L'Oréal - 2018 Registration Document

2018 Consolidated Financial Statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Diluted earnings per share of continuing operations

2018

Number of shares Diluted earnings per share

Shares carrying ordinary dividend rights Shares carrying preferential dividend rights

514,624,593 48,473,913

6.86 7.54

6.86 7.54

Diluted earnings per share of continuing operations

2017

Number of shares

Diluted earnings per share

Shares carrying ordinary dividend rights Shares carrying preferential dividend rights

517,623,734 45,904,768

6.30 6.93

6.73 7.40

Diluted earnings per share of continuing operations

2016

Number of shares

Diluted earnings per share

Shares carrying ordinary dividend rights Shares carrying preferential dividend rights

523,478,712 41,030,423

5.46 6.01

5.46 6.01

Provisions for liabilities and charges – Contingent liabilities NOTE 12 andmaterial ongoing disputes

4

Provisions for liabilities and charges 12.1.

ACCOUNTING PRINCIPLES Provisions for liabilities and charges are set up to cover probable outflows for the benefit of third parties without any equivalent consideration being received by the Group in return. They relate mainly to restructuring costs and tax risks and litigation, industrial, environmental and commercial risks relating to operations (breach of contract, product returns) and employee-related risks.

These provisions are estimated on the basis of the assumptions deemed most probable or by using statistical methods, depending on the type of provisions. Provisions for liabilities and charges are recorded either as Non-current liabilities or as Current liabilities , depending on their nature. Provisions for liabilities or litigation which must be settled within 12 months of the closing date, and those linked to the normal operating cycle ( such as product returns), are recorded as Current liabilities . Other provisions for liabilities and charges are recorded as Non - current liabilities .

Closing balances 12.1.1.

31.12.2018

31.12.2017

31.12.2016

€ millions

Non-current provisions for liabilities and charges

336.1 336.1 979.8 102.1 316.8 560.9

434.9 434.9 889.2 146.0 303.6 439.6

333.3 333.3 810.7

Other non-current provisions (1)

Current provisions for liabilities and charges

Provisions for restructuring Provisions for product returns Other current provisions (1)

47.5

323.4 439.8

TOTAL 1,144.0 This item notably includes provisions for tax risks and litigation, as well as industrial, environmental and commercial risks relating to operations (breach of contract), (1) personnel costs, investments in associates when the Group's share in the net asset is negative, as well as risks relating to investigations carried out by competition authorities (note 12.2.2.a and b). At end-December 2017, L’Oréal and some of its subsidiaries in France received a reassessment proposal relative to 2014 financial year, mainly concerning corporate tax. After consulting with its tax advisors, L’Oréal decided to contest these reassessments and sought the legal means of recourse to ensure its defence. The process was ongoing at end-2018 and the inspections for 2015 for L’Oréal and 2015 to 2017 for its subsidiaries were not yet complete. In 2018, L’Oréal reconsidered the assessment of its risks in Brazil, particularly concerning the IPI (see notes 12.1.2 and 12.2.1.) 1,315.9 1,324.1

REGISTRATION DOCUMENT / L'ORÉAL 2018

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