L'Oreal CEO Nicolas Hieronimus Talks Earnings, Consumer Demand

**SPEAKER_1** (0:02)
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**Francine Lacqua** (0:07)
Nicolas Hieronimus, thank you so much for joining us on Bloomberg. When you look at the trends from now until the end of the year, what are you most excited about? I know you've worked on innovation. The economy is what it is. Do people buy beauty differently?

**Nicolas Hieronimus** (0:21)
Well, I think people buy beauty, which is the most important thing for me, is that beauty is a very dynamic category, and it shows once again its resilience in times of trouble. We call it, whether you call it the lipstick effect or the dopamine effect of beauty, the market's growing. It has accelerated a bit in Q2, and people are going for new, for innovation, for quality. And that's probably the reason behind our great first half at plus 6.5% way above the market growth, is that we brought a lot of innovation and of superior quality into the markets.

**Francine Lacqua** (0:57)
Is there a section of the markets, because you're really exposed to some of the very high end brands and some of the more mass market. Is there a section of those that is actually doing better than expected?

**Nicolas Hieronimus** (1:09)
Well, overall, what's great this year is that, and that's probably the strength of our portfolio, the breadth of our portfolio, which goes from products at 4 or 5 euros to product at 300, is that all our divisions and brands are contributing. If I look at my, the top four brands that are contributing to my growth, you have L'Oréal Paris, you have Caristars, you have La Roche Posay and Yves Saint Laurent. So a luxury brand, a dumb brand, a mass market brand and a professional brand. And that shows that you have to have beauty for everyone. Now, if you look at the categories or the type of products that are flying the most, you've got two categories that are really driving the growth is haircare and fragrance. And as far as market is concerned, you continue to see dermatological beauty extremely dynamic because people want safe and efficacious product, which is what we provide with brands like La Roche Posay or CeraVe, which are doing phenomenal in the beginning of the year.

**Francine Lacqua** (2:08)
Is there anything actually underlying that is boosting that growth? I know we talk a lot about GLP-1s, whether that changes our taste, whether that changes our hair, or is it something more fundamental to beauty because of advertisement or influencers?

**Nicolas Hieronimus** (2:22)
Well, I think beauty has always been a quest and everybody is trying to find their own ways. And as far as hair care is concerned, for example, you've got several driving forces. One you mentioned, it's not a major one, but it's an important one. One is the GLP-1 effect, which has both an impact on people wanting to buy products that protect the hair or help the hair regrow because they have some hair losses or some experiences. You also have a boom in skincare products that provide a firmness. By the way, we are launching right now a new product on Kiehl's that's called ColorShot that's particularly designed for GLP-1 users. But there's a much bigger underlying trend on hair care is that hair is longer and more diverse, which means that people need more care, more detangling products and better products in general. That's why there's a boom in professional hair care products which are growing even faster than the category.
So it's part of demographics. And in your right, there are trends such as GLP-1, which are impacting consumer's habits. The good thing for us is that people under GLP-1 buy more beauty than before. So that's great.

**Francine Lacqua** (3:35)
Do your customers spend differently in the US than they do in Europe than they do in Asia?

**Nicolas Hieronimus** (3:40)
Well, the markets are different. Asia is a skincare market. And the good thing about Asia is that it confirms that China is back to positive territory and is driven by luxury. So there's, I would say, a stronger habit right now for premium in China. And our L'Oréal Luxe division is at plus 10 after six months in China, which is very positive. So China is more about skincare.
The US has always been a very strong makeup market and remains so, but it's true there's been really an acceleration of hair care a lot in the US. Overall consumption is pretty good in the US. Consumers are pretty resilient.
And then we see all around the world, you know, the need for better skincare, for UV protection. And that's also an area where some of our brands thrive with just long service skincare, which is doing great too. So, in the end, I think the, I know you're trying to find differences, but there's an overarching trends that people want beauty and want innovation. And, you know, one of the things we've done at L'Oréal is that we've more than doubled the weight of innovation in our business between this first half and last year's first half, which is also why we are gaining market share, because consumers are constantly tempted by new ideas, new products, and you're right to mention influencers that play a very important role in bringing these new products to life on TikTok or other channels. And you have to be in that game and to be providing very exciting new products. And that's true all across the world, whether Asia, North America or even the Middle East.