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

Good morning. It's my pleasure to welcome L'Oreal back to CAGNY. L'Oreal has one of the leading brand portfolios in global beauty, covering all facets of beauty, including color cosmetics, skin, hair and fragrance operating across the luxury, mass, dermatology and professional channels. L'Oreal operates 40 global brands, which are sold in 150 countries, generating EUR 44 billion in sales. In 2025, the company delivered strong financial performance despite the volatile environment, adding to its long history of consistent organic sales growth, strong returns and resilience across economic cycles. Today, we're pleased to be joined by CEO, Nicolas Hieronimus; CFO, Christophe Babule; and David Greenberg, Chairman of L'Oreal U.S. Nicolas and David will share L'Oreal's strategy, priorities and the planned path forward with Christophe joining on stage, albeit not presenting. I'll turn it over to Nicolas. Thank you.

Thank you, Olivia. Good morning, everyone. Nice being back in CAGNY. It's beauty time. So you've been seeing a few images of pets, of snacks. And this morning, I will try to entertain you with a few beautiful images of beauty products and beautiful men and women on the screen. And as always, at L'Oreal, we'd like to start with a video that presents who we are so that we can go faster on the rest of the presentation. So welcome to the beauty world of L'Oreal. [Presentation]

So you've seen what L'Oreal is. As you know, we are the world leader in beauty and by the way, have once again increased this leadership this year, EUR 44 billion in sales, EUR 6.4 billion in profit. 7 billion units sold around the world in 150 countries, 95,000 employees and around EUR 200 billion market cap. And today, with David Greenberg, we're going to show you how L'Oreal is not only performing regardless of the turbulences that affect the world, but how 2025 has been truly a defining year in the way we have transformed in major aspects of the company to prepare for future growth and how we want to accelerate. And clearly, this year has been a year of performance in a very particular context, the geopolitical landscape, the tariffs and everything. That hasn't prevented L'Oreal from outperforming its market. The beauty market has grown around 3.5% with an acceleration on the second part of the year, where the second half of the year was more in the 4% to 4.5% bracket. And we have accelerated at the same time and did overperform the market with a global growth at plus 4%. But what's really important is this acceleration because if you look at our performance throughout the year, this is our numbers adjusted of our IT invoicing transformation, 2.6%, 3.7%, 4.9% and 5%. And you'll see later that even if you put aside the little Travel Retail one-off in the fourth quarter, it's even better growth. So it's an acceleration throughout the year. That has been driven by a clear step-up in innovation. We have, of course, played a part in animating the market. The beauty market is an offer market. It's not a need-based market. So you have to tamp consumers with exciting products. And you just see here a small array of what we have put on the market on the second half of this year and most of these products being great hits. So that's been one of the reasons why all our divisions have been growing. The 2 biggest ones, mass market, so what we call consumer products at plus 3.5%, then luxury on a slightly slower market. Dermatological beauty, which has been for the past couple of years, our fastest-growing division has truly accelerated on the second half. And Professional Products, which is our oldest division, but the fastest-growing one, has been growing at 7.5%. 3 out of 4 of these divisions have been outperforming their respective channels. We've also been growing in all categories, albeit some more than others. The 2 stellar categories have been hair care and fragrances, both growing at double digit and where we are by far the global leaders and augmenting this leadership. Makeup has been a tale of 2 parts. First part of the year, the market was slow. And the second part of the year, as we're going to see later, we did accelerate the market and our own performance. Hair color is a bit of a slower category. And clearly, one area of underperformance in 2025 after 8 years of continuous overperformance has been skin care, which has been clearly the focus of the end of the year and the beginning of this one. All categories are growing. All regions are growing. Europe are -- homeland is growing at plus 4%. North America, you'll hear from David Greenberg, the Chairman of L'Oreal U.S.A. in a minute, has been not only doing a good year, but an accelerating year all over the one quarter after another. North Asia, we'll talk about it in a minute, has been turned back to positive. And emerging markets are close to plus 10% with our 2 regions, Southeast Asia and Middle East, at plus 11% and Latin America at plus 8% slight slowdown in the first quarter, but overall, emerging markets are a major driver of our growth. They are 17% of our sales. We are probably one of the consumer groups where emerging markets have the slowest we because the distribution and the purchasing power weren't right for our brands. But now it's clearly accelerating and it represents 40% of our growth. But probably the 2 most important factors in this year's performance was the acceleration of our 2 biggest -- outside of Europe, our 2 biggest regions. One was the U.S.A., a clear acceleration, plus 2% in the first half, plus 4% in the second half and a good start of the year says that the U.S. -- beauty in the U.S. and L'Oreal and Beauty in the U.S. is really in acceleration mode. And the same thing has happened in China, where we have truly accelerated even though as we'll see in a minute, Travel Retail has kind of offset this performance in the fourth quarter. Because if I take Mainland China, our first half was at plus 1% and the second one at plus 5%. And that's a very important story for us because we see that the market has turned back to positive, even though it's a small positive, it is positive, and we have been accelerating and increasing our market share in China. And again, there, even though we have to wait for the end of Chinese New Year, the start of the year is pretty good. On the other hand, Travel Retail, which was progressively, as you've seen in our sellouts improving on a market that has been resetting for a couple of years now. There was a fourth quarter disruption with -- in Mainland China, where one of the apps was closed and to a force change owners and they stopped selling. So we decided to reduce the inventory and to stop shipping or reduce shipping very strongly in the Q4 so that we start 2026 on a good basis for Travel Retail. The overall, the news in North Asia are really good, and our L'Oreal Luxe division has taken the global leadership in North Asia for the first time. It was the only region when they were a leader, and it's very promising for the future. So if we look at this growth, excluding Travel Retail, Asia actually 3%, 4%, 5%, 6%. So that's why I'm pretty bullish about 2026 because here, you see a good trend of acceleration for L'Oreal, which is -- will allow us to invest behind our brands and to continue to recruit new consumers. This is a lot empowered by e-commerce. E-commerce today for L'Oreal is 30% of our sales. Just a decade ago, it was barely 5%, growing 13%, so continuing to gain share. And of course, it's a massive tool of penetration, particularly in emerging markets where our products are not totally fit for small mom-and-pop stores across the country. So the rise of e-commerce in every emerging region as in China, U.S. and Europe is a massive growth engine for L'Oreal. And as it's accretive, it's a very favorable growth engine for the company. When we look at that, therefore, we have had a pretty strong P&L despite the 30 basis points of tariff hits, we've improved our gross margin to a record high of 74.3%, maintained our A&Ps at EUR 14 billion, reduced the weight of our sales, general and administrative expenses to 18.8% and therefore, been able to once again deliver a 20 basis points improvement in operating margin despite the 40 basis points tariff hit at the global level. So a very well-managed P&L, thanks to my great CFO, Christophe Babule and his teams. And that allows us to continue to give stronger and stronger dividends to our shareholders. So we will be proposing at the AGM in April, an increase of the dividend from EUR 7 to EUR 7.20, which is a growth of plus 2.9% and a distribution of around 56% and of course, with a loyalty bonus of 10%. So we want to remain that company that consistently delivers profit improvement, operating margin improvements and dividend improvements for our shareholders. But in the end, the performance of 2025, as I said, should not -- the financial performance should not dismiss the fact that we continue to want to be a sustainability leader, to want to be an ethical leader, and we have been receiving multiple accolades, including the 10th consecutive year AAA from CDP, and we are the only company in the world, all categories included that have this type of recognition. And that remains a very important part for L'Oreal because we want to be a financially effective company, but also contribute to the world and to sustainability. But 2025 was truly for us a year of transformation. We've really been investing into making this company both fitter for the future but also ready to accelerate. We have invested record amounts in tech, in AI, in R&D, what we call R&I and of course, in acquisitions, and I'm going to share some of these investments for you in a minute. The first one is in tech. It's a record year in investment in tech, EUR 1.5 billion invested in technology, and that goes from building the IT backbone, the ERP of our company, which has some impact sometimes on the eligibility of our quarterly sales, but it's very important because it is the first and necessary step for us to be able to truly leverage the scale of L'Oreal whilst keeping agility and speed, and it is the base for our AI development. Clearly, AI is at the core of what we work on, on L'Oreal, and it touches every part of the organization. We are developing strong use cases with value that we are measuring both for consumer journeys. So AI-powered consumer journeys is about giving consumers possibility to have the best possible choice amongst the millions of products that are available out there. We are powering our functions at a different level with AI. And of course, we empower our own employees with AI and the use of L'Oreal GPT. So just a few examples. If I take the AI -- the augmented consumer journey, we have this Beauty Genius in the U.S. where you can have tailor-made recommendations powered by AI on L'Oreal Paris, and it's got already 1 million interactions. But also, we've invested in a small start-up, which is a multi-brand AI-powered recommendation engine called Noli, and it's really getting a lot of positive feedback from consumers. We are using AI to augment the efficacy of our -- fuel of our A&P. That's our famous BETiq proprietary tool that allows us to optimize our spending and to generate 10% to 15% productivity on the first year in any country. And now it's being rolled out to 10 countries and more than half of our A&Ps are going to be covered. So it's truly something that allows us to maintain, control the percentage of A&P in our P&L and potentially to reduce it because we are truly seeing the benefit in a more fragmented than ever media landscape and promotional landscape for our teams to be able to allocate the monies in the most efficient way. Of course, AI augments creativity. You see a few images here that come from our CREAITECH studio, where we create around 500,000 pieces of content a month, and our teams do it at a much cheaper, faster, efficient and in the end, more creative way because there are no limits to what can be done. And that's a fantastic way to augment our contacts with consumers whilst creating the aesthetic that beauty requires and, of course, the specificities of each brand. And then there is AI for our functions. And the example I choose is clearly R&I, R&D. This is -- we have signed this partnership with IBM, where we mix our own data, which is very unique and massive in terms of beauty expertise with their computing power to augment the number of molecules and formulas that we can create, that we can test, that we can assess by very important multiplying factors. So that's really allowing us to be even stronger in terms of innovation, which is the engine, the nerve of this market. And that's why if I look at this year, it has been a record year in terms of innovation. Our weight of launches has increased by 150 basis points versus last year, and that's a decision that we took very late in 2024. So our capacity to accelerate and to bring to the market more innovations, more initiatives has been powered by AI and has been powered by the reactivity of our research team. And it's just the beginning because we can continue and will continue to do more. As illustrated by the number of patents that have been filed by L'Oreal in 2025, 725 patents for the single year of 2025. It's our record, and it probably makes us one, if not one of the most innovative companies in terms of patents in Europe and the world. And actually, that's a great source of pride for me and for all the L'Oreal employees. In 2025, L'Oreal has been named Europe's most innovative company by Fortune Magazine across all sectors, whether tech, automobile, weapon reef, airplanes. And that's something we are very, very proud of because in the end, and I say it again, beauty is an awful market. You don't innovate, you don't grow. You don't bring superior products to the consumer that they are willing to pay a bit more for, you don't get the growth, you don't get the gross margin, and that's what we are fighting for, and that's what we've been delivering this year. And of course, it's been a record year in terms of acquisitions after Dr.G, a Korean brand last year, we've signed the license for Jacquemus, a fashion brand. We have both 2 Indie brands with very interesting technologies, Medik8, a U.K. skin care brand and Color Wow, an American styling brand. We've, of course -- and that's the biggest deal in the L'Oreal -- history of L'Oreal acquisition acquired and we are finalizing the deal as we speak. We have acquired Kering Beaute. So all the beauty licenses or brands that Kering has. So full acquisition of Creed, which is a high-end fragrance brand and the long-term licenses of Bottega Veneta, Balenciaga and when available of Gucci fashion. So that will clearly augment in a major way our luxury leadership. And finally, it's not an acquisition, it's a participation. We've raised our stake into Galderma from 10% to 20%. Galderma is a leading company in aesthetics and dermatology. And of course, this is very interesting to us as aesthetics are a growing phenomenon and a clear and complementary adjacency to, I would say, traditional cosmetic beauty. So major, major year in acquisitions. And today, when I look at the portfolio of the L'Oreal brands, there's a lot. There's 40 brands, international brands. And most people don't even know that they belong to L'Oreal. But what's important is that this brand portfolio, which are classified on the 2 big axis of beauty, health on the one hand, glamor on the other one and then with different price points, we see that we cover pretty much all price points and beauty position is. Of course, we like to spend a bit higher. So we are more on the upper side on the chart than on the bottom one, but we clearly cover everybody, and that's a great reason to be ambitious in terms of acceleration. Over more as beyond the brands we have in our traditional playground, we have been investing into opening new growth opportunities. Part of our Kering deal is a partnership on longevity, which remains to be worked on, and you may have some questions about it. We'll be building on the trend for this hospitality of where high net worth individuals go to have some experiences to live longer, better. And of course, there is the Galderma participation which goes along with a scientific partnership that would increase again, the level of innovation and differentiation of our brands. That's why I feel that after 2025, L'Oreal is stronger than ever. We are really ready to accelerate. And I will show you why we will accelerate our growth because the market will do better and because we have a very powerful strategy to overperform that market. The market will do better because, first of all, there'll be more consumers. There is 2 million consumers that we aim to target over the decade. But the reality is that you have emerging middle classes that are 400 million more people entering middle classes that will be able to afford beauty. You've got consumers that are younger and younger entering the market, 125 million more people less than 25. I've actually been told that one of our investors had brought his kids to this presentation. I don't know if Talia and Seth are here, but I'm sure they'll be at one day consumers of L'Oreal products, and I hope they will enjoy this presentation. And finally, we have people living longer. And that's a blessing for the beauty industry. We're not one of these categories that worries about people living older. On the contrary, you have to have people and women and men over 60 that are going to be 170 million more, mostly in the mature markets, and they use a lot of beauty products. So beauty market will increase. There are lots of trends that are making this market grow. E-commerce continue to accelerate and facilitate penetration. The price ladders are stretching. So if you have the capacity, as you saw in our portfolio to offer products from very cheap to very high, you can cover everybody. Beauty routines are truly sophisticating because you see that on social networks, on TikTok, on Instagram, influencers are sharing all their beauty recipes. And by the way, this health obsession and this longevity obsession leads to augmentation of beauty routines and protocols. And finally, diversity is creating a lot of new needs. It's true in hair. You have much more curly and cold hair and skin. You've got much more different shape of skin and climate has an impact on it, and that's creating the growth of the beauty market. And L'Oreal is really ready to serve on this trend because what we do is that we use all these brands we have, these divisions, these 4 divisions that might be strange to some of you are actually allowing us to make sure that we don't lose one consumer and not lose one trend. And we've been doing this across all our categories. If I take hair care, this is the market that has been sophisticating the most and actually taking the prices up. So it makes it now, I would say, a profitable category. And we've really been tackling it through our all multiple divisions outperforming it by 2.5x over the last 6 years. That's been one of our biggest and strongest growth engine. And as you can see, this is an example of how we address the market with multiple brands and divisions. You've got Kerastase and the Professional division on the high end that are really growing at twice their historic average. And you saw that the Professional division was the fastest-growing one. You've got mass market that has the third consecutive year at double digit. That's addressing whether curls or frizz or anybody at all price points. And now you've got the dermatological Beauty division because there's lots of scalp tissues, hairful, dandruff that are -- that is contributing a lot to the growth. And here, you can really see how we occupy the market with multiple divisions. Of course, we'll continue to innovate, many launches planned in 2026 for us to continue to lead in hair care. Then we didn't have a big strength in styling that was probably the only gap in our portfolio, which is why we made this acquisition of Color Wow, great American brands and #1 in this category and just in its infancy as it relates to its globalization. So we are just beginning to make this brand global. And hopefully -- and not hopefully, I know it's going to be a great success because wherever we launch it, consumers are reacting extremely well. Another category where we've been growing, as you saw, double digit is fragrance, where we've truly been building a real powerhouse. We have benefited from the love of fragrance that has developed amongst young consumers who want to have several fragrances. It's what we call the wardrobe effect. You have people across the globe that weren't using fragrance like in Asia that are falling in love with this category and Middle East continues to develop it. You have all these expectations, which we have been able to seize and we have become the global leader in luxury fragrance with spectacular performance on women, where we have the top 3 family fragrances in Europe. And I just heard that our Libre fragrance from YSL, which is #1 in Europe, is now also #1 in the world, which ahead of Chanel, which was a great thing for us to achieve. And we are really making strong strides with men, both with Yves Saint Laurent or recently Prada. So fragrance will continue to be a very strong growth engine. We have great Couture success stories. All our brands have been growing very, very strongly on Couture fragrances, which is why the Kering deal is such a big opportunity. Of course, we have Jacquemus, Kering, Bottega Veneta, Balenciaga and Gucci are massive growth opportunities for us. When you realize that YSL, Yves Saint Laurent is bigger today in beauty than it is in fashion. And if you know or Google the size of Gucci fashion, you can imagine what we could do with Gucci Beauty. So it's a massive opportunity for us, and we will continue to grow. And we will cover the market again at all price points with Mist at a very affordable price and oud perfumery fragrances such as Creed or Aesop that we acquired a year ago. In makeup, it's all about speed and creativity. So we've increased our pace of launches. And you can see that even when the market is slow, because it's an offer market, the leader can make the trend. And CBD brands, our mass market brands have been generating the whole of the acceleration in the U.S. market on the second half and increase their market share with a combination of L'Oreal Paris, NYX and Maybelline at different price points. So we do bring more launches, more innovation, whether on Couture or on mass market. And of course, it's about innovation, but it's -- and there will be a lot in 2026, but it's also about activation. And the way we work now with our teams in the U.S., and David will tell you, if I leave some time a little bit about it, it's how we partner with the big shows of the moment, the big stars of women and implant our product in shows that the younger generations are seeing and that they find ultimately relevant. And if any of you, I'm not one, but he's a fan of Emily in Paris. And if you watch the last season, there was one full episode where L'Oreal Paris brand was at the core of the plot where the agency was supposed to create an ad for our new lipstick, which, of course, is creating a strong connection with our consumers. This is also what beauty and creativity are about. Finally, there's skin care, which, as I said, has been our pain point this year. But it's also where I have the biggest ambition because this is where this quest for health and longevity and our pioneering the science of longevity will make the biggest difference. We've had a very strong track record in skin care growing 8 years, not this year. And really, we've upped our game in the second part of the year with more innovation, and that has shown in our Dermatological Beauty division performance, which has clearly benefited from new launches on the second part of the year. And it shows, again, if you have the right playbook, if you adapt your engagement strategies and have better new products, you can accelerate again. We have had lots of victories in CeraVe turnaround. SkinCeuticals, our aesthetics brand has become billionaire in Euros. That's joined our roaster of billionaire brand and Vichy that some of you may know, has rebounded. But more importantly, this portfolio that we have allows us to cover every price point from EUR 3 cream [indiscernible] in Brazil, where I'm going tomorrow to the EUR 450 Helena Rubinstein that's treasured by Chinese consumers, you have to have skin care for everyone, and that's what we have at L'Oreal. So we recruit new consumers in emerging markets. And of course, we accompany consumers in their aging journeys in the mature world. That's why our acquisitions matter. Dr.G, a Korean beauty brand, K-Beauty is hot. We have bought one. And Medik8, which is science-driven luxury will allow us to accelerate in skin care around the world. And finally, on skin care, it's truly an opportunity. I'll skip the body attack because we don't have a lot of time, but it's really that this longevity quest is really making people expand their beauty routines and their protocols. They want diagnosis that allow us to know what they truly need. They will use topicals like the one we're launching with Lancome Absolute MD. They will -- they are using devices, LED masks like the one we presented at the CES in Vegas and supplements. And all these extended protocols offer growth opportunity for L'Oreal because we are playing and we will be playing in each and every one of them. Thanks to our science. We have groundbreaking molecules in the pipeline from our advanced research. We are one of the only 2 beauty companies that has its own advanced research with partners from our ecosystem and tomorrow with the partnership of Galderma. So as you can see, we are stronger than ever. We feel stronger than ever. We want to accelerate because we think the beauty market is showing more and more dynamism. We want to outperform it. We have a lot of innovation in the pipeline, and we have this multi-division strategy that I have tried to outline for you, which makes us very confident that the future of beauty will be bright because it's expanding to these new adjacent territories I was talking about, technologies, categories or services. And because we have the teams, we have the means, we have the science, we have the resources to invest behind this science, and that's what makes us very confident that we will continue to win across categories, across channels and across regions. And because we are here in the U.S.A., I accelerated a little bit my presentation to make sure I leave time to David Greenberg, who's the Chairman of L'Oreal in the U.S.A., and we will give you some news of this beautiful market, which happened to be our biggest one. Thank you.

Thank you, Nicolas, and good morning, everybody. It's great to be here. And of course, you know perfectly well that L'Oreal has been in the U.S. for some time, but we haven't taken this opportunity to really share it with you directly, and I thought this was the perfect moment. Just a couple of years ago, we celebrated 70 years in the U.S., and it's an extraordinary history. Personally, I've been a part of it for over 30 of them. And I can say the spirit of our company in the U.S. is a spirit of entrepreneurship and a spirit of challenger, which is interesting because we're the global leading company, but we start from very humble beginnings. And while today, we're the #1 subsidiary in the group, we're about 27% of the turnover of the group. We're also very -- we've built an ecosystem over these years that has made us very self-sufficient in many ways. We produce over 3/4 of everything that we sell in our market locally in our zone, thanks to 6 factories and an enormous footprint of retail stores as well, which is very unique for our business because we have a direct connection with our consumers across brands like Kiehl's, Aesop and even in Professional Beauty, where in the Professional Products division, we connect directly with over 1 million stylists through our salon-centric distributor, which operates both stores, e-commerce, of course, and direct sales. And an amazing team in the U.S. of over 13,000 of us. You don't see charts like this often, but I love this chart, not because the first bar is more or less the year I started, but because -- with the exception of 2 moments in the last decades, which were the financial crisis of 2008 and '09 and, of course, the pandemic, we've had consistent growth in the U.S. market for all of these years. We surpassed $10 billion in 2023 and close to $12 billion in this most recent year. So we're a very scaled subsidiary in a very dynamic market. And I hope if you leave here with nothing else today is the fact that we consider this market to be a very high potential growth market for years to come. Why can we continue to succeed in this market? It has a lot to do with the way we built our conquest, our foundation in the U.S. over these years. With the acquisition of Maybelline some years ago, we put ourselves firmly planted in the mass makeup market with a brand that was very deeply penetrated in the market, which then allowed us to ignite our sales across multiple brands. We added more later. In Pro Hair, where we started very small, we acquired the #1 and the #4 brand at that time. Now we own #1 and the #2 brands in addition to some of the new brands coming on board, and we've built the salon-centric network over these years through acquisition and through organic growth to give us those direct connection with our customers. We identified the Indie makeup phenomenon many years ago. And in fact, we acquired the OG of Indie makeup with Urban Decay in 2012 and then more in the digital era in the social media era with NYX Professional Makeup, which so far this year seems to be off to a fantastic start. I think we're the fastest-growing cosmetics brand in the mass market year-to-date 2026. And finally, accessible dermatology. We've seen this phenomenal surge of consumers interested in self-care and taking care of themselves and their skin is, of course, emblematic of health. And with the acquisition of CeraVe, which by now you know a lot about, but from under $100 million in sales to well over $1.5 billion in a very short period of time. It's been an extraordinary success, not just in the U.S. but globally. We continue to optimize our Couture business as well. Nicolas shared a lot about that with you. I won't go into it deeply other than to say that thanks to this connection with culture and this connection with celebrity and this connection with sport and this connection with social media, these brands have become loved by Gen Z and even Gen Alpha, which gives us enormous potential to continue to grow these brands in the future. The aesthetics trend, I think we're all keenly aware of our population of not just the affluence in the age, but the fact that more and more is available to us. Over 20% of people are on GLP-1s, 1/4 of women over the age of 45 have done or are contemplating some kind of aesthetic procedure. So this segment is a powerful segment of growth, of profitability and of connection because we're, in fact, present in over half of all dermatologist offices in this country and in addition, over 85% of all med spas. So these brands like skin better science and SkinCeuticals are the brands of choice for the professional world. And finally, where beauty wellness comes together, experience, fragrance, care and this combination of efficacious as well as pleasurable is an enormous explosion in our country and in the world, frankly. And with the acquisition of youth of the people in addition to Aesop, these are brands that are firmly implanted in these places. So we are the #1 beauty company in the U.S., somewhere around 13% share. So lots of upside, plenty of room to continue to grow, 2x the size of the #2. And I think you got from Nicolas presentation that what this provides us is the resources and the ability to amplify from the position that we're starting in. We're #1 across all of our divisions and pretty well balanced as well. In categories, it's the same. Our weight of business by category, you can see here, hair is the biggest at 31%, followed by skin, then make up 26% and fragrance at 13%. And we know the fragrance story has been a powerful engine of growth. We're pretty much aligned with the market everywhere. However, in skin care, we have a lot of upside where skin care is 37% of the U.S. market, and we're only at 30%. And we have the brands, we have the technology and we have the innovation. We also have the top ranking brands. Why is this important? We play the pricing, of course, but we can also play very carefully consumer segmentation. We don't have to be all things to all people with every brand. In makeup, we occupy the #1 3 and with NYX, we're just outside of the top 5, but one of the fastest growing. Top 3 in hair, in skin care with CeraVe #1. La Roche-Posay is now in #3 and SkinCeuticals #4. So these brands are big and powerful brands in this market. And this year and just recently, this is new data that YSL has taken over the #1 fragrance position in the U.S. market, which is an extraordinary achievement over many years of innovation, excitement and building connections with consumers to see that happen is quite phenomenal. And then up and comers that are quickly becoming top 5 like Valentino, soon, we're going to see Prada there and many more. The market, as we know, is a big market, somewhere around EUR 74 billion, growing at 4%. So we know this market is critical to the success of the group. And we know, of course, that it has a vitality, thanks to the economic engine of the U.S. We're often asked whether or not this market has continued growth potential. And you heard it from Nicolas. I mean, this is a market that's an offer-driven market. So the more we put into it, of course, the more we stimulate the growth of the market. Historically, there was a CAGR of around 4%. When you take out the periods of the pandemic and then the pandemic recovery, we also saw most recent years somewhere around 4%. And frankly, I'm a firm believer that this will be the baseline, and it could even be a little bit better than this. Why? Because these are still preferred categories. So this is data from Circana, but what it says when you compare us to a number of other categories, we are a preferred category. Therefore, we're one of the fastest-growing categories with the exception, it looks like of toys and video games. So what can we say? Pretty much everything else is in low growth. And it's both value and volume, which is important because it's more consumers and more usage opportunities. And in the U.S., we're gaining momentum. We outperformed the market in every one of our divisions by considerable margin, and you can see that on this chart. And this demonstrates that our innovation is working and our marketing engine is working. And of course, we're not starting from a base of 0 here. So this is a very exciting results to see and to share with you, and we see it continuing into this year. Why is this market so important to us and so important to the group? Diversity, you're well aware of it. But what matters the most is that each generation has a unique contribution to make to the beauty business and of course, to our business and to our brands. From Gen Z that loves so many of our brands, both fragrance, skin care and makeup, all the way to men who today are comprising only 10% of beauty business and have so much more room to go. And we've seen what has happened in men's fragrance and now even in skin care. And the boomers, of course, have so much potential, especially as science and technology brings more options for them. Today, it's incredible. 40% of the beauty spend is driven by millennials and younger. And almost half of those consumers are now diverse in some way, skin, melanated skin, hair texture, and they're looking for different kinds of products, and they're embracing the brands that we have in our portfolio that bring that kind of innovation. Almost 1/3 of the spend comes from the affluent consumer who comprises less than 10% of the U.S. population. And these consumers are not just trying things, but they're very ambitious and aggressive in the kinds of things that they want to do, especially in skin care and in hair care. This 55-plus age consumer, not only are they populous and not only do they have the disposable income to spend, but they're interested to know what they can do to improve the way they look, the way they feel, and it's intrinsically linked to self-confidence and to longevity. And of course, this is an enormous potential for us over the years to come and a great dynamic. And you can see here, we have some brands that are particularly dialed into each one of these segments, brands like Redken and NYX on Gen Z or Urban Decay and Maybelline on the Millennial or Lancome and L'Oreal Paris for the boomer and for men, of course, brands like Kiehl's and Yves Saint Laurent. So very much connecting these brands to these consumer targets to allow us to deepen the penetration, continue to recruit and bring new offers to these markets, things that you've seen powerful innovations and successes over these years, like the new YSL Blush, which was the must-have item for millennials or Ralph's Club, which was the launch we did with Usher under the Ralph Lauren brand last year or P-TIOX, which is your companion to Botox or in some cases, your replacement for Botox. So all of these brands very dialed into these consumers. And of course, at all price points from where we play an under $15 brand on TikTok Shop all the way through to the most expensive products, be it at Sephora or Macy's, Ulta or anywhere else. Building this connection is what makes the difference for us. And we are, of course, at our heart, a marketing company obsessed by the consumer, but this has changed from the analog world to the digital world, from the cookie world to the individual ID world and now in agentic commerce and AI. But it all starts with 3 things. First is rapidity of movement, understanding culture and being connected. Second is being creative and third is scaling. In order to scale, of course, you need to build enormous reach in a very authentic way. So I'm going to play you some examples of some of the things we've done recently and... [Presentation]

So I'm going to finish on the topic of our go-to-market. With all of this excitement, of course, we have to be where the consumer is, and we've seen this enormous shift to e-commerce. We're also outpacing the e-commerce market. So overall, we grew at 14% versus the market at 6% in e-commerce. And of course, you have to play all of your e-commerce partners. We performed pretty well across most of them. We have the #1 position on all of our e-commerce partners from Amazon to Sephora with the exception of Walmart, where I think it will happen pretty soon. How do we do this? We do this by being very linked to content to how consumers make choices and to provide the kind of data, the kind of content and the kind of information that helps them make the right choice with partnerships with ChatGPT, where we load our own data directly into ChatGPT so that they don't have to scrape and we can make sure that it's the kind of data that the consumer is looking for and partnerships with Target and Amazon on those same kinds of topics. We never forget about brick-and-mortar. It's still where we showcase our brands in the most powerful way. And importantly, and I think you probably understood that from this week and everything else that's going on, most of our retail partners are investing in beauty. They've understood that beauty is the future of their business. It's where the consumers are most engaged. It's higher margin, and it also showcases what they do in a more powerful way. So with that, lots more consumers, lots more connection with those consumers, lots more conversion to our L'Oreal brands and products and lots more growth in the U.S. So with that, I thank you all for listening, for being here. And I think we're probably taking questions, I'm guessing, in the next room.

I thank L'Oreal for the presentation. Appreciate it.