L'Oreal Co Eur Ord

Welcome to the L'Oreal 2026 Half Year Financial Webcast. The conference is about to begin. I now hand over to Eva Quiroga. Miss Quiroga, please go ahead.

Thank you very much, Eugenia, and good morning to all. And thank you for joining us for the presentation of our first half 2025 results. I'm here with our CEO, Nicolas Hieronimus.

Hello.

Our CFO, Christophe Babule. Hello. and our Head of Corporate Finance and Financial Communications, Laurent Schmitz.

Hello, good morning.

As always, Christophe will comment the first half results. Nicolas will then share his key highlights from the first six months and tell you why we remain confident in the outlook for the rest of this year and beyond. After that, we'll open for Q&A. You can find the slides of both presentations on our website already. You will be able to access the replay of this call later today and a half-year report will be available at the beginning of next week. So that's over to you, Christophe.

Thank you, Eva. Ladies and gentlemen, good morning. L'Oréal delivered an excellent first half. My four key highlights are the very robust adjusted like-for-like growth of 6.5%, the strong growth margin of 74.8% of 10 basis points, the record operating margin of 21.3% of 20 basis points, and the operating net cash flow of more than 3 billion euros up 13.9%. Sales increased by 5.8% and foreign exchange had a negative 2.8% impact as the euro appreciated against most of our key currencies. If the exchange rates on the 30th of June were extrapolated until the 31st of December, the full year impact on sales would be a negative 0.6%. This is a clear improvement over the negative 2.5% we had anticipated at the start of the year. The change in scope of consolidation contributed 1.8%. It reflects the acquisitions of Dr. J, ColoWOW, Medicaid, and Kering Bote. It also includes the impact of hyperinflation accounting in Argentina and Turkey. Note that excluding the impact from exchange rate, growth stood at 8.6%. Last, on a like-for-like basis, growth came to 6.8% with a positive contribution from volume and value, especially mix. As you can see on the left, like-for-like growth adjusted for the impact of our IT transformation amounted to 6.5%, pursuing the gradual acceleration from 3.2% in the first half and 4.9% in the second half of last year. On the right, you can see that growth was very similar between the first and second quarter of this year despite the total comparison base in the second quarter. As we are on the subject of our IT transformation, let's have a quick look at where we are in the process. This year, we continued our IT transformation in three additional clusters. Australia, New Zealand, and UK Ireland went live at the end of March. The US went live in early June. And by the end of the year, we will have completed around 60% of our total IT transformation. Let's move on to look at our divisions. Each of them grew on an adjusted basis. Professional products posted exceptional growth of 11.6%, boosted by the ongoing boom in premium hair care. Consumer products grew 4.3%. L'Oréal Paris delivered exceptional growth driven by hair care. Luxe advanced 5.1%, boosted by the recovery in China and the continued dynamism of fragrances. and at 10.6%, Dermatological Beauty delivered a third consecutive quarter of double digit growth with both skin care and hair care contributing. Let's now move to growth by region. Our three developed regions spotted solid adjusted light for light growth. At 6.1%, Europe remained very robust, all countries grew and all divisions contributed. At 6.7%, North America maintained its strong rhythm Thanks in particular to professional products and dermatological beauty. In North Asia, sales grew 4.6% and 6.1% without travel retail. The key contributor was the acceleration in China, driven by the continued recovery in Lux. Emerging markets was the most dynamic region, growing at close to 10%. Sapmena SSA advanced at an impressive 13.8%, and in a more challenging context, Latin America grew at 5.2%. And finally, let's look at our categories. Each of them progressed. With growth of 15.6%, haircare was the most dynamic. Each division contributed strongly, growing in double digits. Pregnancies maintained their double digit pace at 10.3%, with strong contributions from Prada, Valentino and Ezo. InCare accelerated strongly to 5.8% as dermatological beauty maintained its double-digit rhythm and looks gradually improved. Hair color advanced by 3.5%, driven by consumer products. Professional products gradually accelerated. And finally, makeup grew by 2.5%, which was penalized by service levels in the Americas. Next, I would like to share our e-commerce performance with you. E-commerce grew by 18%, almost twice as fast as the market, and reached 7.4 billion euros in sales. Compared to the first half of last year, that's an increase of over 200 basis points for the group. In emerging markets, the weight of e-commerce rose by more than 400 basis points. Meanwhile, our brick-and-mortar business grew 2.5% thanks to strong partnerships with key retailers. Let's now move to the P&L. In a context of ongoing economic and geopolitical tensions, we delivered strong results. Gross profit amounted to almost 18 billion euros, resulting in a very strong margin of 74.8%. Research and innovation expenses came in at nearly 700 million euros, broadly stable at 2.9% of sales, in line with the long-term average. Advertising and promotional expenses to that almost 8 billion euros or 32.6% of sales, a 70 basis point increase to put fuel behind driving our innovations and supporting our newer brands. SG&A increased expenses of 4.3 billion euros, decreased by 70 basis points in relative terms, reflecting our continued focus on cost control and operational efficiency. Operating profit increased by 6.8% to 5 billion euros, The operating profit margin advanced by 20 basis points, reaching a new first half record of 21.3%. First, let me remind you that L'Oreal is managed on an annual basis. Therefore, the profitability of the group and the divisions in the first half cannot be extrapolated to that in the full year. Each of our divisions reported operating margins above 22%. The margin of professional products stood at 23.3%, up an impressive 90 basis points. The consumer product margin increased by 20 basis points to 22.7%. The margin of L'Oréal Deluxe stood at 22.1%, 20 basis points below last year due to the small dilutive impact stemming from the first-time consolidation of Kering-Bauté. The dermatological beauty margin increased by 20 basis points to 28.4%. and non-allocated expenses consisting mainly of corporate and fundamental research costs were stable at 2.3% of sales. The net financial charge came in at 187 million euros. Total dividends received amounted to 366 million euros. Income tax, excluding non-recurring items, stood at 1.3 billion euros, an increase of 7.2%, representing a rate of 24.5%. Net profits excluding non-recurring items amounted to 4 billion euros and therefore diluted earnings per share came in at 7.40 euros, up 4.8% compared to last year. Non-recurring items amounted to a negative 413 million euros in line with the first half of 2025. First, other incoming expenses stood at 301 million euros and included 50 million euros related to various restructuring projects, 169 million euros related to product liability lawsuits, and 42 million euros mainly of acquisitions related costs. Second, non-recurring tax items came in at 112 million euros, including the exception of 188 million euros, the surcharge approved by French Parliament. Considering all non-recurring items, net profit attributable to owners of the company came out at 3.5 billion euros, an increase of 5.3% year on year. Gross cash flow of 4.8 billion was up 9.7%. Our working capital amounted to 962 million euros, up from 861 million euros last year. Capital expenditure stood at €760 million of 3% of sales. Therefore, operating net cash flow of €3.1 billion increased by 13.9%. Following the payment of our 2025 dividend, as well as the acquisitions of Kering Bote and the additional 10% stake in Galderma, receivable cash flow was a negative €9.8 billion. The balance sheet remained robust with shareholders' equity of €33.9 billion or half of the total balance sheet. Last at the end of June, net debt amounted to 12.7 billion euros and to 10.3 excluding financial lease debt. The gearing ratios stood at 37.4% and the financial leverage at 1.2 times. The financial situation remains healthy and all else being equal, we estimate that our leverage would be below one turn at the end of the year. Thank you for your attention.

Thank you Christophe and good morning to you all. I'm now happy to comment on our results for the first half. Our second quarter kept the strong rhythm of the first and we delivered the promised acceleration versus 2025. So let me share with you how stepping up our innovation game has led to delivering this strong first half, why we are confident in the second half, and why we are stronger than ever to keep winning. We delivered a strong first half. Since the start of last year, adjusted life-for-life growth has been accelerating semester after semester from 3.2% to 4.9% to plus 6.5% in the first half of this year. Global market growth has been accelerating since the start of last year and stands at around plus 4.5% in the first half of 2026. The grimmer the economic and geopolitical headline, the more consumers crave an affordable feel-good treat, or as I like to call it, the dopamine effect of beauty. By region, Market growth was well above last year's in North America and North Asia. Europe and Sapmina kept their rhythm. The only region which growth was below last year was Latin America, and we're starting to see first signs of stabilization there. In that context, we increased our outperformance and expanded our market share. Let me give you some of my personal highlights. By region, the clear winner was Sapmina. It delivered broad-based meeting growth despite the ongoing crisis in the Middle East. Special shout-out to Vietnam, up over 50%, and to India, which saw a strong acceleration at plus 70%, well ahead of the market. North Asia accelerated semester after semester, driven by the ongoing recovery of the Lux division in China, which advanced by 10%. By division, PPD maintained its stellar momentum. It grew almost plus 12%, outperforming the professional market more than two-fold. And LDB is back in the game. having delivered a third consecutive quarter of double-digit growth led by CeraVe. When I look at growth by brands, I'm very happy to see that many of our historical brands have kept a spring in their steps. L'Oréal Paris was the number one growth contributor to the group. CareStars, created by us 60 years ago, was up in the high 20s. La Roche-Posay and YSL, both in the L'Oréal family for decades, had vaulted mid-teens. I think that should kill the myth that L'Oreal grows only thanks to its acquisitions. But it doesn't mean that more recently avid brands have not been on a roll. Take Prada with growth over 30%. By category, hair care continued to grow in double digits on the back of strong launches in all relevant divisions. And so did fragrances, driven by a combination of strong pillars like YSL Libre, now the number one female fragrance worldwide, and successful new launches like Prada Paradigm and Harmony Power of You. So what's behind these successes? Number one, of course, our innovation. Since our beauty stimulus plan kicked into gear at the start of last year, the change in sales contribution from new products has been accelerating each semester from 100 basis points to 200 basis points in 25 to 250 basis points in the first half of 2026. There have been many successes, and you can see a selection of them on this slide. Second, our e-commerce leadership. Online contributed to be the fastest growing channel for beauty globally. It is a channel where we over index and where we outperform. In the first half, we grew plus 18% almost twice as fast at the markets. We continue to win on Amazon and accelerate on TikTok shop among many other platforms. At the same time, we grow in brick and mortar importance as it's the in-store experience that creates the magic in beauty. Three, our consumer engagement, which is at the heart of what we do and which we are winning thanks to the unique combination of our scale and agility. In an increasingly fragmented landscape, we master every facet of consumer engagement. From our one-of-a-kind L'Orealistar community that brings together thousands of influencers worldwide to AI-based innovations that pioneer the way people experience beauty. We are continuously growing our share of beauty influence, which stands approximately at 29%. And we are building the future of the consumer journey. Fourth is our multi-division category conquest. And let me give you two examples. We continue to double down on hair care as the category becomes more sophisticated. And thanks to our broad-based innovation strategy, our brands are winning in each division, whether L7 masks, care styles and professional, and Sarah Bae in Derma. All are growing well into double digits. And skincare is on its way up, contributing one third of our growth in the first half and confirming last year acceleration, LDB delivered double digit growth led by Sarah Bae. Lux was boosted by the ongoing recovery in China where Helena Rubinstein is going from strength to strength. In Europe, Mixa delivered another semester of growth well into the 20s. And there is a lot more to come as opportunities abound in this category. And fifth, our P&L. Christophe has already commented on our very virtuous first half P&L. And as you saw, our finance teams continue to exercise strict control of our ISG&A. This allowed us to increase our A&P by 70 basis points, mostly behind the innovation surplus of our beauty stimulus plan, as well as the rebound of China. This allowed us to finish the first half strongly and is a good omen for the rest of the year. That's why we are entering the second half with confidence and intend to keep our pace. In the full year, we expect the global beauty market to grow somewhere between 4, 5, and 5%. And we expect to keep outperforming this market. So far, July is off to a very good start and our teams are confident for the rest of the year. Why? Well, first, because our beauty stimulus plan will remain in full swing. We continue to roll out our launches of the last 12 months and we have another strong lineup across all our divisions ahead. Second, skincare will affirm its comeback as I just described. In addition, we're rolling out some of our smaller brands. Dr. G, the number one skincare brand in Korea, will travel to China and the U.S. in the second half. And Medicaid, a star performer since its acquisition, will start its global expansion. The brand is currently present in just two countries. Third, acquisitions will prove their full weight. Creed will be consolidated for the whole of the second half, and the brand is currently growing double-digit. And we will once closed, consolidate, innovate our acquisition in India. And fourth, North Asia will continue to support growth. The recovery in China continues. It is driven by Lux, which clearly plays to our strength. And in addition, we expect a return to normal in travel retail Asia over the course of the second half, especially in the fourth quarter. And we are more ready than ever to keep winning in the long run. First, beauty runs on two engines, dopamine of pleasure and health. Feel good and live well. Dopamine is beauty as indulgence, a scent you love, a texture you enjoy. And health is beauty as wellness, a quest for longevity and skin rejuvenation. And L'Oreal is well positioned to fire on both engines. And there is no other company that can do that. We have decades of olfactory science and texture innovation to fuel the indulgence of beauty at scale. And our best-in-class R&I drives the extension of beauty into health. With over 15 years dedicated to longevity research, we're uniquely positioned to offer advanced beauty protocols like Lancome Longevity MD or Kerastase Chronologist. Or take GLP-1. Rapid weight loss leads to skin sagging and hair thinning, issues we address with launches like SkinCeuticals AG Interrupter, Redken Acidic Growth Pool, and Kiehl's ColorShots. Second, we're only scratching the surface of our adjacencies. In body care, where consumers are looking for more performing products, we continue to build on the strengths of our never brands, of our derma brands, and mix-ups. We leverage ESOP in the selective market of indulgences. And we're launching NYX in mass body health. In the first half, body care grew in double digits across all divisions. The entry of Vichy into beauty supplements is off to a promising start, and we will be in the Europe-wide rollout of Vichy collagen from next year on. Third, our portfolio is becoming ever stronger. In late June, we announced the anticipation of the Gucci license by one year. This means that our teams will kick off the transition in September and launch the first product as early as 2028. and I'm extremely excited about what lies ahead. Gucci is one of the most iconic brands in luxury and we have an unrivaled track record of turning beauty licenses into success stories. Prada and Valentino went from less than 100 million to over 700 million euros in sales in just 46 years. YSL is a 3 billion euro brand in beauty on par with fashion. So the potential is huge given that for Gucci, sales in beauty are only a fraction of those in fashion. Fourth, AI. For us, AI means several things. It means accelerated innovation. R&I is the method that has been the most augmented by AI. In the last four years, the number of molecules we analyze has increased exponentially. This allows us to launch more new products faster every year and to keep outperforming the global beauty market. And AI also means augmented imagination. In our Createx studios, we create over 500,000 pieces We were an early adopter of AI, and as with every tech disruption, we quickly accelerated its adoption across the entire organization. We better understand and influence consumer journeys, we augment all our métiers, and we augment our 90,000 employees. Earlier this month, I took my full comex on a learning expedition to the Silicon Valley A trip that confirmed our belief in the huge benefits that AI will have for L'Oreal. I'll stop there on that topic since I know that many of you will come to Paris for an AI deep dive later this year, so I do not want to spoil that. So let me conclude. The global beauty market is dynamic, boosted by consumers' insatiable appetite for beauty and supported by favorable demographic trends. and we have every intention to keep winning. We are on a roll. Our innovation engine is running at full steam. Our digital mode is further strengthened by our AI transformation. The breadth of our portfolio allows us not just to seize all those opportunities, but to amplify them across categories, channels, geographies and price points. L'Oreal is truly one of a kind to me. We are a unique blend of luxury, of dermatology, of consumer products, of tech, Thank you for your attention and we are ready for your questions.

Ladies and gentlemen, if you wish to ask a question, please press star and one on your telephone keypad. Please use your handset before asking your question and set your microphone on mute once you ask your question. The first question is from Guillaume Delmas with UBS. Please go ahead, sir.

Thank you very much and good morning Nicolas, Christophe, Laurent and Eva. Two questions for me please. The first one on Europe because it seems you keep on very materially outperforming the market there and it's broad-based, all divisions outperforming. Can you maybe shed some light on the L'Oreal winning playbook in the region, particularly if you can touch on online how big it is now for Europe and how fast it is growing? And then looking ahead, do you see this impressive 6% like-for-like as a sustainable run rate? or should we anticipate at some point some gradual normalization towards levels we've been more used to, so more like a 3-4%? And then my second question is on Greater China, so strong performance in the first half, Can you maybe help us unpack this performance and particularly what you saw in Q2 around 6.18, how it played out for the industry as a whole and for L'Oreal in particular? And again, if we think about the second half, you cycle tougher comps. Do you remain confident about further acceleration or at this stage just maintaining the current run rate will already be a strong achievement? and maybe just a side question on China, but I saw that you mentioned USI in the press release, so USI doing quite well. Does the success of USI make you want to own more local brands in China? Thank you very much.

Guillaume, if I'm not mistaken, that's four questions, but we'll try to...

Apologies, sorry.

We'll try to indulge you. Well, on Europe, I think... You're right to say it's an impressive performance because this is where obviously we have our highest market share above 20%. But let me try to unfold it. First of all, the great thing about Europe is that the market continues to be impressively dynamic. It's up mid-single digits, which is great considering everything we see around there. And once again, probably demonstrates that beauty is not only essential, but a great way to We keep on outperforming it across all divisions quite significantly. and here it's a mix of category. We are, Europe is one of the regions of the world where we have the biggest weight in healthcare and as healthcare is pretty dynamic that helps us. It is also, as you mentioned it, a good contribution of e-commerce. This is one of the regions where we have the biggest acceleration in in e-commerce with the development particularly of Amazon in this part of the world. And then probably what you don't see is the fact that over the last five years we've been transforming our organizations, our processes at high speed in Europe both through clusters Grouping countries and therefore freeing some SG&A and having more resources to fuel our brands. The transformation we've done with our ERP where Spain, Portugal were the first to go and it has made them stronger and more agile and we're seeing the same thing right now in the UK and Ireland. So it is good and you know and even Our sell-in in Europe is slightly below our sell-out, so it's good, and I guess also I should never forget to mention that we have great teams in Europe, and they're working really hard. It's also a big fragrance region, so fragrance and hair care are really doing good there. So that's the positive thing about Europe. I'll switch to... To Greater China, before talking about the growth pace, which is the big question. In China, we have seen indeed the market stabilizing at a growth of around 2% over the last quarters. But the good thing is that there's been a shift back to more premiums. The mass market has turned negative, slightly negative, whereas whether it's the dermatological beauty or the luxury markets are close to a 7% growth, which is much better than what it used to be, and clearly it plays to our strengths. Our strengths in lingerie, as we are the dominant player, depending on the periods, around 30% market share. And we have been winning share, as you saw, on this 7% growth with a plus 10 in Celine. And it's true also on Derm Beauty, where we have two phenomenons. We have the acceleration, I would say, in Chinese terms, the more affordable brands, which are CeraVe and ArchePosay. But really, and a striking performance of SkinCeuticals, which is a bit like Kerastase, are more premium parts of the catalog. So we were in a very negative combination. If you look a year back, which was mass growing and all the Chinese brands growing, we were fighting with our other divisions, and here it's a reverse. Many Chinese brands are declining steeply. It was very visible in 618 and the premium brands were growing. And as you were asking about 618, the market, we're trying to compute in net sales because there's a lot of returns happening. So sometimes if you look at the GMVs that are published here and there, you don't have a The right picture of the market. But our estimation was that the market was up 10% in 2018, which is pretty good total market. And we beat that growth slightly and retained our position. And we had the number one brand in each respective universe. L'Oreal Paris, number one across all beauty brands. Lancome, number one in selectives. SkinCeuticals in dermal. And Kerastase in professional. So we'll see on the second half. As always, we have to be careful. But I would say that Chinese consumer confidence, and especially Chinese with savings and money, is improving. The stock markets have been better. There's a big tech growth and hype in China. And I feel that at least consumers are a bit more eager to spend their money on on premium products. So we bet on a continuation of this over the second part of the year. A quick word on UCI. Indeed, it has very significantly picked up after, I must say, years of not so great performance. We seem to have found the recipe. and we're happy to have a Chinese brand. Whether we'll have more in the future, we'll see. So it's always a question of opportunity and of having the right targets. But there's nothing being planned. And as far as the 6% you were referring to as the pace, should it be the pace? The only thing I can tell you is that we have every intention to keep that pace. Then we'll try to do our best to make it happen.

Very clear, thank you very much.

The next question is from Charles-Louis Scotty with Kepler Chevreux. Please go ahead.

Yes, good morning everyone. Thank you for taking my questions. I have two. The first question relates to skincare. You mentioned that the category accelerated in the first half. Could you provide a bit more granularity on the performance across the three divisions? And also it appears skincare accelerated within L'Oréal Luxe. Is this acceleration driven primarily by the ramp-up of Medicaid or are you also seeing broader strengths across the rest of the Prestige portfolio? And on Medicaid, a quick follow-up question, but if I'm not mistaken, the brand is planning a major launch with Sephora in the US. Do you believe you have the potential to replicate the success of that brand like CeraVe achieved? Even so, obviously, they are not in the same category. And my second question relates to ANP that increased by 70 bps and at the same time SGNA declined by roughly the same magnitude. Should we view the reduction of SGNA as structural? And how should we think about the increase in the ANP spending going forward because I had initially expected this ratio to stabilize or eventually decline, particularly with the rollout of beta 2. and if the increase primarily driven by the changes in the sales mix with, for example, a greater contribution from fragrances which tend to be probably a bit more anti-intensive. Thank you.

Okay. So, yes. So, on skincare, indeed, we have seen improvement and we are back to, you know, single-digit growth. So, it's close to plus six and it's above the market. Yes. It's not true across all our divisions. It's very obviously a very strong performance in LDB and I'm very happy about that because if you'll remember we had a few quarters of doubts on whether this dynamism that we'd seen in the previous year had reached the plateau and as I told you it just took a bit more Innovation on CeraVe to bring the machine back to growth and CeraVe is in a mid-team and doing great. First, you know, biggest driver of growth to LDB, but La Roche-Posay is not far. By the way, it's just a detail, but we launched CeraVe SunCare this year and it's doing great. And if you haven't tried it, I invite you to try the combination of great filters and ceramides. It's fantastic for skin. So LDB is really very, very strong on skincare. LUX is improving. And for LUX, it's a combination of two factors. One, indeed, is that you have a brand like Medicaid, which is growing close to 50%. But it's still relatively small, but it is contributing. And I'll get back to your question around CeraVe. But you also have the fact that China, which is the biggest skincare market in the world, going back to growth and us outperforming the Chinese market is clearly a contributor with brands like Lancome, but also Helena Rubinstein doing very good in China. So Lux is back to positive above its market, whereas CPD... It's slightly behind the market. We have, of course, the opposite effect in China because math is not positive in China. But I would say the Garnier Tokyo Seco launch is doing well. It was intended initially only for the emerging, and we decided to launch it in Europe with great results. And we have a few more initiatives on L'Oréal Paris coming in the second half. And as you've heard, Next to the Mixa performance, or Thayer's performance, we have decided to accelerate the rollout of Dr. G. You know, we keep on hearing about how Korean beauty is hot and so on and so forth. And we have the number one skincare brand in Korea. So I told the team, guys, let's go fast on that one. And typically, Dr. G will be launched in the U.S. at the end of the year. I'm sure it's already... We have a number of initiatives, but it's fair to say that today, or at least in the first half, CPD is not delivering the acceleration yet in a significant way on skin care. As far as Medicaid compared to survey, you said it yourself, there are two very different, not Brands, of course, but also distribution strategies. CeraVe is a mass medical brand, so the idea that you could roll it out in mass channels pretty quickly. Medicaid is more selective, but we have a lot of ambition in the U.S. with the support of Sephora. It's a brand that has fantastic formulas that consumers love, and so we'll focus on the big brands We have a lot of ambition for that brand because it's a unique combination of premiumness and dermatology, which was a neat gap in our portfolio and a fast-growing subcategory in the world of skincare. I would say good progress on skincare overall, not equal across all divisions, so the good news is that if we fix what's not doing great, it should get even better. As far as PNL, I will pass the mic to Christophe, and I'll add a color to it if necessary.

Yes, Charles, you were mentioning this question. Step up in our investment and finance in a certain way by our SG&A. So first, to answer your question regarding the SG&A, yes, of course, we want to keep working on the productivity of our organization. Of course, 70 basis points first half cannot be projected on a full year because it depends on the phasing of certain projects. But definitely, as you know, that's why we are investing in our IT transformation. That's why we're investing in AI. It's definitely to look for those synergies that we know where to find. So probably we could expect on a yearly basis, based on the past experience, around 20 to 30 basis points improvement if we keep with the same risk of growth. And that's very important because it helps, of course, to finance when there is the opportunity, finance the support of new launches, finance our new brands. and that's what we did in the first half. 70 basis points, it's to help on innovation that are extremely strong this first half. But also we have also some impact like the original mix. You know that when China wakes up and Sapena, it has an impact on the overall investment that we have. And some other mix like the distribution mix. But it was really to push our new brands and our innovation and some specific issues like the Prime Day that this year was in June and not in July.

Sometimes you have to be optimistic. I still continue to believe that we are getting more productive on our INP but in the end we had this surge of innovations which are all doing great. We had good work and good news on the gross margin at 10 basis points, despite 20 basis points of negative impact of the tariffs. And we wanted to deliver 20 basis points of profit increase. So we saw the opportunity and went for it. And that's also a way to increase our market share and to start the second half of the year launched, as one says, and with a good dynamic.

Thank you very much.

The next question is from Warren Eckerman with Barclays. Please go ahead.

Yeah, good morning, Nicola, Christophe, Eva. It's Warren here at Barclays. I've got a few as well. First one is on Sapmina. Stunning performance in Q1 and again in Q2, Nicola. You called out Vietnam and India. Can you talk about the sustainability of this growth? Are we at the tipping point yet? in places like Vietnam. And I'm just interested to know, not so much in percentage terms, but how big in absolute terms could Sapmina be and how are you allocating capital to this region? And then related to that, can you maybe talk about India specifically and the acquisition of Innovist? It looks interesting. It looks like a very high multiple. Is it worth it? What's it bringing to the party? And then finally on Gucci, this wasn't in the statement, but I saw in an interview that you're talking about crippling revenues on Gucci. What are the priorities and how would you contrast it versus YSL, where I think you 10x that business? So just interested to hear the compare and contrast on that when you get the license. Thank you.

Okay, so on Satmina, it's clearly a priority, as I said, emerging companies. All the new growth relays, this is where most of the new consumers, both to the market and to L'Oreal, are going to be coming from. And that's why we are doubling down on this region where we have also invested a lot. It was one of the first regions where we started developing our You know, content factories boosted with AIs and new types of organizations to boost our e-commerce strength because it's clearly a region where e-commerce is accelerating a lot. We are really having very strong growth in e-commerce there. I'm not going to give you the weight Satminia could represent in L'Oréal, but it's true that we have overall in this region a market share that, if I'm not mistaken, is around 12% to 13% when our global average is 15%, and of course Europe 20%, so we have lots of growth opportunities. and in India it's even a bit lower. So clearly it's a focus. The good news is that e-commerce is really doing great and we are, I would say, getting better at playing the TikTok shop game, which was probably a new playground where we had to understand how to make it work profitably. And we see that typically in a country like Indonesia, we're doing much better with both content management and brand support. The other good news is that all divisions are growing. Of course, it's more a mass and dermatological beauty play because the products need to be more affordable. So CeraVe is a great weapon of growth there. And of course, we don't see, Asmita, today you were asking about capital allocation. It's not a region that is Massively dilutive to the group. First of all, in this region, you've got Australia and New Zealand, which are very profitable. And overall, because it's mostly commerce-driven, we managed to make this very sound in terms of economics. So we don't have lack of resources, and top-line growth really self-fuels the economy. and the resources they need. So, of course, we run into this on a monthly basis. Do you want to add something to all that, Christophe?

Anyway, we have flagged, of course, India and the whole region as a strategic region for growth. So that's why we are carefully looking at any opportunity to first support the organic growth. And that's what we did in India with the launch of both Dermatological Beauty and Luxe Division. We are setting up also our industrial capabilities there. And whenever there is an opportunity, of course, we go for some acquisitions. That's what we did with Innovist.

Yeah, so just going back to Innovist, first of all, we have, in the end, we have good positions in some categories. In India, typically, we're strong in hair care, strong in makeup, with Maybelline, which is a Very strong brand there. We're beginning to see a surge in fragrance usage there. And skincare is a category where we have to accelerate. And we have, first of all, a big drive right now on CeraVe. We are opening CeraVe. I think right now we're probably around seven or eight cities in India and expanding. And there's very good response. We created some specific textures to match The Indian climate, which is hotter, so you need lighter textures. And so we have our own, you know, our existing international brands are growing because the plus 20 we have in sell-outs on the market, that plus 10 or 11 year-to-date, is made only with our existing portfolio. But it's true that Innovist, and we've been looking at Indian opportunities for a while, and what we like about Innovist is that, first of all, it's got two brands that are very interesting and original. One is for skin care hygiene and the other one for hair care. And it's also an e-commerce platform which has been very well developed, well crafted, with good KPIs, which is both a source of growth for that brand but also a learning curve for us on how to manage even... More dynamic e-commerce in India. So all in all, I think it's a very promising acquisition. You were talking about multiples. I can tell you that compared to the traditional multiples of the Indian market, which is a very expensive market as it relates to M&A, and compared to some others that we studied and passed upon, it is a very decent one, probably because we came in early enough and it will be a great addition to our consumer products division. The closing should happen in Q3. And then we'll start seeing how we can support them and how they can support us. So that's for India and innovates. And to finish on Gucci, the journalist from the EFT put words in my mouth that I didn't pronounce. What I said was that I believe that Gucci is has to become because she asked me whether Gucci would become a billionaire brand and I answered it should be a multi-billionaire brand because it's not only 3 billion I guess Gucci has to get bigger at some point it will take time because you know first of all now that we have anticipated the license our team will be built and set up to start working on the 1st of September work on new projects that will probably appear in 28th We'll get the products and the turnover back in July 27. So it will probably take time, but it is, I am super ambitious for that brand. It's a beautiful brand. I was happy to see, I was a bit in the know, but that the Gucci numbers are getting a bit better, that the Demna takeover of the license of the Couture is... It's always good, that's why anticipation was important, to synchronize the re-acceleration of beauty with the re-acceleration or rebirth of fashion. So it will take some time, and as far as your question on how do we manage the other fashion brands, well, that's what we do. We make sure that Each brand has a different persona, a different target, a different way to express beauty. We've developed Saint Laurent next to Armani, and we're now developing Prada and Valentino without any negative impact on the other brands. Actually, there's a bit of emulation amongst our team, so I guess we'll do the same with Gucci. It's too early to say because we haven't really... The next question is from Callum Elliott with Bernstein. Please go ahead.

Hi, good morning. Thank you. So firstly, I wanted to just follow up on something you were talking about earlier, Nicolas. You made some really interesting comments about the organizational changes with the clusters, how that's helped you be more agile and, I guess, ultimately grow faster in Europe. And I just wanted to push you a bit more on this. I would love to hear more about it. I don't think you talk about it very much. Can you help to sort of bring it to life for those of us outside of the business? How specifically have those changes driven improvement? And maybe you can share a couple of examples. And then my second question, you know, it feels like a very exciting time for the business, huge number of opportunities. We see that in terms of how active you've been from an M&A perspective over the course of the past 12, 18 months. I guess at the same time it's also been 18 months I think now since you did anything with the Sanofi stake a lot of capital tied up there leverage has crept up a bit at the same time with all of this deal making and there are still obviously a number of other potential deals waiting in in the sidelines so I wonder just in that context can you give us a bit of a quick update on how you're thinking about the Sanofi stake please okay

So I'll take the clusters and let Christophe think about what he can tell you on the scientific stage. On the clusters, very clearly, we really doubled down on Europe, particularly over the last five years, because that's our biggest region, but it's also the region where we have the largest number of countries. We had, you know, every Scandinavian country had its P&L. Now we have the Nordics Hub, which has one command, one P&L, and of course, you know, a bit less high-ranked and high-paid leaders and more people on the ground. We had UK and Ireland. We did DACH, which is, you know, Germany, Switzerland, Austria, Switzerland, which was You know, some of the companies have done that before, but we haven't. Spain, Portugal, we have also a few in Eastern Europe. And if you accumulate the combination of the movement of these products, and you have some smaller countries that become satellites of of the bigger ones that remain, you know, with people on the ground and really focusing on the specifics of their consumers, but they are benefiting from all the backbone, the power, the media, know-how, the quality of the teams of the big brothers. It's very effective. And if you add to that, which is where we see some more of it today, the benefit of having the young one P&L One common ERP, which is this SAP for HANA that we're moving to, which we've done in the UK, Alan, which we've done in Spain and Portugal, and we will be doing in Germany. This is also creating a lot of synergies, money saving, and more time to focus on the end consumer. When I visit countries, recently I went to visit our Spain-Portugal subsidiary and for once I decided not to do the visit in Madrid but to go to Lisbon to visit stores and what was great is that our brands were really stronger than ever, we are gaining share but with less people in the country to some extent. So we have very strong Portuguese team but they are entirely focusing only on serving the consumer and the customer. And that's something that has proven very effective. We've done that also a bit in Latin America, with Colombia, the Andes region, and Ecuador. We're doing this with Singapore and Malaysia. and of course Australia and New Zealand so we could say that we're a bit late on these things but the fact that we're doing it and just right after doing the IT simplification gives us free some resources as GNA in Spain are amongst the lowest seen and therefore it creates a lot of it frees a lot of monies in the P&L to to support our brands. So I would say it's been one of the recipes of capacity of Europe where you had pretty high SG&A and lots of fragmentation to become more lean, agile, and effective over the last couple of years.

OK. On your second question, you are right to say that there are opportunities when it comes to MMA. Believe me, we look at all of them as we usually do. And why? Because we still have a very strong balance sheet. We have a very strong EBITDA. We have a very strong cash flow. And despite, you know, the acquisitions of Caring Beauty and Galderma, as I said before, the leverage of L'Oreal by end of 2026 would be already well below one. So, you know, Sanofi, for us, as you know pretty well, it's a financial asset. And I just want to remind you that it's bringing 365 million euros of dividends, and the net of taxes is nearly the same amount. So every time when we look at, you know, first, do I need to transform this asset into cash? Honestly speaking, no need right now. And when I look at, you know, what it brings to the P&L, I think it's wise for Tandil to keep it like this.

Very clear. Thank you both. Thank you.

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

Bonjour Nicolas, Christophe, Laurent, and Eva. First I've got a housekeeping question for Christophe about the Galdama stakes, the 20%. How do you account for it? Why does it appear it doesn't seem to be in the share of associates? And then I've got two questions really. First on marketing spend, that increased by about a bit more than half a billion incremental in H1, which is particularly impressive, reaching 32.6%. As you get more efficient, how should we think about this ratio going forward? Could you go back towards the 31%, which was kind of the historical run rate? And then a question on fragrances. I mean, in a recent interview, your head of Lux was expecting L'Oreal to outperform the fragrance category by a factor of three. What are your expectations for the new fragrances launched in H2, such as Valentino Vendetta or Armani Arouil? How will it compare to product paradigm, for instance, considering that the Armani or Valentino brands are much bigger than product?

Okay, so maybe I'll start with the technicalities of Galderma. So as you know, when we took another 10% to reach 20%, we had to change the methodology of accounting and apply the equity method. And when an investor holds 20% or more of the voting power of a company, we have to apply EIS 28, which basically requires purchase price allocation. And therefore, we need our math, and at the acquisition, We have identified some assets where the fair value exceeds the carrying amount of the balance sheet, and this excess has to be amortized by L'Oreal. So actually, when you look at the way it is done, of course we keep 20% of the net profit of Galdama, but on top of this expense, there is PPR allocations or amortization, and this is why it is impacting the net net amount at L'Oreal. So on top of that, in the first half, just for your information, there is a one-off, which is the step-up of the cost. And this is happening only in first half. And if you want to project a bit on the long term, what you have to understand is that on the net income of Galdama, there will be roughly $450 million that will be netted from this amount. And then, of course, we take the 20% of this amount. Is it Pierre? Yes, thank you.

So, ANP, I'm afraid that somehow they could be related questions because in the end it's a question of what are the opportunities, what you can afford. I've said and I continue to say that the weight of ANP in the P&L of L'Oreal could very well go back down to around 31%. But it's true also that our objective is always the same. It's to beat the market, increase our market share, and deliver regular improvements in profits of around 20 to 30 basis points. So then, as you know, we have a P&L where with the level of gross margin we have when top line is very positive, it generates capabilities of investment all the more when its G&A are under control. So when you have the combination of the dynamism of the business that allows for it, many new brands and new products, and it could be new friends or soldiers, then we can decide, and that's how we pilot the company with Christophe and the head of the division, to reinvest some of the money generated by the top-line growth and the SGA control Thank you very much. growing at twice the market speed, which is already pretty good. I was not aware of... Thank you for informing me that my head of luck had said three times, so I know what to tell him next time he presents me some of his budgets. But right now we are twice the market speed, and we have indeed a few launches coming. It's very hard to predict in fragrance. which fragrance is going to do better than the other one. What I know is that all these launches have been crafted with the utmost care, seeking complementarity in terms of factory notes between one another. So we have Vendetta that's coming with two launches, one masculine, one feminine. We have a number of range extensions in our already very dynamic fragrances, whether on Prada, on Valentino and I would end by the claim of the new Armani fragrance is it's not about luck it's about will and I think it applies very much to our fragrance strategy and so we'll do our best to put another of these launches and maybe two in the top ten the same way we did it with Prada and Thank you very much. The next question is from Celine Panouti with JP Morgan. Please go ahead. Thank you and good morning everyone.

So I have two questions. Thank you. My first one is on the market growth that has accelerated. I think in June you were saying that the market was shy of four. Now it's four and a half. Can you say where is it that there has been this acceleration? And where is it that you are seeing, expecting it to accelerate further in the second half of the year? And I know you already commented on China, where the market is going at three, and I think you expect it to be stable at that level. But North America, I think Ulta was talking about a bit of a slowdown through Q2. So yeah, quite interested if you could particularly as well comment on the North American market since there's been no question on the U.S. so far. And then my second question for Christophe, a lot of financial questions, so hopefully I'll put everything in one. Thank you for the Gelderma explanation. Can you likewise explain... The impact of caring beauty from a dilution perspective, because you said it would be dilutive year one and year two. So if you could explain the impact on margin and on EPS. And you said that Creed was growing double digits. Are we talking teens or twenties or more? I don't know if you could spell out the number. And then tax and net financials came a bit below expectation. Could you give us a guide for the year, please? Thank you.

So I will take the market discussion. First of all, when we commented the first quarter, we said the market was shy of four. As you know, every time we speak to you, we have only a partial vision of the quarter because we don't have all the data from all the countries. So it's constantly reassessed. And actually, The first quarter was slightly above four rather than shy of four. And we see the first half around four and a half. So it was driven by indeed the good, all regions got more or less at the same rhythm than At the end of last year, North America accelerated. It had accelerated in the first quarter and continued to do so in the second. And the market is around, and that kind of answers your question on North America. The U.S. market is mid-single digits, and there are indeed shifts in categories. Makeup is a bit slower. Hair care is more dynamic. Hygiene is also a bit better. So there are fluctuations in this market. This market, which can explain maybe why Antas is things with a slightly different perspective. But overall, the market is, well, at least until the end of Q2, was pretty dynamic around 5%. As I said, Asmita has continued to be as strong and double-digit as Europe. So most countries are stable. If you take China, it's the same as China. Q1, Q2, and not far from Q4 last year, but the beginning of last year was negative in China, so that creates a bit of acceleration. So as far as the second half is concerned, I don't see an acceleration of the market. I see something that is more in the line of what we saw in Q2. So I don't see any major change, but what I see is that People have this appetite for beauty and respond to stimulation, to new ideas, to new products, which we'll try to contribute to. Second half, I see it more as a continuation of Q2 than another acceleration. Just on China, you said 3% market is just shy of 2%, so it's not 3%, but it's true that for some parts of the market like luxuries, so you have differences amongst channels. Regarding Creed, I think it's slightly above plus 10. Right now, we haven't done anything, but it's By the way, it's a big brand in North America, and I think it will be a profitable brand, so we'll be able to invest behind it and hopefully continue to grow it. So, all in all, and the good thing is that we are, you know, going back to the U.S., market's around five, we are in sell-out around seven, so we are, and we are getting share in the four divisions, which was not always the case, with a particularly strong performance of CPD, I'll hand over to Christophe on the...

Yes, so a few information. First on Caring Beauty. So Caring, as you know, has been consolidated in the account since the second quarter. So we are still in the process of financing the step-up of the stores, all the Cost of Integration, etc. But if I project for the full year, first on the RECs, it will be slightly relative of around 10 basis funds at group level. And then on top of that, we have, of course, the dilution linked to the financial expenses. So this dilution will probably last until we are investing on the brand. And when it comes to the EPS, it will be slightly negative in 2026 and probably back to a very, very small growth in 2027. So that's the best estimate that I can provide to you.

And very obviously, when we take back brands, that's why we use the product Valentino, you have to You have to re-launch, you have to re-ignite. And these brands now are worth 700 billion euros. There were a couple of years where they were a pure operating profit, where they were very dilutive to L'Oréal Luxe and other brands compensated until they reached a critical mass when it suddenly stopped paying off and then we can be extremely lucrative. So it's how we It's how we work our portfolio. Absolutely. You have to have brands that contribute as well as to fund the acceleration and take-off of the new ones.

So to complement on what Nicolas is saying, priority will be the growth of the brand because as you can understand, the impact on the rest of the group is very limited. And I think you had two small questions. One was related to the financial interest. So obviously it's increasing. We have roughly 18 million more compared to last year. And of course it's due to the payment of both Caring on one side and Galderma on the other side. What I can tell you is that projection for the full year is around 400 million of financial expenses in 2026. And when it comes to taxes, Here, there is a lot of plus and minus, slightly above last year, but mainly due to a mix of geographies that is slightly impacting the tax rate. And of course, in absolute amount, we have the exceptional taxes of the French government.

Yes, absolutely. Excellent.

Thank you very much. The next question is from James Edwards Jones with RBC. Please go ahead.

Thank you. Good morning. Two questions, please. First, on the outlook, you were previously talking about being optimistic. You're now talking about being confident. Is there any subtle change in meaning that follows from that change in the wording? And the second one, you were talking about the model and your desire to grow Can you say a little bit about the additional volume leverage that you're getting? When you get an extra 1% or so of volume, what sort of margin do you expect to earn on that volume?

Well, that's a tough one. I let Christophe think about the answer. No, frankly, on the semantics, the only thing I could say is that when you start the year, you have 12 months ahead of you. So you are optimistic. When you have six months in the bag, you start being confident. And when you know what's ahead and you see what your teams are telling you and their own level of confidence, you can move from one to the other. And hopefully, at the end of the year, I'll tell you that I'm happy.

So looking at the second question, First, just as a reminder, you know that the weight of the cost of goods in our P&L is quite small because with the gross margin at nearly 75%, I'll let you guess what is the impact of the cost of goods. And therefore, increasing the volume by 1%, of course, it has always a marginal benefit on the added value of the factory, but it's not meaningful. So it's always welcome, but it's not critical, you know, in the margin of the group. There are many, many other factors that may impact the margin before the increase of volume.

So, Christophe, are we saying that an extra 1% volume really, we should just assume, comes through at the same sort of average margin as the group? Yes, yes. Got it. Thank you.

The next question is from Tom Sykes with Deutsche Bank. Please go ahead.

Yeah, morning, everybody. Thank you. Just are you able to say what the volume component of growth was Q1, Q2? Would you be able to say what the Suncare contribution to growth was, again, perhaps Q1, Q2? And just with LLM adoption, and they're going to go into AI later in the year. But do you think, I mean, is that at the moment or do you think that will stop indie beauty companies taking share, please?

I'm not sure I understood your last question, Tom. Can you try to rephrase it?

Yeah, just, yeah, sorry. As people adopt LLMs and in theory there's these curated lists of a narrower number of brands. Do you see those large brands at the moment actually taking share? Is there any statistics you can point to to improve conversion rates when brands appear in those curated lists? Do you see it at the moment or expect in the future that that entails the growth of smaller indie beauty brands relative to larger brands, please?

Okay, well, I'll take that one first, as we have, you know, clearly, first of all, the younger generation are shifting massively to using NLMs for their product queries, and beauty is probably one of the biggest categories where they have, you know, conversations, and they're asking, and it's longer interactions, actually, it takes more time, Search is not over. And by the way, you also saw that Google added an AI layer to their search bar, so the two are emerging. What we see today, and we have clearly several task force, a lot in the US, also in Europe, on how to constantly analyze and understand where the LLMs are driving their responses from. And what we see is clearly that There is, aside from the size of the brands, which of course, you know, famous brands may pop up more, but it's really more about the quality of the data and particularly the science behind the products, the endorsement of products by professionals. And we see typically that if I take skincare, LLMs are really benefiting our LGBT brands because they have both I think it will benefit us The brands of the group because we have this combination of science, data, professional endorsement, and brand scale that will allow us to prevail. And that's also why we signed various partnerships with OpenAI, which we announced at DivaTech. As I said, I took my whole ex-co to the Silicon Valley, and we had very exciting discussions with the Google teams and NVIDIA clearly work on that and on this optimization. So even though it's still a moving target, it will be beneficial to us in the years to come. That's something that I find I'm pretty convinced about. And all the experiments we did on our own sites, thanks to prove that. On volumes, I don't think we have it per quarter, and I think it's irrelevant because you have these big swings I don't have the data. I don't have...

The thing you can say about Suncare, you really can assess Suncare season at the end of August-September because

The way it works is that you always, and we've been more careful, I would say, this year than we had two years ago, where it kind of bit us. But you place your first orders, and then basically, depending on the weather and, of course, the success of your brand, you got reorders that come in, let's say, August. So we're still in the first part of the season. The only thing I can say is that, well, I think the weather's been pretty sunny, so people have needed protection. And the other thing I can say is that... Cerave Suncare, which is an entirely new brand, is starting very, very well. It bites a little bit on Vichy, which was not great. It was not a big brand. So overall, you have the combination of La Roche-Posay and Cerave, which is doing very good. And also, we are celebrating the 19th anniversary of Ombre Solaire. invented by our founder in 1936, which is more French and Spanish brand, but we have a lot of innovations there. So too soon to tell. The only thing I'd say that the placement was good without being forced and that the weather's been good so far. For the rest, we'll see. The next time we speak, we'll have more information on sun care.

Okay, great. Thank you very much.

The next question is from Jeff Stent with BNP Paribas. Please go ahead.

Good morning everyone. Just one sort of housekeeping question and just back to the PPA on Galderma. I think Christophe that you mentioned the number of 450 million dollars. What is that number or to rephrase you know on an annual basis What will be the PPA that will go through the P&L for Galderma offsetting the underlying share of the profits? If you could give us that number, that would be great. If indeed it is a different number from the 450. Thank you.

Yes, of course. So in fact, when I was speaking to those 450 million US dollars, and I specified US dollars, this is the yearly amount. that will be deducted from the net result of Galderma. And when you deduct those 450 million US dollars, then of course we keep only the 20%. So that's why there's an impact this year because it is on top of that impacted by the one-time cost linked to the step-up. But starting from next year, And this amount, by the way, will be quite fixed because, you know, it's the amortization of this kind of asset. I think the minimum in terms of years of amortization is seven years. So you can expect, you know, this amount of $450 billion to be deducted from the net result of Gelderma every year before applying the 20% share.

Very clear. Thank you, Christophe.

Thank you.

The last question is from Jeremy Fialco with HSBC. Please go ahead.

Okay, thanks for squeezing me in. I've just got one question. In the presentation you referred to the 29% share of influence online. Maybe you could talk a little bit more about that metric. So where was it historically? Is it growing? Is it relatively stable? How you can be confident that that's the That's the right number. And then also how you feel that that share of influence translates into your market share given the share at 30% is roughly double your global market share of beauty. So just a bit more context and color on that would be very useful. Thanks.

Well, that's going to be a tough one for me to answer because, first, I don't master all the ways this is computed. We work with a number of companies that are specialized in measuring our share of influence, which is always a combination of the measurement of number of views and engagement, i.e. people who we like or who we share. who respond. So what it is, is that it is higher than our share of voice in media because we have really, our share of voice in media has always been higher than our market share. It's always in the 20s, low 20s. And in influence, we've really doubled down because that's where That's where you win the game online against Indies on platforms like TikTok where you have to increase the quantity of content and of course the quality of content that you share, that you push towards the market. That's why we created this L'Orealistar Force where you offer influencers who need revenues to have access to the whole portfolio of L'Oreal brands, not just one, and therefore they know that they can at the same time promote, you know, CeraVe, L'Oreal Paris, or YSL, which is very attractive to them, and that there are, you know, companies that are measuring these influences, these likes, and these views. It is... A technology or a technique that is getting more and more accurate, but as it's something that you have billions of contents out there, I'm fearful about the accuracy of the number. What I can tell you is that it has been increasing for L'Oreal, and you have to be in that game in order to win share in this market. So that's how we do it, but at the same time, and that's very important, is that We never give up, and that's also why sometimes we have a little boost in A&P on what I would call more the equity building advertising, where you have the more traditional or more branded piece of content, which are not necessarily as instantaneous in terms of purchase generation. It's more interesting to be often more reactive, as do promotions, but they are the ones that build the brand equity over time and that you know creates the capacity of any brand to prevail over decades which is what we do we build brands and you know having L'Oréal Paris being the number one contributor to the group's growth and the first half is a sign that it's not just about the new fun stuff that appears on the market it's also about brands that have equity so I apologize for not being able to give you the accurate Thank you very much all of you for attending and we wish you a very good summer. With good sun care. Have a great one. Thank you so much.

thank you ladies and gentlemen this concludes the webcast thank you all for your participation you may now disconnect