FRANCE: L’Oréal H1 Profit Hurt By Writedowns

L’Oréal has incurred a strong impact to its first half profit figures, due to impairment charges related to two acquisitions.

The cosmetics giant took a €447m charge in the half, which included €213m writedown on Chinese group Magic Holdings and a €234m writedown for Clarisonic. It did not provide details of their financial performance.

Those charges meant the operating profit rose by just 1.7% to €2.36bn, while gross profit grew by 1.6% to €9.33bn.  Meanwhile, sales were up 4.5% to €12.9bn on a constant-currency basis (+0.6% reported).

Sales at its Professional Products division were up 2.2% to €1.72bn on a like-for-like basis (-0.6% reported), the Consumer Products division reported a 4.3% increase to €6.15bn (-0.1% reported), the Luxe division saw sales grow by 5.6% to €3.6bn (+3.1% reported), while the Active Cosmetics division generated a 5% increase to €1bn (+0.3% reported).

L’Oreal said it continued to face tough conditions in Western Europe due to a “very difficult market in France”, but noted that growth was accelerating in North America. It also continued to do well in emerging markets, with Latin America and the Africa & Middle East regions showing particularly strong growth.

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