
Since 2005, L’Oréal researchers
have been focusing their efforts on
enhancing biodiversity and
meeting the targets of the Biological
Diversity Convention. Today, 40% of
the group’s raw materials are
plant-based and derived from
300 species that have been evaluated
for their potential impact on
biodiversity preservation.
In 2009, L’Oréal was ranked by
the WWF as one of
the ten most responsible
companies amongst
the members of
the Roundtable on
Sustainable Palm Oil
(RSPO), which promotes
the use of palm oil sourced
from sustainable
plantations,
ensuring respect for
both people and
forests.
Certified organiC produCt
ranges
Across the group, more than 400 raw
materials have been Ecocert certified,
including 170 sourced from organic
farming, and this has already enabled
more than 70 certified products to be
marketed. In 2009, organic product lines
were launched
across all divisions.
ENVIRONMENT
reducing the group’s
environmental
footprint
In 2009, L’Oréal not only set
highly ambitious environmental
targets of halving its greenhouse
gas emissions as well as water
consumption and waste per finished
product by 2015 (1) , but achieved
tangible advances in all of these areas.
Climate change
To achieve its objectives, the group took numerous
initiatives to limit its greenhouse gas emissions.
The North Little Rock (Arkansas) plant in the
United States now meets all its energy needs
thanks to a nearby hydroelectric dam, thereby
reducing its CO emissions by 80% compared with
2
2008. L’Oréal also introduced a number of important
measures in its transport activities. Wherever
possible, the group prioritises transport by rail and
river rather than by road and air, and has set itself
the target of reducing the share of air transport in
the total transport of goods to 10%. Overall, the
(1) Reductions calculated on a like-for-like basis.
The Mexico City distribution centre
significantly reduced its electricity
consumption by installing
1,000 square metres of solar panels.
group’s direct CO 2 emissions were reduced by
1.3% per finished product and 3.3% in absolute
value during the year.
Energy
L’Oréal continued to step up its use of several renewable
energy sources. In China, the Beauty Tech plant
installed 2,000 solar tubes to reduce its CO emis- 2
sions by more than 5.3 tonnes a year. In India, the
Pune plant now uses 320 solar panels to heat
32 cubic metres of water a day, cutting CO emis- 2
sions by 93.7 tonnes a year. In Belgium, the Libramont
plant also opted for 100% green energy, and
is carbon neutral in terms of emissions (see page 28).
Water
In 2009, a new “Better Utility for Sustainability” working
group was set up to identify, establish and rollout
best practices in cleaning operations in all divisions.
All plants and distribution centres have applied such
measures as sterilising with steam rather than hot
water, reusing some wash water from manufacturing
tanks, and using rainwater for gardens and green
areas. In 2009, the group’s total water consumption
was reduced by 0.8% per finished product.
Waste
In the long-term, L’Oréal plans to stop all landfill
disposal of its waste. Nearly half the production
and distribution sites have achieved the zero landfill
target, and aggregate recycling, energy recovery
and reuse rates have reached around 95%
worldwide. In 2009, total transportable waste
(excluding packaging shuttles) was cut by 1.4%
per finished product at group level.

Ada Yonath, Nobel Prize for Chemistry 2009 (on the left), and Elizabeth Blackburn, Nobel Prize for Medicine 2009
(on the right), both received the L’ORÉAL-UNESCO “For Women in Science” award in 2008.
PHILANTHROPY
giving meaning to
beauty
In 2009, the L’Oréal Foundation
continued to implement its emblematic
programmes, and laid the cornerstone of
a vast new programme of research on
beauty in the field of human sciences by
supporting the book 100,000 Years of
Beauty.
The L’Oréal Foundation develops major global
programmes alongside pilot projects in France in
three fields: promoting scientific research and the
role of women in science, helping people made
vulnerable because of a change in their appearance
to regain self-esteem and fit back into society,
and facilitating access to education. In addition,
the L’Oréal subsidiaries in different countries
are actively involved in local philanthropic initiatives
to help disadvantaged communities.
Two “For Women in Science”
winners receive Nobel Prizes
Through the “For Women in Science” programme,
L’Oréal and UNESCO have been
actively supporting the cause of women scientists
over the last twelve years. This programme
turns the spotlight on eminent researchers and
talented young fellows. In 2009, Professor Ada
Yonath and Professor Elizabeth Blackburn, winners
of the L’ORÉAL-UNESCO awards in 2008,
received Nobel Prizes for Chemistry and Medicine
respectively. Recognition of the excellence
of these two women scientists by such a prestigious
institution is a tremendous encouragement
for the L’Oréal Foundation and UNESCO to continue
their work together.
Beauty from the heart
Beauty and self-confidence are closely linked,
which is why the L’Oréal Foundation recently created
its “Beauty from the Heart” programme. To
help people in difficulty, products are donated,
and socio-beauty care is provided in France with
the help of partners such as Les Restaurants du
Cœur, Samusocial, La Maison de Solenn, and
L’Agence du Don en Nature. The Foundation also
works with Médecins du Monde to support and
develop “Opération Sourire”. This reconstructive
surgery programme helps bring a smile back
to the faces of people who have been disfigured
by disease, malnutrition or war.
Education to prevent AIDS
The “Hairdressers against AIDS” programme
was launched in 2005 in partnership with
UNESCO, and now operates in 26 countries.
Each year 400,000 hairdressers are made more
aware of the risks of AIDS and how to protect
people from it. In 2009, for example, the programme
made a powerful impact in Russia,
where 340 seminars were held across the country,
and training courses offered to more than
4,700 hairdressers.
the eteRnAL
quest fOR beAuty
The quest for beauty has been
crucially important since the dawn of
mankind. Yet it is still a largely
unexplored subject that has often
not been granted the serious
attention it deserves. This is why
the L’Oréal Foundation set itself
the task of delving more deeply into
the history of beauty, by launching
a wide-ranging human science
investigation, the first tangible result
of which is an unprecedented body of
work, 100,000 Years of Beauty,
published by Gallimard in 2009.
The book received public acclaim
as an authoritative reference work
on the topic. Combining artistic
sensitivity with scientific rigour,
this multi-disciplinary, five-volume
book is the culmination of the largest
project ever carried out in human
sciences on beauty and the role of
appearance in societies. It constitutes
a real exploration of mankind’s quest
for beauty, from prehistoric times
to the present day, together with
conjectures about the evolution of
beauty in the rest of the 21 st century.
Its 1,300 pages bring together
the work of 300 contributors from
35 nationalities working in 20 fields,
including history, anthropology,
philosophy and sociology.
25

Human resOurCes
perpetuating the
spirit of adventure
In 2009, employees were re-energised
by the centenary celebrations and
showed that they were more than
ready to enthusiastically tackle
L’Oréal’s second century.
The group pursued its programme
for recruiting recent graduates to
prepare for the future and extended
its international mobility policy to
drive geographical expansion.
26
L’Oréal confirmed its long-term commitments to
ensure future dynamism by recruiting recent
graduates in 2009, attaining over 85% of the 2008
level. The group also stepped up its worldwide
roll-out of the “L’Oreal & Me” (1) programme
begun in 2008.
Powerful values
On June 4th , 2009, the group’s 64,600 employees
celebrated the 100 years of the L’Oréal adventure.
The centenary offered an opportunity for
everyone to express their adherence to the
group’s enduring values of daring, imagination,
creative passion, a constant quest for excellence,
a strong work ethic and love of challenges, the
spirit of conquest, and respect for diversity in all
its forms.
(1) “L’Oréal et moi” in France.
In a difficult year, the centenary also offered an
occasion to express confidence in the future,
reinvigorate our teams, and renew L’Oréal’s
sense of adventure.
Investing in the future
By continuing with its recruitment efforts targeting
recent graduates, L’Oréal maintained a
strong Human Resources presence in over
200 universities around the world, using business
games and case studies to attract new talent.
L’Oréal also prolonged its innovative training
programmes such as “EurOpportunity”, which
began in 2008, and offered 50 students from
partner universities an internship outside of their
country of origin in one of the group’s European
subsidiaries as a first step towards an international
career.

1
Creativity without borders
L’Oréal’s business games play a vital role as a
recruitment tool. They publicise the group and
identify new talents among the most creative
and enthusiastic students, offering them a
chance to defend and promote their ideas. A
large proportion of these participants come
pROmOting gReAteR diveRsity
In 2009, L’Oréal showed unprecedented
determination in promoting diversity,
employing disabled people and raising employee
awareness. During the year, the group co-created
the Italian Diversity Charter and was one of
its first signatories.
❙ In December 2009, the group signed
a mature-age employment agreement with
the French government. Several measures
were implemented, including periodic career
assessment, mentoring, knowledge transmission,
telecommuting solutions and flexible hours for
those in the latter stages of their careers.
2
Highlights of the year
1 _ L’Oréal opened ultramodern offices in Hong Kong and China, and
a second building for L’Oréal USA.
2 _ The “I want more” recruitment campaign attracted the younger generation and
gave L’Oréal a powerful footprint on social networks such as Facebook.
3 _ In the Universum poll of 50 “students’ preferred employers”,
L’Oréal was first in Europe and third worldwide among consumer product companies.
from new markets where L’Oréal is growing
strongly. The first prize for the 17 th “L’Oréal
Brandstorm” business game was awarded to a
team of Indian students. There were a large
number of Chinese participants in the “e-strat”
strategy game and one of the country’s teams
won the competition.
❙ In France, the Consumer Products Division
kicked off the operation “Handicap Première
Chance” in partnership with the Casino
hypermarket group. L’Oréal will give disabled
young students a “first chance” by financing their studies for the Baccalaureate
professional diploma in Business and Beauty studies and, through the Casino Group,
they will have the chance to acquire their first in-store experience.
❙ The Luxury Products Division, in partnership with LB Développement,
an agency specialised in disability issues, launched an innovative project to
promote professional integration for disabled students and offer training contracts for
acquiring office and administrative skills.
loreal2009.com
Sustainable Development Section
suppORting
the chinese AdventuRe
In 2009, the company recruited
a record number of young management
trainees across all disciplines
to keep pace with its growth. Indeed,
the group received the “Internship
Base for Youth” award in recognition of
its action in the employment of
young people. Using business games,
it maintains a very powerful presence
at universities, and China is one of
the three countries along with
France and the United States,
where the first version of the “L’Oréal
Innovation Lab” game for young
scientists was launched. Today, 12 of
the group’s 14 international brands
in China are managed by
Asian managers, most of them Chinese.
The group has a centre for skills
development in Shanghai
offering training courses to all
managers in the Asia zone.
26-27
27

Published by the Corporate Communications and External Affairs Division of L’Oréal group.
Photograph credits : Rachael Armstrong (p.22), Cédric Arnold/Eyedea Illustration (p.7), Astrid Arnslett (Norwegian Red Cross) (p.22), Hany Ata Ramzy/
Eyedea Illustration (p.11), Larbi Bakhouz (p.22), Pierre-Henri Berthezène (p.22), Martina Bogdahn (p.22), Alain Buu (p.28), Chih-Jiun Chen by courtesy of
Global Views Magazine (p.22), Chou Chiang (p.22), Tsui Chun Hung, Chamberlain (Vision One Production) (p.22), Justin Cooper (p.10), Cyrille Coussat/
Eyedea Illustration (p.9, 15), Stéphane de Bourgies (p.2, 3), Séverine Desmarest (p.22), Jean-Jérôme Destouches/Eyedea Illustration (p.7), Maria
Alexandra Dorta (p.22), Adan Espino (p.22), Linda Ferrari (p.27), Ethan Finkelstein (p.27), Carlos Foyo (p.22), Drew Gardener (p.22), Ian Girardbille
(p.22), Kellie Gould (p.22), Emiliano Grassi (p.22), Christophe Guibbaud/Abacapress (p.22), Martin Hangen/Eyedea Illustration (p.7, 13), Karen Hatch
(p.18), Víctor Hernández Sevillano (p.22), Sang Mi Hwang (p.22), Image by Wouter Kingma/OrangeExpressions.com (p.22), Dimitris Ioannou (p.22),
Marc Jauneaud (p.22), Lesly Jimenez (p.22), JSJ (p.25), Israel Kenes (p.22), Christian Kettiger (p.14), M Khawli (p.22), Sebastian Kim (p.8), Ida Kurkowska
(p.19), La Chose (p.22), María López (p.22), L’Oréal (p.22, 23), Sarah Maingot (p.16), Ade Maradona Hatta (p.22), Mariano (p.27), Valentina Martinetto
(p.22), Matteo (p.20, 21), Craig McDean (D.A. Baron & Baron) (p.12), Rob Melnychuck/Getty Images (p.22), Eduardo Melo (p.18, 24), Machek Miroslav
(p.22), Vincent Nghai (p.22), Tri Nguyen (p.22), Oleg Nikishin (p.22), Alexandra Oliva (p.22), Kátia Oliveira (p.22), Carlos Oliveira (p.22), Thierry Orban/
Abacapress (p.22), Micheline Pelletier/Abacapress Miroslav Petrovi (p.22), Photo documentation of House of Experiments Slovenia (p.22), Niu Ping/
ATTIC (p.27), Koos Postma (p.22), Manuel Prieto (p.22), Marcell Rév, Equipe de danse Yvette Bozsik (p.22), Philippe Salomon (front cover, inside front
cover), Dinesh Saparia (p.7), Save the Children (p.22), Felix Schobert (p.22), Jan Skar y ski (p.7), Gerardo Somoza/Eyedea Illustration (p.18),
David Stanton (p.19, 22), Jesper Sunesen (p.26), Pornravee Suramool (p.22), Jeremy Sutton-Hibbert/Eyedea Illustration (p.19), Krzysztof Szulim (p.22),
Eric T. Michelson (p.22), Patrick Wack (p.21), X.
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Find out more about the 2009 highlights at www.loreal2009.com