L'Oréal - 2018 Registration Document

Presentation of the Group Integrated report BUSINESS MODEL - A DEVELOPMENT MODEL SERVING A CLEAR MISSION: BEAUTY FOR ALL

31 of L’Oréal’s industrial sites were “carbon neutral” at year-end 2018, an increase of 29% since 2017, including 12 plants (Libramont in Belgium, Settimo in Italy, Burgos and Alcalá de Henares in Spain, Rambouillet, Ormes, Gauchy, Tours, Vichy and La Roche Posay in France, Karlsruhe in Germany, Yichang in China). At year-end 2018, three plants were “dry plants” (Burgos in Spain, Settimo in Italy and Vorsino in Russia): all the water required by the utilities (equipment cleaning, steam production, etc.) comes from reused or recycled water in a closed circuit on-site (see paragraph “The dry plant concept”, 3.3.1.3, B/ “Preserving water resources”). L’Oréal’s over 25-year commitment to environmental leadership was recognised in 2016, 2017 and 2018, by the best possible rating from the CDP (1) . This year, L’Oréal became the only company worldwide, out of 7,000 companies assessed, to receive a triple “A” ranking for the third consecutive year, for its commitment and results in each of the key areas for environmental protection: the fight against climate change, sustainable water management and the fight against deforestation. Fast-changing omni-channel logistics strategy L’Oréal Group’s supply chain organises and optimises all product delivery flows to all our customers as well as direct deliveries to e-commerce consumers. It is responsible for making sure that the products are delivered under optimum conditions, at the right time and at the best cost. L’Oréal is unique in the cosmetics market in that it serves a global market through a diverse range of distribution channels (hair salons, mass-market retail channels, perfumeries, department stores, pharmacies, drugstores, medispas, branded retail, Travel Retail, e-commerce) with a brand portfolio of many different beauty and cosmetic product categories. L’Oréal continuously optimises all information flows and physical flows from suppliers to customers.

At the heart of production: environmental protection

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The Group’s environmental policy aims to roll out best practices in sustainable production to preserve resources. It spans energy efficiency, the use of renewable energy, optimisation of water consumption and recycling, and reduction of waste generation, amongst others. Results in 2018 once again demonstrated L’Oréal’s capacity to decouple increased production (+38% since 2005) from environmental impact with CO 2 emissions cut by 77% in absolute terms since 2005, water consumption per finished product down 48% and waste generation per finished product reduced by 37%. It should be noted that 97% of residual waste was recovered in 2018, meaning that it was reused, recycled or used for energy recovery.

RESPONSIBLE PRODUCTION

+ 38%

- 37%

- 48%

- 77%

2005

2018

Growth in production Waste generation per finished product unit

Water consumption per finished product unit CO 2 emissions in absolute terms

The CDP is an independent NGO which offers a global system for the measurement and publication of environmental information and which assesses (1) the strategy, close involvement and results obtained by companies in the fight against climate change, sustainable water management and forest protection.

REGISTRATION DOCUMENT / L'ORÉAL 2018

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