L'Oréal: 4% Organic Growth, Proposed Dividend Increase
L'Oréal has released its 2025 annual results, marked by an acceleration in organic growth to 4% and an enhancement of its margins. The group also announced the strengthening of its strategic portfolio through the acquisition of Kering Beauté and an increased stake in Galderma.
Financial Performance
L'Oréal's group revenue reached 44.05 billion euros as of December 31, 2025, up by 1.3% in reported figures. On a like-for-like basis, that is, with identical structure and exchange rates, revenue grew by 4.0%, in line with the accelerating momentum announced quarter after quarter. Growth at constant exchange rates was 4.9%, while currency effects had a negative impact of 3.6% over the year. The net effect of structural changes stood at 0.9%. This growth was achieved in a context marked by unfavorable exchange rates and penalizing customs duties. The group highlighted a strong recovery in the second half of the year in its two largest markets, the United States and China, while continuing to expand in emerging markets. All divisions of the group contributed to this growth: Professional Products posted a 7.5% increase on a comparable basis, Consumer Products grew by 3.5%, L'Oréal Luxe by 2.8%, and Dermatological Beauty by 5.5%.
Margin and Profitability
The gross margin stood at 74.3% of revenue, improving by 10 basis points. Operating income increased by 2.4% to 8,891.9 million euros and accounted for 20.2% of revenue, up by 20 basis points. This improvement was achieved thanks to productivity gains offsetting the effects of exchange rates and customs duties. Research and innovation expenses remained stable at 3.1% of revenue, while public-promotional expenses also remained stable at 32.2%. Commercial and administrative expenses decreased by 10 basis points to 18.8% of revenue. By division, the profitability of Professional Products was 22.9% of revenue, up by 70 basis points, that of Consumer Products was 21.4%, up by 30 basis points, that of L'Oréal Luxe was 22.4%, up by 10 basis points, and that of Dermatological Beauty was 26.1%, stable compared to 2024. The net income attributable to the group amounted to 6,127.2 million euros, down by 4.4%, while net earnings per share were 12.71 euros, up by 0.4%. Net income excluding non-recurring items stood at 6,806.4 million euros. Non-recurring items attributable to the group amounted to 681.1 million euros net of taxes.
Strategic Developments and Governance
The group is accelerating its transformation with the strengthening of its brand portfolio. The acquisition of Kering Beauté enhances L'Oréal's leadership in luxury beauty with highly attractive brands and strong growth potential. Increasing its stake in Galderma allows L'Oréal to participate in the aesthetics market, a key adjacent area with strong growth in the beauty business. In terms of governance, the Board of Directors has decided to propose to the General Meeting on April 24, 2026, the renewal of the mandates of Jean-Paul Agon and Patrice Caine for a period of four years. The separation of the roles of Chairman of the Board of Directors and Chief Executive Officer is maintained. Jean-Paul Agon will be reappointed as Chairman of the Board of Directors following the meeting on April 24, 2026, subject to the approval of the renewal of his mandate. The Board has also decided to propose the appointments of Pablo Isla and Anna Lenz as directors for a period of 4 years, as well as that of Christel Bories. A dividend increase to 7.20 euros per share, representing a 2.9% increase compared to the dividend paid in 2025, will be submitted for approval at the General Meeting on April 24, 2026. This increase will be paid on May 4, 2026.
