L'Oréal S.A. (OR) Earnings Call Transcript & Summary

Ladies and gentlemen, dear shareholders, dear friends, good morning to you all. It's in a very special context that we're meeting today for our General Meeting like last year. Given the health situation, the AGM is being held at our administrative head-office at Clichy behind closed doors without the physical presence of shareholders. I regret, of course, being unable to meet you in your numbers every year at the Palais des Congrès, where we generally hold our AGM. But it is our duty, of course, to comply with all the health measures put in place by the government and to limit the risk of COVID-19 spreading. L'Oréal's AGMs a high point in the life of our company. This AGM is broadcast fully and live. In addition to the legal provisions of written questions, we've chosen to promote interaction by making available 2 schemes. The first will allow you, like last year, to freely ask your questions by e-mail to a dedicated address and that between Saturday, 17th of April, yesterday, 3:00 p.m. The second new development is a possibility to put questions by phone during this AGM. I invite shareholders who so wish to dial the number shown on the screen. Answers will be provided during the Q&A session. Questions on topics that have not been addressed during the meeting will be answered individually as soon as possible after the AGM. There were many of you who voted ahead of this AGM, either by correspondence or by Internet, and we thank you for that. This remote participation, the only possibility this year to express your voice allows us to gather the required quorum for a combined AGM. I therefore propose that we now officially open our AGM. I will chair the session and declare that this meeting is being held behind closed doors as required by law. Given the current health crisis, shareholders were convened and informed of the particular arrangements for this AGM by a notice of meeting and a convening notice published in the bulletin of mandatory legal announcements on the L'Oréal website, a press release on the 16th of March and an ordinary notice in L'Oréal new publication, I shall now proceed to form the executive committee. In accordance with the order of second of December 2020, your Board has appointed as scrutineers. First of all, société TETHYS controlled by Madame Françoise Bettencourt Meyers and her family, represented as scrutineer by Mr. Alexandre Benais. Also société Nestle as represented to act as scrutineer by Mr. Christophe Cornu. They are in attendance in the room that Chairman and scrutineers formed the executive bureau, who appoint Secretary, Madame Catherine Bellon, Board Secretary. Also in attendance, Mr. Christophe Babule, Chief Finance Officer is also at my side. On the stage, [ Mr. Eric Mulan ] bailiff of the court is also in attendance. Lastly, Board members of your company are following like you are this AGM by webcast. Let's now return to the business of our AGM. I can inform you that no shareholder has asked for a draft resolution or other items to be placed on the agenda. I now ask Catherine Bellon to give us the quorum as well as some additional information on our AGM.

Ladies, gentlemen, Chairman this year, given the organization of the AGM behind closed doors, all votes were expressed ahead of the AGM. 15,571 shareholders voted by correspondence by net or given power of attorney to the Chair and other person. The quorum stands at 459,649,387 shares. That's 82.9% of shares comprising the shares of the company with voting right. The attendance sheet was signed and recorded at quorum. The meeting has the required to take decisions both in the ordinary and extraordinary meetings. The agenda was published in the notice of meeting on Monday, 15th March 2021 and in the convening notice of Wednesday, 31st of March 2021. On the desk are the documents that were made available to shareholders as required by law. Mr. Chairman, the meeting is normally constituted and can therefore take a valid decision.

Thank you, Catherine. I'd like to now explain in a few words how our meeting will proceed. Mr. Christophe Babule will begin by presenting the group's results in 2020, and then I will provide you with a review of your company's business in 2020 that was an unprecedented year. I'll explain how L'Oréal was able to weather the crisis in the best conditions and emerged stronger. You'll also hear Mr. Nicolas Hieronimus, who will present the outlook for L'Oréal for the coming years. As you know, Mr. Hieronimus, who's today CEO in charge of divisions, will become upon decision of the Board that will be held after this AGM Chief Executive of the group as of the first of May 2020. Then I'll talk to you about your Board, about its activity and that of its committees during the past year. As Chair of the nominations and governance committee, Madame Sophie Bellon would set out in greater detail the work of this committee devoted to my succession at the head of L'Oréal and changes in governance of your companies announced in the autumn. I'll say a few words about the composition of your Board after this AGM, and then you'll hear from Madame Sophie Bellon once again as Chair of the human resources and compensation committee. She will present information pertaining to the compensation of corporate executive officers. [ Mr. Frederic Mulan ] from Deloitte will speak on behalf of the group of statutory auditors and then there'll be an opportunity to interact with you as shareholders. We'll provide you with the answers of the Board to questions put by shareholders. And then we will answer, if time allows, the other questions, those sent to the dedicated e-mail address as well as questions put by phone during the meeting. And lastly, we'll provide you with the result of the vote on the draft resolutions in order to facilitate the broadcast of this meeting and to reduce the number of people present in the sessions preceding the Q&A were prerecorded. And now Christophe Babule will present the financial highlights 2020.

Ladies and gentlemen, good morning. The presentation of L'Oréal's al financial results will include information about sales, profit, cash flow, balance sheet, dividend and extra financial performance. Consolidated sales amounted to EUR 27.99 billion, down 4.1% like-for-like. After a substantial decline in the first half of the year, business recovered sharply by the middle of the year with a like-for-like growth of 3.2% in the second half and even 4.8% in the last quarter. At constant exchange rates, sales decreased by 3.6%. The change in the scope of consolidation is positive by 0.5%, mainly due to the acquisitions of Mugler and Parfums Azzaro brands as well as the American skincare brand Thayers partly offset by the disposal of Roger&Gallet and the termination of Clarisonic. After taking into account a negative currency impact of 2.7%, reported sales declined by 6.3%. Currencies now. More than 60% of the group's business is invoiced in 3 currencies: the euro, which accounted 20.7% of sales in 2020; the U.S. dollar, 22.8%; and the Chinese yuan, 18.2%. In 2020, the group's main billing currencies weakened against the euro with the exception of the yen, which remained stable. Sales by division now. The Professional Products division ended the year at minus 6.4% with a very strong rebound of plus 8.7% in the second half. The Consumer Products division was penalized by its portrait in makeup and posted a decrease of 4.7%. L'Oréal Luxe achieved a good fourth quarter with a growth of 4.4% and ended the year with an 8.1% sales decline. The division recorded growth in the Asia Pacific in 2020. And lastly, the Active Cosmetics division achieved record growth of 18.9%. Note that the division posted growth in all regions, especially in North America, which grew at 42.5%. Now by region. Asia Pacific accounted for 35% of total sales, increasing its weight within the group. Sales in Asia Pacific increased by 3.5%, driven by strong growth of 27% in Mainland China. Western Europe, the second largest region for the group, contributed nearly 27% of revenue. The zone posted an annual decline of 10.3% and with the second half at minus 4.3%, a clear improvement compared with the first half. North America, which represents nearly a quarter of revenues, was down by 7.4% with a return to positive territory in the second half. The Professional Products and Consumer Products division were remarkably resistant, but the performance was held back by L'Oréal Luxe. In descending order of weight came Eastern Europe at 6% of total, Latin America 5.2% and Africa, Middle East at 2.2%. A limited decline in activity in Latin America should be noted, thanks to 10.5 positive growth in Brazil. Now sales by category. Skincare, which is growing in all the divisions that are active in the category, posted strong growth of 8.7% with slightly more than EUR 11 billion in sales. Skincare now accounts for close to 40% of total group sales. At 21% of total sales, the makeup category, down by 21.6%, was heavily impacted by the pandemic. Haircare is almost stable at minus 0.8%, while hair coloring posted 2.3% growth. Lastly, the fragrance category posted a decline of 15.4% with a much better second half at minus 6.2% and represented 9% of total sales. Let's move now to our operating margin. 2020 was a tale of 2 halves, a first half in resilience mode and the second half returning to a virtuous dynamic of operations. Overall, operating margin is maintained at the high level of 2019 at 18.6% of revenues. Gross margin is up by 10 basis points to 73.1% of sales. Regarding operating costs now. Research and innovation expenditure increased by 10 basis points at relative value to 3.4% of sales. They amounted to nearly EUR 1 billion. Advertising and promotion expenditure increased by 10 basis points relative to revenues. We have chosen to be very flexible in the allocation of our business drivers in order to seize all market opportunities wherever possible. Note that 63% of our media expenditure is now digital. Selling and general and administrative expenditure fell by 7.1% in absolute terms or by 20 basis points as a proportion of sales. Now profitability by division. The profitability of the Professional Products division came out at 18.8% compared with 20.1% in 2019. The profitability of the Consumer Products division increased by 20 basis points at 20.4%. The profitability of L'Oréal Luxe at 22.4% decreased slightly by 20 basis points. Finally, the profitability of the Active Cosmetics division came out at 25.4%, a significant increase of 200 basis points compared to 2019. Non-allocated expenditure came out at 2.9% of sales, and the operating profit margin is stable at 18.6% of sales. Let's continue with the P&L. Operating income came out at EUR 5.2 billion, down by 6.1% after taking into account net finance expenses of EUR 95 million and a dividend received from Sanofi of EUR 372 million. Profit before tax, excluding nonrecurring items, came out at EUR 5.48 billion, down by 6.2%. At 25.2%, the tax rate is similar to the level of 2019. Net profit, excluding nonrecurring items after noncontrolling interest amounted to nearly EUR 4.1 billion and earnings per share to EUR 7.30, down by only 5.7%. After taking into account negative nonrecurring items of EUR 535 million, net income after noncontrolling interest amounted to EUR 3.56 billion. Now cash flow for this year. Gross cash flow remained nearly stable compared to 2019 at EUR 5.72 billion. Working capital requirements showed a strong improvement at EUR 729 million. CapEx amounted to EUR 972 million, 3.5% of sales. Operating cash flow reached EUR 5.48 billion, an increase of 8.9%. Your group ended the year with a particularly solid financial situation. The cash situation is positive by EUR 3.8 billion and by EUR 5.5 billion, excluding the financial lease debt. These results reflect the short-term ratings from rating agencies, which are the best likely to be obtained. Now as far as the balance sheet is concerned, you will notice solidity with shareholders' equity of EUR 29 billion, which represents 2/3 of the total balance sheet. This quest for solidity is permanent. Indeed, efforts continued in 2020 in many areas of internal control and compliance. We can mention, in particular, the following projects: compliance with data protection regulations; updating the group's risks metrics, in particular, on climate risk management; a review of the cybersecurity policies deployed; procedures in place to fight and prevent corruption; and vigilance policies regarding suppliers and subcontractors. These reviews had, of course, been brought to the attention of the audit committee. The resilience demonstrated by your group during the pandemic and the quality of balance sheet led the Board of Directors to propose to the AGM a dividend of EUR 4 per share, an increase of 3.9%. As you can see on the chart on the left, from the end of 2019 to the April 15, 2021, L'Oréal's share price has appreciated by 29.8% compared to 4.3% for the CAC 40 Index of the Paris Stock Exchange. On the right, you have the total shareholder return indicator, TSR. It's a synthetic measure of stock market performance, which includes both the valuation of the share and the income received in the form of dividends. As you can see, this return is above 15% per annum, regardless of the period under review, 3, 5 or 10 years. A return that is always significantly higher than the return of the index. Now a few comments regarding the business prospects at the beginning of 2021 in the context that is still marked by the pandemic in a number of countries. Sales advanced by 5.4% to EUR 7.6 billion. On a like-for-like basis, the growth was 10.2% compared to the first quarter of 2020 and 5% over 2 years, i.e., compared to the first quarter of 2019. L'Oréal continued to significantly outperform the beauty market, which is gradually recovering. By division and on a like-for-like basis, the Professional Products division recorded a remarkable plus 21% growth, driven by North America and new markets. The Consumer Products division ended the quarter down -- up by 0.7%, still held back by its high exposure to the makeup category, which remained lackluster. L'Oréal Luxe division grew by 14.6%, driven by the success of its skincare brands, in particular, Lancôme, Kiehl's and Helena Rubinstein, and Active Cosmetics continued its strong growth at plus 28.7% after an already strong growth in 2020. All geographic regions reported growth with the exception of Western Europe, which was down by 2.4%, as measures related to the health situation remains restricted. With the growth at 6.3%, North America performed well, both online and off-line. All the new market zones reported double-digit growth. Asia Pacific at plus 23.8% returned to its extremely dynamic pre-pandemic growth rates, driven by Mainland China with a very strong 37.9% increase. Growth came to 10.7% in Eastern Europe, 15.1% in Latin America and 12.7% in Africa and the Middle East. A few words now about our nonfinancial performance, which is also remarkable and echoes our financial performance. 2020 was the final year of our Sharing Beauty With All program, our first in-depth transformation plan that we initiated in 2013. We have fulfilled a substantial number of the targets within the allowed time frame. In particular, we have reduced carbon emissions by more than 80% since 2005, provided employment to more than 100,000 people from disadvantaged communities. Therefore, your company has shown that it is possible to decouple growth and environmental impact, while making a positive contribution to our society. In 2020, L'Oréal has been recognized by several renowned international organizations as a leader in the field of corporate, environmental and social responsibility. First, by CDP for actions to fight climate change, protect forests and manage water sustainably; by Refinitiv for diversity and inclusion promotion; by Ethisphere in the field of ethics; or even by Bloomberg, for gender equality. With the L'Oréal for the Futur program, our sustainable development, journey enters a second phase. This program aims at a more radical transformation of our business model to respect the planetary boundaries. Our new commitments will also tackle our indirect extended impacts relating to the activity of our suppliers and the use of our products by our consumers. We also want to contribute to solving today's most pressing environment and social challenges. L'Oréal for the Futur is an ambitious strategy based on measurable time bound impacts reduction targets. These 2030 objectives, of which you can see a few on the slide, have been defined in accordance with the rationale for science-based targets, in line with what scientific experts say is necessary to follow the 1.5-degree Celsius trajectory and preserve our planet. Finally, starting in 2020, we're committing EUR 150 million to address urgent social and environmental challenges, allocating EUR 50 million over the next 3 years to a charitable endowment fund to support highly vulnerable women and EUR 100 million to impact investing in the L'Oréal Fund for Nature regeneration and in financing innovative projects to promote a circular economy. Thank you for your kind attention. And I now give the floor back to Jean-Paul Agon.

Christophe for presenting these results that I hope make our shareholders confident and proud of their company. I'd now like to tell you more about 2020 that L'Oréal managed to weather in the best possible conditions. We're able to involve in a context, never seen before. Who would have imagined at 1 day throughout the world, 7 million salons and almost all perfume stores would be closed at the same time. The pandemic provoked an unusual supply crisis with the beauty market down by 8%. 2020 was an opportunity to demonstrate that we're both a strong and supportive company. Both are intrinsically linked for us, supportive. #1 priority, of course, was the health and safety of our people. As we showed you last year, we also rallied to the support of our partners, clients and suppliers to help them confront the crisis, whilst bringing our support to caregivers worldwide. A strong group now and always L'Oréal was able to adapt posting remarkable resilience in this exceptional context. Once again, it's our employees who made the different. Full year, the group achieved historic market share gains. We saw a return to growth as of Q3 and accelerated in the fourth quarter, thanks to 3 strategic wagers. The first to go full out on digital and e-commerce. All our divisions were able to largely offset the closure of stores. Secondly, to maintain the major launches in the second half to boost the market and sales. Third wager was to massively support media investment, growth drivers to stimulate consumption and fuel growth. These strategic choices paid off 3 of our 4 divisions, significantly strengthened their positions, and the fourth was in line with its market. Active Cosmetics delivered its best year, plus 18.9%, crossing the bar of the EUR 3 billion and markedly outperforming its market. The division fully sees the opportunity linked to the rapid growth of skincare, in health and beauty, buoyed by the success of its brands recommended by health professionals as well as its digital initiatives. Professional Products delivered a remarkable year. The division achieved major market share gains after a record second half coming in at plus 8.7%, its best growth for 16 years. Its in-depth transformation these past few years allowed it to better seize the e-commerce opportunities. Furthermore, its solidarity plan. Lastingly strengthen ties to hair salons in a difficult context, L'Oréal Luxe was able to significantly outperform the market for the 10th year in a row and ended with the final quarter coming in at plus 4%. This performance results from strategic decisions, maintain and support the global world launches in the second half, strongly accelerate in e-commerce and lastly, strengthen its position in China, which is the world's most luxury -- dynamic luxury market. The Consumer Products division ended the year in line with its market in spite the heavyweight of makeup, the most impacted by the crisis. In the second half, it posted plus 8%, excluding makeup. It gained market share in hair color, haircare and skincare, thanks to an impressive acceleration of its online sales. We also outperformed in most geographies. In Western Europe, our market share increases, were the best for a long time. Continental China, we rapidly bounce back to end the year plus 27%, remarkable outperformance versus the market. In Brazil, L'Oréal came back strongly after several years of in-depth transformation. Lastly, in the United States, where our sales were up in the second half, were accelerating at lightning speed in digital and online sales, as we did in China a few years ago. In spite of the unprecedented context, our financial results were particularly robust. We managed to maintain the operating margin at 18.6%. That is the same record level as in 2019. And our earnings per share is down by only 5.7%. Given the quality of these results, we proposed today a dividend of EUR 4, up 3.9%. And for those of you, who hold registered shares for over 2 years, the dividend is still increased with a loyalty bonus of 10%. Year-on-year, you are increasing in your numbers, over 50,000 for opting for registered shares. I'd like to thank you for your long-term commitment to L'Oréal. Rest assured that your loyalty and expressions of trust are very valuable to us, especially during the difficult times and inspire us to go even further. These good results were, of course, reflected in the share price performance. In 2020, it grew up 10%, whereas the CAC 40 was down 7%. As you can see, our aggressive and proactive mindset has allowed us to emerge even stronger from 2020 that was unfavorable. Sales that we've just disclosed for the first quarter 2020, up 10.2%, shows that we remain more determined than ever to continue to outperform the market in spite of the context. Dear shareholders, this AGM, it's also very special to my mind, it's the last time that I'll be addressing you as Chief Executive in your company. That's why I'd like to take this unique opportunity to outline the road that we have traveled together over these 15 past years. For those of you who were at our side in 2006, you'll agree, I'm sure that your company is not the same. In terms of its business, the group is far better balanced. The center of gravity in terms of its geography of L'Oréal has shifted to the new markets that represent almost half our sales, in particular, Asia Pacific, that's become our #1 geography. China symbolizes this impressive growth in Asia. 15 years ago, it was ranked ninth in our markets. It's now in second place. Our ambition is immense in this country that's ready to become the world's largest beauty market. L'Oréal is better equipped in terms of businesses and channels. 15 years ago, haircare was our flagship category. Today skincare, the biggest, the most dynamic market category has become our first division. In terms of channels, the weight of our 2 largest divisions, Consumer Products, luxury, almost identical; Active Cosmetics, almost on a par with professional products. We've considerably enriched our brand portfolio. Some 30 acquisitions with prestige names Yves Saint Laurent, Prada, Valentino or Mugler with expert brands, CeraVe, or pioneer in natural or organic cosmetics, such as Sanoflore or Logocos in Germany. Your company brings together the best in the beauty universe. L'Oréal has also changed scope in the financial and economic sense. Over 15-year sales almost doubled. Profitability continued, grew continuously and steadily going from 15.6% to 18.6% of sales, and net profit was multiplied by 2.5 coming in at over EUR 4 billion. L'Oréal has created ever more value over 15 years. The share price is led by over 350%, and the market cap that has quadrupled is close to EUR 200 billion. Your company has entered the very select club of the 50 leading global companies. I know it's important to assess the overall investment of your investment. Total shareholder returns high, 13% over 15 years, 16% over 10 years and over 20% over 3 years. If we've obtained such results, it's because we began by defining a mobilizing strategic project for L'Oréal with a new mission Beauty For All, a new self-renewed ambition, attract 1 billion new consumers, new strategy universal salonization. That's to say globalization showing respect for differences. And last year -- as we presented last year, a new purpose creating beauty that drives the world. If your company has constantly strengthen its global leadership, it's because we've devoted these past 10 years to inventing a new L'Oréal. We conducted in-depth transformations that were going to prove indispensable revolutions to succeed in the 21st century. The first is the digital and e-commerce revolution that's radically transformed the group, leveraged our strengths and is incredible accelerator for opportunities. Our online sales were inexistent 10 years ago. They accounted for over EUR 7 billion in 2020. The #1 L'Oréal market with 27% of our sales. We've emerged in less than a decade as the beauty e-commerce leader. We also reinvented our marketing model, thanks to data social networks and over 2/3 of media spend in digital. We are also the first consumer goods company to acquire a company specialized in artificial intelligence and virtual reality ModiFace offering personalized beauty services and experience to our consumers. All in all, 1 billion virtual makeup tests, coloring, skin diagnostics or bespoke recommendations for products achieved in 2020. Our digital lead positions us as leader at the forefront of the beauty that is more connected, more personalized, more social. Our ambition is very soon to become the absolute champion of beauty tech. The second revolution is that of responsibility and sustainability. The protection of the environment was already a reality at L'Oréal. But we wanted to take it to the next level by launching, in 2013, the program Sharing Beauty With All. With this program, we've achieved a step change in the paradigm from supply to packaging, marketing, formulation and production. It's the full value chain that was upended. In 7 years, we reached the majority of the goals in this exacting program, and we're going to exceed some very ambitious such as CO2 reduction. But we firmly believe that we need to go further. Our new program, L'Oréal for the Futur, launched in the midst of the pandemic, which Alexandra Palt presented to last year reflects There's even more radical transformation that we wish to implement, so that L'Oréal is in the only possible scenario for humankind, respecting the planet's limits across the life cycle of our products. So more radical transformation. We're going to devote EUR 150 million to supporting vulnerable women and the environment causes that reflect the historic values and commitment of our group. L'Oréal won't be able to change the world alone, but the world needs players such as L'Oréal to reinvent itself. And with you, we'll be able to deliver. Our vision of responsibility extends, of course, through our personnel, faithful to the humanist tradition of L'Oréal. Our program of universalizing the best social practices, Share & Care launched in 2013, served as a model to the international labor organization. Thanks to it, our employees in the 68 countries where we're present benefit from the best standards in terms of health, parenthood and quality at work. We've intensified our efforts in terms of diversification and inclusion. 15 years of proactive policy have led to major improvements, notably to gender equality. We have a pioneering approach on the ethics fronts. We'll never compromise. We have strong exacting ethical principles that guide The group has received many awards. L'Oréal is the only company in the world to oversee 5 years in a row AAA from the CDP, the group was named for the 12th consecutive years, one of the most ethical companies and well by And in gender equality, L'Oréal is in the top 5 and #1 in France of the ranking. I'd like to thank you for your support and your untiring trust in this twofold ambition, excellence, both financial and nonfinancial. Together, we've proved that economic and environmental performance go hand-in-hand. Third revolution, managerial was set in hand 2016 through the simplicity program, a fully fledged cultural revolution in-house to change the way we work to meet the new staff expectations, notably, the youngest. In barely 5 years, this revolution has upended the company and made possible solidarity, flexibility and efficiency between our teams, who were able to work together remarkably well remotely and in spite of the difficulty during the health crisis. If your company through these revolutions was able to reinvent itself and adjust to the major change of the 21st century, it remains loyal to the major principle basing its identity, focusing on one business, beauty, only beauty, but all of beauty, the primacy of research to meet the need for extra quality, effectiveness, safety, responsibility, a balanced business model that creates value with a strong, solid financial situation, priority to people and social harmony based on a bedrock of humanist and ethical principles and a strong and unique enterprise. These principles delve their strength in the sustainability of permanent shareholder base that ensures long-term continuity and visibility for 15 years. We've been writing together this tremendous adventure in L'Oréal's adaptation to 21st Century. The transformations and reinventions made L'Oréal stronger, better equipped than ever to win and make us very confident in the future. This great confidence also comes above all for the quality and the tremendous commitment of each of the 85,000 people working at L'Oréal. Your company can count on the best beauty teams in the world, if L'Oréal is the efficient and civic company that it is today. Thanks to them, and I'd like to express to them my full appreciation and admiration to shareholders. I hope that you appreciate the road we travel together. I'd like to thank you also from the bottom of my heart for supporting us over all the years. I'm very confident at a time that I entrust Nicolas Hieronimus the task of writing the next chapter, the great history of L'Oréal as of the 1st of May. Nicolas will be the sixth Chief Executive of L'Oréal in 112 years. His track record within our company was a standard set and gives him full legitimacy, and I saw that over 30 years. For 3 years, he's played a key role at my side as Chief Operating Officer in charge of division. Nicolas combines sensitivity to the needs and expectations of consumers, clear understanding of current trends that's key, a passion for marketing, innovation and an obsession for excellence. And lastly, in its key, he's a great team captain, an inspiring leader possess energy. For all these reasons, I'm firmly convinced that he's the best man to head your company in the years to come. He will lead L'Oréal to new heights in full continuity with our strategy and values whilst reinventing the group and adapting it to the great challenges of the world ahead. You'll have understood Nicolas Hieronimus enjoys the fullest confidence of the Board and my own. I'm convinced your shareholders that very soon, he will own your confidence. I'm very pleased to hand over to him, so that he can set out to you his vision and ambitions for the years to come.

Ladies and gentlemen, dear shareholders, I would like to begin by thanking Jean-Paul Agon for his thoughtful words. I'm very happy to talk to you today at L'Oréal Annual General Meeting. I would like to take this opportunity to present the road map for the group and team, who deserve the utmost respect for their unfailing commitment in these difficult times. Taking up the reins of your company after Jean-Paul Agon is an honor, an honor for which I am obliged to you, dear shareholders, to the Board and to each of L'Oréal's 85,000 employees. Let me start by quickly introducing myself. I'm French, I'm 57 years old. After graduating from Business School and working on at project in Honduras, I joined the group when I was 23 in 1987. That was 34 years ago. L'Oréal is a company of lifetime to which I've given my all has given me so much in return. Over the past 34 years, I have held a series of responsibilities, ranging from more creative positions to others that were purely business. I have worked abroad to gain experience and developed in emerging countries. I have also worked at 3 of our 4 divisions, 2 of which Professional Products and L'Oréal Luxe. I headed directly before becoming Deputy CEO in charge of all 4 divisions. The main milestones early in my career, including developing and launching the Fructis hair care range with its distinctive green packaging, 6 years heading the group's #1 brand, L'Oréal Paris, with a notable acceleration in skincare and my experience as General Manager in the U.K. and then in Mexico. For the last 13 years, I have worked alongside Jean-Paul Agon as a member of the executive committee I began by heading the Professional Products division from 2008 to 2020. Faced with the financial crisis in 2009, my team and I reacted on 2 fronts, showing solidarity and determination in true L'Oréal fashion. We provided solid support to our partner hairdressers, organizing an event in which thousands of them took part to celebrate L'Oréal as centenary in Paris, while at the same time, innovating with the launch of ammonia-free hair color, solidarity and innovation where again our watchwords in tackling the terrible challenges of 2020. In 2011, I began heading our Luke division with a mission to match the leading lights in the luxury business. In 8 years, L'Oréal Luxe more than doubled its sales and profitability. And it's now It's just one of the biggest times of the sector. As of 2013, Jean-Paul gradually put me in charge of all divisions and the digital side of our business. In 2017, he named me Deputy CEO, allowing me to work alongside him on the group's transformation and new achievements. As I'm sure you can tell, I'm extremely attached to L'Oréal, the company whose I have climbed step by step by step, for which I've traveled the world. I'm deeply attached to the group's values and culture. They include performance, entrepreneurial spirit, risk-taking excellence, of course, but also kindness, cooperation, tolerance, diversity inclusion and a strong belief in the leading role our group plays in contributing to and shaping society. I believe I am now perfectly prepared for the task at since these very different stages in my career have given me in-depth knowledge of our company, its people and the challenges it faces. I would now like to expand on 3 key concepts that will punctuate and shape the group's road map over the next few years with a watchword that reflects the thrilling task ahead, creating the future of beauty. The first concept I would like to share with you today is continuity. First and foremost, that means continuity in the transition between Jean-Paul Agon and myself. Over the past few decades, and especially over the past 8 years, Jean-Paul and I have built a very close relationship and partnership. I have been actively involved alongside him in each of the group's transformational decisions. There could not have been better preparation for this transition. Together, we are an effective team, and our relationship will continue to evolve on different terms, but in the same spirit of connection and proximity. I would like us all to take a moment now to pay special tribute to Jean-Paul Agon to his outstanding track record, both financial and extra financial and to the way in which he has orchestrated the transformation of the L'Oréal group. Jean-Paul is a humanistic visionary leader. And I know we are all delighted to be able to get on his immense qualities in the future as Chairman of the Board of Directors as we go forward. Continuity also concerns the pursuit of our performance goals. Growth in sales and outperforming the beauty market will continue to be our primary goal from profitability. Top line growth is what will allow us to pursue and strengthen our investments in research and innovation and in our digitalization as well as in data, tech and of course, human capital to an ever greater extent in the future. As a result, in the market will always be L'Oréal's #1 priority. Despite our leadership, our global market share is only around 13%, which gives us significant scope to grow. The differences between sales also reveal real potential. As you can see, there is still plenty of room for progress. In Asia, our market share is just 11%. There's a huge opportunity there in what is the world's fastest-growing zone. But even in Western Europe, the zone in which we have our strongest market share, there is real growth potential since our market within the region go from 16% to 30%. To meet these top line targets, we will have 3 regional priorities. First, pursuing Chinese momentum; second, boosting growth in the U.S.A.; and third, accelerating in emerging markets, where rapid digitalization and the rise of e-commerce will give us easier access to a pool of consumers, who are keen to obtain the best beauty products. My second source of conviction, confidence in L'Oréal's unique business model. We are and will remain a beauty expert. Yet we are also a multifaceted pure player in beauty. We have a long-standing relationship with the hairdressing professionals with whom we started out over 110 years ago. We then moved into consumer markets to bring the best of beauty within reach of the world's middle classes. Next, we established ourselves as a leading luxury group, offering the most exclusive high-end products and experiences. More recently, we have become the #1 name in dermatological beauty in partnership with health care professionals around the world. These many facets allow us to meet the needs of all consumers at every price point, while trends and coping with even the most challenging market conditions as we did in 2020. We believe beauty comes from a combination of science and creativity. This is one of the secrets of our success. In the beauty industry, we are the biggest investor in research and innovation, which represents 3.4% of total sales in nearly EUR 1 billion. Our brands thrive on our R&I discoveries, which are marketing teams through their unique intuition and creativity, transform into products that meet the needs of consumers and more importantly, still reflect their beauty aspirations. Our brand portfolio is stronger than ever. It comprises billionaire brands, including the L'Oréal Paris, the world's #1 beauty brand, along with smaller brands that are growth drivers for the future. We have built a model based on universalization and work that is more fragmented and in times divided than it was. We rolled out global brand, which we adapt to local requirements. But L'Oréal's strength also comes from the competitive advantage. We derive from the solidity and stability of our shareholder base. I'm of course, thinking of our long-standing backers and all of you loyal shareholders who have continued to show your faith and supported the group's employees over the year. Finally the strength of the L'Oréal model also stems from its ability to constantly evolve, anticipate change and adapting to the faster adults with no maximum, sees what is starting. One of our secrets is the agility and unique capacity of L'Oréal's incredible employees to adapt and manage change. It is this strength that will allow us to fully assume our leading role as the beauty market bounces back. We have every confidence in the recovery. Beauty is and will always be essential. As Aristoteles asserted people are social animals, never has the desire of a social interaction, renewed ties, contact with family and friends been so strong. People everywhere will want to be ready themselves for these future interactions and be at their best inside and out, which is where naturally beauty comes in. Over the last few months, as soon as countries eased their lockdown restrictions, there had been a clear resurgence in demand for beauty products. The Chinese market for example quickly offset the downturn seen in early 2020 and that Israel were the clear lead in vaccinations gave rise to booming consumer demand, especially consumer demand especially for makeup. Over the coming decade, growth in the beauty market will be driven by strong structural trends with 1.5 billion more middle and upper class consumers who want the best of beauty; young people who will want to embrace and assert their beauty of their identity with ever greater impact; seniors with increasingly busy social lives; and men who will continue to use more beauty products, especially in Asia. Finally, the growth driver we have to bear in mind is urbanization. With 2.3 billion more people set to live in cities by 2050, which will have an impact on haircare and skincare needs. We are therefore confident the beauty market will bounce back. And we will naturally play our part in this rebound as a global leader, accelerating our innovation because we continue to see beauty as primarily a supply-driven market. The third idea I would like to share with you today is the prospect of a huge and thrilling challenge ahead, recreating the future of beauty. In line with the strategic guidelines set out by the Board of Directors, my ambition is to work with L'Oréal teams to create the future of beauty. The post-pandemic beauty market will be different because COVID has accelerated some very powerful trends, most of which preexisted the crisis. They will have a longer-term impact on the beauty market. These trends obviously involve digital technology, the need to protect the environment, the priority given to health and product transparency and the importance of the values and purpose of the group and its brands. Lastly, we have the return of science and technology, now center-stage in finding solutions to the world's most pressing issues. For our part, we are ready to create the future of the beauty. The Beauty of the Futur will be diverse and will be inclusive In keeping with L'Oréal's values. Our brands are not there to set a unique beauty standard, but to develop the well-being and confidence of every consumer by considering their regional and sociocultural environment. The Beauty of the Futur will be generous and will be committed. Our brand support ambitious causes to South Islands against women tackle literacy and protect erosions. The group will also continue to invest in the campaign to combat inequalities, especially those affecting women and will reinforce its exemplary approach to corporate social possibility. The Beauty of the Futur will be sustainable in 2020. We committed to respect planetary boundaries through the L'Oréal For The Future program. Our pledges concern our products, our employees and all of our partners. The Beauty of the Futur will be significantly supported and sustained by green sciences, which are the new frontier of research, combining efficiency, naturalness and sustainability to give our products another competitive edge. The Beauty of the Futur will be largely driven by tech and the full array of possibility, it offers more personalization, more experiences and more recommendations tailored to individual consumers. We will invest more than ever before in new R&I augmented through data and our AI under the leadership of Barbara President, Research, Innovation and Technologies. We will continue to shape the future of beauty by continuously reinventing ourselves. During the crisis, e-commerce provided an incredible growth driver. We are preparing for an era, in which e-commerce could represent 50% of our business. Our transformation also involves making L'Oréal the company of the future, a company with a strong culture, able to welcome and integrate talent from all backgrounds, all generations at all stages of their career to trusted them and help them grow well at same time, enriching our collective project, in line with the new partially remote approach to working practices. L'Oréal will always retain its edge in corporate social responsibility. It's a and As you can see, I have a lot of ambition for the future. And the future starts just now. We will, of course, remain cautious in the first half of the year. But we are confident that the beauty market will maintain its momentum. The drivers that enable us to outperform the market last year will reach the full potential in 2021 with all divisions building on a strong innovation plan. We are confident in our ability to again outperform the beauty market this year and depending on how the crisis on the health to grow our sales and improve our results this year. Over the next decade, we will continue L'Oréal's remarkable invention, an adventure that will take us to new heights as we explore new business models, new territories from green sciences to beauty tech. I plan to work with everyone on the executive committee to make L'Oréal a company of the future that creates the future of beauty; a global leader with strong values, committed to sustainability, working within the planet's foundries, but also a leader committed to helping beauty fully blades rolled in relation to people around the world; a role of affirmation and inclusion; role of harmony, respect and encouragement of diversity and differences. With the strength and passion of L'Oréal's teams and with your health together, we will create the beauty that moves the world. Thank you.

Thank you, Nicolas, for sharing with us so enthusiastically his vision of Beauty of the Futur that it chimes fully with L'Oréal's fine purpose. As you can see, Nicolas is fully prepared to his new task. I won't go back on his career. Nicolas has introduced himself. He's spoken to you about his rich and successful background. It's a career that sets the standard as to the way in which the group prepares to talk executives for the most senior positions. Nicolas is a tremendous leader with great leadership skills. These qualities are essential at the head of L'Oréal. I'm convinced that he's be able to uphold the human values that our group has always been very attached to. Now I'd like to turn to the activity of your Board of Directors during this year, 2020, particularly marked by the COVID-19 pandemic. Board met on 8 occasions in 2020. Given the health context, 7 of its meetings were held by video conference. The Board members part of the annual self-assessment of the Board felt that they were able to address all issues and discuss them in depth. The Board conducted all its missions and were able to take its decision having been fully informed. And I wanted to inform you that, of course, the Board followed closely all the consequences of the pandemic. It was systematically informed of measures taken to ensure the safety and support of our employees throughout the world. It supported the solidarity initiatives rolled out to our stakeholders. It examined in-depth the impact of this crisis on changes in sales and L'Oréal results compared to its peers. It was able to discuss management methods put in place. It endorsed strategies aimed at relaunching all the growth drivers. Over and above monitoring the crisis, the Board concentrated every year strategic issues. Board members nurture a constructive and open dialogue with top management. They regularly meet with management teams that allows them to be very much in touch with L'Oréal's economic reality and to examine, whilst being fully informed of major areas for long-term development. The group -- this year, the Board was able to discuss notably the acceleration of the digital transformation and the extraordinary growth of e-commerce, an issue that we have discussed. It tracked the changes in the geography organization aimed at being ever closer to our customers and in tune with our consumers, wanted to have an in-depth analysis on the consequences of a health crisis, on the cosmetics markets and L'Oréal growth. It worked closely on M&A and licenses. The Board is very sensitive to sustainable development issues considered that there's no sustainable economic growth without taking into account global challenges, social environmental needs. It reviewed the Sharing Beauty With All program and discuss the new ambitious targets L'Oréal For The Future. By 2030, it reviewed the group's human resources policy that of diversity and gender equality rolled out at every level in the company and more specifically within the management teams. The group bases the decisions on the basis of the recommendations of the 4 committees that met 22 in 2020. I'd like to say a few words. The strategy and sustainable development committee reviewed market trends, the results and the strategic prospects for the group's growth. At each of the meetings, it reviewed the potential of a brand of the group and reviewed recent launches. It looked at M&A opportunities. And the L'Oréal investment fund is bold. At each of its meetings, it reviews new initiatives in terms of sustainable development. The audit committee reviewed the financial statements of L'Oréal. It analyzed the risk map and changes in the vigilance plan. It tracked the internal audit and internal control activities. It reviewed cybersecurity, essential with the development of remote working. The human resources and compensation committee made proposals regarding the compensation policy for executive officers and assessed my performance as Chief Executive -- Chairman and Chief Executive Officer. It examined compensation policy for all employees, put in place the implementation of a share performance plan and followed the results of the second share ownership plan. Lastly, the nominations and governance committee considered the composition of the Board and the selection of new Board members. It led the annual assessment procedure on the functioning of the Board. Lastly, it devoted the bulk of its work to my succession at the head of the group's management after a very complete procedure conducted with impartiality compliance with the best governance rules. It was able to make proposals to the Board of the 14th of October last that followed its recommendations. Let's listen to Madame Sophie Bellon, independent Board member, who chairs the nominations and governance committee. She'll talk to you about the work of this committee and decisions announced by the Board.

Good morning, ladies and gentlemen, dear shareholders. On behalf of the nominations and governance committee, which I chair, it's a pleasure for me to share with you what work we did and presented to the Board of Directors, in the framework of the new L'Oréal governance. As you certainly know, the of our company have led Mr. Agon, who is currently CEO, to stop in this role before he celebrates his 65th birthday in July 2021. In this context, Mr. Agon and the Board of Directors have wished that the committee set up with very much forethought, an upstream in-depth process to select the new CEO, while abiding by the best possible rules of governance. It so happens that L'Oréal's achievements have always been measured by the perfection of its selections in this framework with only 5 CEOs ever since it was setup. Our committee therefore worked over a period of over 18 months and met over 15 times. I wish to thank its members, Mr. Jean-Pierre Meyers, Madame Françoise Bettencourt Meyers, Mr. Paul Bulcke and Mr. Patrice Caine who were all active and very involved to do this job as best as possible. I would like to tell you a few words about the procedure that we followed. First of all, the committee worked with Mr. Agon on defining the strategic challenges the group was going to have to live up to in the years to come. Then extremely specific and thorough selection criteria were defined in order to define what the best profile and necessary qualities, the best candidate had to display. The committee, who knows very well all the top managers of the group, felt that there were several potential people that could be looked into and therefore, decided it was not necessary to conduct an external search. The shortlisted candidates presented their own vision for L'Oréal in the year 2030 in the absence of Mr. Agon. Of course, the committee regularly informed the Board of Directors of how this selection procedure was moving ahead. And that is how, after months of work, our committee proposed unanimously to the Board the candidate that seem to be the most legitimate to succeed to Mr. Agon as CEO. As you know, on October 14, 2020, the Board of Directors announced its intention to renew Mr. Agon in his role as Chairman of the Board and to appoint as CEO of L'Oréal Nicolas Hieronimus, who is currently #2. These decisions mark a new phase in the governance of your group And as the new CEO, Mr. Nicolas Hieronimus will be given all the broadest possible powers to act on all -- in all circumstances on behalf of the company. In his quality as President, Chairman of the Board, Mr. Agon, will organize and chair the works of the Board and will continue to contribute actively to the definition of L'Oréal's strategy. The Board will benefit from his expertise in the fields of governance, in the face of the increasing expectations of stakeholders. The Board has decided to take into account Mr. Agon's experience and his in-depth knowledge of the group. For this reason, we have extended his missions, and we have asked him to bring his help and advice to the CEO, especially in defining the new strategic orientations of the group. The Board of Directors is convinced that this will be the best way to embody in the long term, the performance, the values and the commitments of the group as well as the quality of its governance. These new measures will enter into force on May 1, and I wish on behalf of the Board to really thank Mr. Agon for his 15 years as CEO. He has imagined the beauty of tomorrow and transformed in-depth the company in order to adapt it to the challenges of its time, while remaining true to the very basic tenets of this great group. The Board of Directors is very happy that we'll be able to continue to work with Mr. Agon as Chairman of the Board and knows that the trust and friendship will be pursued in the future. Thank you very much.

Bellon for the clarity of her presentation and her warm words that are very touching. I'd like to thank our Board members for the trust they placed in me by renewing my term as President, Chairman of the Board. Of course, I shall strive to fully chair the work of the Board, a very active board, and I know its expectations and its will to improve continuously. Our share with each of its members the conviction that an exacting governance, a source of value for the company. I'll be very happy as part of this new governance to continue to play an active part in defining L'Oréal's development strategy and to bring my full support to Nicolas Hieronimus. Nicolas, who enjoys my fullest confidence, and as Nicolas -- as Sophie Bellon said, the full confidence of the board. I'd now like to report to you on changes on the composition of your Board after this AGM. First of all, 2 appointments as Board members are put to the AGM. The first proposal quite naturally is that of Nicolas Hieronimus. Indeed, the Board considers as absolutely essential the participation of the Chief Executive as a Board member in the discussions of the Board. I also note Nicolas will be very attentive in ensuring a transparent and constructive relationship with the Board. Second, nomination proposal as a Board member of the appointment of Mr. Alexandre Ricard. Alexandre Ricard is Chairman and CEO, Pernod Ricard since February 2015 after a career in France and internationally, very rich and successful. I'll allow him to introduce himself in this short film.

Hello, I'm Alexandre Ricard, 48, 3 young children. I live in Paris, and I'm CEO of a large family group Pernod Ricard. I'm a graduate of ESCP University of Pennsylvania and The Wharton School I started out my career for 7 years at the strategy and finance consultancy. Before joining Pernod Ricard in 2003, I was in charge of Travel Retail in Asia, CEO of our Irish subsidiary before returning to France in 2011. I was successfully CEO in charge of distribution and then Deputy CEO in 2012. And I was appointed Chairman, Chief Executive Officer, Pernod Ricard in 2015. They're simple, but essential values on a day-to-day basis. I follow my father's motto, no difficulty without work. My commitment is that of conviviality, everything. It conveys diversity, inclusion, living together L'Oréal's purpose is a fine and noble ambition, create beauty that moves the world that is creating conviviality, universal, timeless aspirations and more essential than ever. L'Oréal is first and foremost, a global player with French roots that has conquered the leadership of the cosmetics market, a modern, agile consumer-focused company in the lead in digital and a standard setter in terms of social responsibility. It's no accident if L'Oréal and Pernod combined their strengths in Poland to produce hand sanitizer for hospitals. We have the same view of the company and society. A Board must constantly and constructively question general management without trying to replace it. This division of roles that must necessarily rest on mutual trust allows the Board to provide maximum value added to management, so that it can devote itself fully to the challenges of the company. I'm fortunate in having been a Board member of Pernod Ricard before chairing it for 5 years. It's that governance experience that I propose to bring to the Board of L'Oréal as well as my knowledge of the consumer and major strategic markets, such as Asia and the United States. Furthermore, the digital transformation has always been at the heart of my vision and strategy because it holds great potential to strengthen and enrich the link that we have with our current and future consumers. I would be very honored to number amongst L'Oréal Board members to bring my experience with another group, 2 companies whose challenges have much in common. Like you, I'm imbued by one conviction, a great company is, above all that, which can combine over time economic and social performance, standard and sincerity of its commitments. Thank you.

I'd like to stress where it necessary, how much Alexandre Ricard's experience at the head of a large international company, its strategic vision and entrepreneurial spirit will be enriching for the Board. I'm delighted with the quality and the interest of our future discussions. Furthermore, 3 terms of Board members, those have Madame Françoise Bettencourt Meyers, Paul Bulcke, Virginie Morgon maturing in 2021 and their renewal for a 4-year period proposed to the AGM. There's no need to introduce Madame Françoise Bettencourt Meyers, whom you know well. She's been a Board member of L'Oréal since 1997, Vice Chair of the Board and member of 3 Board committees. The granddaughter of Eugène Schuler, L'Oréal Founder. Her in-depth knowledge of the model that forge the success of the companies over the years is a vital asset. She brings to the Board her strategic vision of the future growth of the group, whilst being very attentive in making sure that the social, environmental challenges as well as the value of L'Oréal be at the heart of its engagements and practices. The term Mr. Paul Bulcke is also coming up for renewal. Mr. Bulcke has been a Board member since 2017. He's the Vice Chair of the Board member of 3 Board committees. He chairs Nestle's Board since 2017. The Board benefits is from his experience as the leader of one of the largest and most prestigious global companies. His in-depth knowledge of consumers across continent, his taste for innovation and the richness of his strategic analysis of precious assets to develop the universalization strategy of L'Oréal. Lastly, it's proposed that the Board renewed the term of Madame Virginie Morgon, madame Morgon, chairs the management Board of Eurazeo. She is an independent Board member of L'Oréal since 2013 and chairs the audit committee since 2016. Madame Morgon brings to the Board her recognized financial expertise combined with a dynamic entrepreneurial and responsible vision of business. She actively contributes as Chair of the audit committee to the development of the L'Oréal model based on economic excellence and environmental and social excellence. At the end of this AGM, given these appointments and renewals of terms, the Board will be made up of 16 Board members: the Chairman of the Board, the Chief Executive Officer, 3 Board members from the family, 2 from the Nestle company, 7 independent Board members and 2 Board members representing the employees. Gender parity will be fully respected, 50% women, 50% men. The balance in terms of independents will also be fully respected. 50% of independent Board members exercising responsibilities at the highest level in large international companies, which allows them to assess all the dimensions of L'Oréal's activity and to fully discharge their role by questioning and interacting effectively with management. L'Oréal's governance will be able to rely on an effective and committed Board, bringing together personalities of talents of various backgrounds, with complementary skills, entrepreneurial, industrial, digital, financial and nonfinancial. This composition reflects the diversity and complementarity of profiles, experience and skill set sought by the Board. I'm pleased and proud to continue to chair this Board. I will now hand over to Madame Sophie Bellon, who will summarize the resolutions pertaining to the compensation of corporate executive offices.

Ladies and gentlemen, dear shareholders. Every year, the AGM is called upon to improve, on the one hand, the elements of remuneration paid or allocated to directors and corporate officers in accordance the remuneration policy approved for the period in question. And on the other hand, the policy for remuneration, according to which, pay will be affected to the corporate officers. In my capacity as chair of the committee of human resources and remuneration, I wish to tell you about the resolutions we have adopted regarding the remuneration of corporate officers. Now as regards to the elements of remuneration paid or allocated to Mr. Jean-Paul Agon in 2020 in his capacity as CEO and Chairman of the Board, and I will try to sum this up. In light of the exceptional circumstances like the COVID-19 and to show his solidarity, Mr. Agon has told the Board that he accepted to renounce any form of remuneration based on financial objectives or to -- and he renounced equally the attribution of performance shares for 2020. In other words, for 2020, the annual remuneration of Mr. Agon was maintained at EUR 2,200,000, unchanged since 2013 and a variable part, the maximum amount of which was brought down from EUR 2.2 million to EUR 880,000 growth on the basis of extra financial and qualitative criteria. And exclusively, those criteria, the Board of Directors has assessed the performance of Mr. Agon at 97.7% of the maximum. And he will therefore be attributed the variable amount of EUR 859,831. His total remuneration for 2020 will therefore be equal to EUR 3,059,831. As regards now to the remuneration policies, for corporate officers, you have a number of resolutions. 12th resolution covers the remuneration policy for the Chairman, CEO, applicable to Mr. Agon, for the period going from January 1 to 30th of April of this year. The Board of Directors have proposed to maintain this fixed remuneration at EUR 2.2 million and the variable amount to 100% of the fixed amount. These amounts will be paid out on a pro rata temporis basis for the period concerned. The Board has further decided not to grant Mr. Agon, any performance shares for 2021 as he will cease to be CEO as of April 30. With the vote of resolution 13, you were to take a vote on the remuneration applicable to the CEO, Mr. Nicolas Hieronimus, as of May 1st of this year. The Board of Directors has restated the policies applicable to executive corporate officers, which you see on the screen. This remuneration is composed of a fixed part, an annual variable part and performance shares that are granted. This policy is balanced between short and long term. 75% of the remuneration is subject to performance results. Mr. Hieronimus and his capacity as CEO will have a fixed remuneration of EUR 2 million on the following basis, his experience -- the expertise he has acquired after 34 years at L'Oréal, attractiveness. So with respect to remuneration that he had as assistant CEO since 2017 and competitiveness with respect to a panel of similar job roles taken from 14 international corporations. The variable part of the remuneration is set at 100% of the fixed and will therefore be up to 120% in case of outperformance with respect to the objectives added to the 2030 L'Oréal For the Future program. Finally, the Board has decided to grant performance shares to the CEO. This will correspond to 50% to 60% of total annual remuneration. As regards the remuneration of the Chairman of the Board, applicable to Mr. Agon, as of May 1, 2021, this is covered by resolution 15. The Board has decided that the Chairman of the Board will be paid a fixed remuneration to the excision of any other element. And this fixed remuneration will be set at EUR 1.6 million, which is an amount that has been defined in order to make it competitive with respect to a reference panel. Mr. Agon has furthermore told the Board that he wanted to put in them to his employment contract that had been suspended in order to start perceiving his retirement pension. We exceeded to this request. And we decided that this could not be as Mr. Agon decided. This could not be accrued with the remuneration as Chairman of the Board. This nonaccretion is part of a good governance principle. We were also supposed to express yourselves on the regulated agreement that is covered by resolution 15 covering Mr. Hieronimus' work -- employment contract. The Board of Directors did not wish that Mr. Hieronimus new CEO after 34 years at L'Oréal be deprived of the advantages he continued to accrue -- he would have continued to accrue had he retained his previous contract. Therefore, his contract has been deemed to be suspended. Should the employment contract be terminated, Mr. Hieronimus would therefore have a right to all the indemnities that are foreseen by the contract itself. Nicolas Hieronimus will continue to benefit from the fixed benefit retirement scheme that is applicable to top management of group detailed Page of 109 of the reference document. No special indemnity will be paid out to Mr. Hieronimus, otherwise. You will find the detail of the regulated agreement on Page 115. I wish to thank my fellow members of the committee for their involvement, and I thank you for your kind attention.

Thank you, Madame Sophie Bellon for reviewing compensation. I now suggest we move to the statutory auditors, [ Mr. Frederic Mulan ] from Deloitte, who will speak on behalf of the statutory auditors in this recorded message.

Thank you, Chairman. Ladies and gentlemen, shareholders, on behalf of the group of statutory auditors Deloitte. I'm pleased to report on the execution of our assignment for 2020. We issued various reports to allow you to fully exercise your judgment when you vote on the resolution, our reports for the ordinary meeting concerns the regulated financial statements. Those are the extraordinary meeting are requested in the event of the issuance of equity instruments or shares. I'll present the highlights and our conclusions for the ordinary meeting, we issued reports on the verification of the parent company statements as well as group consolidated financial statements at the end of the year, they are to be found in Pages 343 and subsequent of the universal registration document made available as well on Pages 49 of the convening notice. Let me remind you that these accounts were approved by your Board on the 11th of February, of items available in the changing context of the COVID-19 pandemic, our work aimed at providing a reasonable assurance that the accounts comprise no material misstatements, appropriate financial and accounting methods. Risk estimates are reasonable. All the techs are complied with. This particular year, we adapted our audit approach to take account of COVID-19 effects be in a working setting. We performed our audit work across the subsidiaries, 70 countries, that were internal control procedures in place, covered current operations as well as particular events for 2020. Considering that the announcements of sufficient to our opinion with the necessary means to discharge our commitment, we issued on the 17th of February this year unqualified certification, both on the parent company and consolidated financial statements. In our reports, we highlight the key audit matters. These required specific attention because of their nature, significant misstatement, relative the accounts are an important degree of judgment to assess the estimates. Adopted 2020 assessing equity holdings and intangibles on booking revenues reassessment, deduction of sales, assessing provisions for contingencies and contingent liabilities, your description of these key points and those of our work in the report. We also check the Board management report, the exactness of the information contained therein that pertaining to compensation of benefits to corporate offices and that of corporate governance. All our work and conclusions detailed were shared regularly with the audit committee and the Board of your company still is part of the ordinary General meeting. We issued another report concerning related party agreements to be found on Pages 114, 116 of the universal registration document on Page 50 to 52 in the convening notice. It describes in order for you to assess each of these points the related party agreements between L'Oréal and companies with shared Board members or agreements between your company and one of its executive officers. Our report records continuing in related party agreement regarding the employment contract of your CEO already approved in 2010. Furthermore, we've been informed of a new related party agreement on the 11th of February concerning the suspension of the employment contract of Nicolas Hieronimus when he was appointed CEO as of the 1st of May 2021. For those pertaining to the share capital of your company, the extraordinary part of the AGM, we issued 2 reports on Pages 393, 394 of the document as well as on Pages 53 and 54 the convening notice, both our reports concerning the delegation of authority to your Board to decide on the issuance of shares or equities reserve for employees, members of a corporate plan. It's the 20th resolution or the 21st for overseas employees resolution 21, a maximum limit of 1% of the capital for respective periods, 26 and 18 months. None of these reports comprise any observation on our part. It stated the operations that they cover, prescribed by law and all the information required to allow you to assess the deletion of your preferential subscription right were brought to your attention. Ladies and gentlemen, Chairman, thank you for your attention.

Thank you, Mr. Frederic Mulan for the report in the 6 years during which he reviewed L'Oréal's accounts. It's his last meeting today because Mr. Mulan is now affected by the rule for the change in the auditors. He'll be replaced by Mr. David by Deloitte. We will now move to Q&A.

I would, first of all, like to read out to you the answers provided by the Board of Directors, 2 questions asked by shareholders. The questions and the answers provided by the Board will be put online on our site at the close of the AGM. Let's start off with questions raised by Mr. Pierre Lugo. I will read them out to you. Question number one. In previous years, funds had been provisioned in order to cover the tax risk linked to the absence of partial billing of management or other fees to foreign subsidiaries. Do you still do this to cover for tax risk? And if so, for how much? The group is all major groups is the answer regularly is the subject of tax audits in France and in countries where we have activities. In accordance with applicable regulations, we provision funds when we feel there is a risk of tax liability. You will understand that with the best interest of the company at heart, we will not communicate on the detail of this provisioning and specific risks. Second question. To supplement this first question, this amount on the basis of your experience is or not higher than EUR 350 million. Are you aware of the fact that of limitations can cover periods of 10 years? Of course, we take into account in our provisioning policy, the relevant periods of liability. We can indicate in terms of total amount of provisioning for risk that we have posted the amount of EUR 1,067.5 million, Page 253 of the document. And the tax provisioning is EUR 397.9 million. Third question. Provisions as of December 31, 2020, corresponding to the partial lack of building of management fees has occurred at the end of fiscal 2020. And if so, for what amount? As I said earlier, the amount of tax provisioning as of December 31, 2020, for the group, is equal to EUR 397.9 million, and we do not give further details. Question four. Have your accounts been certified with no reservation? If there were reservations, what nature -- what did they cover? Our auditors did not express reservation whatsoever, this year or previous years. You can check this with the reports that are covered in the main document. Question five. The company had a tax audit and had to pay EUR 1 billion for its French subsidiaries. Have you taken steps to avoid double taxation? Sir, we have already answered questions on the same topic last year. As you can read in the press release published by the group on September 20, 2019, our agreement with the French tax administration corresponds to a total cumulative charge over 5 years of EUR 320 million, which is equal to EUR 64 million per year for those subsidiaries concerned. has Active Cosmetics International and Prestige These companies have deployed the procedures covered by the agreement with the French Tax Administration. We have entered into a tax partnership with the French tax administration, and we do not communicate any further details. I would now like to move on to questions posed this year by the Forum for responsible investment. First of all, a series of questions relating to the environment. In order to be in line with the Paris agreement, whether the amounts of CapEx, you plan by 2025. How does your CapEx over the value chain between maintenance CapEx and growth CapEx. What is the geographical breakdown? Answer. We've been working on environmental and social issues for a very long time. And we have been investing significantly in human and financial. Programs. The programs concerned have an impact on all of the activities of the group and all of our expertise in all of our countries of activity. We could tell you that on the -- for 2020, the total CapEx of the group will total EUR 972.4 million, but we do not provide forecasts for CapEx in the medium term. Second question. How do you limit the impact of the on your future income flows? Could you tell us what indicators and means you use? L'Oréal has committed to abide by planetary limits. That is what the planet can put up with in accordance with what environmental science states, a science-based approach, to measure our impact on ecosystems and reduce this effect. We have been working with external experts, and we now have computed an ecosystems occupancy footprint using an innovative method to measure our impact. We use 1,600 raw materials derived from about 350 plant- and animal-based species. And our commitments within the framework of L'Oréal for the future with 2030 horizon. Our detailed Pages 153 to 177. Third question, how do you anticipate increasing scarcity of a number of natural resources and the problems this will mean in terms of sourcing for you? What are you doing to translate this in your business model and secure your sourcing? L'Oréal has been very concerned about the sourcing of its raw materials and the sustainability of resources and quality for a very long time since 2005. L'Oréal Research units have on trying to enhance the durability of our sourcing in the framework of the Nagoya protocol. We have been granting priority to the use of raw materials of renewable source and have made sure that our sourcing was always responsible over the last 10 years. Green chemistry has also become a catalyst for our sustainable innovation policy. The results we have achieved in the framework of our Sharing Beauty With All program can be read on Pages 230 and 231 of our group. Next question. Solidarity between economic actors, large and small companies, seems essential today to impact the negative impact of the current health crisis. How has your group adapted to that nationally and internationally? Have you changed the way you buy and you sell in order to suppliers and customers affected by the crisis? Do you have specific policies for us SMEs? Have you structurally changed your policies? As you know, L'Oréal is very much involved in supporting both customers and suppliers. We have set up a solidarity fund for communities with solidarities, the sourcing that works with local NGOs. We have distributed had sanitizer And over 4.3 million products. We have frozen the liabilities of 100,000 clients and accelerated payment for 9,000 suppliers. Fifth question. How do you manage at the group level, the social impact of the massive move to work from home due to the pandemic? Every since the beginning of the COVID crisis, L'Oréal has acted as responsible employer in order to guarantee the health and safety of its employees and all its subsidiaries. We have published a number of instructions adapted to specific focuses and specific jobs for all of our subsidiaries. We developed and proposed e-learning modules. We distributed specific devices. We have provided dedicated hotlines for psychological support. Wellness support has been provided for groups. And as we've always done, we have conducted polling of job satisfaction with our employees. Sixth question. Do you have a definition of a decent wage that is not strictly identical to the local legal minimum? The group has ensured that all of its employees are paid at least the local minimum wage or what is applicable due to local collective bargaining. And on the whole, we have been working with an independent expert fair wage network in order to make sure that decent wages are paid. This same approach has been carried out with our strategic suppliers. Seventh question. In the framework of your profit-sharing agreements for employees, do you take into account environmental and social criteria? If so, what are these criteria? Have they changed since the 1st of April 2020? What is the share of funds covered by this? For the last several years, L'Oréal's policy has been to work with its employees and to engage in profit sharing. Among the various investment funds available in this framework, a number are ISR guaranteed and free choices given to employees. You will find all of the relevant information, pages 213 to 215 of the reference document. Question number 8, in the framework of your employee savings plans, what are the funds that actually have been labeled as compatible with corporate, social and environmental responsibility, CIES Financial green for ISR? For each funds, what are these -- what are the proportions of funds under management? And how do you control the quality of all this? Answer. For the 6 funds proposed to our French employees are going to be subject to labelization procedure under ISR in 2021. This will cover 77% of the funds under management. Our employees are furthermore perfectly aware of our constant commitment. For governance, do you apply the standard? Do items contain the full standard? If not, what items have you decided not to report? If you don't use the standard, what are the reasons do you plan to apply it soon within the next couple of years? What are the measures do you plan to implement to meet the growing demand for tax transparency on the part of your stakeholders? Answer. L'Oréal's tax policy responds to the managerial approach of the GRI 207 standard. The document 2020 indicates the information on tax policy, information pertaining to tax governance, control and risk management, GRI 2072 as well as information on stakeholder involvement and issues pertaining to tax policy, GRI 2073, L'Oréal has deployed its tax policy principles, contributing the contribution of taxation as part and parcel of societal, environmental, social responsibility, which is a way of taking part positively in the development of countries, where the group's present specific information on country reporting, GRI 2074 is the subject of a very detailed tax statement forwarded to the French tax authorities that can exchange that information with foreign tax authorities, and it does the reporting in France. The group indicates operating data that L'Oréal doesn't wish to disclose to its peers, who would not be subject to the same publication obligation for that reason. L'Oréal does not wish to make that information public. Furthermore, L'Oréal established and developed constructive relationship with tax and customs authorities based on mutual respect. And when states allowed, L'Oréal joins the cooperative compliance programs launched by tax administration. For example, L'Oréal has joined a relationship of trust with the French tax authority on the 3rd of February 2020. Question #10, what is the scope taken into account for the equity ratios that you disclosed? How do you assess these ratios? Did it lead you to adapt your compensation policy? If so, how calculation of compensation ratio is done on the scope by regulation in France? L'Oréal is -- it numbers, 880 employees at the end of December last year. And all groups divisions are represented operations, logistics, commerce, research, marketing, digital support functions. It sharply done in 2020, takes account of My own waiver to part of his compensation and the spirit of solidarity given the circumstances linked to the COVID-19 health crisis. Compensation of employees has continued to grow over the past 10 years, including in 2020. Compensation policies take into account a great number of factors beyond the compensation ratio, position of functions, market practice and performance-based compensation. Question #11. As regards the implementation of the gender equality policy of your group, could you give us the costed objectives, the agenda, reached or not, topics, career, training, compensation, home, professional life at all level of responsibility? And if this gender policy is applied in all companies as a group, France and international? If not, why? If yes, what means to deploy to promote gender equality in the countries where you're present or where there are difficulties in counter? Answer. The group has a very proactive gender policy for 15 years. It's a strategic issue for L'Oréal. 5,300 key positions are occupied 54% by women. Since 2007, L'Oréal works with the Economic Institute The variance of median compensation in France has reduced to 0 in 2019 internationally Edge, unexplained gender methodology calculates and measures pay equality of 84% of the global headcount. It will be 100% in 2022. Our efforts have been recognized in the rankings 21 and Bloomberg Gender Equality Index 21. Question 12. How your lobbying practice is formalized? And how do they form part of your group's CSR strategy? Can you describe the chain of responsibility company in terms of lobbying or institutional relations? In what case does the Board Supervisory Board, most what items do you publish about lobbying, public positions, budgets for each of your global markets? As sector leader, the group interacts regularly with authorities on major environmental and social challenges and solutions that companies, such as L'Oréal can bring. We ensure that our lobbying activities remain in perfect sync with our CSR policy with a public affair CSR policy to define the main areas of consultation with public authorities. We disclose guidelines to our public affairs offices worldwide. So as to allow L'Oréal to intervene a national public debate, we are regularly auditioned by public bodies to share our role of the enterprise in the ecological transition and social inclusion. Our transparent approach extends to our lobbying initiatives, but also to the public through the platform inside our products. 13, last question, how do you involve social partners at group level locally to engage your company in a fair transition? Do you plan to publish their view regarding your vigilance plan or their opinion regarding your nonfinancial performance document? The view of social partners, specifically on nonfinancial performance, is not a matter of mandatory consultation of bodies. Every year, the management report of the Board that comprises the vigilant plan and the nonfinancial performance declaration is presented to the central economic and social committee of L'Oréal. This committee in 2020 did not make any specific comment. Regular dialogue has been established for a long time between the Board and the social partners on strategies defined by the Board that comprise L'Oréal's commitments in terms of nonfinancial issues. You have just heard the answers of the Board to the questions raised by shareholders. I will now with the help of Christophe Babule answer the other questions that have been combined by main themes to answer the greatest number of questions and then we'll answer the questions put by phone during the AGM to the phone number displayed on the screen. Questions concerning topics that have not been addressed through lack of time will be the subject of reply as soon as possible after the AGM. I now ask Madame Catherine Bellon to read these questions. Please, Catherine.

First question, Chairman, what is the impact of COVID on your future development strategy?

That's a brilliant question. The COVID crisis has been a major crisis. And therefore, we tried to think about what the impact could be. I see several possible impacts. First of all, I'd start off by saying that it doesn't radically change the group's strategy over the long term. But there will certainly be some changes all the same. The COVID crisis, as we've seen, has accelerated a number of underlying trends. Some trends are going to move faster and geographically also COVID has enhanced even more China's development. China's market has continued to progress enormously in 2020, and it's still doing that this year. So strategically, our will to develop in that country is ever stronger because it's about to become the strongest market for our group worldwide. Another trend is the acceleration of e-commerce. E-commerce has really been enhanced by the closing of stores. We were ahead of the pack in that field, and therefore, we're going to go ever further, ever faster. That has also confirmed a strategic orientation. Thirdly, you can also say that from the point of view of consumers, the COVID crisis has certainly pushed consumers to seek out products that are better from a health point of view, better for their skin. And that's certainly what our brands and particularly our active cosmetics brands embody. They have developed considerably during the crisis. And that also confirms our strategy. And finally, working from home has developed considerably over the whole of last year. It's still underway. And this will probably lead to new strategies marked by flexibility between working from home, coming into the office occasionally. We had already experienced, at some extent, become more confirmed. In other words, I would say that in general terms, it's -- what's happened is nothing radically new, but a number of trends have been accelerated and confirmed and they will become so even more in the future. Another question?

Yes, another COVID-related crisis. How did you manage to preserve your margin despite the crisis?

That's another brilliant question. And thanks to the person who asked it. It's true that that was no small feat because that was the biggest crisis experienced in decades, and we maintained record profitability -- that had -- we had clocked in in 2019, 18.6%. So one of the authors of this feat is Christophe. He is going to tell you how we did this. In order to preserve our margin, we had to control our operating costs and our expenditure and relaunch sales as soon as recovery seems possible. I would say that we worked in a differentiated fashion. Over the first half of last year, we were in a position of resilience. We tried to adopt measures at the group level to keep -- to put it into travel, business travel, reduce a number of other sources of expenditure meetings, in particular. Then with all points of sale closed down, we started investing in points of sale, and we redirected all of those monies towards digital because that was how we could maintain the contact with our consumers. Then we had a second half, where we became very much more proactive. We made a number of strategic bets in terms of launches to relaunch consumption. We did digital launches, which grew our e-commerce outcomes very considerably. And all of this proved to be very successful because as of the second half, we were back in the block. And it's because of this very tailored management that we manage what we did. Catherine?

Yes, e-commerce exploded during the pandemic. Do you think this is a long trend? Is this going to last?

Well, that's a brilliant question as well, and it's a real question because this pandemic crisis is probably going to go down in history as a turning point for retail sales. E-commerce became the name of the game all over the world because a lot of points of sales were closed, lots of shops were closed. And those consumers who haven't yet experienced e-commerce discovered that it was an amazing alternative. As far as we're concerned, this was not a complete novelty because, as you know, especially in our field, the field is beauty and probably even in mass market products, we were really a leader in e-commerce. We've been active in the field for the last 11 years. And we believe that as soon as a a long time ago, And that really picked up the slack during the pandemic. E-commerce sales now account 27% of our total sales for last year over 1/4. And it's going to go on growing because it's a new extraordinary channel for the 21st century. So we really think it's going to go on developing. What's new is that now ability picking up in all countries. Before COVID struck, it was something that was specific a bit to China, to a lesser extent, to the U.S. But now it's all over, all continents, all countries. We've seen growth that is truly amazing, and that is Still the case over the first quarter of this year. We've been doing a lot more in e-commerce outside of China this first quarter than we have done in China, knowing we're doing a very sizable part of our sales -- total sales in China in e-commerce mode. But there are other countries where we're only doing 10%, 15% of our sales via e-commerce, and there will be tremendous acceleration there. I think it's going to be absolutely a major phenomenon over the 10 years to come.

Now e-commerce and digitalization, do you think this is a way to develop your brand portfolio?

That's a bit unexpected question. I'm not going to say there's a direct connection between e-commerce booming and the fact that we have a broader brand portfolio. But there's an indirect one because there's greater market segmentation, therefore, greater brand segmentation in order to better target segmented consumer groups. It's true that in the future, we may also have brands that are exclusively e-commerce. For instance, we bought out a Korean brand 2, 3 years ago, and we launched it in China now and both in Korea. And in China, this has been an e-commerce launch. And practically, all sales are e-commerce sales. There are 4 or 5 stores that are flagship stores, but that's it. So that's an interesting question. E-commerce may ultimately be a gateway to launch new brands or buy out new brands that are more specific.

Question on active cosmetics, what's the outlook for the division?

The outlook is great, as I said earlier. The outlook was already looking good before the COVID-19 crisis because you'll recall that back in 2018, '19, we already saw an acceleration very strongly of Active Cosmetics. Why? Well, fundamentally, there's an underlying trend worldwide. Universal consumers are looking for care products that nourish, that nurture the skin and which are also recognized by health care professionals, such as dermatology. So that trend preexisted COVID-19. Of course, COVID amplified still further that trend, both because all health issues are on the rise, increasingly important and also all the health channels remained open whereas others were closed. So the Active Cosmetics division has really gone from strength to strength. It's topped the EUR 3 billion mark. Outstanding growth. It's also becoming as big as large as our Professional Products division, which is a historic event in the company. And personally, I'm very confident, very ambitious for this division. We have brands in this division that one day is set to become billion-dollar brands. L'Oréal already is. So we're very ambitious, very confident for that division.

Next question. I have a question on China. H2 2020 was largely driven by your growth in China. Is that set to last? Don't you fear that the growth of the group is overly dependent that market?

Yes. Well, that's another good question. It's true that our growth in China last year was spectacular. Let me remind you we achieved plus 28%, plus 27% on a Chinese market that was only growing by 5%, 6%. So the Chinese market remained buoyant last year. Perhaps the only country in the world that remained positive last year, but we are truly in an incredible momentum. All our brands are gaining market share. All our divisions are growing their market share. And I have to say that for me, it's a great joy and pride. You'll recall that I opened or set up the L'Oréal subsidiary in China way back in 1997, 27 years ago. So I'm very pleased with developments. Personally, I don't think that there's a risk of being strong in China. It's almost rather an obligation. You need to realize China is returning to a place that it had in history. Remember, back in the 16th, 17th century, China accounted for about 25% of the world's GDP, and China is returning to a preponderant place in the world for a global company, such as ours. We need to assume our share of that market that is becoming absolutely essential. So of course, we don't have a crystal ball. We don't know how things are going to involve. But betting on the fact that this market will continue to grow. We have less than 100 million consumers in China. It's a country with 1.3 billion inhabitants. So there's huge potential out there to tap where consumers really have high expectations in terms of beauty products, who love quality brands, innovation. So it truly is an ideal market for L'Oréal, where we really wish to continue to grow strongly. Catherine, not much time left? Is there maybe a question by phone that's reached us today? Sorry, we don't have time to take many questions.

Yes, we have a few questions over the phone. Questions that were put to us by Mr. [ Sulang ]. Greetings mister. Do you think that the splitting of the functions of Chair and Chief Executives facilitates the transition within the company?

Well, if we took that decision, obviously, it was that it was the right decision in our views. I mean, I think that it really is the ideal solution. I wouldn't give any lessons to other companies in the case of L'Oréal, that's really on the strategy of continuity of permanence. Also a company that's preparing, as you've seen, it's future executives through long careers. I've been in the company 41 years. Nicolas only 34 years. The fact that we're doing a transition as we are now is quite ideal for the company, for its employees and above all for its shareholders. So as we said also, the that we formed with Nicolas as CEO and CEO will continue. I one have the same role nor will he. But it's an ideal way to ensure continuity that ensures the company continues focus on its major goals, respecting its values, its ambitions, it's ideals, especially for shareholders.

Another question still from Mr. [ Sulang ]. The regulator nominated over 100,000 new shareholders. Has L'Oréal benefited from that surge? Your registered shareholders enjoy a 10% increase of the dividend. Are the registered shareholders on the rise? And what about the interaction?

That's a long question. Christophe to try and take another one after that, if we can hear very rapidly. So the number of our individual shareholders rose in 2020. It's close to almost 200,000 individuals in 2020. That's an increase of some 50,000 shareholders in 2020 COVID year. Physical meetings were heavily disrupted, but we organized digital for -- let me remind you that we were present at the Investor Day at the end of November and another meeting held in December, bringing together other groups, students in addition to the interaction that we have through the free phone numbers and regular quarterly newsletters. Thank you. Next question.

Maybe a question from madame [ Blonding Gordo ], the Advisory Committee of retail shareholders. The group has a very rich portfolio of brands. Do you plan any new acquisitions in the near future?

Good question, we can't with give a specific answer. Acquisitions are, by definition, secret. We can't say when we'll do one, which one. But I can tell you, of course, we'll continue. Why? Because for 2 reasons. Firstly, the beauty market is fascinating because it's constantly renewed every year. There are new trends, new needs, new desires, et cetera. So the market undergoes transformation. There's always an interest in having a new brand that will meet that new need that maybe our current brands can't meet. And secondly, as I said, we're bound to recognize that there's a form of market segmentation. With my 42 years career in the company, I recall that 40 years back, the market was less segmented, a few brands. We could cover the bulk of the landscape, the market is more segmented. It's important to have more brands. So the answer is yes. We will continue in fact, each and every year, it's no secret. All the brands that are up for sale on the cosmetics market call us because it's normal that they should call the leaders. So every year, we see some about 100 proposals -- opportunities that -- we're highly selective to only keep the most interesting, the most complementary, the most strategic. On average, we make 2 or 3 acquisitions. It was the crisis. It was the case last year in spite COVID. It will continue And so I can't tell you when, which one, how, but there's no doubt, we'll continue this acquisition process. It's very important. And the group's expansion, for example, the last major acquisition that we made with CeraVe 2, 3 years back, is today a major growth driver for the group. Our strategy, transformation, transforming these acquisitions into organic growth at a major component of the L'Oréal model. One final question.

Same committee, [ Marcel de Cromo] remarkable work done in China [indiscernible]. Has that been replicated in the USA?

Well, Mr. [ Marcel de Cromo], if he's watching, will be delighted to see that he was mentioned. It's true he didn't do the work in China by himself. He worked with teams. But for years, he was behind this amazing performance we had in China and our color does is not One of the reasons we decided to to the U.S. is that we wanted to try and replicate the amazing acceleration of e-commerce he had in China in the U.S., and he's managed. The U.S. is in the of accelerating. We've heard from that market very recently. Things are really moving fast. There has been an extraordinary acceleration in terms of e-commerce. And I think they've increased by, what, 100% plus. 100% isn't too bad result, I think. Once again, that's by himself. He doesn't do this single handedly. You know that in our group, it's really teams that drive the business. But did play a very significant role. And I wish to thank him, and I'm very happy you mentioned my name. Okay. Thank you so much, but I think we have to put an end into this Q&A section because, unfortunately, we have very limited time in this format. But we did take about 30 questions, which is the best we could do under the circumstances. But once again, what questions were asked, that did not correspond to the leading topics we addressed during the AGM will find answers on our site later. We're now going to move on to the vote of resolutions. We're going to be presenting them with Catherine Bellon. Catherine, all yours.

Yes. As we said at the beginning of this AGM this year, as we did last year and for exactly the same reasons, voting was entirely remote and upstream of the AGM. We can therefore now share with you the results of this vote that were submitted to our shareholders. Resolutions for the ordinary part are approved by simple majority and those coming under the extraordinary part by a 2/3 majority. At the close of the AGM, you will find the complete results on our L'Oréal finance site as of this afternoon. First resolution approval of the 2020 parent company financial statements. Approved 99.9%. Second resolution. Approval of the 2020 consolidated financial statements. 99.6% in favor. Third, allocation of the company's net profit for 2020 and setting up the dividend. Adopted 99.9%. Four, appointment of Mr. Nicolas Hieronimus as a Director. 99.21%. Five, appointment of Mr. Alexandre Ricard as a Director. First resolution, in favor, 99.54%. Six, renewal of the term of office of Mr. Françoise Bettencourt Meyers as Director. In favor, 93.67%. Seven, renewal of the office of Mr. Paul Bulcke as Director. In favor, 93.8%. Eight. Renewal of the term of office of Ms. Virginie Morgon as Director. In favor, 90.4%. Nine. Approval of the information on the remuneration of each of the directors and corporate officers required by Article L22, 109, 1 of the French commercial code. In favor, 98.57%. Ten. Approval of the fixed and variable components of the total remuneration benefits of any kind paid during the 2020 fiscal year or allocated for that year to the Chairman and Chief Executive Officer, Mr. Jean-Paul Agon. In favor, 98.4%. Eleven, approval of the remuneration policy for directors. In favor, 99.72%. Twelve. Approval of the remuneration policy for the Chairman and Chief Executive Officer, Mr. Jean-Paul Agon go from January 1 to April 30, 2021. In favor, 98.91%. Thirteen, approval of the remuneration policy for the Chief Executive Officer, applicable to Mr. Nicolas Hieronimus May 1, 2021. In favor, 93.4%. Fourteen. Approval of the remuneration policy for the Chairman of the Board of Directors, Mr. Jean-Paul Agon as from May 1, 2021. In favor, 89.5%. Fifteen. Approval of the agreement on the status of Mr. Nicolas Hieronimus, whose employment contract will be suspended as from his appointment as Chief Executive Officer. In favor, 85.1%. Sixteen. Authorization for the company to buy back its own shares. In favor, 99.2%. We now move on to the extraordinary part of the AGM. Delegation of authority granted to the Board of Directors to increase the share capital through the issuance of ordinary shares with maintenance of shareholders for subscription rights, 17th resolution. In favor, 96.6%. 18th resolution, delegation of authority to the Board of Directors to increase the share capital through the capitalization of premiums, reserves, profits or other amounts. In favor, 99.48%. 19th resolution. Delegation of authority to the Board of Directors to increase the share capital in order to remunerate the contributions in kind of equity securities or securities giving access to the share capital of third-party companies made to the company. In favor, 99.4%. 20th resolution. Delegation of authority to the Board of Directors for the purpose of carrying out a capital increase reserved for employees with cancellation of shareholders, preferential subscription rights. In favor, 99.28%. 21st resolution. Delegation of authority to the Board of Directors for the purpose of carrying out a capital increase reserved for categories of beneficiaries, consisting of employees of foreign subsidiaries with cancellation of preferential subscription rights within the scope of an employee share ownership act. In favor, 99.28%. 22nd resolution. Amendment to the Article -- 9 of the Articles of Association to provide for written consultation of the directors under the conditions defined by the regulations. In favor, 100%. 23. Powers for formalities. 100% in favor.

Okay. Thank you, Catherine. So the resolutions have all been adopted. I wish to thank you for that. And I wish to thank you once again for your loyalty despite the exceptional circumstances. This is a very special moment for us. And I hope that we will be able to organize further meetings with you the way we've done every year for several years. On behalf of the Board of Directors, I wish to thank you for your understanding in the face of this exceptional format. And I wish to tell you that I hope to see you on April 21 next year or Thursday for our next AGM. I hope it will be held at the Paris under better circumstances. Take care, be healthy, stay healthy. And thank you.