L'Oréal - 2018 Registration Document

4 2018 Consolidated Financial Statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AcneFree markets and distributes, in the USA, a complete range of OTC skin-cleanser products that can be obtained without prescription, and acne-treatment products. Ambi distributes skincare products designed to meet the needs of multi-ethnic consumers. Both brands are distributed in drug stores, mass retailers and select online outlets. These three brands generated combined annual sales of approximately US $168 million in 2016. CeraVe, AcneFree and Ambi will become part of L’Oréal’s Active Cosmetics Division, which includes brands such as La Roche-Posay, Vichy and SkinCeuticals that are developed with and endorsed by health professionals – dermatologists, paediatricians and other physicians. This operation was finalised on 3 March 2017. This acquisition has been fully consolidated since 3 March 2017. On 2 May 2017, L’Oréal USA announced that SalonCentric has agreed to acquire key assets from Four Star Salon Services, a full-service wholesale distributor headquartered in Hauppauge, New York. This acquisition will provide SalonCentric, L’Oréal USA’s professional salon distribution operation, with expanded distribution coverage of salon professional products within New York, New Jersey and Connecticut. The acquisition will align Four Stars’ field sales and stores with SalonCentric’s field sales and store network. In total, 11 stores and various field positions that service approximately 3,500 salons will be included in the transaction. This acquisition was finalised on 31 May 2017. This acquisition has been fully consolidated since 31 May 2017. The cost of these new acquisitions represents €1,245.3 million. The total amount of goodwill and other intangible assets resulting from the acquisitions was €1,017.8 million and €198.4 million, respectively. In 2017, these acquisitions represent around €154.1 million in full-year sales and €31.0 million in full-year operating profit. b) Other operation On 9 June 2017, L’Oréal announced, following an extensive review of the strategic options for The Body Shop to ensure its best future development, having received a firm offer from Natura Cosmeticos SA to acquire The Body Shop and has entered into exclusive discussions with Natura. The sale contract to Natura Cosmeticos SA was signed on 27 June 2017. After obtaining the necessary authorisations from the competent authorities, L’Oréal and Natura Cosmeticos SA finalised the definitive agreement to sell The Body Shop to Natura on 7 September 2017, in accordance with the terms of the project communicated on 9 June 2017 (note 2.3.).

full-service wholesale distributor of salon professional products. The acquisition will expand SalonCentric’s distribution coverage of salon professional products in Pennsylvania, New Jersey, Delaware, and portions of Maryland, West Virginia and New York, representing approximately 3,500 salons. This acquisition has been fully consolidated since 26 February 2016. On 30 June 2016, L’Oréal announced the signature of an agreement to acquire Atelier Cologne. Launched in 2009, Atelier Cologne specialised in niche perfumery sold in selected retailers. This operation was finalised on 25 July 2016. This acquisition has been fully consolidated since 25 July 2016. On 13 July 2016, L’Oréal has submitted a firm offer to Rivadis group for the acquisition of the Société des Thermes de Saint-Gervais-les-Bains and licence to use the Saint-Gervais Mont-Blanc brand. Based on this offer, the Rivadis group has granted exclusive negotiation rights to L’Oréal. This operation was finalised early-November and has been fully consolidated since 1 November 2016. On 22 July 2016, L’Oréal announced the signing of a definitive agreement to acquire IT Cosmetics, one of the fastest growing prestige beauty brands in the United States for a cash purchase price of US $1.2 billion. For last 12 months prior to the acquisition, IT Cosmetics had sales of US $182 million. Founded by Jamie Kern Lima and Paulo Lima and co-owned by TSG Consumer Partners, IT Cosmetics was developed with leading plastic surgeons to provide women with innovative, problem-solving skincare and makeup products that empower them to feel confident and beautiful. This acquisition was finalised on 31 August 2016. This acquisition has been fully consolidated since 31 August 2016. The cost of these new acquisitions amounted to €1,238.8 million. The total amount of goodwill and other intangible assets resulting from the acquisitions amounted to €932.5 million and €286.3 million, respectively. In 2016, these acquisitions represented €224.5 million in full-year sales and €51.5 million in full-year operating profit. Impact of changes in the scope 2.2. of consolidation in the cash flow statement In 2018, this item mainly related to the acquisitions of Stylenanda, Pulp Riot, ModiFace, Logocos and the La Roche-Posay thermal centre. In 2017, this item mainly related to the acquisitions of CeraVe and the assets of Four Star Salon Services, as well as the sale of The Body Shop to Natura. In 2016, this item mainly related to the acquisitions of Raylon, IT Cosmetics, Atelier Cologne and Thermes Saint-Gervais.

Year 2016 2.1.3. Acquisitions

On 4 January 2016, L’Oréal USA announced the signing of an agreement to acquire key assets from Raylon Corporation, a

REGISTRATION DOCUMENT / L'ORÉAL 2018

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