Sales At September 30Th 2008

12.912 billion euros
+7.4% at constant exchange rates,
+4.4% like-for-like,
+2.2% based on reported figures
At 9 months, L'Oréal continues to strengthen its worldwide position and grow very rapidly in the new markets

12.912 billion euros

+7.4% at constant exchange rates*,
+4.4% like-for like,
+2.2% based on reported figures

At 9 months, L'Oréal continues to strengthen its worldwide position and grow very rapidly in the new markets.
Confident in its development strategy, L'Oréal is maintaining strong advertising and promotional support for its brands despite the tougher economic environment.
2008 targets:
- Like-for-like sales growth of approximately +4%
- Net Earnings per share (1) growth of approximately +7% to +8% at constant exchange rates*.

Like-for-like, i.e. based on a comparable structure and identical exchange rates, the increase in the sales of the L'Oréal group was +4.4%.
The net impact of changes in consolidation, mainly as a result of the acquisitions of YSL Beauté, of PureOlogy, Beauty Alliance, Maly’s West, Columbia Beauty Supply, CollaGenex Pharmaceuticals in the United States and of Canan in Turkey, amounted to +3.0%.
Currency fluctuations had a negative impact of -5.2% (at current exchange rates, the impact would be - 3.7% for the whole of 2008).
Growth at constant exchange rates was +7.4%.
Based on reported figures, the group's sales, at September 30th 2008, amounted to 12.912 billion euros, an increase of +2.2%.

Commenting on the figures, Mr Jean-Paul Agon, Chief Executive Officer of L'Oréal, said:
We had anticipated that the growth at the end of June would continue in the 3rd quarter; however, since September, we have noted a clear slowdown in some markets in Western Europe and North America, and have been confronted with a contraction of purchasing by some distributors in view of the current economic crisis.
With like-for-like 9-months sales growth of +4.4%, and +7.4% at constant exchange rates*, we are continuing to increase our worldwide market share; our 4th quarter will be bolstered by numerous initiatives developed by our brands, which are off to a good start.
In view of this tougher environment which remains uncertain, we now consider it more prudent to forecast 2008 like-for-like sales growth close to that reached at 9 months- i.e. approximately +4%.
Nevertheless, we have made the decision to maintain strong advertising and promotional support for our brands in the 4th quarter in order to prepare for 2009 in the best possible conditions.
As a result, our target for 2008 is now to achieve net earnings per share
(1) growth of approximately +7% to +8% at constant exchange rates*. This represents a further significant improvement compared with 2007, particularly allowing for the dilutive impact of the consolidation of Yves Saint Laurent.
Confident in our development strategy, we are looking ahead to 2009 with realism, but also with the determination to continue strengthening our worldwide position thanks to the quality of our innovations and the richness of our brand portfolio.”

* based on constant translation rates:
2008 data at 2008 rates / 2007 data at 2008 rates
excluding non-recurrent items

Sales by operational division and geographic zone

Third quarter 2008At September 30th 2008


€mLike-for-likeReported €mLike-for-likeReported
By operational division      
Professional Products599.4+ 0.2%- 2.7%1,848.4+ 2.6%+ 4.5%
Consumer Products1,995.4 + 2.3%- 0.9%6,302.1+ 4.6%+ 0.2%
Luxury Products1,082.7 + 2.5%+ 15.3%2,893.9+ 4.0%+ 4.4%
Active Cosmetics281.9+ 5.4%+ 5.1%1,020.0+ 4.7%+ 3.6%
Cosmetics total3,978.2 + 2.1%+ 3.4%12,112.5+ 4.0%+ 2.1%
By geographic zone      
Western Europe1,744.6- 1.8%+ 3.9%5,539.6+ 0.3%+ 1.1%
North America925.7- 5.7%- 10.8%2,729.6- 2.3%- 8.0%
Rest of the World, of which:1,308.0+ 15.0%+ 15.6%3,843.3+ 15.5%+ 12.5%
- Asia432.9+ 15.2%+ 13.9%1,310.7+ 18.1%+ 12.2%
- Eastern Europe337.6+ 27.5%+ 29.6%1,031.1+ 26.4%+ 26.4%
- Latin America312.2+ 7.6%+ 6.9%842.6+ 5.7%+ 2.8%
- Other countries225.3+ 9.3%+ 13.1%658.8+ 9.1%+ 7.6%
Cosmetics total3,978.2+ 2.1%+ 3.4%12,112.5+ 4.0%+ 2.1%
The Body Shop 176.2+ 8.1%- 2.2%510.1+ 7.6%- 2.0%
Dermatology(1)111.5+ 17.9%+ 16.4%289.8+ 17.7%+ 13.6%
Group total4,266.0+ 2.7%+ 3.4%12,912.3+ 4.4%+ 2.2%
(1) Group share, i.e. 50 %

Cosmetics Branch. Sales trends by division and zone

The Professional Products Division achieved like-for-like growth of +2.6%. The Division is winning market share by conquering new salons and launching new services.
The luxury brands are continuing to prove highly dynamic. Kérastase is expanding with the success of Chroma Riche for hair with highlights, and of Nectar Thermique for damaged hair. Shu Uemura Art of Hair, the premium Japanese haircare brand, is launching its new line Muroto Volume for fine hair.
L’Oréal Professionnel is moving into the buoyant segment of natural products with the haircare line Série Nature and is introducing two innovative hair colourants: Les Rouges Rubilane and the lightening paste Platinium Plus.
Redken 5th Avenue is launching Real Control, a haircare line specially developed for South American and Mediterranean hair.
Kéraskin Esthetics, the new professional skincare brand, is now present in 4 countries.

The Consumer Products Division grew by +2.3% in the 3rd quarter, with like-for-like growth over the first 9 months reaching +4.6%. As we had previously announced, 3rd quarter growth has been held back both by launch phasing and by early Maybelline/Garnier invoicing in the USA in the 2nd quarter, due to the introduction of the SAP information system on July 1st, which had an unfavourable impact of 1.7% on the division's 3rd quarter growth.
In skincare, the success of Skin Genesis from L’Oréal Paris is continuing, with roll-out in the Rest of the World zone, and the launch of cleansing products. At Garnier, the launch of Eye Roll-on Caffeine, a new eyecare routine, is proving highly successful.
In make-up, the excellent start of Volume Collagene mascara and Infallible powder from L’Oréal Paris, together with Superstay PowerGloss lipstick from Maybelline, should be confirmed in the 4th quarter.
Casting Crème Gloss hair colourant from L’Oréal Paris is proving increasingly successful worldwide, and Excell 10’, with new 10-minute permanent colouration technology, is already helping to bolster the European market.
Elsève Re-Nutrition by L’Oréal Paris in Europe, Total Reparaçao 5 in Latin America, Fructis Blond Care and Soft Waves from Garnier are strengthening the division's positions in haircare.

The worldwide sales of the Luxury Products Division have grown by +4.0% up to the end of September. Growth has been driven by the Rest of the World zone, and particularly by Eastern Europe, while growth rates are again excellent in Asia, the Middle East and Latin America.
In fragrances, the Division is reaping the benefits of the promising launch of Magnifique by Lancôme and the very good performance of Emporio Armani Diamonds for Men. The launch of Notorious by Ralph Lauren should consolidate the brand's performance, and the same is true of Diesel Unlimited in women's fragrances.
The Division is strengthening its positions in skincare, with launches including Prodigy Re-Plasty by Helena Rubinstein and the success of the Rénergie line by Lancôme. There was also a very strong performance in men's skincare, with Facial Fuel from Kiehl’s proving particularly successful
In make-up, the Division is continuing its conquests, with the launches of Ôscillation, the first powermascara by micro-oscillation, for which 4 patents have been filed, and Absolu Rouge by Lancôme and Rouge Volupté from Yves Saint Laurent.

After accelerating in the 3rd quarter with a growth rate of +5.4%, the Active Cosmetics Division has achieved like-for-like growth of +4.7%. Its results are driven by the good performances in the Rest of the World zone.
Vichy is continuing to advance in the new markets, and is introducing major innovations such as Liftactiv CxP, the first "biological lifting", and Aminexil Energy.
La Roche-Posay is maintaining its rapid growth thanks to the success of its facial skincare line as well as Physiological Cleansers and the launch of Kerium Anti-hairloss.
Innéov is growing strongly with the launch of Innéov homme anti-hairloss.
The gradual roll-out of SkinCeuticals is continuing in Europe.

Western Europe

At the end of September, the group achieved like-for-like growth of +0.3% in Western Europe, in a market whose growth has slowed.

- The Professional Products Division is continuing to win market share, particularly in Germany, the United Kingdom and the Scandinavian countries.
The Consumer Products Division is consolidating its positions in skincare and make-up. L’Oréal Paris is winning market share thanks to Excell 10’ and Elsève Re-Nutrition. Germany is recording a good performance, as is Northern Europe. France and Spain are particularly affected by the changing economic environment.
The performances of the Luxury Products Division are being bolstered by a set of targeted initiatives, particularly in fragrances and make-up, and by the dynamism of the relay brands Kiehl’s and Shu Uemura. The highest growth rates are being recorded in the United Kingdom and the Netherlands.
The Active Cosmetics Division recorded a better performance in the 3rd quarter, boosted by the powerful innovations of the Vichy brand.

North America

North America had a difficult 3rd quarter, with -2.3%, like-for-like, at the end of September, in the context of a negative 3rd quarter market trend, and stock reductions by distributors.

The Professional Products Division is strengthening its hair colourant positions by conquering new salons. Salon retail sales have been slower, affected by a sharp drop in salon visits. Kérastase, Shu Uemura Art of Hair and Mizani are maintaining high growth rates in top-end salons.
- The Consumer Products Division trend was negative in the 3rd quarter, partly because of additional invoicing of Maybelline and Garnier products at the end of June. In a highly competitive context, the Division's facial skincare breakthrough is continuing, and it is strengthening its leadership in make-up.
- The sales of the Luxury Products Division are contracting, reflecting a decline in department store footfall and inventory reductions, despite the successful launches of Lancôme, Ralph Lauren and Giorgio Armani fragrances.
The Active Cosmetics Division is continuing the upmarket roll-out of the Vichy and La Roche Posay brands in American drugstores, while SkinCeuticals is successfully launching its new anti-oxidant skincare line Phloretine CF.

Rest of the World

Dynamic growth is continuing in the Rest of the World zone at +15.5%, where the group continues to strengthen its positions significantly.

Over the first nine months, growth in the Asia zone amounted to +18.1%, with +22.0% outside Japan. The group is winning market share not only in Northern Asia, but also in China and the countries of South-East Asia.
In Japan, despite some contraction in the market over the summer, the group is performing well thanks to the good figures of Kérastase Noctogeniste, Shu Uemura, and the anti-ageing skincare products of Lancôme.
In South Korea and Hong Kong, particularly rapid growth rates reflect the breakthroughs made by the Luxury Products Division brands.
In China, L’Oréal Paris is strengthening its leadership in its distribution universe, thanks to the expansion of the Revitalift anti-ageing skincare line and the Men Expert skincare line. Matrix is continuing its rapid roll-out in Chinese hair salons.
In South-East Asia, the 3 brands of the Consumer Products Division all produced good performances. The Garnier facial skincare range is now on sale in the main countries of the region.

The Eastern Europe zone has again been highly dynamic, with like-for-like growth of +26.4%.
Very rapid expansion is continuing in Russia across all the group's divisions. In the Consumer Products Division, the very rapid growth rate stems from products such as Casting Crème Gloss by L’Oréal Paris and Affinitone foundation by Maybelline. Lancôme and the Giorgio Armani men's fragrances are enabling the Luxury Products Division to strengthen its positions, and the same is true of Kérastase in the Professional Products Division.
Growth rates remain high in Poland, Ukraine, Romania, Slovenia and Croatia.

Sales in Latin America advanced in the 3rd quarter, reaching +5.7% at the end of September, with contrasting