L’Occitane International announces FY2023 results
L’Occitane International has announced its annual results for the year ended 31 March 2023 (FY2023), with dynamic growth in travel retail.
The group delivered strong double-digit growth against a challenging macroeconomic backdrop, including surging global inflation, widespread recession fears and a sharp Covid-19 related consumer pullback in China, one of its largest markets.
Net sales grew 19.8% at reported rates to €2,134.7m, exceeding the €2bn mark for the first time. Excluding the impact of the deconsolidation of the US subsidiary last year, sales grew 17.9% at reported rates and 13.4% at constant rates.
Sales growth was contributed to by the group’s newer brands, Elemis and Sol de Janeiro, as well as the resilience of the core L’Occitane en Provence brand, particularly its improved momentum in the final quarter thanks to the travel retail channel and early positive signs in China.
On a like-for-like basis, i.e. excluding Russia, the newly consolidated brands Sol de Janeiro and Grown Alchemist, the deconsolidation of the US subsidiary last year and at constant rates, sales growth was 3.7% in FY2023.
As markets around the world reopened, the group’s retail channel in key markets recovered as customers sought to rediscover its products in person. At the same time, the effective omni-channel strategy led to a more balanced channel mix, with dynamic growth in travel retail and the development of newer brands contributing to a sales growth of 50.9% in wholesale and other channels. The addition of digitally-centric brands Elemis and Sol de Janeiro to the portfolio also supported the 4.8% growth in the online channel despite the recovery in the retail channel.
The group’s resilience within the global premium beauty sector was reflected in its healthy operating profit margin of 15.8% on a management basis, i.e. excluding accounting adjustments related to one-off impairments on the underperforming brands, Melvita and LimeLife, the divestiture of the Russian business and the share of losses of associates. Mostly as a result of the impairments on the two underperforming brands, the group’s reported operating profit and net profit declined by 23.0% and 51.1% to €239.1 million and €118.2 million respectively.
- The core brand, L’Occitane en Provence, excluding the China and Russia markets, grew by 6.8% in FY2023, delivering an operating profit margin of 14.6% in FY2023.
- Elemis grew 8.9% at constant rates in FY2023 with an operating profit margin of 20.2%.
- Sol de Janeiro has grown to become the group’s second-largest brand with sales growth of 135.2% and an operating profit margin of 24.6%.
- The group’s overall sustainability performance was recognised with the EcoVadis Gold medal, placing it in the top 5% of assessed companies. After celebrating Elemis’ B Corp certification in January 2023, the group is on track to become B Corp certified in 2023.
L’Occitane Vice-Chairman and Chief Executive Officer, André Hoffmann said: “We are cautiously optimistic as we head into FY2024. While the macroeconomic environment remains uncertain, we expect to achieve double-digit sales growth and healthy profitability, supported by significantly higher marketing investments for the core brand in key markets and channels, as well as for our new brands as they enter new markets, including the upcoming launch of Sol de Janeiro and Grown Alchemist in APAC.”
“We are convinced that these investments will not only allow us to capitalise on the clear opportunities this year with the gradual return of international travel and a rebound in China, but also to propel our development as a multi-billion Euro, multi-brand group in the years to come.”
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