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

Good morning, everyone. I'm delighted to welcome you in person for the very first time to present our 2022 results. So we'll start with a detailed presentation from Christophe Babule, our CFO. Then you'll have a short presentation by each division Presidents. So Alexis Perakis-Valat for Consumer Products Division; Omar Hajeri for the Professional Products Division; Myriam Cohen-Welgryn for Active Cosmetics; and Cyril Chapuy for L'Oréal Luxe. So without further ado, I will hand over to Christophe. And of course, you'll have a presentation from myself and a Q&A at the end of this presentation. Christophe, you're on.

Ladies and gentlemen, good morning. L'Oréal showed another excellent performance in 2022 in spite of the fact that we had to face an unprecedented number of challenges. If I had to summarize the past year in 3 key figures, I will highlight the double-digit like-for-like growth of plus 10.9%, the operating profit margin of 19.5%, up 40 basis points, and a 27.6% surge in EPS to EUR 11.26 per share. Consolidated sales increased by a substantial 18.5% to above EUR 38 billion. Foreign exchange had a very positive impact of 7.2% as the euro remained weak throughout the year. More detail on our invoicing currencies and their evolution against the euro can be found in the appendix of the presentation posted on our website, loreal-finance.com. The change in scope of consolidation was a positive 0.4%. It was mainly due to the acquisition of Youth To The people in December 2021 and of skinbetter science last October. On a like-for-like basis, growth came to plus 10.9% over the full year. Excluding 2021, which was an exceptional year in many respects, 2022 showed the best growth in more than 20 years. On a reported basis, it was the best in almost 30 years. Looking now at the performance of the last quarter alone. You can see on the left that sales increased by 13.5% to EUR 10.3 billion, passing the EUR 10 billion mark for a quarter for the first time. Like-for-like growth came to plus 8.1%. On the right of the chart, the comparable quarterly growth since 2019. Over 3 years, annual growth was plus 23.4% on a comparable basis and growth sequentially accelerated quarter after quarter to plus 26% in the last quarter. Let's look at sales by division. Like-for-like, they all grew strongly. The Professional Product Division ended the year on a high note and posted a 10.1% increase. L'Oréal Luxe continued at a strong pace, up plus 10.2% despite the turbulence in the Chinese market. Active Cosmetics posted another year of stellar growth at plus 21.9%. The division has almost doubled in size since 2019. And the most remarkable, however, was the acceleration of the Consumer Products division, which achieved its best growth in 20 years at plus 8.3%. Our business is well distributed by region. Europe and North Asia account for around 30% of sales, with North America at over 26% of our business, 3 zones are now exceeding EUR 10 billion in sales. The emerging markets, combining SAPMENA-SSA and Latin America now accounts for 14% of total sales and are becoming a true growth engine for the group. Business was very dynamic in all regions, both versus 2021, which was a year of sharp recovery and even more versus 2019, as shown on this slide. On the left, in Europe, we recorded 11.6% like-for-like growth, up double digits for the second year in a row, led by the Spain, Portugal hub at mid-teens, while the German, Austria hub, the U.K. and Italy rose high single digit, a strong performance in these large countries where we sold significant share. In North America, momentum remained very strong at 10.4% like-for-like as the American consumer showed strength throughout the year. In North Asia, growth came to 6.6% over the full year as business was softer in the second half due to the challenging market conditions in China with the resurgence of COVID. In a declining market, sales in Mainland China rose 5.5%, boosted by double-digit growth in e-commerce and a strong performance on Singles' Day. Emerging Markets, up by 20.5%, punch well above their weight, contributing 1/4 of the group's overall growth. India, the Malaysia, Singapore hub, the Gulf countries and Vietnam drove a swift 22% like-for-like increase in SAPMENA-SSA, while growth of 18.6% in Latin America was quite broad-based led by Mexico. To be noted on the right, the remarkable 3-year growth in North Asia and emerging markets. Let's now look at sales by category. Skincare, our #1 category, grew by 10.1%. The category accounted for 40% of our total sales. Makeup continued its rebound at plus 9.2%, but was penalized by health resections implemented in China. It represented 20% of our total sales. Haircare was very dynamic at plus 12%, both in the Professional and Consumer divisions. Fragrances recorded an impressive 22.8% increase and accounted for 12% of our turnover. And hair color grew by 4.6%. In a nutshell, the key word of 2022 is balance, a balanced contribution to growth by division and by region. And the balance can also be applied to the components of the growth. 1/3 came from volumes, 1/3 from price increases and 1/3 from mix improvement. Let's move on to the profit and loss account. Gross profit increased by 16.1% to EUR 27.6 billion. The gross margin stood at a high 72.4%, 150 basis points below the level of 2021. As every year, let me give you some additional color on the development of the gross margin. Currency impact, including conversion and transaction, were negative by a significant 85 basis points. Thus, on a comparable basis, the gross margin decreased by a much more limited 65 basis points. The value effect combining price increases and mix improvement offset about 2/3 of the substantial input cost inflation. Research and Innovation expenses advanced 10.7% to EUR 1.1 billion. We have continued to invest significantly to support the growth of our brands. Advertising and promotion expenses increased by 14% or by EUR 1.5 billion in absolute value to over EUR 12 billion, amounting to 31.5% of sales. Selling and administrative expenses continued their relative decline, down 40 basis points to 18.4% of sales. This demonstrated the strict management discipline in the context of strong growth and improved efficiency of our organizations, thanks to the creation of hubs in various geographical areas. Operating profit surged 21% to almost EUR 7.5 billion. The operating margin stood at a record 19.5%, up 40 basis points over 2021. Last year, the group expands the cost of configuring and customizing software user in Software as a Service mode. This cost previously recognized as fixed assets had a negative impact of 20 basis points on the operating margin in 2022. On a comparable accounting basis, the operating profit margin will therefore have increased by a noticeable 60 basis points. By division. The profitability of the Professional Products division was unchanged at 21.3%, that of Consumer Product division stood at 19.8%. And L'Oréal Luxe increased 10 basis points to 20.9%, and Active Cosmetics came out at 25.4%, up 20 basis points. Non-allocated expenses, consisting mainly of corporate and fundamental research costs, were 40 basis points lower in relative terms at 2.4% of sales. Note that the operating margin of each division was negatively impacted by 40 basis points in 2022 as a result of structural accounting adjustment. Minus 20 basis points related to the reallocation of certain central costs to each division, which is reversed in the nonallocated cost at group level and minus 20 basis points in each division and at a group level due to the change in accounting of software-related expenses I mentioned earlier. Therefore, before taking into account this reallocation and accounting adjustment, the operating margin would have been up 40 basis points for the Professional Product division and change for the Consumer Product division at 50 basis points for L'Oréal Luxe and up 60 basis points for the Active Cosmetics Division. Since 2019, L'Oréal has gone from strength to strength. A few key figures to highlight how well we have navigated the last 3 years. Consolidated sales advanced 28% to over EUR 38 billion. Comparable growth was 23% over 3 years. Operating profit increased 34% from EUR 5.5 billion to EUR 7.5 billion. The operating margin advanced 90 basis points to a record 19.5%, notwithstanding the fact that we substantially invested behind our brands to secure our growth and prepare for tomorrow. In relative terms, our A&P spend was up 70 basis points. And in absolute terms, it increased the 1/3 to over EUR 12 billion. From operating profit to net profit, excluding nonrecurring items. The net financial charge came at EUR 73 million. For the full year of 2023, the net financial charge of EUR 130 million can be anticipated, all other things being equal. Sanofi dividends amounted to EUR 468 million. In addition to the annual EUR 393 million, Sanofi paid the dividend in kind in the form of newly listed EuroAPI shares for an amount of EUR 74.5 million. Income tax was EUR 1.8 billion, representing a tax rate of 22.8%, below the 23.7% rate the year before. For 2023, we can anticipate at this stage, the tax rate of slightly below 24%, all other things being equal. Net profit, excluding nonrecurring items, exceeded EUR 6 billion. Diluted earnings per share of EUR 11.26 showed a substantial 27.6% increase and the impact on EPS of the distribution of EuroAPI dividend amounted to EUR 0.13 per share. To help you in estimating your EPS for 2023, I will recommend that you base your calculation on the diluted number of shares equivalent to that of 2022. Nonrecurring items were broadly unchanged at EUR 347 million. The other income and expenses of EUR 241 million, mainly include restructuring charges of EUR 172 million, of which EUR 114 million related to the ongoing disposal of Logocos and EUR 37 million for various reorganizations in Europe and SAPMENA. Last EUR 39 million for [indiscernible] brand impairment. Donations to charities and exceptional costs related to the Ukraine conflict for EUR 43 million. Gross cash flow advanced 9.8% to over EUR 7 billion. Working capital increased significantly due to some precautionary stock building at raw materials and supplies, the price of which had risen sharply and of finished goods to mitigate supply chain disruptions. Capital expenditure of EUR 1.3 billion represented 3.5% of sales. For 2023, an investment in the order of 4% of sales may be expected. Net operating cash flow amounted to EUR 4.9 billion. Lastly, after payment of EUR 2.6 billion of dividends, of EUR 740 million for acquisition of EUR 500 million for share buybacks and of redemption of the lease debt, the residual cash flow was positive at EUR 518 million. The balance sheet remains robust with shareholders' equity of EUR 27.2 billion or 58% of the total balance sheet. And the financial situation remains healthy. At the end of December, net debt amounted to EUR 3 billion and to EUR 1.4 billion, excluding the financial lease debt. The gearing ratio stood at 11%, and the financial leverage of net debt over EBITDA was down to 0.3. The group's 2022 outstanding performance as well as the quality of the balance sheet led the Board of Directors to propose to the AGM a further 25% increase in the dividend to EUR 6 per share. This new increase in the dividends leads then to a payout ratio of 53.3%. This is another illustration of L'Oréal's consistent, dynamic and balanced dividend policy. With regards to L'Oréal for the future, 2022 was a year of further progress. You can see on this slide some of our achievements in the effort to fight against climate change, manage water sustainably, respect biodiversity and preserve natural resources. For example, regarding climate, the group is committed to achieving carbon neutrality for all of its sites by 2025. At the end of 2022, 110 sites, including 22 factories, had already achieved carbon neutrality that is 65% of our sites. In 2022, L'Oréal was once again rewarded for its social and environmental performance and recognized among the best companies in the world by nonprofit organizations, rating agencies or international bodies, all leading in their respective fields. I thank you for your attention.

Thank you, Christophe, for these great results. And we'll now hear from the division, starting with Consumer Products division in Alexis Perakis-Valat.

So good morning, everyone. 2022 was a dynamic year for the mass beauty market, which grew at plus 6%. And it was a great year for our division, which trust the EUR 14 billion mark and grew at plus 8.3%, our best result in 20 years. This acceleration was very balanced, coming from value at a solid plus 5.7%, but without sacrificing volumes, which grew at plus 2.6%. This dynamic shows the power of our brands and of our data science of pricing capabilities. We're not only growing, but accelerating our market share gains, widening our lead over the market year after year. We achieved all this while protecting our profit despite exceptional cost of goods increases. All our major brands are growing and gaining market share. L'Oréal Paris reinforced its place as the world's leading beauty brand at plus 7%. While Garnier accelerated by plus 8%, powered by green science and innovations. The boom of Maybelline at plus 16% and NYX Professional Makeup at plus 21%, fueled a spectacular bounce back of makeup. The category is on fire for us at plus 15%. Haircare was another highlight, growing double digits twice as fast as the market, thanks to our focus on premium. And in fact, beyond makeup and haircare, the division gained share on all of its major categories. Our growth was also balanced across regions. We performed well in Europe and the U.S., both growing above 8% and at the same time, 40% of our growth came from the emerging markets of South Asia, Latin America, the Middle East and Sub-Saharan Africa, led especially by high potential countries like Mexico, India and Brazil. So building on a successful '22, we are determined to keep accelerating, thanks to 4 strategic growth drivers: First, our focus on the upper half of the middle class. This group represents 2 billion people worldwide and thanks to search, makeup tutorials and TikTok skinfluencers, they are becoming more beauty savvy every day. And as they learn, they seek out more efficient and desirable products at a premium. Our division is perfectly positioned with brands that are particularly strong among these more affluent and demanding mass consumers. Emerging markets are key for this target, representing 38% of this upper middle class group. Take India, for example, which is rapidly growing into a beauty epicenter. In India, 50% of the mass beauty spending is done by consumers that fall in the top 2 socioeconomic classifications. But in our division, 70% of our business comes from this upper half of the Indian middle class, which will fuel the market growth for years to come. Second, we specialize in beauty categories with high potential to premiumize and inspire new consumer habits. Skincare, premium haircare, makeup and hair color are markets in which people seek innovation and desirability, not just utility that makes these categories ripe for new products and segments. Look at skincare serums, a high-efficacy product with a masstige price positioning. In the U.S., the number of households buying at least 1 serum has increased by over 80% since 2019. The third driver is, obviously, our highly desirable brands that are creating game-changing innovations. L'Oréal Paris, is a luxury brand. That happens to be sold at mass. It is a unique blend of femininity, feminism and superior science. After the successful launch of Hyaluron Plump in 2022, Elvive is introducing Bond Repair, a highly effective salon solution brought to mass for the first time. Garnier is the champion of Green Beauty from its innovations to its social causes. In '22, it's new vitamin C serums took the skincare market by storm. And this year, the brand will reinvent at-home hair color with the launch of Garnier Good. Maybelline, the world's #1 makeup brand is on an innovation winning streak. First, Sky High mascara, then Vinyl Ink lipstick. And this year, they launched Surreal mascara, a groundbreaking fiber technology for a stunning lash lengthening effect. NYX Professional Makeup is accelerating its presence as the brand of entertainment. In '22, the brand created lines inspired by Cirque Du Soleil and Avatar 2, with more blockbuster collaborations coming in '23. Fourth and last, we are pioneers of Beauty Tech and data, which actually unlocks value in many ways. Thanks to tech, we are bringing service to the self-service world of mass. Our tools, like the Skin Genius diagnosis by L'Oréal Paris is like putting a beauty adviser in the pocket of millions of consumers. We're also leveraging our data capabilities to target the right consumers with the most compelling messages. Our brands are already winning on this front with Maybelline topping the Digital Genius ranking by Gartner. And finally, we're exploring new digital territories like NYX Professional Makeup's recent launch of GORJS, a web free community of 3D artists and beauty makers, whose mission is to create the future of digital beauty. So as you can see, we are entering the Year of the Rabbit with confidence, speed and agility as we open a new era of strong, profitable and balanced growth. Thank you.

Thank you, Alexis. Omar, let's look at the Professional Products division.

So good morning, everyone. In 2022, our division saw yet another year of exceptional performance. We passed the EUR 4 billion turnover landmark, with 2 billionaire brands, L'Oréal Professionel and also Kérastase, which passed a symbolic billion euro landmark for the first time. On a full year basis, we grew by 10.1%, twice the speed of the market estimated at plus 5%. Compared to 2019, the division has grown by 29%. We outperformed the market in all zones, in our historical key zones. In North America, we're up 7%, led by our powerful salon centric distribution network and strong growth in e-commerce and specialty retail. In Europe, we're up 7%, with impressive growth in our major markets and a strong rebound in salons. Our growth markets also recorded substantial growth, plus 32% in China, which has become our #2 country worldwide. We still have strong [indiscernible] potential in many cities. And plus 50% in India, now our fifth biggest country worldwide, where an exciting e-commerce journey is only beginning. We outperformed the market in our 2 key categories: haircare and hair color, fueled by innovations and supported by the breadths of our powerful brand portfolio covering all our needs at all price points. In haircare, we grew by 16.5%. The division keeps accelerating on the haircare market, which is promising. Following the COVID period, we see a strong appetite of consumers investing more in the premium haircare category and sophisticating the haircare routines. Premium haircare is becoming a luxury category. Kérastase is growing by 16% with the ongoing success of its 2 blockbusters, Genesis and [indiscernible]. Following our Metal Detox disruptive innovation, L'Oréal Professionel recorded double-digit growth at plus 27%. In hair color, we grew by 5.3%. Growth is driven by our blockbuster Shades EQ by Redken enhanced by powerful innovations like our Shades EQ Bonder Inside. Our performance, since 2019, is a result of our winning strategy, built on 2 major transformations in our business model. First, a reinvented relationship with consumers. Today, our division is truly omnichannel. To recruit new consumers at scale, we continue, of course, to capitalize on our strong salon footprint. We remain dedicated to our 400,000 salon partners, leveraging the fantastic power of stylist advocacy and professional expertise, and we go further by accelerating in e-commerce, and we are progressively extending our distribution in specialty retail. Together, e-commerce and specialty retail represent 30% of our total turnover. Our omnichannel strategy is supported by investments in media, CRM and advocacy, financed by a strong valorization that's a tight control of our SG&A. Our second key transformation is a reinvented relationship with hairstylists. We continuously adapt to an ever-evolving market characterized by the rise of independent stylists. To reach them all, we are building the most powerful data-driven digital ecosystem. There are 7 million hairstylists in the world. Every week, the division is interacting with 2.5 million of them and the number keeps growing. Digital now drives our relationship with salons and stylists through commerce, thanks to our B2B commerce platform, L'Oréal Partner Shop; for education, thanks to online academy L'Oréal ACCESS and through services, thanks to the recent launch in the U.S. of the first-ever marketplace dedicated to beauty professionals. Capitalizing on all these transformations, the division is uniquely positioned to reach consumers and stylists at scale and recruit new clients. In 2023, I'm confident. I'm confident that we'll keep our growth momentum. Thanks to our cutting-edge innovation agenda and our strong potential of conquest in our growth markets. Innovation in haircare with the launch of Symbiose by Kérastase, our unique answer to the huge anti-dandruff markets. Innovation in hair color with the relaunch of INOA by L'Oréal Professionel, an [indiscernible], the ultimate in-salon luxury color experience. Innovation in Beauty Tech with the rollout of our disruptive SteamPod 4, the first all-in-one professional steam styler. Innovation in sustainability, the deployment of our L'Oreal Water Saver, our breakthrough showerhead, saving up to 69% water and acceleration in our growth markets. We'll further strengthen our footprint by recruiting new consumers and conquering new salons in China and in India. As you can see, we are ready for the future and ready for growth. Thank you.

Thank you, Omar, for this great presentation. And Cyril, let's talk about L'Oréal Luxe.

Good morning, everyone. In 2022, L'Oréal Luxe outperformed the luxury beauty market for the 12th consecutive year. The market ended at a solid plus 8%, and we closed with a very strong plus 18.6% in published and plus 10.2% in like-for-like. Our net sales reached EUR 14.6 billion. Worldwide market share increased by 60 basis points in just 1 year. And if we consider the long-term perspective, it has increased by over 200 basis points versus pre-COVID. In skincare, the first category of Luxury, we again made significant strides at plus 7% versus the market at plus 2%. This is thanks to the success of our ultra-premium skincare, namely Helena Rubinstein and Buy Lancôme Absolue; a strong start for recent acquisitions, Takami and Youth To The People; and last but not least, our powerful award-winning innovation in the age-defying segments. In fragrance, the fastest-growing Luxury category, we strengthened our worldwide leadership big time at plus 23%, on a market at plus 17%. This despite some disruptions in our supply chain. Worldwide blockbusters were consolidated, like, for instance, [ Libre ] by Yves Saint Laurent, #3 in Europe, just 3 years after hitting the market. Our launches over the last few years also kept gaining traction, and we had very impressive scores with the new Paradoxe by Prada, the best feminine launch of 2022. Finally, our collection business in Asia maintained impressive momentum, namely Maison Margiela, recording phenomenal growth at plus 90%. In makeup, our third category, the main drivers were San Laurent and the [ reinvented ] Urban Decay, both recording double-digit growth. In 2022, L'Oréal Luxe balanced its geographic footprint more than ever. In North Asia, the biggest luxury beauty region, we had a strong year, ending at plus 8% on the market at minus 2%. The performance was particularly strong in China local markets with the highest ever market share over 30% in China local markets. In 2022, L'Oréal Luxe China grew 11 points above its market and was the only major player to grow in a difficult context affected by several lockdowns. L'Oréal Luxe is the leader by a long distance in China, and I'd like to pay special tribute to our teams there. We also continued gaining market share in Travel Retail in the Asian region despite keeping a very tight control policy on our brands. In North America, L'Oréal Luxe grew by 7%, slightly below market as we concentrated on revamping our business. The second half showed some very encouraging signs of acceleration of our sell-out. In Europe, where we are the historical clear leader, L'Oréal Luxe again delivered a solid year plus 16% and is evolving at double-digit growth in Germany, Spain, Italy, U.K. In the promising emerging markets, we became the luxury market leader. Importantly, 2022 was another year of profit improvement for L'Oréal Luxe at 22.9%, our profit level far exceeds all direct competitors. Let's now look ahead to 2023 and beyond. I am extremely confident in our capacity to deliver consistent strong growth. First, because I'm convinced the market will continue to show strong dynamism. Desire for luxury amongst the global upper middle class is extremely robust. Our market registered a 6% CAGR over the last decade, and it will remain at least at the same pace and because I'm convinced L'Oréal Luxe is perfectly equipped to keep outperforming the market. There are 7 very important points I'd like to highlight. The first one, L'Oréal Luxe has the most diversified and balanced brand portfolio of the industry. We now have 5 powerful billionaire brands, we will consistently be investing in. Helena Rubinstein is joining this very selective billionaire club in 2023. We have exceptional growth relays brands like Takami, Youth To The People, Prada, Valentino and Carita, which are just beginning their globalization journeys. With our 23 brands, all price points in the luxury ladder are covered perfectly. The quality of our portfolio allows us to answer to all beauty aspiration, all communities, from culture lovers to science lovers, from boomers to Gen Z, from classical to highly creative customers. Point 2, L'Oréal Luxe has a dominant position in the Chinese ecosystem, which will bounce back big time after Q2. Six of our brands are in the top 20 of these gigantic markets. Three, we are solid leaders in Europe and in conquest mode in the U.S. with a restructured footprint and P&L. Moving to 4. We are now leaders and growing by over 20% every year in emerging markets, where many new luxury customers will be located. Five, our channel strategy gives us a very balanced business via brick and click, each with highly specialized teams and performance management tools. We can manage any shift in luxury consumption from one channel to the other. Sixth, the innovation we've developed for 2023 and beyond are exceptional. Their added value is clearly understood by customers, allowing us to keep valorizing our prices significantly every year. Last key point, L'Oréal Luxe is permanently stepping up its luxury know-how, becoming the industry very best-in-class. With exceptional services, the Maison, Carita, [indiscernible] perfectly with ultimate experiences rooted in emotion, art and culture, take the incredible Couturissime exhibition by Mugler, a spectacular success. And with high-tech innovation always pushing the boundaries of personalization. Look at HAPTA by Lancôme, which won multiple awards at the last CES, allowing women with disabilities to enjoy the pleasure of makeup. All in all, I'm very confident that the unique brands and the passionate teams at L’Oréal Luxe will continue driving strong, highly profitable growth and gain shares in the coming year. Thank you.

Thank you, Cyril. And to finish. Last but not least, Myriam Cohen-Welgryn for Active Cosmetics with a little surprise.

Good morning, everyone. 2022 was another outstanding year for our division growing by 21.9%. Our division almost doubled in size in the past 3 years. We now reached a sizable EUR 5.1 billion business, which is even more profitable at 25.4%. We consolidated our leadership growing 2.4x faster than the market. Our business model is successful. It is powered by medical, amplified by digital and driven by outstanding teams. I want to thank them for their ongoing commitment. So what explains our remarkable growth? 4 key success factors. First, the power of our complementary brand. They address all consumer needs, those related to skin pathologies and those 2 aesthetics. As you can see, all our brands recorded a very strong performance in 2022. I chose to zoom on La Roche-Posay and CeraVe as they contributed to more than 80% of our growth. Indeed, La Roche-Posay reinforced its position as the #1 dermocosmetic brand. In 2022, it grew by more than 23% and climbed the ranks to become the #6 biggest global skincare brand across all channels. It's life-changing products and UVMune 400 were key to this success. As for CeraVe, it grew by 38% and became the #2 dermocosmetic brand worldwide. International business now represents nearly half of the brand's growth. In the U.S., the cradle of the brand, CeraVe became #2 in total skincare across all channels. I also want to highlight that we acquired the U.S. professional brand, skinbetter science to reinforce our aesthetic anchorage. Second, success factor, our medical leadership. Today, we reached 250,000 doctors globally, 13% more than last year. 3 of our brands are now in the top 5 most recommended, and more and more doctors are consulting and advocating online. Digital allow us to amplify our medical strategy. This is our third success factor. We can now reach many more consumers than before. We are #1 in medical advocacy, meaning we recorded 48% of share or views of the brand videos posted by doctors. E-commerce grew by 20% and is key to make our products more accessible. Finally, our last growth factor, our international expansion. All zones grew strongly. U.S. and China recorded an exceptional performance, growing 3x and 6x faster than their markets. Emerging countries rose sharply at nearly 26%. Europe is accelerating. Now looking into 2023, you may wonder if our growth will continue. I believe it will. One -- for 2 reasons, 1 being that the dermocosmetic share will continue to grow within beauty. Dermocosmetics gained 3 points of market share in the last 4 years, reaching 8% in 2022. For perspective, in 5 best-in-class markets, dermocosmetics already reached a 15% share of beauty. This trend is driven by 2 elements. First, the booming consumer quest for health. Skin issues affect 2.1 billion people and are unfortunately on a constant rise. Separately, there is a boom of consumer visiting aesthetic professionals. In the coming years, these consumers should represent a pool of over 600 million. And second element, the scale-up of teleconsultation and diagnosis services are increasing accessibility to skin health. Finally, I'm convinced our division will keep growing its share of the dermocosmetics market. We have a strong innovation plan, and our brands can still expand their geographic footprint. To sum up, we will -- growth will continue as we will grow the pie and our slice of the pie. Today, to stand more clearly for who we are, a division with dermatological brands on the pathological and aesthetic fronts, I'm thrilled to announce that L'Oréal Active Cosmetics becomes L'Oréal Dermatological Beauty, a division that strives to change people's life and increase access to skin health to everyone, everywhere. LDB also means let's dream big. Thank you.

Thank you, Myriam. So good morning again. Over the next few minutes, I'd like to outline some of the key 2022 highlights, then explain why we are confident for 2023 and finally share with you L'Oréal's vision for the future. Let's start with 2022. As you already heard this morning, 2022 was a year of remarkable performance. Our sale of EUR 38.3 billion represented another year of double-digit growth, close to 11% or EUR 3.5 billion of pure organic growth. As Christophe already showed it, we increased our growth quarter after quarter versus 2019, the only year without any lockdowns or reopening comparative bias. Once again, we significantly outperformed the market at a 1.8 multiplier and thus strongly solidified our position as the world's champion of beauty. Before going into further details about 2022, I would really like to thank our 87,000 strong teams around the world for this great collective performance. This performance truly belongs to them. 2022 was another grand slam year. We outperformed across all geographic zones, divisions and categories for the second year in a row. We can talk about perfect balance, all say that all the L'Oréal engine or all the L'Oréal cylinders are firing in L'Oréal's engine. Let's take a quick look at the geographic cylinders. I'm pleased to say that in 2022, Europe was despite the context, our #1 growth contributor, up 11.6% like-for-like leading to a 20% market share in core countries. 2022 was the confirmation of the turnaround for North America, exceeding EUR 10 billion in annual sales for the first time ever, with like-for-like growth of 10.4%. It was notably the year of the comeback of CPD in the U.S. with growth ahead of its local mass markets accelerating in Q4. North Asia grew plus 6.6% like-for-like with Japan and South Korea, both up double digits. Of course, I want to highlight the extraordinary performance of our teams in Mainland China in a very difficult sanitary context. Their resilience, together with the agility of our operations, who managed to keep product availability close to 100% and of course, the power of our brands, allow L'Oréal to grow 11 points above the market. Finally, our emerging markets, SAPMENA-SSA and Latin America are accelerating as promised, slightly above 20% in aggregate growth. There, middle classes are young, digitalizing and growing a perfect combination for future growth in beauty. From a distribution channel standpoint, 2022 saw the return of our brick-and-mortar, which is up 11.7% versus last year. We are reinventing the retail experience with further O+O integration. In parallel, our e-commerce continues to grow faster than the market at plus 8.9% and therefore, stays above 28% of our total sales. On division, you've heard their presidents, but let me point out my personal highlights. In a dynamic beauty market, which continues to premiumize, each has come out longer. L'Oreal Luxe, our #1 division and growth engine, continues to outperform the luxury market, both in sales and profitability, continues to up its luxury game and to play in all the keys of its super brand piano, accelerating in skincare and strengthening its leadership in fragrance and in China. CPD, our largest division in units has confirmed its turnaround, notably in the U.S.A., thanks to premiumization, acceleration in makeup and hair and has delivered a real breakthrough in emerging markets. The division managed to hold its profitability despite massive input cost increases and is now poised for margin improvements. The Professional Products has become truly omnichannel, serving stylists and consumers alike and leveraging the global appetite for premium professional haircare. And Active Cosmetics, now L'Oréal Dermatological Beauty is working hand-in-hand with the largest global network of dermatologists, above 100,000 across the world, to provide the safest and most efficacious products. It has doubled its size in 3 years and thrives on the 2 strongest ascending beauty currents, skin health and aesthetics. Now with skinbetter science as a new jewel to its crown, LDB can indeed dream big. Let's now look at our performance by category. Our largest category, skincare, which now represents over 40% of our sales, remained our #1 growth contributor at plus 10% in a market growing low single digits. Skincare is a cross-generational need from Gen Z to seniors, driven by science and performance. Makeup continued its rebound driven by the return to social life by innovation and creative flare as demonstrated by NYX Professional Makeup, one of the key contributors to our global overperformance at plus 9%. Then 2 categories came as post COVID good surprises, fragrance and haircare. On fragrances, at plus 23% on the market growing double digits, it's not just about going back to social life. From the U.S.A. to China, we also see fragrance as an affordable luxury aspiration and a self-pampering feelgood gesture. So I think it is bound to last. Finally, haircare, where we grew at plus 12%, well above the market, has become the new skincare. We see longer hair, more diverse types of hair and great hair is increasingly a sign of health and youth. People invest in it with a strong appetite for professional products and premium mass products. So the market is premiumizing and selective retail has made it a growth category. So you see whether it's from a zone, channel, division or category perspective, the L'Oreal engine is indeed firing on all cylinders. The fuel for this fire is once again a great vintage of innovation. We spent over EUR 1 billion in R&I, and it is worth it. In 2022, we have launched several groundbreaking innovations, the one you see on the screens have been mentioned by the division presidents. And we have filed 561 patents that are laying the groundwork for future successes. Innovation are an important asset in our capacity to valorize, most being launched at an accretive gross margin. But of course, financial performance is only one side of the equation. Consistent with our dual performance model, L'Oréal has continued to deliver a strong environmental and social performance. Christophe has mentioned on numerous awards and external recognitions, but allow me to showcase some of our concrete achievements in 2022. First, on the environment. Close to 2/3 of our sites are carbon neutral, including the sites of North Asia, Brazil and our first site in India joining this year. 97% of our products of our new products and renovations are eco-design. We are developing and advocating refills, like with the new Prada refillable fragrance. Over 3/4 of our PET plastic packaging comes from recycled plastic, and 82% of all our haircare bottles are now in PCR. On societal contribution, our program L'Oreal For Youth launched in 2021 has reached its cruising speed. We are now creating 25,000 job opportunities for people under 30 years old every year. In 2022 alone, our Solidarity Sourcing programs have supported over 21,000 people coming from struggling communities in gaining access to employment. Through our funds, we have invested EUR 22 million last year alone to restore degraded ecosystem. EUR 30 million to support over 1.2 million vulnerable women throughout the world. Our brands have also played their part working in partnership with organizations around the world to support a wide range of causes on health, mental wellness, women empowerment and of course, the environment. We have achieved a lot to date, but we are conscious there is still more than we can do and will do to continue sharing values with the world and its people. I am with all 87,000 L'Oréaliens committed to this. To conclude on 2022, I would like to reflect on the past 3 years, in which the world has faced unprecedented challenges. But as they say, when the going gets tough, the tough get going. And we have emerged from this time stronger than ever. We saw that the L'Oréal engine is firing on all cylinders, and this translates into an increase in our overperformance versus the market compared to the pre-COVID period as this graph shows it. Since 2019, we have delivered an average growth of more than 5 points above market growth, significantly increasing the gap with both the markets and our competitors. However, growth is not the whole story. We have emerged from the pandemic more profitable than before, improving our profitability by 90 basis points, whilst at the same time, increasing the fuel behind our brands. A&Ps [indiscernible] of sales is up 70 basis points from 2019, which represents over EUR 3 billion in additional A&P over the 2019-2022 periods. And SG&As have come down 190 basis points. This is the L'Oréal virtuous circle. We have also transformed our organization. First off, our new geographical organization, much of it put in place during the pandemic, has been a complete game changer. Not only has it brought better coherence to each zone in terms of consumer profile and market maturity, it has helped to create the optimum conditions to maximize growth. This has been at the heart of the group's strong outperformance in North Asia and the real acceleration in SAPMENA-SSA. To drive more efficacy and productivity, we have regrouped several markets into clusters. This has allowed us to control SG&A and fuel our virtuous P&L model. Secondly, our brand portfolio has been reinforced. The group has built a portfolio of 36 global brands, 11 of which are members of the exclusive billionaire brand club, which bought 3 new members this year and a couple more knocking at the door. So I'd like to say a big welcome to Kérastase, CeraVe and welcome back to L'Oréal Professionel to the club. More importantly, our portfolio is a winner. We have the #1 beauty brand in the world. We have the most prescribed brands by other skin professionals or hair experts. We have several of the most coveted luxury brands, and we have brands at all price points and for all tribes and generations, including those loved by Gen Z. This portfolio has been strengthened by acquisition as we have identified white spaces. Since 2019, we onboarded Takami, Youth To The People, The Prada license, Mugler, [ Thayers ] and recently skinbetter science. And then we aim at supercharging this acquisition as it was the case with CeraVe, which we took to billionaire status in barely 5 years, growing at tenfold over the periods. Throughout the crisis, we have continuously also invested in maintaining our digital leadership. In 2022, L'Oréal has the #1 position in terms of paid media share of voice in beauty and the #1 share of influence. L'Oréal is the #1 group in Gartner's 2022 Digital IQ Ranking for the personal care category in the U.S., with 7 of our brands in the top genius ones, including the #1 and the #2. Yet, we are never complacent ever seizing what is starting, being first movers on TikTok, for example, or exploring the Metaverse with NYX Professional Makeup, and its first-of-a-kind digital creators community. Finally, we have deepened and increased our team's engagement into the L'Oreal -- unique L'Oreal culture, continuously adapting to the new ways of working, emerging over the last 3 years. In a world of quiet quitting and great resignation, we continue to see high levels of engagement amongst our employees reaching 79%. And a significant rise in job applications of 1.3 million, an increase of 7% versus '21. Our teams are passionate and engaged. We had a strong company cultures and values leading us to enter the Top 5's most attractive employers ranking from Universal. So in all aspects of our activities, it is clear that we are emerging to the post-COVID world in a much stronger position and are ready to take on the future. Now I'd like to look forward to the year ahead. Whilst remaining prudent in this world of poly crisis, I am confident in L'Oréal's ability to build on our strength and deliver another year of growth in sales and profits. At a macro level, and even if currencies should be less favorable in 2023, we see some patches of blue sky amongst the dark clouds. There are a few early signs of reduced inflation on some raw materials, recession is seen as less likely in many parts of the world, and China is reopening with a clear focus on economic growth. If we look at our markets, we know that beauty is an essential human need. And even in times of recession, there is a continued consumer demand for beauty products. The beauty market has always been resilient to economic uncertainty with an average growth of over 4% over the past 23 years, and this has proven true once again in 2022, growing a robust plus 6%. We believe it will keep growing at this rate of 4% to 5% on average in the coming years. In the current inflationary context, we saw limited volume decrease. And even though there are nuances by geography and category, our latest consumer panel show that valorization more than compensates any drop in volume. Indeed, the beauty market maintained solid growth in Q4, mostly everywhere in the world with the exception of China. And as for China, while you've all seen the sharp market contraction in December, which will still weigh on our growth at the start of the year. However, we believe in the rebound of the Chinese beauty market after Q1, and we are prepared for it. I know that some of you worry about the risk of down-trading, especially in developed market, as inflation weighs on consumers' wallets. Needless to say, we monitor this very closely, but feel reassured. The market has remained dynamic throughout the year, as mentioned previously. We are not seeing significant levels of down trading in 2022, and internal studies have shown that the L'Oréal consumer is skewed towards upper middle classes, who are less vulnerable to inflationary pressures. And to continue to fuel that consumer appetite, we have a strong pipeline of cutting-edge innovation for '23 designed to drive consumer towards new and often more premium offerings. We will continue to work on improving our gross margin in '23. We would benefit from 2022 price increases, mostly taken in the second half. They have yet to show their full year impact as well as from new ones at the beginning of '23. So all in all, with the experiences gained during the pandemic, coupled with our balanced footprint and unique operating model, we are perfectly equipped to drive growth despite the uncertain environments. To finish, I would like to talk about the future. It is increasingly clear that these past few words of crisis and constant change will mark the dawn of a new era. It will be an increasingly multipolar era, more fragmented than in previous one, an AI and tech-led era, with the highest expectations in terms of sustainability, purpose and cultural diversity. In this increasingly complex and fragmented world, having solid roots and structural agility will be essential to a company's success, and we have that. Transformation is part of our DNA. Like a Unicornus Rex, we are a truly unique creature that combines the strength and scale of a 114-year-old leader, the Dinosaur, together with the unmatched speed, agility and innovation capabilities of a Unicorn, always ready to seize what's starting. That's why L'Oréal is uniquely positioned to win in this new era. Firstly, L'Oréal is multipolar by design, a multipolar geographical footprint, which will allow us to grow in and beyond China in emerging markets and seize opportunities in North America and Europe. A multipolar supply chain with 38 own factories globally to derisk our service levels. A multipolar divisional model to go beyond luxury and leverage fast-growing dermatological beauty, a premiumizing Consumer Products division and a truly omnichannel Professional Products division. A multipolar R&I model with 20 research centers close to the world's consumers. And finally, a multipolar distribution strategy with an O+O boosted brick-and-mortar going beyond traditional e-commerce to explore the possibilities of D2C and B2B platforms. Next, in an AI and data-powered world, we will extend our digital leadership to harness the possibilities that Beauty Tech has to offer and explore new horizons like the Metaverse. We have over 2,000 dedicated experts working in Beauty Tech and IT together with 800 data analysts. Our entire R&I organization is being augmented with powerful AI and data, including strategic partnership with the experts, such as Verily, an Alphabet subsidiary, where we'll combine their large-scale consumer data with our own to better understand skin and our aging. Data and AI will allow us to develop next-level diagnosis services for personalized recommendation to drive loyalty and satisfaction. Beauty Tech will also help us to create a range of augmented beauty solution, such as HAPTA, specially developed for those with limited hand and or mobility, which was showcased at this year's CES. Finally, the world of beauty has expanded into the Metaverse. To address this need, we have developed the first dedicated incubator in partnership with STATION F and Meta and the first multi-brand Avatar partnership with Ready Player Me. Third, in this new purpose-driven era, companies that do not take action on environmental or societal issues, will simply be left behind. Our long-standing track records of commitments and clear actions in sustainability will give us a head start. We've already discussed the progress we've made in reducing CO2 emissions and plastic, and we'll continue to work towards achieving our 230 goals -- 2030 goals. We have embarked on our green Science transformation, which will reinvent the way we develop and manufacture our products. Currently, 61% of our ingredients are bio-based like hyaluronic acid and vitamin C produced through biotechnology. And this is just the beginning. We will continue to invest in developing new biosourced ingredients, including partnerships or investing in start-ups, such as Global Bioenergies and Microphyt. In addition, to harnessing the power of nature, will also harness the power of Beauty Tech to develop new-to-the-world sustainable solutions like L'Oréal Water Saver and once again, invest in start-up that can scale to have a real impact like net zero in carbon capture. And of course, we can't do this alone. So we'll continue to help consumers make more informed choices towards sustainability with initiatives such as the industry-led EcoBeautyScore. Fourth, in this increasingly fragmented world, we will evolve from universalization to singularization, from offering beauty for all to beauty for each, and we are uniquely equipped to face these shifts. Beauty for each with our unrivaled portfolio of brands with different cultural backgrounds. Beauty for each with regionally developed innovation with global potential like the Garnier Vitamin C serum, born in Thailand, developed in India and a winner in emerging markets and beyond. Beauty for each with a multipolar R&I organization designed to cater to the infinite diversity of hair and skin types around the world. Beauty for each with personalized products, service and experiences powered by AI, data and Beauty Tech. Finally, we will succeed in this new era, thanks to our L'Oréal culture, which will only deepen. This culture full of passion, creativity and commitment, which have been living and breathing for 37 years is truly unique. It is the secret sauce to our success for the years ahead. To conclude, I would like to leave you this morning with 3 key takeaways. Firstly, in '22, in a world of polycrisis, we have delivered our best and most balanced growth since 1999, outperforming the market in all divisions, geographic zones and categories, and we have reached historical levels of profitability. Second, while we know that 2023 may continue to be another bumpy year, we strongly believe that the beauty market will grow yet further, and L'Oréal is ready and confident to deliver another growth of solid growth in both sales and profits. And as we look beyond 2023 and towards a new era, a multipolar model, coupled with our proven capacity to harness the power of data and AI and drive sustainable change will place L'Oréal in a unique position to strengthen our leadership and deliver strong value for our shareholders. I thank you for your attention. Okay. We can start with the Q&A, and Christophe will explain a little bit the rules.

So since the meeting is recorded, I can ask you to state your name and company as clear as possible before you ask your question in English. And I also kindly ask our journalist guest to raise the questions during the latter part of the Q&A session. Thank you.

Celine Pannuti, JPMorgan. Well, 2 questions to start with. Number one, on the growth of the market. So you seem to think that 4% to 5% is what the growth of the market would be for this year, which maybe sounds a bit low if I think about China reopening, which you seem to be quite bullish about and as well for the pricing. So if you could a bit elaborate on that. And maybe as well tell us a bit about Europe, which I found it was quite interesting to see how strong it was at the end of last year, in fact, all of last year. My second question is on China. Just to clarify, do you expect a bounce back after Q1 or after Q2 because those 2 were mentioned in your presentation? If you could elaborate a bit about how you see the bounce back coming through by divisions in that channel? And maybe could you also tell us how big is Hainan, and yes, you didn't talk about Travel Retail, so maybe sharing your views on that and how that will benefit the reopening.

Okay. So that's a lot of questions. I'll start with China because that's probably one of the questions that's on everybody's mind. It's true that in China, for most companies, December and the beginning of January was very low consumption because people were sick and staying home. But the early signs we are getting from February, the first weeks of February are pretty positive, very positive in terms of traffic and as well in terms of purchases. So to answer your question, I think that the Chinese market will rebound from Q2, not from the second half, but it probably will be progressive as consumers need to regain trust. I think it will bounce back on all divisions, but clearly, the divisions that have a stronger brick-and-mortar footprint, like L'Oréal Lux, will probably benefit even more from this reopening, but I think every division will benefit from it. Hainan is a nice part of the Chinese market. And of course, today, Travel Retail, the air traffic has really bounced back a lot in 2022, but it's still more than 30% below that of 2019. So I guess it will be another year of acceleration in 2023. And as far as the way we manage by the way, because this is the implicit question, we have a very good cooperation between our Travel Retail teams and our local market teams in China to make sure that the local market and the value for L'Oréal is perfectly protected. As far as the market growth is concerned, we've looked at decades of market growth. The market was always between 4% and 5%. It's true. It has bounced back stronger last year, and this year was 6%. So frankly, we don't know. It's too early to say. Maybe it's going to be 4, maybe 5 and maybe a bit more. We hope it's going to be a bit more. And what's important for us is to continue to overperform that market, which, of course, as you heard, everybody is very determined to do. And was there -- yes, you had a question on Europe. Europe was really a good surprise for us, and I really want to pay tribute to Vianney Derville, who is in the room, who's managing Europe with great talent. The market has been very resilient, including at the end of the year. The last quarter on the European market was at -- omnichannel was at plus 12. It seems that consumers continue to want to enjoy beauty, to indulge, to wear fragrances, to take care of their hair. And we have no evidence at the beginning of the year that things are changing course, but it's really too soon to tell. So we also have -- I know that the European teams are ambitious.

Jeremy Fialko from HSBC. Thank you very much for the presentation. Good to be back in person in Clichy. So a couple of questions for me. Maybe following up one on China. Clearly, we're going to get more kind of Chinese traveling outside the country this year. So Japan, Korea and perhaps further afield. What do you think the impact of that might be on the kind of the Chinese market and your kind of business when you get that big increase in sort of external tourism? And then the second question is on kind of a compare and contrast between China and India. So if you think of China, say, 10 or 15 years back, how similar do you think India is at the equivalent stage of development in its sort of capacity to become a market of the scale that China is?

Okay. Well, first of all, on India and in China, I think they are two very different markets. I don't think India will ever look like China, but it's still a very promising market for us. We have high ambitions. Statistics say that by 2030, India will represent 20% of the world's population and 30% of the qualified workforce. So it will definitely be a driver of growth for us. Middle classes are rising in a major way. I was in India 2 months ago, and I was really impressed by the growth, the development and the accelerated sophistication of this market. It's still not as developed as we would like in terms of distribution, but it's really accelerating and our shares are growing. We have only 2 divisions over there. We already have an 8% market share. It's actually over 10 if you take e-commerce, which is our main growth driver. So from a EUR 500 million business today, I think we can take it to EUR 1 billion in the next foreseeable future. So very excited about India, but I don't think it will be like China. Today, we are going a lot through our CPD business. Maybe, Alex, you want to say a word about your CPD business in India because I think you have great results.

Yes. No, absolutely. So as Nicolas was saying, I think what's interesting is to look at this upper part of the Indian middle class, which is today, let's say, 200 million, 300 million people, but which is set to double in the next 5 to 10 years. So that's very exciting. And it's true that already we had a great year in India. We grew 2x faster than the market. What was also interesting and what we pay a lot of attention to is to have a balanced growth in these countries between volume and value because it's important for us to both premiumize and recruit. And maybe the last point, as Nicolas was saying, I've been going to India almost every year in the last 10 years, and I've seen changes in the last 2 years like never before. In terms of in terms of sophistication of the market, in terms of change of the distribution, thanks to e-commerce, and all that powered by a super digital ecosystem. So we're very, very bullish about India.

And to go back to your first question about Chinese travelers. I don't think -- for us, it's -- the driver of our growth in China is not so much whether they travel or they travel here or there. We don't highlight some other luxury industries, such huge price gaps that justify big consumption abroad. Of course, our French team is going to be very happy if Chinese consumers come and buy some Lancome in Paris. But overall, our drivers are more the rise of the middle classes, the penetration of our brands in China. We -- today, we have approximately 100 million customers that buy our brands in China, and we have to double that. We have potential in Tier 3 and 4 cities, where our penetration is half of the one we have in Tier 1 and 2. So this is more my focus on the Chinese growth market rather than knowing whether they're going to go to Thailand or to Paris.

Tom Sykes from Deutsche Bank. Just firstly, you mentioned the FX impact on margin. And then you alluded to some FX impact on the business and maybe a bit of a headwind. But could you maybe talk about in periods when the dollar is particularly strong? Has that helped you to sell in and be more competitive? And is that at all a headwind to full-year '23, given FX movements at all? And then would you be able to just clarify some Q4 movements, which to work out what happened by the category, I think, in fragrance, you said at the 9-month level, you were at about 35% year-to-date to at least at the half year where you have 35%? And obviously, quite a bit below that. And you mentioned for the full year -- and you mentioned capacity constraints from glass. And just what impact that may have had on the Q4 growth, please? And perhaps then just on skincare, was there a rebound at all in North Asian skincare compared to Q3. And if so, when skincare remains the same growth, does that not imply that skincare elsewhere may have been a little weaker in Q4, perhaps the U.S. at all, please?

Okay. So I'll let Christophe take the question on FX. Cyril on fragrances, and I'll try to complement.

So coming first on the FX effects. I think what is most noticeable, of course, is the impact on the net sales. As you've seen, it has been a true massive impact of more than 7% growth. Obviously, we will see now what will happen in 2023. Now coming on the P&L. I have to say that, as I was mentioning before, there is an impact, of course, in the cost of goods. That's probably the area in the P&L that is the most visible. In the rest of the P&L, it's much less. It's due to the weight of our factories and the divisions, meaning that, of course, if the euro reinforced this year, of course, it will have a positive impact on the gross margin. But then on the whole P&L and also on the profits, I think that this impact is 10 basis points, very small.

Regarding fragrances, the market was, as I mentioned in my presentation, extremely dynamic throughout the year because the market ended at plus 18%. To be -- to look at it by half by semester, first half was plus 25%, so one half was plus [ 15% ]. So there was a slight decrease, but still an extremely dynamic market in fragrances on . There were some supply constraints from the whole industry, as you mentioned, mainly Class 1s. I think they are behind us now. And for most of the industry, 2023 is going to be healthier, supply-wise. At least for us, it's going to be much healthier. And I'm very confident in the work that my teams have done on glass supply. What you need to understand is that it's the fundamentals of the fragrance market, which [ explain ] the growth. The daily usage of fragrance, which is something extremely strategic for us to look at, has increased between 2017 and 2021 by 10 points in the U.S. In China, has gone from 40 to 52. So Chinese -- half of the Chinese luxury consumers use fragrances every day, which is pretty new. And so overall, this market is bound to grow, thanks to the development of the usage and especially among the young generation. The young generation in America, the young generation in China are really crazy about fragrances right now. They love not only for social benefits, but also for some wellness benefits that they associate to the fragrance. So I'm very confident that this market will keep driving us. And as you know, we are the #1 worldwide by [ fragrances ], so I'm confident it will be a strong business for L'Oréal and L'Oréal Luxe especially.

And on skincare, I'm not sure I can answer your question because anyway, we do not have yet the whole sellout performance of the end of the year. But most likely, I don't think there's been a slowdown somewhere to offset the North Asia rebound because December was very low in China. So the odds are that skincare has remained strong everywhere. I think it's been very strong in the U.S. I look at the CPD performance, it's been very, very strong on skincare. So skincare is one of these categories that has -- that is bound to grow because, as I said, it addresses everybody from Gen Zs, and that's new because they weren't using so much skincare. They're investing into the UV protection and so the penetration and the usage of skincare is going to grow on younger generations. And of course, as you know, as people age, it is the one category that they continue to use. So skincare is doing good, it's premiumizing, and I have seen no slowdown anywhere at the end of the year. If you allow me before handing over to you, we have two questions on the phone, which have been alerted on. So we'll take them, and then we'll go back to the room.

The first question from the conference call is from Bruno Monteyne with Bernstein.

My first question is on those 4 high-growth emerging markets that you mentioned at quarter 3. I think it was Mexico, Brazil, India and Indonesia. At quarter 3, they were all growing around 30%. Can you just comment on what they're growing at right now? And I think they slowed down. Is there anything to read in the quarter 4 slowdown of some of those countries? And second of all, I'm not sure if I missed the number, but could you give us the quarter 4 growth in Mainland China and Hainan, please?

Just on the -- on as SAPMENA-SSA and our emerging market in general, Q4 has accelerated significantly versus 2019, but the drop you see in Q4 is just a fact of comparatives. Last year in Q4 was the reopening -- massive reopening of India after a very strong lockdown, so there's just the base effect. But if you look at our actual sell-out numbers, the market remains as dynamic as it was, a bit like L'Oréal, overall, you have Q4 that compared to 2019 continues on its acceleration path. So there is no slowdown and nothing to read more than a tough comparative. Christophe, you have some on Q4 on China?

Yes, to be...

We don't have the sell-out yet. It's very, very...

To be precise, the growth in China in the last quarter was plus 3.8%, so higher than the growth in Q3.

I think we have a second phone question, and then we'll be back to you, gentlemen.

The next question is from Guillaume Delmas with UBS.