L'Oreal builds on two decades of growth as profits soar

L'Oreal Has set its sights on notching up two decades of consecutive annual double-digit growth after reporting a 13.5 per cent rise in profit last year.

The cosmetics giant said strong demand for its brands such as Maybelline make-up and Fructis haircare in emerging markets was behind its net operating profits of €1.65bn (£1.11bn), up from €1.46bn a year earlier.

Its sales in China soared by 69 per cent and in Russia by 39 per cent, against more muted growth of 4 per cent in the eurozone and 7 per cent in the US. Lindsay Owen-Jones, the chairman, said: "I would say that in terms of turnover we aim to beat the 2003 figure for internal growth." Last year, internal sales, excluding currency effects, acquisitions and divestments, rose by 7.1 per cent. The resurgent euro knocked group sales by 1.8 per cent but its operating margin was stronger at 14 per cent against 12.9 per cent the previous year.

Mr Owen-Jones said the group, which recently unveiled plans to tidy up its shareholding structure, planned to hang on to its 20 per cent stake in Sanofi-Synthelabo if the French drug group succeeds with its hostile takeover bid for Aventis.

L'Oreal intends to ask investors to back the decision of its two biggest shareholders - Switzerland's Nestle and the billionaire Bettencourt family of France - to end a 30-year agreement that gave them control of the cosmetics giant through Gespral, a company that owned 54 per cent of its stock.

After the move, the Bettencourts will have a 27.5 per cent stake and Nestle a 26 per cent holding.