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How are the two largest cosmetics companies in the world performing financially?
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Today we focus on two of the largest cosmetics companies in the world: L’Oréal and Estée Lauder. With the industry being worth an estimated figure of over $570B, how are its key players performing financially? We visualise each of their income statements for FY22, as well as breaking down their revenues further to see what their biggest money makers are.
L’Oréal’s Income Statement FY22
L’Oréal is arguably the world’s largest cosmetic company in the world. It has a huge market cap of €226B, which converts to about $250B. This is even larger than the likes of McDonald’s and Costco. In 2022, they made an impressive €38.3B in revenue. Their gross profit margin was 72.3%, fairly impressive when you consider that across cosmetic companies, the average is about 58%. They ended the fiscal year with a net profit of €5.7B, an increase of over 24% compared to 2021. Furthermore, their net profit margin was about 15%, considerably higher than the cosmetic company average of only 2%.
Revenue Breakdown: L’Oréal
Let’s break down L’Oréal’s huge revenue into its smaller divisions. They made a total revenue of €38,261M in 2022, and their top two divisions are responsible for almost 75% of this. L’Oréal Luxe, the highest earning division, is focused on luxury products, and includes high-profile brands such as Prada, Valentino and Giorgio Armani. Closely following Luxe is Consumer Products, contributing €14,021M to revenue. This division includes skincare, makeup, haircare and hair colour. Notable brands include L’Oréal Paris and Maybelline. The last two divisions: Active Cosmetics and Professional Products are centred around health-focused skincare, and salon products respectively.
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Estée Lauder’s Income Statement FY22
Estée Lauder made $17.7B in revenue for FY22, an increase of 9% from $16.2B in the previous year. Like L’Oréal, their margins are also impressive, with 75.7% gross profit margin and 13.6% net profit margin- both significantly higher than industry averages. Unfortunately, their net profit did decrease from the previous year where it was $2.9B.
They also recently released third quarter results for FY23, and it certainly didn’t impress as their shares took a dip. The company has forecasted lower weaker sales and profits than originally thought. This has been down to reportedly slower recovery in duty-free and travel destinations, particularly Asia.
Revenue Breakdown: Estée Lauder
Breaking down Estée Lauder’s revenue, it is obvious that there is a clear frontrunner. Skincare is the company’s largest division by revenue, responsible for about 56% of the total. The company’s skincare division includes notable brands such as Clinique and La Mer. Makeup is also a significant contributor, bringing in $4,667M of revenue, and MAC contributed to double digit organic sales growth.
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Great post