L'Oreal Co Eur Ord

Welcome to the conference call regarding L'Oréal sales at 30th September 2025. The conference is about to begin. And I'll hand over to Eva Quiroga. Miss Quiroga, please go ahead.

Yes, thank you very much. Good evening and thank you for joining us for L'Oréal's nine-month 2025 sales call. With me are, as always, Nicola Hieronymus. Hello. Christophe Babule. Hello, good evening. and Laurent Schmitt. Hello, good evening. Nicolas will briefly comment on the numbers and the acquisition of caring beauty we announced yesterday. We will then open up for Q&A and aim to finish at 7.30. Over to you, Nicolas.

So good afternoon, everyone. This is, I'd like to tell you about this nine months. First of all, about the market. At slightly over plus 3% in the first nine months, the global market remains dynamic. And in that context, our like-for-like growth sequentially accelerated, reaching plus 4.9% in the third quarter. That is, of course, adjusted for our IT transformation in the U.S. last year. As promised, the contribution from our beauty stimulus plan accelerated. We rolled out our first half innovations and launched new products, including our two latest fragrances, Prada's Paradigm and Miu Miu's Mutine. Both are off to a good start. If I had to name some of my key highlights for the first nine months, I would say the following. First, the gradual recovery in our two largest markets, mainland China, where we clearly outpaced the markets, and the US, where CPD gained market share in each of its categories for the first time since 2021, proof that innovation really is a game changer in beauty. Second, the ongoing strength in hair care and fragrances, now 30% of ourselves, but also the bounce back in makeup, where we grew almost three times above the market. And third, the continued dynamism in e-commerce that plays to our strength, enabling us to outperform us in the fastest growing channel. On Sunday night, we announced the acquisition of Caring Beauty, including the Crete Niche Fragrance brand, as well as the beauty and fragrances licenses of Balenciaga, Bottega Veneta, and, when available, Gucci. I'm extremely excited about this transaction. Not only does it cement our existing leadership in luxury beauty, I also see enormous potential for each one of these four brands. And we have proved our ability to turn licenses into billionaires. Today, YSL is as big in beauty as it is in fashion. Prada crossed the 500 million euro mark just four years after joining the Lorelle Lux family. The future truly smells good, and I look forward to writing this new chapter. And I'm truly delighted to do it with Kering, a trusted partner for more than a decade and a half. And with that, we are all ready to take your questions.

Thank you, ladies and gentlemen. If you wish to ask a question, please press star 1 on your telephone keypad. Please use your handset before asking your question and set your microphone on mute when you ask your questions. The first question is from Guillaume Delmar of UBS. Please go ahead.

Good evening, Nicolas, Christophe, Laurent and Evan. Good evening. Two questions for me. The first one on North America, because you had a slow start to the year. If I remember well, market growth accelerated from the middle of Q2 to And I think since then, we've seen some pretty impressive scanner data for L'Oréal, particularly during the months of summer. So, a bit surprised that your adjusted like-for-like in North America was 3% in Q3. That seems to be a little bit of a deceleration compared to your adjusted like-for-like of, I think, around 5% in Q2. So, could you maybe help us unpack what looks like an apparent slowdown And is it maybe because of a material discrepancy between sell-out, selling in the region? I mean, any color on this performance would be helpful. And then my second question on North Asia. I mean, it's always a bit of a mixed bag with contrast developments between travel, retail, mainland China, and Japan. Wondering if you could touch a little bit on all the different moving parts for Q3 and what did drive this material step up in like-for-like performance? And maybe more of a crystal ball exercise at this stage, but any indications on the upcoming 11-11 and whether the nice developments in mainland China in Q3 could be maintained or even accelerated in the fourth quarter? Thank you very much.

Okay, so we'll share the first question with Christophe and I'll tell you about the news from the market itself and our performance. And then we'll try to explain... the differences between sell-in and sell-out. But I think the first and most important thing to say is that we've indeed seen, you know, real acceleration of the North American and particularly the U.S. market over the year and, as you said, over the summer. And our outperforming has increased, particularly in CPD. where we were below market for the beginning of the year, and we have accelerated. So if I look at the total beauty market, excluding hygiene, where we don't compete in the U.S., the Q1 was flat, Q2 was at plus 2, and Q3 was around 3.9 or close to 4. So it's a real acceleration of the market, and we've been, indeed, outperforming the market in North America thanks to an acceleration in mass, a continuous stellar performance in PPD, in the professional division, which is even before the addition of ColorWire, which joined us in September, was really great. And luck has been... pretty consistent overall over-performing the market. LDB is recovering, fantastic performance of SkinCeuticals, good performance of La Roche-Posay, and CeraVe has finally gone back into a slightly positive territory, not just because of hair care, which is doing good, but also thanks to moisturizers. So, Christophe, on the discrepancies between selling and sell-out, but overall, as you can hear, I'm pretty bullish for the U.S., and I'm very happy with the performance of our CPD teams, which is, of course, helped by the fantastic comeback of L'Oréal in makeup, continuous performance in hair care. And we hope that the market will remain as dynamic in the later part of the year as it was in Q3. Christophe, maybe on selling?

Yes, of course. I want to reinforce the message that the fact the market has been accelerating in the Q3, so that's a very positive figure. And it is reflected also in our selling. Adjusted of the IT transformation impact, North America has been growing at an adjusted rate of 3.8%. And lifting, therefore, the filter growth at the end of September at 3.1%. And I think when we look at the sellout, L'Oreal is overperforming the market. So the only discrepancy is on MDB, where we still have the problem of inventories compared to last year. But besides, on all other divisions, we see the sales improving.

Now, if we go to North Asia, you're right to say that it's a mix of different situations. Let's start with what's, I would say, going in the right direction, which is mainland China. The market is now year-to-date at plus one, so it has continued to slightly improve. It was flattish in the first half. Our estimation of the Q3 was around plus 3. I'm always very careful about China because one quarter doesn't make a trend. But overall, the market has gone into positive territory. It's been boosted by, of all our channels, the one that has improved the most in Q3 is luxury, which has allowed us and which we have outperformed, which has allowed us to improve our performance versus the market, the mainland China market. So overall, China has stabilized. We see a slight uptick in consumer confidence. We see a stock market that has come back to the 2019 level, which is good for luxury consumers' morale. But I wouldn't get overexcited because there are other macro employment statistics that are not as positive. But let's say it's in positive territory. And that's true also for other markets, such as Japan, which is benefiting from Chinese tourists, from Korea. So overall, that's going in the right direction. What's still not improving is travel retail. It's improving a bit, but it remains in positive. in negative territories. Travel retail Asia is negative in single digits, but as we commented in our last call, a significant difference between the downtown stores, which are double digit negative, and the airports, which are doing better. So, travel retail is not positive. Hong Kong is in the same bag, but overall, all in all, you saw the results. As we're entering the end of the year, of course, the big question will be, just because you were talking about should we see a repetition of this improvement on Q4. As you know, this is the big moment for Double Eleven, which is a big promotional event in China. It's too soon to say anything, so it will, of course... The performance of Q4 in China will be, of course, very much dependent upon the dynamism of W11. So too soon to tell. I will tell you as soon as we know. But overall, we are gaining share in China on three divisions out of four, big time in professional dermatology, and we continue to gain despite our high share in luxury. and we are below market on CPD, where the competition is fiercer. But the good news is that the proportion of luxury is increasing, so that's good for us.

Thank you very much.

The next question is from Charles Scotti of Kepler Chevreux. Please go ahead.

Yes, good evening everyone. Thank you for taking my questions. I have three. The first one, I don't really expect you to answer this question, but I will ask anyway. Could you give us an idea of how the 4 billion tag is split between the acquisition of Creed and the beauty licenses? And my second question is still about the strategy deal with caring. You mentioned that you are creating a 50-50 joint venture. Could you give us more details about the services and product that might resume from this? And could you also tell us what know-how and expertise caring will bring that you do not already have internally? And my last question is about the Armani succession. You mentioned being interested only in the beauty business. Could you eventually consider an operation similar to the deal of Estée Lauder with Tom Ford, i.e. acquiring the brand and then granting a long-term license for the management of the fashion business? Thank you very much.

Okay. Maybe I can take the first one. Okay, if you want. So, just want to... remind one point, which is very important, that the price of the deal encompasses the totality of the scope and includes 100% of the acquisition of the House of Creed together with the long-term license for the right fund for three emblematic houses. And the price, of course, is for the total deal. And for the time being, there is no way to disclose what is our own valuation on those different assets.

On the joint venture on well-being, longevity, I mean, it's very early days to give you details. It will take the form of a joint venture between Caring and L'Oréal with a clear goal, which is responding to the strong demand for services and experiences linked to well-being, health, and longevity. And, of course, you know, it's an ambitious project. We put joint resources in it. We will bring our expertise of, you know, skin care, of longevity, the longevity research that we have. We will also bring what we've learned from our you know, our services we offer in the Caritas store that we have in Paris, but Kering will bring with their expertise in experience luxury, their clienteling, they are used to focus on high net worth individuals who are the primary target of this type of business, and I think it will be a you know, a great collaboration. A bit too soon to tell, to be honest, but we are both very excited about it because it's one of the megatrends of the moment. I think you will not have missed it, so more in the weeks and months to come, but that's how we see it, and we're really excited about it, and as far as the The Armani brand or company, Armani Spice Concerns, I will repeat what we have said, is that first of all, I never want to miss saying it, is that we are all very sad of the passing of Mr. Armani, with whom we've collaborated for 40 years. We are very honored that in his succession and in the instruction that he left with these heirs, L'Oreal is considered as a potential acquirer, at least of the first part, of the first 15%. We said we would consider all the options. It's a bit too soon. The family is mourning and focusing also on driving this business. And, I mean, the only important thing I can confirm today is that the the deal we just did with Kering does not prevent us from considering any of the options that are on the table with Armani. So we'll rediscuss it in the future.

Thank you very much.

The next question is from Olivier Nicolai of Goldman Sachs. Please go ahead.

Hi, good afternoon, Nicolas, Christophe, Laurent, Eva. I've got two questions, please. So going back to the deal with Kering, I think you mentioned in the press that you were expecting Creed sales to potentially triple over time. Could you give us perhaps your initial impression on the brand and where do you see the main source of upside? And then just regarding Gucci, I think you mentioned that, I mean, essentially you said that it's by 2028, I believe. But could you see a scenario where you could get a license before that date? And in the meantime, if you can't, what is the risk that the Gucci license, to some extent, could deteriorate between 9 and 2028? Okay.

So, you know, as far as Creed is concerned, House of Creed is... It's a beautiful brand. It's the number three brand in the top three of the niche fragrances markets, which happens to be the fastest growing part of the fragrance market itself. The niche products are more valorized, around 200 euros and more. It's been outpacing the overall fragrance market, and it happens to be a segment where We are just represented by the collection inside our couture brand, so we are underrepresented and undershared. So for us, it's already a step, a strong step in this market, and we think we plan to accelerate both because we think this part of the market is going to continue to grow fast. You know, I just come back. I was... For the last couple of weeks, I was in a trip in Saudi, which is a fast-rising market, which, like the rest of the Gulf, has an absolute love for fragrances, and not just for blockbusters, but really for expensive niche fragrances that they layer. We see the same in other emerging markets, and of course we see this in the rest of the Western world. So we think that there is... going to be organic growth from the segment, but also that we will bring our expertise. We have, I think, proven that we have the capacity with our olfactive department to create one after the other, you know, great juices, great fragrances. And by the way, even though it's not the question you asked me, I'm happy to report that both Paradigm from Prada and Mutin from Miu Miu are off to a very good start, both entering the top 10 in the market where they have been launched. So we think we can bring our knowledge in fragrances and also our clout, because with the number of brands that we have in beauty and in luxury beauty in particular, when we are negotiating with retailers, with space, et cetera, we can probably have some have some leverage as it relates to Crete. So very, very excited about it and looking forward to working with the teams that have already built such a great success story. So as far as the Gucci license, you know, it belongs to Caring to comment on that. I never mentioned the timeline, but it seems that the market has a pretty clear view on it. So we are not, you know, we're not privy of their discussions and it wouldn't be appropriate for me to discuss neither with Scotty nor about the details of this part. So we'll see. For us, we are patient and we'll wait. And as far as your question on deterioration, you know, we've had experiences in the past of taking over licenses from other big groups. In the end, it has always gone well, and these brands are brands that have passed the test of time, so I don't think a couple of years can make a huge difference.

Thank you very much.

The next question is from Ashley Wallace of Bank of America Merrill Lynch. Please go ahead.

Hello, good evening. Thank you for taking my question. I have three, please. The first one is on 2026.

I'm sorry, we can't hear you very well.

Is it better now?

A bit better, yeah.

Okay. So my first question is on 2026. Last year at the Q3 results, you very helpfully gave us some market growth expectations for 2025. I was wondering if you'd be willing to share your market view on 2026 already, and do you think Next year, L'Oreal can see stronger organic revenue growth than in 2025. And if so, what are the drivers of that acceleration, maybe from a regional perspective? Then my second question was a follow-up actually on the U.S. I think Christophe mentioned that excluding IT phasing, your sell-in was up 3.8%. And if I'm not mistaken, you said you estimated the U.S. market growth was at 3.9% for the quarter. So maybe if you can help give us a sense of your sell-out trends in Q3, because it sounds like sell-in was below sell-out, and therefore maybe we can also expect some type of restocking in Q4. What do you think about this? And then my last question is on fragrances. I think there's some debate now in the market that the fragrance cycle is slowing. Do you see any signs of this? It sounds like it's not impacted the launches for Prada or Miu Miu, but what about the other parts of your fragrance business? And then can you just remind us if... the sell-in for Prada and Miu Miu within Q2 or Q3? Or maybe across both quarters.

Within Q3. Thank you. Sell-in for Prada and Miu Miu within Q3. And by the way, our growth on fragrances at year-to-date is just shy of plus 10. And we are gaining share. And overall, our fragrances, you know, there are always some brands that, depending on their comparatives, that have highs and lows. But our fragrances are are doing great. We have multiple brands in the top 10 in both male and female. And Libre is number two female fragrance in the world. We've launched, as you said, Prada Paradigm. We've just launched also a new Ralph Lauren fragrance. Ralph was ushered as a spokesperson. So overall, our fragrance business is doing good. And the niche fragrance business is also continuing on the market to grow. So yes, the market has slowed a bit, but the fragrance market remains the fastest growing category of beauty. I think today we are probably slightly above mid-single digit for the market, which is twice the speed of the beauty market overall. So we remain very confident in in fragrance and we see it continuing to grow with several factors as we commented. Of course, the growth rate is slowing down a bit, but there are still more people using fragrances, more young people having this, what I would call the wardrobe strategy in fragrances, having several fragrances depending on occasions. By the way, what's interesting is that men's fragrances are right now going faster than female, which reflects the entry in the market of multiple young men and boys that are very excited about including Paradigm from Prada. So overall, I remain confident in fragrance, and I would say something on that. one of the consumer trends that we see everywhere next to the medical safety trend is this indulgence, feel-good. I mean, we all see the world we live in, and people want things that make them... I want the bliss of something that smells good. So overall, I remain confident on fragrances. I think your first question was on the U.S. Our sell-out in Q3 was... shy of plus six, so above the market. Then we have, of course, you heard the comparison of the IT system last year. Most of our divisions have, in terms of inventory, absolutely zero issue. We have, as always, a little bit of pipe of the holiday sets from L'Oréal Luxe, but like last year. So we, of course, everything would depend on the success of the holiday season, but as fragrances are overrepresented in this holiday season, we are, I think we are confident for the rest of the year. And I missed one question. I don't know. I don't know yet. I'm surprised that actually you said You said I gave a number in Q3 2024 for 2025 because it seems surprising to me.

I think you said that 2025 would be a year where you would have normal growth in line with pre-COVID level of growth or something to kind of talk about conceptually.

Yeah, yeah. Frankly, I don't know. What I know when I compare to other industries, I've looked at the list of consumer goods and other industries, and I don't see many – many industries that grow above plus 3, which tends to confirm that the beauty exception continues, whether, I don't know if we should call it the lipstick effect or the smell-good fragrance effect, but I think that the market has accelerated slightly in Q3, and hopefully it will continue to go in the same direction for next year, but frankly, with the world we're in right now, I'll refrain from you know, prognostics, if you allow me.

Okay, thank you.

The next question is from Celine Panouti of J.P. Morgan. Please go ahead.

Thank you very much. So, sorry, I was late joining. So, just following back on the discussion just now about market growth, did you mention what market growth was in Q3 last And are you still expecting, I think you were expecting about mid-single digit in the second half. Do you think that's happening? And can you talk about, it seems that China is slightly improving, but can you talk about what's going on in Latin America, Europe, from a market standpoint, and whether you think that mid-single digit is where the market can be at some point? Second question is on Europe. We have seen an acceleration. We are hearing nonetheless that the consumers are a bit more under pressure in that region. So can you talk about what drove that performance and what to expect from this market going forward? And maybe one last question on quite a big change in your executive board was announced a few weeks ago. If you can give us a bit of, you know, the rationale behind those changes. Thank you.

Okay. So I'll start with market growth. We consider that because every time we talk about the market, we don't have the full data. So we'll go back to the first part of the year, tell you what's our assessment of Q3 and how we see the year. But overall, we see that in Q1, the market was slightly above plus 2. It was just slightly below plus 3 in the first half, which meant Q2 around 3 and 4, somewhere like this. And our best estimate at this stage for Q3 is that the market growth was pretty similar. to that of Q2. So maybe a touch better than Q2 because, as you said, the Chinese market was a bit better. The U.S. was a bit better. Latin America was a bit softer, but still in the plus eight. So it's not a, you know, it's a good market growth, but it was softer than the first part of the year. And Europe was pretty... pretty stable with a robust around plus four. So it means that our assessment is that the market at the end of nine months is slightly above plus three, and that for the full year 2025, our estimation that it will be close enough to the plus four I was mentioning, but of course, You know, we know it's, as I say, it's money time at the end of the year between Chinese Double Eleven and holiday season in America and Europe. So fingers crossed, and we have lots of ammunitions to drive that market. It's an offer market. So that's my first take on the market.

Can I just... I'm getting there. Did you say Latin America was plus 8? Can you just then explain why you had a much weaker performance in the quarter then?

Just what? The plus 8 on Latin America? The market was around plus 8 and we've had a pretty good performance overall In Latin America, the market was at plus 9 in the first half, plus 8 in the second. And in sellouts, year to date, we are above the market, plus 10 on the market at plus 8, so we are not underperforming. We never look at a quarter over a quarter because there are some fluctuations of invoicing, but three divisions are outperforming, PPD, LOX, and CPD, big time with hair care, and we're slightly below on LDB. So and selling should be viewed on a nine-month rather than quarterly basis because there are, again, several IT-related factors that are distorting the quarterly rate. So, no, we're very happy with overall our Latin American situation, and the market is a tiny bit slower, but as I said, plus eight is a pretty decent growth number, and lots of Lots of positive things overall in Latin America. On Europe, I think the good performance came from market share gains. We've been gaining market share in, if I look at nine months, we are gaining share in three divisions out of four. As in the total group, the gaining is strongly on PPD. on luxury and at market level on dermatology and slightly below on mass, but again increasing and improving as we do in America with a strong comeback in makeup with many initiatives doing a bit better. So that's the situation in Europe. I think overall what you have to understand, because it's a bit the same situation in most regions, We really see the acceleration of our new product. We talked about the beauty stimulus plan. It gave us an extra 150 basis points of growth, approximately, and most initiatives are doing great. It's very true in makeup on all divisions. It's very true in hair care. We have many initiatives coming in skin care, and that's going to be happening in China with Elena Rubinstein and Lancome. And as I said, fragrances are doing good. So the launches are working, and as it's an offer market, that's what makes us confident. And your third question, Céline, was?

Your executive board.

The changes in the executive committees. Well, you know, as always, we at L'Oréal, we try to give our talents and our leaders opportunities to continue to prove themselves and to bring a fresh view on the different regions. So we also had the desire, considering the importance of the North American market and the need to have very strong relationships with the authorities, with the regulators that are current, the CEO, the great David Greenberg, who's one of our strong American talents to become chairman because I want him, and I'm going to be, by the way, with him in Washington to have him to focus and dedicate his time to this part of the both L'Oréal reputation, but also all the work we do on regulation. And that has given me the opportunity to appoint Alexi Perakis, who's done a phenomenal job on CPD and with a strong comeback, particularly in the North American business on the third quarter, to take America. And then, you know, a chain reaction, Fabrice Megarban, who was in charge of both transformation and our chief growth office, is going to take... The mass division is going to be replaced by Vianney Derville, who is in charge in Europe, and again, a fantastic track record, great contributor of the last couple of years. And pointing to replace Fabrice, to replace, sorry, Vianney in Europe, Emmanuel Goulart, who was in charge of travel retail in prior to that. He was CEO of L'Oréal Italy. And that gave me the opportunity to bring in the COMEX our first Chinese woman, Eva Yu, who is going to be taking over Travel Retail, where she had been for a while the head of Travel Retail Asia. So it's the typical L'Oreal talent development, bringing fresh blood, fresh ideas, and fresh vision on every part of the business and continuing to grow people. This is all going to be implemented on the first of January. They're all in handover right now, and I'm pretty sure this is going to be another source of acceleration in the months and years to come.

Thank you so much, and congrats for the deal yesterday.

Thank you so much. Thank you.

The next question is from Von Udomsilpa of RBC. Please go ahead.

Good evening. Thank you for taking my questions. Two from me, please. The first one, could you talk about the level of impact of beauty stimulus plan in Q3 compared to your previous guidance that impact will be about 300 basis points versus last year in the second half? Is it there yet? And to follow up on that, I appreciate it's too early to talk about market growth next year, but I'll try another way. Any color you can give us on intensity of launch or beauty stimulus plan heading into next year and any category that you will be focusing? Thank you.

As I said, on next year, I'm not going to give you guidance. We've seen the progressive acceleration of the market between the first and second half, and We'll see how things evolve next year. What I can see, let's go back to the facts, because the facts are the following. U.S. market is getting better. SAP MENA, emerging in general, remained dynamic with a slight slowdown, but to a good level of Latin America, consistent growth in double digits of SAP MENA. Europe is quite stable, and we see China China has improved a bit in Q3, as I said, but I'm cautious about China because it's hard to know what the next event will truly represent. So overall, you have better America, at least at the same level, if not a better China, a stable Europe, and somehow a little bit of reduction of Latin America. So it means that the market next year should be a bit better than this year, but I'm being very cautious. As far as the beauty stimulus plan, it added 170 basis points in Q3, and we'll see what happens in Q4, because this is where the weight of fragrances will increase. We have still a few ammunitions, if I may use that term, that were not launched in Q3, That's where, you know, in the end, when I look at Q3, you had the things that were launched in the first part of the year, the new fragrances, but we still have a few launches in skincare in Paris, a few makeup initiatives, so hopefully it will increase even more in Q4. It's not an exact science, but what I know is that it's above last year by, yeah, 170 basis points.

Thank you.

The next question is from Sarah Simon of Morgan Stanley.

Please go ahead. Yes, hi. Just one question. Obviously this year was all about more innovation to kind of stimulate the market. How should we think about that in the context of next year? So I'm not talking about the market. I'm thinking about whether you see the potential to maintain that level of innovation next year, or can you even do better? Thanks.

I think the answer is very clear. Yes, we want, need, and will maintain this level of innovation. It's clear that when the context is a bit less rosy, as is the world today, beauty has to play its role of bringing a smile on people's face, and we have to do our job in tempting consumers with exciting stuff. And we hadn't been doing it enough the prior year because probably there was tailwinds that were carrying the market. Now we have to carry the market, and we do it. We do it both through the launches that are being launched now and that will, most of them being successful, carry over for next year, and we, of course, that's what I spend my days right now in the meetings, is reviewing the plans. We have strong plans for 2026, so we want to keep that pace very clearly, and there is something that we haven't discussed so much in the questions we've had, which plays also a role in our capacity to overperform the market, is the role of digital and e-commerce. When we say the The market is growing a bit about plus three. Probably the growth rate of e-commerce is more than twice that. And we grow, our e-commerce growth is at plus 12% right now. And we are really doubling down on that because it allows us to reach new consumers, whether in India, in Saudi, in the U.S., or in China, where it's the largest part of our business. And e-commerce also allows us to penetrate much faster with new products or continuing to animate an existing brand. I think in the current context where in the beauty world offline or brick and mortar is a bit more stable and where e-commerce is more booming, that helps us overperform and that's what we intend to continue to do too.

The next question is from Jeff Stand of BNP Paribas Exxon. Please go ahead.

Good evening, everyone, and thank you for taking my question. Just a point of clarification. I think you said on North America that sell-out was 6, adjusted sell-in was 3.8. But I think you also sort of suggested there weren't really any inventory issues. So I was just sort of trying to square that circle, if you like. If you could elaborate, that'd be brilliant. Thank you.

Frankly, I don't have more details than that. Maybe, Christophe, you want to jump in? No, I just want... The acceleration of make-up plays a role in our own acceleration.

The category mix is the slave, but maybe, Christophe, you want to... Yes, I just want, again, to restate exactly the growth. North America in Q3 adjusted is 3.8, and therefore, accumulated adjusted is 3.1. Again, we had a very strong Q3 in North America, And this has to be compared, of course, with the situation of the market, reminding two key important factors. First is the fact that we have a business in North America that is heavy-weighted on makeup. And as you know, makeup is not the most dynamic category right now, even if it's recovering. And also, there is a part of the market where we are not there, and here I refer to the mass fragrances and hygiene, where also it accounts only 2% of our sales in the U.S., while the market is 14%. So, what is important is to see really how our divisions are competing in their own territory, and that's an area where we are very proud, because in fact we are still gaining market share, recovering, and that's why overall the situation of our business in the U.S. is nearly on par with the market, despite those unfavorable factors, footprints.

Thank you very much.

The next question is from David Hayes of Jefferies. Please, go ahead.

Thank you. Good evening, all. Just three clarification questions, I guess, on my part. Just to come back to LATAM, just so you talk about the sellout at 10%. But I think that's 4.4 organic sales growth with no adjustments involved there. So just trying to understand, is that a disconnect in terms of shipments that we might catch up in the fourth quarter? Just trying to understand the fourth quarter dynamics. And then going back again to the U.S., sorry, just on the U.S. dynamics, you're doing 3.8, as you say, underlying. I think you said the market did 3.9. Normally you're well ahead of the market. I guess what you just said is that you're in line with the market despite the the weightings of your business, but just again to understand, was there some deficit in terms of your shipments versus the sellout in the U.S., or is that aligned? And the last question, was this the one and a half percentage points you mentioned of innovation impact in the quarter? Is that at the group level? Is that the right percentage? interpretation. And is that something that goes out next quarter, or is that the biggest benefit in the third quarter, or is that something that could contribute even more as you roll those new renovations into next quarter?

Thank you. We'll see. In theory, it should go up a bit in the next quarter. It should go up in the next quarter because you have a bigger weight of the categories that are where we have had our biggest innovation, and particularly fragrances are that are very strong. And as far as the U.S., we were below market on CPD, which weighs a lot, and we have accelerated on CPD very significantly over the summer, particularly July, August, and September. Thanks to great performance, as I said, on hair care, and a great comeback on makeup with both L'Oréal Paris and NYX in particular, significantly outperforming the market. And I have to say that you're trying to get the number of recalculations, which I have a hard time now following. I think the message that you have to remember is that the U.S. market is improving, and we are improving faster than the U.S. market. That's, I think, the best... my best shot at your question. And you want to say a word on Latin America, Christophe, or you want me to take it? On Latin America, we look at the performance on a nine-month basis, and we're indeed roughly at plus 10 in sell-out on the market at plus 8. Thank you.

The next question is from David Damaya of CIC Market Solutions. Please go ahead.

Hi, good evening. My question has already been answered, but I also have some follow-up questions for Nicolas after this very interesting interview you gave with Luca De Meo in Le Figaro. So the first one is on Saint-Laurent-Bauté. Can you confirm the brand is generating today more than $2 billion Euro in consolidated sales, not at retail value. And the second one on Gucci, in the interview, you gave quite bullish comments on the long-term potential of the license. So do you think Gucci Beauty could become, in the long term, your biggest couture brand? I mean, bigger than Yves Saint Laurent Beauté?

Well, you know, first of all, I can confirm that Yves Saint Laurent is bigger in net sales than 2 billion euros. It's actually not far from 3, so it's one of the successes we are the most proud of. It entered the top five worldwide of luxury beauty, and both with great successes in fragrances, but also particularly in makeup. And as far as Gucci, I don't have the exact numbers and data of their sales, but we know it's significantly smaller. And as a fashion brand, Gucci is bigger than Yves Saint Laurent. So in the long term, over the 50 years we are talking about, which is the term of the licenses that we will get when available, I think there is indeed the potential for good cheese to become, I don't know how long it would take, but it can catch up with Saint Laurent, yeah.

Considering that the cheese is probably three times the size of Saint Laurent, of course, it gives the potential a lot of... Okay.

The next question is from Patrick Folan of Barclays. Please go ahead.

Hey, good evening. Thanks for taking my questions. Just within DERMA, outside of this sun care impact, what was the growth of underlying skin? It would be helpful to maybe know how the market is performing today versus how L'Oreal is performing. And maybe if you could split that out, how CeraVe and La Roche-Posay are holding up. And maybe, secondly, just a quick one in light of the caring deal. Does this change your thought process regarding the Golder mistake at all? Thank you.

Okay. So, on LDB. So, indeed, LDB, the first thing to say is that it's the one division where there is still a significant discrepancy between our sell-in, our invoicing, which is a bit less than four, and our sell-out, which is... around seven. The big difference comes from Europe, where indeed we're still offsetting the inventory of the sun care season last year. It's more important to look at sell-out to give you a good perspective. Then I'll tell you about the brands, as you mentioned. The market in Dermo has been slowing. It's globally at plus five after nine months. And it's mostly the North American market that has slowed down with weakness in drug stores and probably a bit cautious consumption of this category of products. L'Oreal is well above that market. We grow at 1.5 times the market, especially in North Asia. In North America, we are going three times the market. So we continue to be healthy in sell-out on the market that's a bit slower. We have, in terms of brands, the strongest momentum right now is in brands that are related to aesthetics, and I'm thinking about SkinCeuticals, which has a double-digit growth, and it's true, it's very strong in the U.S. as it is in China. Haircare is very strong also, both with Dercos and CeraVe. And La Roche-Posay is very healthy. CeraVe, which has gone back into positive territory in the U.S., which was very important to me, particularly in moisturizers. So I think we are now on the upward trend on CeraVe. And we have a number of initiatives coming. On La Roche-Posay, we're launching a new relaunch of Yellow B5, which is one of our best sellers in anti-aging, both with a serum and a cream. We have new intense moisturizers coming on CeraVe. We have acne patches coming on CeraVe. So we continue to believe very strongly in the power of dermatological beauty and of brands that are correlated to the world of aesthetics, such as SkinCeuticals, which is Which leads me to a perfect segue to the question you asked me on . Right now, nothing's changed. The fact that we did this great partnership with and deal with doesn't change the situation on . There's nothing new. We are still in our observation process and nothing more to say on that topic.

Thank you.

The next question is our last question, and it comes from Robert Ottenstein of Evercore. Please go ahead.

Thank you very much. I want to build on one of your prior comments about the importance of e-commerce to your business and the beauty business. So perhaps just narrowing things down on the U.S., Amazon has become an important channel now, and you've done a terrific job with Lancome there, I think, as the pioneer on prestige beauty. So I was wondering if you can talk about the impact you see of Amazon's success on the growth of the beauty market in general, channel dynamics, and your strategy. Thank you.

Well, I must say that, indeed, first of all, we are very happy with our performance in e-commerce in general. As I said, we're growing double-digit. It's around getting closer to 30% of ourselves and 28% as we speak today. And our e-commerce strategy relies on multiple partners from different you know, pure players such as Amazon, OT Mall in China, or JD, social commerce, and of course the e-commerce platforms of our brick-and-mortar partners, be it Sephora or Walmart in the USA. But I must say that overall we are, you know, very happy of the situation with Amazon because it allows our brands a brand to reach a larger number of consumers. And, you know, we were talking about the U.S., but 10 days ago I was in India where it's clearly a game changer for us because whether it's quick commerce or the traditional platform allows us to reach consumers all over the country, which we couldn't do before. But going back to Amazon, it's a very strong partnership. It's recruiting new consumers to the brand. It's also loyalizing some consumers that have discovered some of our brands in other channels. So it's a very, very dynamic momentum, and I think it is indeed contributing to the growth of the market. We saw at the beginning of the year in the USA where there was a little bit of – Lots of traffic in the brick-and-mortar world in North America and e-commerce in general and Amazon in particular were remaining pretty dynamic. So beauty is a category where you need the brick-and-mortar experience to smell, to touch the textures, to discover the brand and have the full experience. but it's also a category where when you fall in love with a given product, whether it's a new mascara, whether it's a fragrance you love, the capacity to replenish and sometimes to discover for categories that are a bit less sensorial, there's a perfect complementarity. So I really believe in what we call O plus O, online plus offline strategy, and that's how we grow our brands, making sure, of course, that their equity is absolutely well served and protected in every channel we operate in. I hope that answers your question.

Thank you.

Okay. Well, I think it was the last question. So a big thank you to all for your attention. And talk to you in February. Thank you very much. Good evening.

Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.