LOREAL_Registration_Document_2017

2017 Parent Company Financial Statements * NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS

Provisions for liabilities and charges NOTE 18

Reversals (used)

Reversals (Not used)

Charges

Other 31.12.2017

31.12.2015 31.12.2016

€ millions

Provisions for litigation (1)

202.5

195.4

1.5

-1.2

-0.4

-

195.3

Provisions for foreign exchange losses (2)

4.9

8.2

31.4 88.1 30.7

-108.8

-

100.6

31.4

Provisions for expenses

118.4 135.0 460.8

107.3

-75.6

-5.3 -5.1

10.1

124.6 115.0

Other provisions for liabilities (3)

90.7

-2.6

1.3

TOTAL 466.3 L’Oréal SA was ordered to pay a fine of €189.5 million following the decision handed down in first instance by the French competition authority on 18 December 2014. (1) L’Oréal appealed against this decision. On 27 October 2016, the Paris Court of Appeal upheld the first instance decision. L’Oréal has lodged an appeal in cassation. It should be noted that since the appeal did not entail a stay in the judgement, the fine provisioned at the end of 2014 was paid on 28 April 2015. The provision was maintained in liabilities and the payment recognised in “Other current assets” (see note 16). The change booked under “Other movements” stems from the change in accounting method relative to ANC Regulation No. 2015-05 (note 1.12). (2) This section mainly includes provisions set aside to cover risks related to government bodies, commercial and financial risks, and personnel-related costs. (3) 401.6 151.7 -188.2 -10.8 112.0

The changes in provisions for liabilities and charges impact the 2017 income statement as follow:

Reversals (used)

Reversals (not used)

Charges

€ millions

Operating profit

54.8 69.7 27.2

-47.4

-7.8

Net financial income Exceptional items

-138,5

-

-2.3

-3.0

5

TOTAL

151.7

-188.2

-10.8

Borrowings and debt NOTE 19

L’Oréal obtains financing through medium-term bank loans and issues short-term marketable instruments in France. The amount of the programme is €4,000 million. None of the Group’s borrowings or debt contains an early repayment clause linked to financial ratios (covenants).

Liquidity on the short-term marketable instruments issues is provided by confirmed short-term credit facilities with banks, which amounted to €3,675 million at 31 December 2017, €3,727 million at 31 December 2016 and €3,813 million at 31 December 2015.

All borrowings and debt are denominated in euros and can be broken down as follows:

BREAKDOWN BY TYPE OF DEBT € millions

31.12.2017

31.12.2016

31.12.2015

Bonds

-

- -

-

Short-term marketable instruments

200.0

100.0 750.3

Bank overdrafts and financing with the Group’s cash pool

-

154.5

Other borrowings and debt

11.6

14.5

17.7

TOTAL

211.6

169.0

868.0

BREAKDOWN BY MATURITY DATE € millions

31.12.2017

31.12.2016

31.12.2015

Less than 1 year

200.5

154.7

850.5

1 to 5 years

9.9 1.2

13.0

16.2

More than 5 years

1.3

1.3

TOTAL

211.6

169.0

868.0

REGISTRATION DOCUMENT / L'ORÉAL 2017

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