PARIS — A page in L’Oréal’s history began to turn during the group’s financial analyst meeting transmitted from company headquarters in the Paris suburbs of Clichy on Feb. 12.
Jean-Paul Agon, L’Oréal chairman and chief executive officer, presided over the virtual conference, seated in between Christophe Babule, executive vice president and group chief financial officer, and Nicolas Hieronimus, deputy CEO in charge of divisions.
The gathering focused not just on discussions about L’Oréal’s strong 2020 results, released the prior evening, but also on the upcoming CEO succession, with Hieronimus speaking in depth about his strategic vision for the world’s biggest beauty company for the first time.
Hieronimus, as previously reported, is to become L’Oréal’s CEO on May 1, after which time Agon will remain as chairman.
During the meeting, Agon gave an overview of how the company is beginning the year, while Hieronimus shared his vision of L’Oréal’s future.
“As I prepare to pass the baton, I am thrilled to see the strength of our unique business model that has proven both its effectiveness and ability to develop our leadership and create value in usual times, and its capacity to resist exceptionally well in terms of market share and profitability in times of crisis,” said Agon. “I am totally confident, because this business model is perfectly suited for the world of tomorrow, as L’Oréal has anticipated all fundamental shifts to win in the 21st century.
“Our group is now ready to make miracles under the leadership of a new captain,” said Agon, who added he is “extremely happy and serene” to be handing the helm to Hieronimus.
“I have full confidence in him,” said Agon. “Nicolas and I have known each other for 30 years and trust each other completely.”
Hieronimus, he said, has played a key role by Agon’s side as deputy CEO.
“I have the deepest conviction that he is the best to lead our beautiful company in the years to come,” said Agon. “He will drive L’Oréal to new heights in full continuity of our strategy and values, while also reinventing the group and adapting it to the major challenges of our future world.”
For his part, Hieronimus shared his vision for L’Oréal, which he shaped around the words: continuity, confidence and ambition.
“Continuity” applies to the CEO transition. Hieronimus said he and Agon have built up a close relationship and partnership over the past eight years.
Hieronimus explained that in his roles as head of L’Oréal’s selective divisions and deputy CEO, he’s been involved in each of the group’s transformational decisions.
“This transition could not have been better prepared,” said Hieronimus. “We make an efficient duo, and our relationship will continue to evolve on different terms, but in the same spirit of proximity.
“I have a lot of confidence for the future, which relies, on the one hand, on the power of the L’Oréal model,” he added. “And on the other hand, on the potential of the beauty market.
“I’m extremely confident in the resilience and the power of the unique L’Oréal model, a model that ensured our performance in 2019, our best in 15 years on a dynamic market, but also in 2020 with a very solid result in the middle of the biggest global storm of the last 75 years,” said Hieronimus. “[It’s a] model that has been constantly evolving over the years in a permanent revolution whilst remaining true to its roots.”
The executive said he’s extremely confident about the beauty market’s resilience and long-term potential, and shared his vision for L’Oréal over the next decade.
“Top-line growth and beating the market will always be my priorities,” said Hieronimus. “This top-line growth and virtuous P&L management will allow [for] regular increases in profitability.”
He explained L’Oréal’s first priority has always been to beat the market, and that there remains a lot of market share to be had. Even as the largest beauty maker, the group’s market share still is only around 13 percent globally.
“The regional differences also show true potential,” said Hieronimus, citing as an example Asia, where L’Oréal has 11 percent market share, and Western Europe, where it ranges from 16 percent to 30 percent.
“My three regional priorities will be pursing the Chinese momentum, boosting growth in the U.S.A. and accelerating in the emerging markets, where the rapid digitalization and the rise of e-commerce will give us easier access to this pool of aspiring consumers,” he said.
Product category-wise, Hieronimus’ first priority will be skin care.
“It is the biggest and most dynamic beauty category, at the crossroads of all trends, a high added-value category, driven by science and performance, where our R&I gives us the upper hand, as proven this year,” he said.
“We will grow valorized hair care and color, both in the professional and mass worlds,” continued Hieronimus. “Our global leadership in fragrance puts us in the best position to benefit from these categories’ acceleration in China.”
He is confident and ambitious about makeup, too, calling it the most cyclical category, down now but due to rebound.
“And we will lead it,” said Hieronimus. “The third driver of my ambition is e-commerce, which will continue to be a strong growth engine. We are preparing for a time when e-commerce may represent 50 percent of our business, split between direct-to-consumer, e-retailers and pure players, which will scale social commerce as a new way to reach and engage our consumers [and] will invest in developing loyalty to increase the lifetime value of our consumers.
“I am very ambitious for the future, and it begins in 2021,” said Hieronimus, adding the group remains cautious for the first half of 2021, but that the beauty market should return to growth after being down an estimated 8 percent in 2020.
“The engines that allowed us to overperform in 2020 will remain in 2021, and all of our divisions will rely on a strong plan of innovations,” he said.
Hieronimus believes L’Oréal can outperform the market again in 2021 and — depending on the pandemic’s evolution — deliver a year of sales and profit growth.
“I have the ambition to shape L’Oréal as a company of the future, a global leader with strong values, committed to sustainability, to growing while respecting planetary boundaries, but also to making beauty play its role toward humanity — a role of inclusion, a role of harmony, of respect and an encouragement of diversity and differences,” he said. “With the strength and passion of the L’Oréal teams, I want to create the beauty that moves the world.”
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