L'Oréal - 2018 Registration Document

1 Presentation of the Group Integrated report

BUSINESS MODEL - A DEVELOPMENT MODEL SERVING A CLEAR MISSION: BEAUTY FOR ALL

RESEARCH FACILITIES AROUND THE WORLD

14 evaluation centres 21 research centres 6 regional hubs 3 global centres (France)

Research and Innovation budget (€ million)

Research and Innovation Headcount

Number of patents filed

2016 2017 2018

850 877 914

2016 2017 2018

3,862 3,885 3,993

2016 2017 2018

473 498 505

A planetary research L’Oréal has a powerful Research & Innovation (R&I) model with unique expertise and a formidable bank of scientific and technical data, which represent a veritable asset. Advanced Research teams create, develop and source raw materials, drawing on their knowledge of skin and hair from around the world; Applied Research then invents formula architectures that increase asset performance and the Development laboratories create innovative formulas with a proven superiority for each brand. This innovation model is nurtured by a constant dialogue between the laboratories and marketing to respond to the expectations of consumers and to support them with the latest technological breakthroughs. In order to adapt to consumer expectations worldwide, L’Oréal’s research teams are present in all the geographic regions through 21 cosmetics research centres and 14 assessment centres. The research centres are grouped into 3 global centres in France (Advanced Research, Haircare Métiers and Cosmetics Métiers ) and 6 regional hubs: Japan, USA, China, India, South Africa and Brazil. These regional hubs identify the needs of consumers and their cosmetic practices. The R&I teams build on this rich seam of scientific ecosystems

to enter into collaboration agreements and excellence partnerships. The data generated enables researchers to develop new products, that are in tune with market needs and local expectations. The innovations produced are also shared in a coordinated way to promote discussion flows.

Innovations that strengthen consumer confidence

The development of digital technologies has created controversies over the safety of cosmetic products directly accessible to consumers, without providing them with all the elements for them to make an enlightened opinion. The assessment of the safety of a cosmetic product should not under any circumstances be based on the sole presence or absence of certain ingredients. Concerned over the number of contradictory opinions, some consumers are turning towards natural products, which for them are intrinsically safe. Aware of this phenomenon, researchers have reconsidered the way in which they develop new products, by including this perception of safety, whilst remaining intransigent over ingredient safety and product quality and efficacy, as well as over the accuracy of claims.

REGISTRATION DOCUMENT / L'ORÉAL 2018

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