Morning, everybody. We are right on time to start this meeting. Let me begin by saying that I hope that you and your families are all safe and well. I'm joined here today by Christophe Babule, our CFO and Nicolas Hieronimus, Deputy CEO and Head of Divisions. As you know, Nicolas will become CEO of L'Oreal, of the group, on the 1st May.
In previous years, we have been joined by the presidents of our divisions. This year, to respect the strictest health and safety measures, we have decided to limit the number of people on stage. The presentation of the 4 division heads have been recorded, and they will then join us remotely by telephone to answer your questions during the Q and A session. So first, a quick word from Francoise Louvain with the housekeeping details, and then we will begin.
Good morning, ladies and gentlemen. We are happy to welcome you to this virtual presentation of our 2020 annual results, which is webcast live in our dedicated website, l'oreal finance.com. Let's have a quick look at the agenda of this meeting. Christophe Babule, our CFO, We'll kick off with a presentation of the financial statements and of our extra financial performance. Then Each Head of Division will summarize the 2020 highlights of his or her division as well as the prospects for 2021.
Jean Paul Agon, our Chairman and CEO, will explain how well L'Oreal navigated through this unprecedented year, And he will let Nicolas Hieronymus, our Deputy CEO, conclude the session. Nicolas will share his strategic perspectives for the long term And his total confidence in the future of L'Oreal. At about 10 o'clock, we will move to the Q and A session, Which will last to the end of the meeting at around 11 Before we start, I would like to draw your attention to a couple of points. The meeting will be held in English, so but there is a simultaneous translation in French for those of you who feel more comfortable in that language. At the end of the presentations, the Q and A session will be in audio mode.
You may use the audio connection now If you would like to follow the presentations by phone in a listen only mode, all slides and visuals We will kindly ask you to state your name and company name as clearly as possible before you ask your questions in English. We will also take some questions sent by e mail, and we kindly ask our journalist guests To raise their questions during the latter part of the Q and A session, before we start, I would like you to read the disclaimer That you should now see on the screen. For those of you in an audio mode, it can be found on the last page of the presentations. Last point, the recorded webcast of the meeting will be available this afternoon in the Annual Results section of our dedicated finance Website. I thank you for your attention and wish you a pleasant meeting.
Thank you very much, Francoise. Now I will pass the microphone to Christophe, who will show us the results of 2020.
Thank you, Jean Paul. Ladies and gentlemen, good morning. The presentation of L'Oreal's financial results for 2020 We'll include information about sales, profit, cash flow, balance sheet, dividend and extra financial performance. Consolidated sales amounted to €27,900,000,000 down 4.1 percent like for like. Sales recovered swiftly from June onwards from an 11.7% decline in the first half to a like for like growth of plus 3.2% in the second half and even 2 plus 4.8 percent growth in the 4th quarter.
At constant exchange rates, sales decreased 3.6%. The change in the scope of consolidation is positive by 0.5%, mainly due to the acquisitions of the Mugler and Parfums ZARO brands as well as of the American skincare brand, Thiers, Partly offset by the disposal of Roger Gallet and the termination of Clarisonic. After taking into account a negative currency impact of minus 2.7%. Reported sales declined by 6.3%. Note that the currency impact Deteriorated throughout the year to minus 5.6 percent in the 4th quarter.
Currencies. More than 60% of the group's business is invoiced in 3 currencies: the euro, which accounted for 20.7% of sales in 2020 The U. S. Dollar for 22.8 percent and the Chinese yuan for 18.2 percent. In 2020, most currencies weakened against the euro, but for the Japanese yen, which was stable.
The dollar was on average 1.8 percent lower. The Chinese yuan depreciated 1.7% and the pound sterling 1.3%. The Canadian dollar dipped by 2.8 percent. The Russian ruble lost 11.6 percent. And the Brazilian real fell by 24 point 1%.
You may find this table useful to update your estimates in the current year. And as far as the impact of currencies is concerned, it is too early at this stage to forecast precisely what it will be in 2021. However, I can tell you that extrapolating current rates of €1,000,000 at around $1.21 The impact on full year sales will be negative to the tune of 3.5%, which, of course, a more negative impact in the first quarter, Estimated at around minus 6%. Sales by division. The Professional Product division ended the year at minus 6.4 percent With a very strong rebound of +8.7 percent in the second half.
The consumer product division was penalized by its Heavy footprint in makeup and posted a decrease of minus 4.7%. L'Oreal Luxe achieved a good 4th quarter with a growth of +4.4 percent and ended the year with an 8 0.1% sales decline. The division recorded growth in the Asia Pacific zone in 2020. Lastly, the Active Cosmetics division achieved record growth of 18.9%. Note that the division posted growth in all regions, Especially North America, which grew at 42.5%.
By region, Western Europe posted an annual decline of minus 10.3 percent with a much better second half at minus 4.3%. It was penalized by the sharp reduction in international travel. And excluding travel retail, the zone will be flat in the second half. North America is at minus 7.4 percent with a positive second half. The Professional Products and Consumer Product divisions We're remarkably resistant, but the performance was held back by L'Oreal Luxe.
The new markets zone recorded growth of 1.5% With growth of 13.5 percent in the 4th quarter. Sales in Asia Pacific increased by 3.5%, driven by a strong growth of 27% in Mainland China. Sales in Eastern Europe were at minus 4.9%. Latin America limited its decline to minus 1.5%, thanks to good growth of 10.5% in Brazil. And Africa Middle East, which was affected by instability in certain markets, posted a 3.3% decrease.
Now here is the breakdown of 2020 sales by geographic zone. The weight of Asia Pacific has increased further, Endozone now accounts for 35% of total sales. Western Europe represents around 27% of total sales And North America, a little less than a quarter. And in descending order by weight come Eastern Europe at 6%, Latin America at 5.2% and Africa Middle East at 2.2%. Sales by category now.
Skincare is growing in all the divisions that are active in the category, with Slightly more than €11,000,000,000 in sales and growth of 8.7%, skincare now accounts for close to 40% of Total group sales. With a decline of 21.6% over full year and of minus 15.5% in the second half, Makeup was heavily impacted by the pandemic. The category now represents 21% of total sales. Hair Care is stable at minus 0.8 percent, while hair coloring posted 2.3% growth. Finally, the fragrance category, which represents 9% of total sales, posted a decline of 15.4% over the full year with a much better second half at minus 6.2%.
Let's move to the profit and loss account. Gross margin is up by 10 basis points to 73.1 percent of sales. Currency impacts, Both translation and transaction are positive by 60 basis points. The impact of changes in the scope of consolidation are negative by 40 basis The positive mix effects within each division almost compensated for the negative impacts of the lower production volumes on the cost of sales and of the increase in distribution costs. Research and innovation expenses are up by 10 basis points at 3.4% of sales.
Advertising and promotion expenses are also higher by 10 basis points at 30.9% of sales. Our choice was to be extremely flexible in allocating these business drivers in order to seize All possible market opportunities where they occurred. Note that 63% of our media expenses were digital. Selling, general and administrative expenses declined by 7.1% in absolute terms Or by 20 basis points to 20.1 percent of sales. And operating profit amounted to €5,200,000,000 or 18.6 percent of sales, a level of change from that of 2019.
2020 was a tale of 2 halves: The first half of resilience and the second half returning to a virtuous P and L dynamic with a like for like sales growth of 3.2% And 140 basis points improvement of the operating profit margin to 19.1%. Profitability by division. The profitability of the Professional Products division came out at 18.8% compared with 20.1 percent in 2019. The profitability of the consumer product division increased by 20 basis points at 20.4 percent. The profitability of L'Oreal Luxe at 22.4 percent decreased slightly by 20 basis points.
And the profitability of Active Cosmetics divisions came out at 25.4%, a significant increase of 210 basis points compared to 2019. Non allocated expenses came out at 2.9% of sales, And therefore, the operating profit margin is stable at 18.6 percent of sales. Let's continue with the P and L. Finance expenses amounted to €95,000,000 In 2020, they were higher due to the cost of interest rates hedging instruments And the commissions related to the credit line secured in the Q2. For 2021, finance expenses can be expected at this stage To be close to €90,000,000 Sanofi dividends amounted to €372,000,000 You will have noted that Sanofi recently announced a 1.6% increase in dividend.
Tax Amounted to €1,383,000,000 The tax rate at 25.2 percent is similar to the level of 2019 at 25.4%. For 2021, at this stage in the year [SPEAKER IGNACIO CUENCA ARAMBARRI:] And all other things being equal, we anticipate a tax rate similar to the level of 2020. Net profit, excluding non recurring items, amounted to €4,100,000,000 and earnings per share declined 5.7 percent €27,030 For those of you who would like to carry out a simulation for 2021, It will be best at this stage of the year to factor in an average diluted number of shares close to 561,000,000. Non recurring items in 2020 were negative by €535,000,000 On top of the EUR 322,000,000 already accounted for in the first half, they include mainly: First, charges for the reorganization of the distribution network of L'Oreal Luxe in the United States and of the Maybelline and Vichy brands in Mainland China. 2nd, charges for miscellaneous reorganizations in Western Europe.
And then other charges, including acquisitions related costs, litigation, donation and endowment. The full year 2020 pretax nonrecurring items breakdown as follows: Depreciations of assets for €90,000,000 charges for various reorganizations for a total of €322,000,000 And the remaining €297,000,000 for other charges. After taking into account all nonrecurring items, Net attributable profit amounted to €5,000,000,000 to €3,563,000,000 down by a limited 5%. Cash flow amounted to €5,700,000,000 marginally below that of 2019. Working capital requirement showed a strong improvement of €729,000,000 This improvement is mainly due to the disciplined management of inventories and of account receivables, combined with the phasing of some expenses towards the end of the year.
CapEx amounted to 3.5 percent of sales or €972,000,000 below the level of 2019. The decrease is mainly due to lower investment in stores and POS material. For 2021, an investment level in the order of 4.5% of sales may be expected. Operating net cash flow increased 8.9 percent to around €5,500,000,000 Finally, after payment of the dividend, acquisitions, redemption of the lease debt and increase in share capital reserved for employees, The receivable cash flow is positive at €1,300,000,000 The balance sheet remains Particularly solid with shareholders' equity amounting to €29,000,000,000 The cash flow the cash situation, sorry, is positive by €3,800,000,000 and by €5,500,000,000 excluding the financial lease debt. The resilience demonstrated by the group in the pandemic and the quality of the balance sheet Let the Board of Directors to propose to the AGM a 3.9% increase in dividend to €4 per share.
This increase in dividend leads to a payout ratio of 54.8%. I would like now to speak about our extra financial performance. 2020 is the final year of our Sharing Beauty With Soul program initiated in 2013 and which led to an in-depth transformation of our organization. We have fulfilled a substantial number of the targets within the allowed time frame, as you can see on this slide. We can therefore prove that it is possible to decouple environmental impact from growth while also contributing positively to society.
Thanks to these performances, L'Oreal has been recognized by several renowned international organization as a leader in the field of corporate environmental social responsibility. BICE CDP is a global leader in sustainable development For our actions to fight climate change, protect forests and manage water sustainably by Refinitiv as a top Ranking company for diversity and inclusion by EtisFair in the field of ethics and Bloomberg for gender equality. With the L'Oreal For the Future program, our sustainable development journey enters a second phase. This program It aims at a more radical transformation of our business model to respect the planetary boundaries. Our new commitments We'll also tackle our indirect extended impacts relating to the activity of our suppliers and to the use of our products by our consumers.
We also want to contribute to solving today's most pressing environmental and social challenges. The outcome of L'Oreal for the future is an ambitious strategy with measurable 10 bounds impact Reduction targets. These 2,030 objectives, of which you can see a few on this slide, have been defined in accordance with the rationale of science based targets, in line with what the scientific experts say is necessary to follow the 1.5 degrees trajectory and preserve our planet. Finally, starting in 2020, we are committing €150,000,000 to address urgent social and environmental challenges, allocating first €50,000,000 over the next 3 years To a charitable endowment fund to support highly vulnerable women. And second, €100,000,000 to impact investing in the L'Oreal Fund for net year regeneration and in financing innovative projects to promote a circular economy.
We are committed to report regularly on each and every objective with clear and transparent indicators in order to share our progress, both internally and externally. I thank you for your attention.
Thank you very much, Christophe. We will now hear the presentations of the divisions, and we will start with the Professional Products division by Nathalie Rose.
Good morning, ladies and gentlemen. 2020 was a year of remarkable performance for the Professional Products division. We did Far better than our competitors and gained huge market shares. On the full year basis, we declined by only 6.4% In a professional market estimated to be minus 16%. And we had a record second half At +8.7 percent, the best growth in 16 years.
This exceptional performance came in a year unlike Any we had ever seen, as all salons worldwide closed simultaneously. But if this crisis Affected us in the short term. It has made us stronger than ever for the long term. It has revealed How essential the hairstyling profession is for people. It has drastically accelerated the trends that we had anticipated.
Digitalization of salons, e commerce and the rise of independent stylists. We were able to accomplish in just a few months What would have normally taken years? We have outperformed the market in all geographies, And the mobilization of our teams led to an impressive rebound in the second half of the year. In North America, at +9%, where our distribution network, Salon Centric, delivers its full potential To reach independent stylists. In Western Europe, at +4%, we've gained 11,000 new salons And accelerated e commerce.
And in Asia Pacific at +14%. Our growth is boosted in the region By China, at +78%, we have found the winning strategy there, Personalized services in salons, live streaming and e commerce. From the very beginning of lockdown, Our solidarity plan for hairstylists with both financial and human support has reinforced our ties with the industry like never before. And above all, we succeeded because our transformation strategy That we initiated more than 3 years ago has enabled us to seize all market opportunities. We created unprecedented reach for our customers at a lower cost by digitizing 2 key engines of the division, Order taking and education.
Our e learning platform, L'Oreal Access, was in 17 countries at the beginning of March. It is now deployed in 85. We trained 2,500,000 hairdressers in only 2 months. We massively accelerated our e commerce, both B2B and B2C. Plus, we created a new Social Commerce with hairdressers at the center, allowing them to sell directly online to consumers.
Our e commerce has doubled since last year and now represents 20% of our total turnover. Within this new ecosystem, our brands have adapted and demonstrated their unique attractiveness. The best example is Kerastase at +14 percent over the year, showing innovation leadership And professional execution through all channels. Capitalizing on all these transformations, in 2021, The division should once again significantly outperform the market. We will lead the innovation agenda.
Innovation in our formulas. We filed 9 patents around the new metal detox by L'Oreal Professionnel. This disruptive protocol neutralizes metal in the hair fiber to eliminate risk of breakage In bleach and balayage, with a 100% reliable color result. Innovation in our packaging, Redken Lightener will be made available as dissolvable pods, caring for the planet while optimizing the customer experience. And innovation in inclusion and diversity.
CURE Manifesto by Kerastase We'll respond to the immense demand of women to express their natural beauty. We will roll out our global program, Salons for the Future by L'Oreal, proving our sincere commitment to sustainability From sourcing and production to delivery and in the salons, 65% water savings with Gyoza breakthrough technology and waste collection for strategic recycling. We will continue to elevate the profession through education. Real Campus by L'Oreal is now international, Thanks to a 20 degree program with Arizona State University. Our commitment to all stakeholders during the crisis, 1st and foremost, hairdressers has sealed our market leadership.
In a market whose value has been renewed, The division records historic growth across all geographies, revealing the power of its strategy. We will stay committed to the profession through these turbulent times. And together, we will accelerate into the future. Thank
you.
Thank you very much, Nathalie. As you have seen, it's True that 2020 has been probably one of the most amazing year for the Professional division with the strongest share gains ever. So now we'll hear Cyrille Chapuis talking about the year for the Luxury division.
Good morning, everyone. 2020 was a very challenging year for the luxury beauty industry. The brick and mortar doors were closed for several months, especially in Europe and Americas, And worldwide air traffic was down 75%. The total market, therefore, ended the year with an evolution of minus 14% versus plus 10% in 2019. The 1st semester was at minus 23%.
The 2nd semester showed a gradual improvement at minus 10%. Within that context, Laurent Lux had a very strong performance. We ended the year at €10,200,000,000 and minus 8.1 percent like for like, over performing the reference market each and every quarter, accelerating strongly during the year and ending with a very strong Q4 at +4%. All in all, in 2020, L'Oreal Luxe outperformed the market for the 10th consecutive year. Furthermore, despite the very challenging environment, The division closed the year with a level of profit of 22.4%, just 20 basis points below 2019.
How did we achieve this? Well, this crisis has actually enhanced furthermore our strength and confirmed the transformative Choices we made very early in the crisis were the right ones. 1, the choice of going full blast into e commerce. The division adapted very quickly to the new market conditions by reshaping and reallocating its business drivers across its whole digital ecosystem. Total e commerce has grown by 63% in 2020.
It has grown in every single region, and e commerce is now 37% of our Alux Business. It will soon be 50%. 2, the choice of investing strongly behind direct to consumer, both in offline and online. Direct to consumer is the most strategic channel of all, because we control there the full customer experience, the full data. When every competitor cancel or postpone their launches, well, we kept them and pushed very hard behind them.
4, the choice of Reinforcing our position on the Chinese consumer, the number one Luxe consumer on the planet. We invested more than ever in China in 2020, and L'Oreal Luxe is more than ever number 1 in the Chinese local market and Lancome more than ever the favorite brand of Chinese women. Thanks to this approach, the division has gained market shares in almost every region. In Asia Pacific, first. L'Oreal Luxe has grown by 12% on the market at minus 1%.
This great performance is driven by Mainland China, which once again posted remarkable growth at +30%. But we also gained market shares in all 15 Asian markets in 2020. LoRaLux has delivered a strong performance in Western Europe also, Evolving at minus 6 percent on the market at minus 16%. In our historical region, we are still making Solid share gains, reaching highest historical levels, despite the closing of our brick and mortar point of sales. L'Oreal Luxe France, for instance, became, for the first time, the number one Luxe player ahead of the historical leader.
In North America, we slightly lost share. This is due to our footprint in makeup and department stores. So we finished the year at minus 17% on the market at minus 15%. But thanks to an impressive e commerce acceleration On the second half of the year, North America confirmed its road to recovery. Finally, in Travel Retail.
Well, the global shopper portion of the business has suffered, for sure. The market was at minus 25%. But we managed to keep our strong positions, Closing at minus 22%, thanks to our strength in Hainan and Korea. In terms of Lux categories now, L'Oreal Luxe has outperformed the market in all 3 categories, this thanks to a strong and balanced brand portfolio, An ideal blend of big brands and growth relays. In Nuxe Skin Care First, the biggest category of Luxe, we made Very significant strides at plus 6% on a stable market for the full year and at plus 18% like for like in Q4.
This is thanks to well established pillars, such as Genifique Banonco thanks also to the confirmed success and expansion of Helena Rubinstein on Ultra Premium Skin Care and thanks to the performances of Kiehl's, which perfectly missed the naturalness and science expectation. In Luxe Fragrance, on a double digit negative market, we strongly reinforced our worldwide leadership of the category. With the successful launch of 2 new fragrances, My Way by Armani, Porche Viva by Valentino, with the integration on April 1 of the Mugler and Azaro brands. And finally, with the continued success of Libra by Yves Saint Laurent, launched last year, but already ranking in the top 10 fragrance worldwide, Which is simply exceptional for such a recent product. In Luxe Makeup, the 3rd category,
the one which has been
the most impacted worldwide, We continue to gain market share. This is thanks to our strong offer in face makeup, a very mass relevant Makeup with our brands like Lancome, Harmony, Shu Uemura, OID Cosmetics. To conclude On the 2021 outlook, we first acknowledge the 1st month are still going to be difficult until the vaccine programs Launched all over the planet, show their efficiency. But we are absolutely convinced that the market will bounce back and get back To double digit levels of growth. The desire for luxury amongst the rising upper middle class is indeed intact in all the research we conducted recently across the globe.
At L'Oreal Luxe, we will be fully ready to take advantage of the recovery. Our portfolio of brands is stronger than ever, reinforced recently by the arrival of Prada, one of the most admired fashion brands on Earth, And the acquisition of Takami, the ultimate Japanese clinical skincare brand. Open year of innovation He's on time and he's best in class in 2021, embodying the new values of the post COVID world, progress with science, respect of our planet, Health has the new and wealth. And last but not least, our P and L is fully reshuffled to fuel The channels, the geographies and the brands in growth. In 2020, we have proven our capacity to adapt to very rapidly changing market condition and still win very significant market shares.
I'm confident in the strength of our L'Oreal Luxe teams to keep outperforming the market in 2021. Thank you.
Thank you very much, Cyrille.
As you have seen also, a very strong year for the Luxury division, probably the best performance in the luxury world for beauty in 2020 and certainly one of the best years ever in terms of market share gains. So now let's hear Alexis Perakizvala for the Consumer division. Please, Alexis.
Good morning, everyone. The beauty mass market declined last year by 5%, but the impact of the COVID crisis was very different by category and by channel. Some categories were particularly hit, especially makeup. Others, less so, like hair care and skin care, and some clearly accelerated. That was the case of at home hair color.
It was contrasted as well in terms of channels. E commerce boomed, food, convenience and value stores held up pretty well, But others suffered, especially drug stores, beauty specialists and department stores, with drops in footfall and some closures. In a very challenging environment, our division closed the year at minus 4.7 percent, But what's more telling is the breakdown of this number by category. Makeup is our biggest business and declined broadly in line with the market by 21%. However, we achieved a plus 6% in face care, plus 4% in hair care and plus 13% in hair color, gaining market share on every one of these categories.
So in the short term, we have been penalized by the weight of makeup in our category footprint. But the division has actually weathered this storm very well. The performance was particularly notable in the second half, where we returned to positive territory, outperformed the market and achieved a growth of +8%, excluding makeup. So you can imagine what we might expect when makeup does bounce back. Let me share some additional highlights with you.
2020 was a pivotal year for us in e commerce. We gained online market share in most major markets, increased our global sales by 47% I notched up spectacular results in some geographies like the U. S. A. Where online sales nearly doubled.
Garnier closed the year at +2.4 percent after accelerating in the second half at+9. This 2nd semester bounce back of the division occurred across most of our regions Western Europe, The U. S. A, Asia Pacific, Latin America and Africa Middle East all returned to growth. We gained market share in Western Europe.
We had a great year in China at +18%, strongly outperforming the mass market, and you can take a look at how L'Oreal Paris, the number one mass beauty brand in China, celebrated the Chinese New Year with a drone show in the Shanghai sky streamed on WeChat. And we also Achieved a major turnaround in Brazil, the world's largest emerging beauty market, with a year at plus 7%, our best year since 2013. We delivered these results thanks to 6 strategic choices. First, we accelerated innovation, innovations that democratize the very best of our technologies, like the L'Oreal Paris hyaluronic filler serum. Disruptive, sustainable innovations like Garnier's solid shampoos and innovations that we rolled out faster than ever before, like Garnier's Fast Bright line.
2nd, we focused on skincare, And we did that across our brands, with L'Oreal Paris pioneering science, and Garnier championing natural yet highly effective skincare. In the U. S, we acquired Thayers, a high potential brand at the intersection of nature and health. 3rd, the COVID crisis allowed us to leverage our digital leadership. We reallocated resources everywhere to further strengthen our e commerce firepower.
Thanks to ModiFace, we rolled out digital services around the world in a few weeks. And our brands strengthen their digital connection with consumers. In the U. S, for example, NYX professional makeup was recognized by Gartner as the country's most digital savvy brand across all channels and categories. 4th, we deepened our partnerships with key retailers, helping them reinvent A seamless on and offline beauty experience and co creating with them powerful back to beauty operations to reignite consumers' desire for beauty.
5th, 2020 was the year where we pushed the boundaries have commitment and purpose on all our brands. Two examples, L'Oreal Paris launched a global crusade against street harassment, while Garnier championed green beauty powered by green science. Our 6th priority was the reengineering of our P and L. We have been very disciplined in lowering general expenses, reassessing our marketing costs To focus on ROI, and that allowed us to gain market share by investing effective brand support after the first lockdowns. These 6 strategic choices will continue as our key priorities for 2021.
This year, we have a very strong plan of superior high value innovations like L'Oreal Paris Retinol Skin Serum and L VIVE, 8 seconds wander water. And of course, we haven't given up on makeup and are currently launching 2 great products well attuned to the times. Maybelline Sky High Mascara to highlight your eyes above the mask, And NYX professional makeup, Shine Loud, a non transfer mask proof lipstick, both off to an impressive start. In addition, the division will benefit from 4 significant tailwinds when the world gradually recovers from the pandemic. First, in many countries, the upper part of the middle class is growing and has more available income to spend.
2nd, our markets are premiumizing, fueled by the e commerce and digital boom that makes consumers Everywhere, choose more sophisticated beauty solutions, and that's great news for our brands. 3rd, with the rise of beauty at home, new consumers have been recruited to the likes of at home recolor, At home nails and skin masks, and many will stick to their new beauty routines. And finally, we know that makeup will bounce back strongly. In fact, we are even anticipating a makeup boom because lipsticks and mascaras will be one of the symbols of our return to a more social and unconstrained world. So even though the beginning of the year remains uncertain, we are confident in a progressive acceleration of our business and are very ambitious for the future.
Thank you.
Thank you very much, Alexis. In fact, as you have The Consumer division had also a very good year considering the difficult handicap of their heavy footprint in makeup. So now let's pass the microphone to Active Cosmetics with the new queen of growth, Miriam Cohen, Walgreen, who succeeded Brigitte Liberman at the beginning of the year.
Good morning. Despite the difficult context, 2020 was an exceptional year for L'Oreal Active Cosmetics. We passed the $3,000,000,000 sales mark. In a demo cosmetic market, experiencing a slow growth, estimated at around 2%, We achieved a new annual growth record of 18.9% on a comparable basis, the strongest growth in the last 20 years. Thanks to this spectacular acceleration, the division strengthened its leadership in Medical Beauty.
4 success factors explain these exceptional results. First, our brand perfectly addressed the growing concerns of consumer Looking for more health, performance and safety. In the COVID context, our dermatological brands are more relevant than ever, Our skin is weakened by repeated hand washing and the use of masks. La Roche Posay grew at a double digit rate for the 9th time In 10 years, at the cutting edge of microbiome science, the brand launched with great success Lipica AP Plus M For Atopy prone skin, C. Ravi is experiencing historic growth and practically double in size.
The brand's star products, the moisturizing cream and its hydrating cleanser are particularly relevant during COVID To strengthen the skin barrier, thanks to the ceramide technology. The brand also benefits from its affordability and its first major Further, SkinCeutical's exceptional growth is driven by its high performing formulas and Outstanding results in China and in the U. S. Last but not least, VICI, which reported growth in the second half of the year, Maintain its leadership in anti aging in Europe and experienced very strong growth in Latin America. The second success factor, our medical business model based on the recommendation of healthcare professionals who are More trusted than ever in these COVID times.
In 2020, we have strengthened our collaboration with healthcare professionals And now reach more than 180,000 physicians. La Roche Posay is the most SkinCeutical, the number one medical aesthetic skincare brand worldwide, while Vichy ranks number 1 in anti aging in Europe. 3rd, our digital advances have enabled us to adapt with agility to our new context. Our e commerce sales are skyrocketing, and now represent 29% of our business. The accelerated digitalization of our interactions with doctors enables us to radically increase our reach.
Through webinars and on digital events, we reached more than 250,000 doctors. These physicians reach more and more consumers as they increase their presence on social networks. The collaboration of health and beauty influencers Revolutionizes our ability to increase products recommendation. Finally, The division accelerated its international expansion with spectacular growth in North America and Asia, While all regions are growing and gaining market share. We approach 2021 with confidence as The medical business model of our division is now more relevant than ever.
While skin health has been a major trend over the past years, The pandemic has turned it into a core expectation. More and more consumers in search of higher efficacy I'm relying on our dermatological brands and on doctors' recommendation. The acceleration of the health ecosystem digitalization, Particularly with the growth of telemedicine is opening up new possibilities. Furthermore, Our medical brands still have a strong reservoir of growth, especially in the U. S.
And Asia. Finally, our 2021 innovation plan is very promising. Health, Which is our raison d'etre is more than ever the future of beauty. Thank you.
Thank you very much, Miriam. As you have seen, also an amazing year for Active Cosmetics. So now it's my turn. As you have seen globally, L'Oreal has demonstrated remarkable resilience and Solidity through the crisis, thanks to the fantastic engagement, fighting spirit and dedication of our teams. We did what we announced at midyear.
We strongly outperformed the market over the full year. We got back to positive like for like sales growth in H2 and accelerated our growth in Q4 while preserving our profitability as we delivered the same record level of operating margin as last year. For the beauty market, it was clearly a year like no other. For the first time in history, the closure of millions of salons, perfumeries, department stores and airport stores around the world heavily impacted the beauty market during the first half. The recovery was progressive in H2.
This extraordinary crisis of supply translated into an unprecedented drop of the market that we estimate to be around minus 8%. However, there is also good news. Consumers' appetite for beauty remains strong. We saw We have seen recovery everywhere when stores reopen, the quest for higher performance and superior quality continued the premiumization trend And last but not least, the huge surge in e commerce is helping to democratize beauty. In this totally disrupted environment, contrast were stronger than ever.
By sector, closures particularly affected the professional sector, with almost all salon closed in the Q2 and the luxury sector, which suffered also from a strong headwind on makeup and a heavily impacted travel retail market. On the other hand, dermocosmetics experienced a much less disturbed market and was the only positive as retailers, pharmacies, drug stores largely rip and open and consumers look for healthy products. Mass remained open, but stores suffered from less traffic as also many consumers preferred to stay at home and shop online. By channel, the pandemic brought monumental shifts as e commerce soared during lockdowns and continued to accelerate even as stores reopen. Many consumers discovered this channel for the first time during the pandemic and embraced its convenience.
At the same time, travel retail dropped dramatically with the halting of international travel. By category, skincare, the largest category in beauty, was the least affected as consumers looked for more care and protection during the pandemic. Haircare resisted pretty well. Makeup and fragrance were the 2 categories that suffered most from home working and mask wearing and less opportunities, obviously, to socialize and celebrate. Finally, by geography, North America was heavily But it is recovering progressively, thanks to e commerce and skincare.
Western Europe was heavily affected by lockdown measures. In the new markets, China was the only country with significant growth. Its market rebounded very quickly, returning to growth as e commerce remains strong and offline recovered. In this exceptional context, L'Oreal managed to weather the crisis remarkably. Since day 1, our first priority was the health and safety of our employees.
We implemented drastic health and safety measures in workplaces and aggressive remote work strategies. We also took swift to protect and reinforce our partners, retailers and suppliers. And we mobilize to support caregivers and frontline workers, notably by donating hand sanitizers. On the business front, after a very negative H1, We have been on the offensive to bounce back. Our strategic bets have paid off as we returned to positive like for like growth in H2 and accelerated our growth in Q4.
The first best was to maintain our launches of our key product initiatives in H2 to create excitement and reenergize the market and ourselves. The second bet was to unleash strong media support and business drivers to seize all opportunities and fuel growth. We have been full blast with Back to Beauty program to stimulate consumption and help retailers reopen and bring customers to their stores. Within this particularly difficult context, we made historic market share gains. As you have seen with our division presidents, 3 divisions out of 4 remarkably outperformed the market and one is on par despite the footprint on makeup.
Active Cosmetics, which achieved another year of stellar growth, perfectly sees the opportunities of the skincare boom and the growing aspiration for performance, health and security. In a very challenging market, professional products bear the fruit of its in-depth transformation over the last few years and especially its ability to jump on the e commerce opportunity. L'Oreal Luxe significantly outpaced the market, thanks to its presence in China, its edge in e commerce and by maintaining its strategic launches in H2. Consumer Products considerably reinforce itself in all geographies and manage to return to growth and over performance in H2 despite, as I said, its large makeup footprint. The division is poised to flourish when makeup returns to shine.
We also outperformed in most regions. Our share gains in Western Europe were the best in a long time And we're even more impressive excluding travel retail. Almost all big countries beat the market. We continue to break new grounds in the new markets. In Brazil, the group is now back in force with strong share gains after a few years of reengineering our presence.
In China, we rebounded quickly to end the year at +27%, growing several times faster than the market. Online sales now represent 60% of our business, still growing at plus 56%. In the U. S. A, our sales were positive in H2 as we managed to offset the headwinds of our heavy footprint in makeup, thanks to the explosion of e commerce in which L'Oreal doubled its weight in just a few months, reaching 22% of sales.
The group became the number one company in the 2020 Digital IQ Beauty Rankings with 5 brands in the top 10. We are accelerating the penetration of digital and e commerce in the U. S. A. At lightning speed, just as we did in China a few years ago.
Lastly, we beat the market in all categories with a special mention to skincare and hair. As you heard from Christophe, L'Oreal also delivered very solid results. In this exceptional year, We were able to preserve and even optimize our P and L. We increased our already high gross margin, mainly thanks to valorization. We lowered SG and As from 20.3% to 20.1%, thanks to strict cost discipline.
We were able to maintain in relative value our investment in R and I and A and P in order to support our and fuel future growth, and we were able to preserve our profitability at the same record level as last year at 18.6%. The net earnings per share decreased by only 5.7%. And lastly, our operating cash flow increased by plus 9%. And considering all these results, the Board of L'Oreal has decided to propose at the next shareholder meeting a dividend of €4, an increase of 3.9% compared to last year. We also posted, as you've seen, exemplary extra financial results.
The group achieved almost All its ambitious 2020 goals and made its 1st sustainability program, Sharing Beauty With All, a resounding success. Most notably, as Chris has already showed you, we reduced our CO2 emission by 80% since 2,005, which represents a real milestone. Independent experts have recognized our efforts and placed L'Oreal on top of key ELG rankings. Paradoxically, in such a challenging context, the crisis has been an accelerator of transformations and reinventions that actually strength and loyal to weather the challenges of 2020 and prepare future growth. The group opens 2021 stronger than ever before for 10 important reasons.
First, our relationship with our partners are closer than ever. We solidify trust and proximity and multiply goodwill with hairdressers, retailers and suppliers through our solidarity during the crisis. 2nd, Our market share gains are stronger than ever. Many new consumers who shifted towards our brands this year are likely, of course, to stay loyal to them in the future. 3rd, our increased leadership in China is more forceful than ever.
Our winning strategy places us in the best position on this market, which will soon become the biggest beauty market worldwide. 4th, our digital prowess gives us a cutting edge. In 2020, we continued to transform our marketing model very fast to build even more personalized relationship with consumers. We are now a digital first company that is making beauty more connected, more social and more conversational than ever. 5th, our leadership in e commerce, as you've seen, is more powerful than ever.
Online sales were an absolute game changer, increasing by +62%, growing 1.5x the market and reaching 27% of our total sales. This impressive search was seen across all categories, all divisions and all regions. E commerce is now the first country for L'Oreal And we have, for the first time ever, 2 e billionaire brands as L'Oreal Paris and Lancome each surpass €1,000,000,000 in e commerce sales. 6th, our leadership in skincare is more pivotal than ever. We have Swiftly embrace this rising wave.
Skincare is the biggest and fastest growing category in the beauty market and now represent 40% of our sales. 7, our research and innovation is sharper than ever. In the last 5 years, we have positioned our RNI on the most promising fields of science and technology. Barbara Laverneaus, our new Head of Research, Innovation and Technology, will be appointed Deputy CEO in May. This places R and I at the highest level of the Group, confirming its crucial role in our company.
8, our sustainability and responsibility effort is more exemplary than ever. We took a bold step forward with the launch of our new commitment, loyal for the future. It is one of the most ambitious programs in the world with more radical goals for 2,030 that address pressing environmental and social issues. 9, our organization is more agile and our teams more empowered than ever. The agility and adaptability of our teams enables us to respond to huge shifts in categories and channels and reimagine our products, marketing models, manufacturing and distribution at high speed.
Our approach, strategically concentrated operationally decentralized is perfectly adapted to the crisis and will be also to the post COVID world. Lastly, the 10th reason is that our P and L is more virtuous than ever. Thanks to valorization and productivity, we are improving gross margin. In terms of SG and A, we cut all unnecessary spending and fixed costs. And in terms of A and Ps, we are reshuffling All our spending dramatically reducing POS material and tester for brick and mortar and rebalancing our media investments to digital and precision advertising.
Digital media now represent more than 60% of our total media with a stronger ROI. As I prepare to pass the baton, I'm thrilled to see the strength of our unique business model that has proven both its effectiveness and ability to develop our leadership and create value in usual times and its capacity to resist exceptionally well in terms of market share and profitability in times of crisis. I am totally confident because this business model is perfectly suited for the world of tomorrow as L'Oreal has anticipated all fundamental shifts to win in the 21st century. Our group is now ready to make miracles under the leadership of a new captain. I'm extremely happy and serene to hand over the helm of CEO of this fantastic company to Nicolas in May.
I have full confidence in him. Nicolas and I have known each other for 30 years and trust each other completely. He has played a key role by my side as Deputy CEO in out of divisions and has developed the group's brand with great talent. I have the deepest conviction that he is the best to lead our beautiful company in the years to come. He will drive L'Oreal to new heights in full continuity of our strategy and values while also reinventing the group and adapting it to the major challenges of our future world.
Thank you. And now here's to Nicolas.
Hello. Thank you, dear Jean Paul, for your kind words and continued trust. Today, I would like to share with you my vision for L'Oreal's future, which is shaped around 3 key words: continuity, confidence And ambition. The first word, continuity, applies to the transition between Jean Paul and I. I have been part of L'Oreal for 34 years and a member of the group's executive Committee for the last 13, we have built a close relationship and partnership over the past 8 years.
Indeed, in my previous capacities as Head of Selective Divisions And as Deputy CEO in charge of divisions and digital, I have been associated and involved in every transformational decision of the group. This transition could not have been better prepared. We make an efficient duo, and our relationship will continue to evolve on different terms But in the same spirit of proximity, I would like today to pay a very special tribute to Jean Polagon for his formidable track record, be it financial Or Extra Financial and the transformation of the L'Oreal Group he has led. 2nd word, confidence. I have a lot of confidence for the future, which relies on the one hand on the power of the L'Oreal model and on the other hand on the potential of the beauty market.
I'm extremely confident in the resilience and the power of the unique L'Oreal model, a model that ensured our performances in 2019, our best year in 15 years On a dynamic market, but also in 2020 with a very solid result in the middle of the biggest global storm of the last 75 years. A model that has been constantly evolving over the years in a permanent revolution was remaining true to its roots. 1st, We are a pure player in beauty, and we will remain so. Yet we are a multifaceted beauty player. We were born 100 and 10 years ago in hair salons, And we continue to leverage the innovations born from the high demands of professional stylists.
We are also a major FMCG player, Democratizing the best of beauty to reach the middle classes of the world with superior quality at affordable price. We have become a leading luxury group, regularly outperforming its peers, offering premium products and experiences to the aspiring affluent consumers of the world. And we have lately become the leading dermatological beauty company, partnering with prescribing doctors in every country. These multiple facets allow us to satisfy all consumers at all price points to seize all trends and absorb even severe market conditions Like in 2020. 2nd, we believe in research, in science and innovation.
Since the creation by Eugene Schweller of the harmless hair tint, We are the biggest investor in R and I in the beauty industry to provide superior and safer products to consumers. The choice to regroup RNI and tech under Barbara Laverneux's leadership underlines our belief in the synergies of data, AI and biology to create an augmented RNI, increasing the speed and relevance of our innovations and invent the beauty of the future. 3rd, we believe in brands and in marketing creativity. Our brand portfolio is stronger than ever. It is made of billionaire brands, including the number one beauty brand in the world and of small indie like brands, which are growth relays for the future.
In 2020, most of our billionaire brands have grown above their respective segments, and many of our smaller brands like Style Nanda, Valentino or CeraVe Have been real growth contributors. In 2020, we're also focused on planting the seeds of the future with Prada, Takami and Thayers. Our brands are fueled by a unique marketing flair and creativity that transform R and I discoveries into products That satisfy consumers' needs and more importantly, their dreams. This is one of L'Oreal's magic touches as beauty is clearly science plus creativity. Some of this year's initiatives are a perfect proof of this.
4th, I'm also confident in the relevance of our universalization strategy in this more fragmented and sometimes community centric world. We roll out global brands, which we adapt for local relevance. Our local teams are true entrepreneurs with the freedom to operate within a strategic frame. Our RNI has hubs in every major region. And we have recently changed the organization of our zones, basing it on consumer similarities rather than geographic proximity.
5th, the power of the L'Oreal model lies in its capacity to constantly evolve, to anticipate change and adapt, Forever true to the Francois D'Al famous mantra, seize what is starting. One of our secrets is the agility and the unique capacity of the Formidable L'Oreal teams to embrace change. This is a unique strength in such a fast changing VUCA world. To conclude this section, I believe in the power of this multifaceted L'Oreal, true to its roots and values, but always evolving, combining the strength and solidity of a century old leader And the agility and speed of a start up. Looking ahead, I'm also extremely confident in the beauty market, In its capacity to bounce back after COVID and in its long term potential.
The COVID crisis has clearly had a major impact on the world And on our market, social distancing, widespread use of masks and its impact on makeup in addition to lockdowns and store closures did not help beauty. But like a flower after winter, beauty is ready to blossom as soon as the COVID goes away. We've already seen it in China, where all categories return back to normal, Placing the beauty market at positive double digit growth. Even this holiday season in the U. S.
A. Showed a bounce back in fragrance sales, which increased by 4% in December. We are confident that like in the Roaring '20s, there will be a big beauty party once the pandemic is over. And as a leader, we will make sure to cater for it. If we take a longer term vision, beauty is and always will be essential, an intrinsic part of humanity, Source of self esteem, well-being, pleasure and of inclusion, both a need and an aspiration.
In the next decade, The beauty market growth will be driven by solid trends, the rise of the middle and upper classes, the young who are consuming younger and younger, Seniors who have a busier social life men who are consuming more beauty products, particularly in Asia and urbanization, With 2,300,000,000 extra people living in cities by 2,050, which will impact hair care and skincare routines. Around 1,500,000,000 new consumers will enter the middle and upper classes before 2,030. These consumers see quality products and are our traditional targets. More purchasing power will mean more spending per capita. Take China.
The market still has many years of growth ahead as the beauty and personal care consumption per capita there is almost 6x lower than that of Japan or the U. S. A. This is also true in Southeast Asia where the consumption per capita is 3x lower than the worldwide average. Finally, the market will grow through valorization.
The aspiration for personalized and superior products should lead to the acceleration of premiumization. It is a trend in all regions, all categories. Even in 2020, in the middle of a pandemic, we saw price increases on our major categories versus 2019. So the beauty market is poised for long term growth. But after the COVID crisis, it will be a different beauty market Because the crisis has brought some very powerful trends that will durably impact the beauty markets.
Most of these trends Pre existed COVID, but we're accelerated by the pandemic. And on all these trends, L'Oreal was ahead of the curve. The first of these trends is digitalization, obviously, as we have vaulted 10 years forward in consumer and business digital adoption in a matter of few months. People have lived virtual lives and many of these habits will stay. Today, digital is embedded at all levels of the company.
Tomorrow, We'll take digital to the next level, thanks to the power of real time data and fast evolving technology. Data will allow us more personalization in terms of engagement And of product creation. We'll invest in new services in a world where online and offline will be seamlessly intertwined. 2nd, the sanitary crisis shed light on the vulnerability of our ecosystem, and sustainability is more than ever an imperative. Sustainability is core to L'Oreal.
We announced our L'Oreal For the Future program, working within the planet's boundaries because we can have a positive impact because it is our duty as a leader. All our brands are reinventing their formulas, their packaging whilst our operations Work on the whole supply chain within a total cradle to shelf action plan. Our products' environmental footprint will be communicated to consumers. The third trend is health and transparency as we enter a new health first era where ingredients are questions And transparency expected. Consumer safety has always been at the heart of L'Oreal values.
Inside our products, An online platform launched in March 2019 explains transparently our ingredients philosophy whilst RNI was relentlessly to create the cleanest yet most effective formulas. Our Active Cosmetic division is well positioned to satisfy the healthy beauty expectations. The first one is the importance of companies and brands' values and purpose as 6 in 10 consumers Say they will choose products from brands or companies which are aligned with their values or act for the greater good. In 2020, the group published It stands for purpose, create the beauty that moves the world. I am committed to this mission.
I believe in L'Oreal's duty and capacity to make the world and humanity better. Our brands will also play their role like L'Oreal Paris with stand up or Urban Decay promoting the beauty of being different. The 5th COVID generated trend is the return of science and tech on the center stage as the solution to the world issues. We are a science based company. More than ever, we would invest in R and I, today at 3.4% of L'Oreal's turnover, But a new RNI augmented by data and AI and green sciences will be the next revolution that reconcile efficacy, Naturalness and sustainability in a new competitive advantage for our products.
So as you can see, we are ready for the post COVID beauty. And I would now like to share with you my ambition for L'Oreal for the next decade. Top line growth and beating the market will always be my priorities. This top line growth and a virtual P and L management will allow delivering regular increases in profitability. The first driver of my ambition is our market share potential.
L'Oreal's number one priority is always to beat the market. Even as a leader, our global market share is only around 13%. The regional differences also show true potential. As you can see, there is still some room for gains. In Asia, our market share is only 11%, huge opportunity on the fastest growing region.
Even within our best region, Western Europe, there is growth potential as our shares vary from 16% to 30%. My three regional priorities will be pursuing the Chinese momentum, boosting growth in the U. S. A. And accelerating in the emerging markets where the rapid digitalization and the rise of e commerce will give us easier access to this full of inspiring consumers.
The second driver of my ambition is our category strategy. Our top priority will be skincare, Whether it is dermatological, super premium, high-tech or natural, it is the biggest and most dynamic beauty category. At the crossroads of all trends, a high added value category driven by science and performance, where our R and I gives us the upper hand as proven this year. We will grow valorize hair care and color, both in the professional and mass world. Our global leadership in fragrance Puts us in the best position to benefit from this category's acceleration in China.
As far as makeup is concerned, we are both confident and ambitious. This has always been the most cyclical category and now is a down cycle. But wake up remains the easiest, fastest way To express one's personality, to look better and younger or just to feel good, makeup will come back, and we will lead it. The 3rd driver of my ambition is e commerce, which will continue to be a strong growth engine. We are preparing for a time when e commerce may represent 50% of our business split between direct to consumer, e retailers and pure players.
We will scale social commerce as a new way to reach and engage our We will invest in developing loyalty to increase the lifetime value of our consumers. Finally, I want to express my ambition To deliver regular improvements in profitability through top line growth and ever more virtuous P and L. In a high gross margin model, Top line growth translates into profits. 2020 has allowed a P and L reset, which freed new resources to reinforce our brand building investments and profit at the same time. In this context of crisis and accelerated digitalization, each division has reallocated and optimized their resources.
We could digitalize our B2B. We have experienced new ways of working of less traveling. Our distribution footprint is more productive With fewer better points of sales to attend, data and AI will make our A and P more productive. So we should get more bangs for our bucks. So as you can hear, I am very ambitious for the future, and it begins in 2021.
Of course, We remain cautious about the first half, but believe that the beauty market will get back to growth. The engines that allowed us to over perform in 2020 We'll remain in 2021, and all our divisions will rely on a strong plan of innovations. We are therefore confident in our capacity To outperform the market again this year and subject to the evolution of the sanitary crisis, achieve a year of growth in sales and profits. For the next decade, we'll continue the unique L'Oreal adventure. This adventure will take us to new heights to explore new business models And new territories from green sciences to beauty tech.
I am confident in our ability to strengthen the group's model to deliver financial and extra financial performance. I have the ambition to shape L'Oreal as a company of the future, A global leader with strong values committed to sustainability, to growing while respecting planetary boundaries, but also to make beauty Play its role towards humanity, a role of inclusion, a role of harmony, of respect and an encouragement of diversity and differences. With the strength and passion of the L'Oreal teams, I want to create the beauty that moves the world. Thank you.
Thank you very much Nicolas. Congratulations for this great vision and these great ambitions. So now we are ready to start The Q and A session, of course, we will share the answers between, of course, Nicolas, Christophe, the 4 President heads and myself. And I'm ready to take the first question.
Thank you. The first question comes from Celine Pannuti from JPMorgan. Madam, please go ahead.
Yes. Good morning. Thanks for taking my question. First of all, I want to say congratulations for quite an exceptional performance in an extraordinary year. And thank you for the presentation.
That's a testimony to all that has been achieved to over the past 15 years. So I also want to tip my hat Off to you, Mr. Agbon.
Thank you, Cecilia.
Now to
my questions. First of all, on the beauty market, You said it was down 8% in 2020. You seem to be a bit quite cautious about the start of the year, which is quite surprising given that You had quite a tough time from March. So do you have any views on what the market growth would be like in 2021? And should we expect you to continue to outperform to the same level as you did in 2020?
And my second question is on this Reset in P and L. Obviously, I understand now what handsome margin means if I look at H2. But does it mean that when we have Higher top line growth with the reset of, let's say, the SG and A and continued high level of A and P investment yet flat, Are we going to get a
bit more drop through to
the bottom line? Thank you.
Thank you very much, Celine. I'm not surprised that you had the first question. I think that during this Last 15 years, you were always the first one to ask the questions, and I'm very happy about that. And I will miss your first question. So and thank you for your comments.
So first about the growth of the market and maybe Our growth in this quarter and the next month. Well, obviously, we have to be cautious The situation is more than ever, more volatile, uncertain, complex, ambiguous And it's very difficult to do predictions. Still, we are as you have seen or heard, we are positive and optimistic. We believe, as Nicolas said, that the market should be back to growth in 2021. Of course, everything we say is dependent on the evolution of the pandemic, but considering what we know today with the Arrival of vaccines and etcetera, we think that the market should be back to growth.
And of course, as we have this commitment to beat the market every year, it means also that we want also to be seriously back to growth. And regarding the trend right now, I would just say that because we don't want to give guidance, of course, for the Q1, But what we can say to just to give you a hint is that you have seen that we were at plus 3% on the last 6 months, plus 4.8% on the last 3 months. And I would say that there is no reason to believe that we should not be able to be in positive territory, of course, in this Q1. And that should come also even stronger for the Q2 because we will have a different historic basis. So that's for the growth.
So we are pretty, Of course, not I cannot say bullish, but we are optimistic and there is always a kind of volunteerist attitude at L'Oreal and confidence. 2nd thing, the reset of P and L, it's true that This crisis, which was a terrible crisis in terms of pandemic, in terms of health for the world, Whilst also at the same time for a company like L'Oreal an opportunity to reset cost and P and L. They are, as Nicolas explained and Christophe also, there are Costs that have been eliminated because of the pandemic that will not return to where they were before the crisis. So for us, it has been a great opportunity to redefine exactly new ways of working. And definitely, this will have a positive impact on our SG and A.
As Nicolas said, for traveling, for Meetings for training, we will do things differently after the pandemic than we did before. And most of these changes will have a very positive impact on the cost. Same, by the way, For the A and Ps, the shift from brick and mortar to e commerce has Always has also obvious consequences in terms of reduction of cost in bricks and mortars. For example, we are reducing significantly what we'd spend in terms of merchandising in stores, POP materials, testers and many other things because we don't need them obviously for e commerce. And as e commerce is increasing in terms of percentage of sales.
This cost will diminish. So there is a very important reset in terms of SG and A cost, A and P and this will be significant in this year and also the next years when the pandemic will be gone. I think that was the questions. Thank you. Thank you, Celine.
Another question?
The next question comes from Olivier Nicolai from Goldman Sachs. Sir, please go ahead.
Hi, good morning, everyone. Just got two questions. First, in an interview, I think in years ago, You highlighted Africa as one of the big next growth opportunity. I would be interested to know what's your current footprint there and how you're thinking about the region. And then just going back to follow-up on Celine's question actually.
You obviously see very impressive margin progression in H2. Now we finally know what handsome means at L'Oreal. As we look into 2021, between Keep cosmetic accelerating, L'Oreal Luxe rebounding, the direct to consumer sales, which are more important than ever, also perhaps some margin catch In Professional Products, how should we perhaps think about group margins this year in 2021?
If they
are not handsome, they'll at least be good looking, for instance.
Thank you. Thank you for the question. I remember that when I said last year that we you have all reasons to expect a handsome profitability for the second half. It was a surprise for many of you because it's true that in financial vocabulary, handsome is not very, very precise. But at least you were not disappointed, which is very good.
So I cannot of course, Nicolas will be the next CEO starting in May, so I don't want to take any commitment on his behalf.
Thank you.
And we never give guidance anyway. But we want this last year, we were able to maintain the profitability of the year before, which is already, I think, quite spectacular. Clearly, what I can say And as we have said also in the presentation, is that we want to get back to profitability increase in 20 21, so will it be good looking, handsome, beautiful? I don't know yet. It's too early to tell.
But I don't think you will be disappointed. Regarding Africa, yes, Africa is my only regret. I'm very happy and proud of what we have been collectively doing for these past 15 years together with the teams here. And the only regret I have is that I wish we could have done more in Africa, because I think that Africa is a fantastic continent. It's probably the press in the world where women are the most excited about beauty, where beauty is the most important.
And so that's a great next adventure for Nicolas. Of course, it's not the only one. There will be many, many adventures. He's right say that development in Asia will be super important. There are still a lot of potential, USA.
But I think that for L'Oreal, the last frontier is Africa. And I'm sure that it's going to be an exciting adventure for Nicolas and for the teams in the next 10, 20 years. Thank you.
The next question comes from Bruno Montaigne from Bernstein. Sir, please go ahead.
Good morning. Few questions for me. You clearly indicate a lot of confidence in gaining share again in 2021. But if I think about your competitors, they have delayed some of their launches, which will then now accelerate and bring back all their delayed launches. They're clearly learning from your e commerce prowess and starting to copy that.
So despite those delayed launches, despite them copying what you do, Where do you get to confidence that you will have enough in the bag to keep outgrowing the market in 2021? My second question is, You've alluded several times that e commerce is more profitable, lower distribution costs and the like. However, can you just quantify, are you talking about it being tens of basis More profitable are 100. And as part of that, would it be right to expect that all those kind of profitability savings will always be reinvested? And now as a issue at least, Mr.
Agon, if you were to give your successor an advice in terms of where do you think the most likely threat The L'Oreal success is going to come from during his reign. What should he most look out for in terms of a potential threat? Thank you.
Thank you very much. Thank you, Mr. Montaigne. So I'll start with the last one, threats. At L'Oreal, we are more upset with opportunities than with threats.
We respond to threats when we see them coming, But and usually we respond well. So I'm sure that Nicolas will be good enough to see when threats are coming. And I will not recommend to him any to worry about any specific threat. Number 1, Gaining shares, Nicolas again will be the new captain starting May 1. So maybe Nicolas, how would you gain market shares in 2021?
Well, first of all, I have lots of respect for our competitors, and I have no doubt they are working very hard To catch up, but I'm really confident that we are very equipped to continue to gain market shares because it's not just about launches. But first of all, As you said, we made we took lots of great initiatives on the back half, and these are going to spill over on 2021 where we have additional extra launches We have our R and I, and I want to insist on that because we saw in the trends of this post COVID world that consumers are more and more Paying more and more importance to the superior quality, safety of the products and all our initiatives particularly in skincare, but it's true in all categories are supported by extremely strong R and I contribution and that makes a difference that consumers do perceive. And we have also the power of our business model, which is very hard to replicate because strategy, this model of being strategically centralized but operationally decentralized, gives a lot of strength to L'Oreal. The entrepreneurship, the qualities of our teams are in every country in adapting our mixes and our global strategy to the reality of each market is extremely powerful.
And with the growth relay of digital, well, as you said, we are ahead not just in e commerce, but also in a capacity to engage in social networks, in leveraging the TikToks and the newer networks of the world, on leveraging social commerce, which is just in its infancy, but We are going to scale. I'm quite confident that we have many cartridges to continue to lead the growth and to gain market share.
You want to speak also about the e commerce profitability without committing to
No, no, don't worry. No, no. I have to say that, first of all, the thing that must be said is that the profitability of e commerce It's very different from one country to another, from one model to another, whether you're talking about direct to Consumer, pure players or e retailers and even from one division to another depending on the price points of your products. So It is helping in terms of profit. It's stronger.
It's a stronger help in the divisions such as the Professional division, for example, Than on the Consumer division, but it's allowing us, and that's what happened this year, to reinvest fuel in terms of media, To support our launch agents, to support our brands, which is another way to continue to gain market share.
Thank you very much. Another question, please.
Yes. The next question comes from Jan Simpson from Barclays. Sir, please go ahead.
Good morning and congratulations on a strong finish to a challenging year.
Thank you. A couple of questions from
me, please. Firstly, could you talk a little bit more about what you've learned over the last year about activating new product launches with little or no bricks and mortar presence? And what does this mean for the business and how you approach innovation going forward? And secondly, What do you think will be the catalyst for makeup rebounding as a category? Is it the world moving on from COVID or Consumer preferences and fashion just changing again or perhaps something else we should be looking out for?
Thank you so much.
Okay. Thank you very much. So maybe Nicolas, you take the first question and we will share the second one. Yes. Because I would like to share my conviction about this Famous Roaring 20s.
Did you share by the way?
I will leave you the Roaring 20s with great pleasure. As far as the what we've learned from the crisis, First of all, I have to say that before talking about the ways to launch product, what we've learned and have been extremely impressed during this crisis It's the extraordinary agility, dedication of the L'Oreal teams around the world who's the who've all gone on homeworking for those who Working in offices and gone to the factories to produce hand sanitizers in our factories. So great Power of the teams, which I want to really pay special tribute to. Beyond that, what we've seen is that, first of all, that and we knew that, that Through e commerce and digital, you could launch very fast, very powerful products. And especially if products are of great quality, They're picked on upon by influencers, by consumers.
And there's a snowball effect, which makes some of our products extremely successful. I was looking yesterday, Which is an opening on the answer on makeup. We're looking at the results of our new Maybelline Mascara Sky High, which was presented by Alexis Perakis. This product has been launched in the U. S.
A. And we cannot keep it on the shelves. And we cannot keep it in stock either On Amazon, because it's such a great product that consumers have just taken it and made it a huge success. So we can go Directly through e commerce, but we also want and that's very important, we believe that beauty is also a category that needs to be smell, touched In stores. And that's why we are all our 4 divisions created very strong activation plans on the back end of 2020.
Alex Siperakis shared his back to beauty plans, but all division really reactivated their the stores because We believe that maybe in the future, as I said in my presentation, e commerce may represent 50% of our business, but brick and mortar, we represent the other 50%. And that is a brick and mortar that needs to be exciting, providing experience to the consumer. And that's what we are going to do with our partners in the years to come. So this year has been fantastic because we can really leverage the power of our brands, The power of digital and at the same time focus on providing the best experience in store. As far as makeup is concerned, I will hand over To Jean Paul, but what I can say and I've shown it with a graph in my presentation is that if you look over the last 25 years, the makeup Category has always been the most cyclical.
It's always been going up higher when the market was going up and Going down faster when the market was a bit more down. So we are used to these ups and downs. And it will come, as you said, from Our initiative from our launches for our capacity to engage with consumers, and it will come also From fashion, because it's true that when masks are the fashion, it's really not helping beauty. But we know and that will be a perfect Transition for Jean Paul, we know that people love makeup. I mean it's still the number one discussed category on social networks today.
So as soon as people can go out, they will wear makeup again and we'll make sure to tempt them with great exciting products.
No, talk about the Roaring 20.
No, no,
Please. No, before talking about the heroic tattoos, what I want to say and I thank you very much for your question on makeup because to be honest, you know, The makeup drop in 2020 was maybe the most severe handicap that we had. Even in a way stronger than the closure of stores, because of course, we are the number one makeup manufacturer in the world. Makeup is very It's important for us, for example, makeup is 35% of the sales of the Consumer division. And definitely, Clearly, in 2020 with mask wearing, no ways to going out, to going to restaurants, to going the office, to socialize, to whatever, to celebrate.
Obviously, makeup was something very penalized. I have to say also that I have a great respect for all the women who still wear makeup. And still, you know, the market is not completely down. It's only down minus 20% last year. So I'm absolutely sure that it will come back.
And why it will come back? For all the reasons that Nicolas said. And also because you know there are many more and more people, writers, even from universities that think That when the COVID will be gone because one day the COVID will be gone let's be positive and again and optimistic when the COVID will be gone People will be happy to go out again, to celebrate, to socialize and this will be like in the famous Roaring 20s And this will be the fiesta of makeup and fragrances, by the way. So we are very, very positive. Next question?
You had another question? No, that's
No, no.
No, yes, okay. We answer all your questions. Next question, please.
Thank you. The next question comes from Eva Quiroga from Bank of America. Madam, please go ahead.
Hello, Eva.
Yes. Good morning. Nicolas, you've obviously talked about China being one of your areas of focus going forward. So I was wondering if you can maybe talk to us about the big white space opportunities there. I'm not really thinking about Luxury.
I'm thinking about masks and the other two divisions. We've obviously heard a lot about local brands emerging strongly in masks, whether it's in skincare and nikawa, Yes, you have been loyal Perez has been number 1 on Tmall. So if you can talk us through these dynamics. And then my second question is on Professional products. And after years of radio silence, I have seen the word salon tend to appear in a lot of press releases this year.
Can you maybe talk us So a little bit on how that concept has come into its own and what we've learned from it on a more global basis. Thank you.
So first, China. Nicolas, China.
Yes. I will and then we'll hand over to Nathalie on salon centric.
Yes, Julien?
As far as China is concerned, it's true we have we are the number one beauty group in China, and we have We are lucky to have 2 brands, Lancome and L'Oreal, who are really the favorite brands of Chinese consumers. And we see a lot of still a lot of growth potential in this country. As you know, the Chinese love beauty. They are really aspiring to me. And it's not just Chinese women, it's also Chinese men.
They love great brand and they know quality. They want quality products. And we've established in the minds of the Chinese consumers that the L'Oreal brands were providing superior quality at the good price. And for that, I'm extremely confident in our capacity to continue to lead in this market. We also have we are So very strong in e commerce.
It is the market where 50% of the market is already online. And our Digital advantage, our capacity to over perform, as you mentioned, on Tmall on a market that's already 50% digital and 60% for our business It's extremely powerful and that will continue to allow us to over perform. And finally, as mentioned, The market is still has still many years of growth ahead, as I showed in my presentation. The spending per capita of Chinese consumers is still quite low Compared to that of the U. S.
A, so there is no limit to the growth potential of China. We haven't launched all our brands yet In this country, so we have also expansion potential. We've made acquisitions of brand like Takami, which is a Japanese skincare brand. We'll also have very interesting potential in China like Style Nanda. So overall, we are China will remain Probably the strongest or one of the strongest growth engines for the group for the next years.
Thank you, Nicolas. And maybe the question regarding salon centric in the U. S. For Nathalie, Nathalie Ross?
Yes. Thank you, Jean Paul. Indeed, the performance of Cellent Centric in the U. S. Is quite impressive.
In Q3, we posted a gap of 15 points of growth compared to our major competitor, BHG, And 12 points of gap as well in Q4 for a CellCentric performance compared to BHG. Why? So SoundCentric is our distribution network with all way to reach stylists in the field with about 500 salespeople in stores with more than 600 stores. And what we have created is also a B2B online app To be able to order online for any hairdressers at any time. We have revamped completely our stores, which are particularly Ideal for reaching independent stylists as much as the online B2B.
We have a data System which has been completely created with most more than 80% of data Individual stylists of the United States in our fight. So it allows us to really reach out to all stylists in the U. S. On top of that, At Sound Centric, we have amazing partner brands that we are distributing, but also our own brands, which are really performing, and especially Redken, Which is by far the leader of the market, which is really creating attraction to stylists. On top of that, we are distributing Perp Riot, Which is the booming brand in the U.
S, growing at more than 25% over the year despite the pandemic.
Thank you, Nathalie. Back to Nicolas.
Yes. Maybe one last point on Eva's question, which I did not answer in terms of categories. Well, Obviously, 1st, skincare will remain the number one driving force of our growth in China. But there are indeed opportunities, white Spaces in other categories. On skincare, to remain on skincare, our active cosmetics division is still quite small in China.
It's growing very fast, But we can probably double its size. And as far as other categories, we see a potential In premium hair care or hair color, for example, our professional division is having great results. Kerastase is booming in China. And even from our for our Consumer Products division, we see that our their premium hair care lines are doing great in China and probably are have Lots of growth potential ahead. I hope this answers your question.
And another comment on the Professional, just to emphasize The fact that really 2020 was an amazing year for the Professional division. Our business was at minus 6 when the market was at minus 16. The professional business This at L'Oreal since 190 9 and would not be surprised if this is the year where by far We had the strongest market share gains. And I think also that's going to be a tipping point for the division and its acceleration on the market. So next question?
The next question comes from David Ayda from Societe Generale. Sir, please go ahead.
Thank you very much. Good morning. Also, 2 for me, one on store closures and one on the Hainan Duty free dynamics. So just on store closures and retail chain liquidations, did you see negative impact from Some store closures in Q4 and should we be factoring in that post the holiday season, we're going to see more department store closures in the first half of 21, I think one of your competitors talked about 1 or 2 percentage points of headwind. Is that something that you would echo as a dynamic to consider?
And then the second question on the Hanan Duty Free. We understand there's quite a frenzied buying in the Q4 as consumers tried to get to the limit The sales quotas for the year, is that something that you saw that benefited the Q4? And again, we should factor in A bit of that unwinding in the Q1 2021 because those sales were brought forward. Thanks so much.
Thank you very much. I will give the first question to Cyrille Chapuis to talk about the store closure because mostly or only, I would say, in the Luxury world. So Cyrille?
Yes. So the store closures, The brick business worldwide this year in Luxury for total market at minus 14, the brick business was at minus 30. So obviously, There was a strong impact of store closures, especially in Luxury, and this especially in the Western world because store closures Didn't last very long actually in China. But in the Western world, clearly, there has been with the confinement policies, A strong impact in terms of on the luxury market of minus 29, compensated partially by the explosion of e commerce, which was in total at the market at plus 50% in e commerce this year.
Thank you, Cyrille. Nicolas, Travel Retail?
Yes. So the specific question about Hainan, it's True that within the drop of traffic of the travel retail world, the only destination where Chinese Shoppers and consumers could travel really during this year. And during this last quarter, the holiday season was Hainan. Hainan for I guess everybody knows it. It's a tax free zone that's been promoted by the Chinese government and that allows consumers to buy Products at very interesting prices, tax free prices whilst being close to the scene in beautiful results.
So it is of the Chinese consumers and has been for the last quarter. In 2020, 65,000,000 consumers Visited Hainan. So it did help the business on the last quarter. But Hainan is continuing to grow. Now it's you can travel there without Visa from 59 countries, I believe.
So it's being very made very attractive. And even right now, we are Just the beginning of Chinese New Year. Even though the Chinese authorities have advised people not to go out of their province, There's a lot of traffic to Hainan because it's the destination for Chinese consumers, both for pleasure and shopping. So I think there might be a slight difference between Q4 and Q1 on that, but it's not material, I believe.
Thank you, Nicolas. Another question, please.
The next question comes from Thomas Fajd from Deutsche Bank. Sir, please go ahead.
Yes. Thank you. Good morning, everybody. And a couple of questions. 1, firstly, on the Incremental consumers you're getting in e commerce.
How are the demographics changing For those incremental consumers, are you seeing, for instance, more older consumers? How does that affect your A and P and marketing strategies and how important is B2C in that context. And then just on the active brands, You obviously highlight the impact and the importance of the physicians and the physician network, the professional network there. But also, can you just go through the importance of influencers and the online growth within Active And maybe try and give us a view as to the future growth profile of Active coming from And the sorry, the benefits of influencers on the active growth, please.
All right. Thank you very much. So Nicolas, maybe you can take the first questions, and Miriam will prepare herself for the second one. Nicolas?
Yes. So on the incremental consumers with the explosion of digital, I have to say that it's a bit too soon to know exactly everything about Who joined the e commerce party in 2020. But when you start when you see the level of the penetration, the percentage that e commerce He's achieving in some markets 50% in China, 40% in the U. K, over 25% in the U. S.
A. It's probably getting closer and closer to the actual profile of the population. So whether a few years ago it was really the millennials that were shopping prominently On e commerce, it's probably more even now. But the good thing is that, as you saw, over 60% of our media is digital. And this allows really much greater targeting.
We have the tools, leveraging data, leveraging our 1,000,000,000 cookies. We can Tima is our media and therefore target different types of consumers with the right product for them. So it's getting closer to the reality of the population and of the market, and we're equipped to send the right message to everyone.
Thank you, Nicolas. Miriam, for the question regarding Active Cosmetics, please?
Yes. So our business model is based On medical prescription and most of our investments are focused on driving collaboration With up to 180,000 physicians in the world, it's a big part of our investment, and we grow that investment year on year. The international the acceleration of the digital interaction with the medical world has allowed us to Significantly increased the reach of physicians that we touch through e commerce, through e commerce and through webinars. Just in 2020, we were able to touch through this digital activation 250 ks webinars, So even more than the number of physicians that we choose here. And these physicians also have increased Their activities on social network and they themselves increased their influence.
We are now working with influencers, Dermatologists influences that have up to 1,000,000 followers. This is a very good news for our business model as it allows us to Increase the reach to consumers and makes our business model more relevant and more powerful.
Thank you very much, Miriam. Another question?
Yes. The next question comes from Rich Chuck Taylor from Morgan Stanley. Chuck, please go ahead.
Thanks for the question and good morning everyone. Good morning. You've been a little bit Koi, talking about the future of the beauty tech or beautiful technology, as I prefer to call it. So maybe a first question for Nicolas. If digital defined the last 10 years for L'Oreal.
How will beauty tech define the next 10 years? And then a little bit more specifically, How are you seeing consumption patterns evolve as more of your consumers use L'Oreal's tech services in terms of the overall funnel, The stickiness of the consumers and the frequency of purchase. And then finally, just a small one, Another huge success this year for L'Oreal on Double 11, where you obviously continue to lead. Please could you share what Double 11 is How as a proportion of your overall Chinese e commerce sales? Thank you very much.
So I will try to answer. I'm not sure I understood all the elements of the questions, but just going back to Beauty Tech, Which I think was your first question. Beauty Tech has multiple aspects. It's both In the end, it's a way to create an augmented R and I, an augmented beauty for our consumers and an augmented Company in terms of leveraging the data and intelligence we have to over perform in every domain. So it goes from Using AI and data to speed up our R and I developments, I visited a couple of weeks of possibilities and of technologies.
So R and I will be more powerful and faster. We'll also use This data and this intelligence we have of the beauty market to create more personalized and high quality products To match our consumers' expectations, we will continue to also to work Beauty Tech will also continue to include Devices, we stopped the Clarisonic brand this year because as a standalone brand, it was not performing. But We continue to use technology for many of our brands, whether it's SkinCeuticals or Lancome or a few more Or even Kerastase. And we will use also this data to make our A and P Optimized and more efficient. So Beauty Tech is, in the end, making us an even more intelligent, faster, more accurate company for the future.
Thank you, Nicolas. And you want to talk about 11.11?
Well, 11.11 is one of the big rendezvous of L'Oreal China and of L'Oreal every year. It's true that It's a big event. It's a big event on Tmall. It's a big event also on other platforms such as JD or VIP. And every year, Our teams are getting better at leading this race.
So you saw the performance of L'Oreal is the number one L'Oreal group. We're number 1 in many categories. L'Oreal Paris had the number one was the number one brand. So I'm not sure we want to comment on the value it represents for us, but it's true that it is the focus of all the efforts Of our Chinese teams but also of our brand teams who create special products, special packages, special communication for this big event, which is A big rendezvous with the Chinese customer.
Thank you very much. Other question, please?
Yes. The next question comes from Jeremy Falcao from HSBC. Sir, please go ahead.
Hi, good morning and thanks for taking the questions. So one more follow-up on China and then a second question after that. So on China, Could you talk a little bit about the effect of repatriation on spending? So you talk about the market being up 4%, But do you have any sort of estimate as to what was attributable to Chinese consumers not buying overseas and buying in China instead? And then the second question is, there's quite a big difference in the overall market growth of North America and Western Europe, so both your developed market regions.
Could you talk a little bit about why there was this quite large difference in the kind of growth of the respective markets and whether there are kind of any implications of that for the recovery As we come out of pandemic. Thanks.
All right. So maybe you want to talk repatriation and then you pass to Cyrille, if you want.
Well, I think for the Chinese consumer repatriation, it's a good question For Cyrille Chapu, considering it's really on the luxury markets that the outbound purchases were the highest. So maybe Cyrille, you can say a few words on how we did manage to recapture some of the Chinese shopping that was done initially in travel Or in other countries on the local market?
So overall, for the luxe market in general, not necessarily the luxe beauty market, But for the Luxe market, in general, we consider that before 2020, around onethree of the purchases were done inbound, Inside China and twothree were done outside of China. So this year, there has been a rebalance, obviously, thanks to phenomenons like Hainan, which has, As Nicolas mentioned earlier, has been a destination where Chinese consumer went shopping. There have been 65,000,000 Tourists who travel to Hainan this year, and they are mainly Chinese. So this is the first part of what has happened in terms of recuperation of the business down outside China, inside China. And second, there has been a strong denizen, obviously, of the Chinese market.
As you've seen, on a year of the pandemic, of the COVID pandemic, The Chinese market in Luxury did plus 30%. So it's a very strong growth of the Chinese market, so which means that consumers shopped Locally versus shopping when traveling in the previous years. So we had, obviously, a very strong strategy to Develop our market shares within China Mainland this year and to recuperate the maximum of the business done inside China And our strength both digitally with TIMOL and in store in the offline allowed To keep gaining market share in China and so recuperate a good part of the business, which was done outside China.
Thank you, Cyrille. Maybe on the question if I understood well your question, it's the difference of growth between that we recorded between in Western Europe and in the U. S. In fact, there are many factors, of course, to explain the difference It took us a lot of time to explain all the factors, but I would say that 2 factors interesting is One that in fact, the lockdowns are more handicapped in Western Europe than they were in the USA. And by the way, we see that also at the beginning of this year, where The situation is pretty different, even if the pandemic is strong.
On both sides of the Atlantic, The lockdowns and the handicap of the business is stronger in Western Europe than it is in the USA. And the second reason is that there is an impact also of the travel retail, because in the numbers that we publish, we incorporate Travel Retail in the zones and the travel retail numbers in the zone in Western Europe are very negative, of course, and they have impacted pretty strongly the growth in Western Europe. So the growth of Western Europe without Travel Retail would be significantly better. So these are the two main factors that explain also the difference. And also, of course, the dynamic of the different divisions.
In the U. S. A, we have to say that 2 divisions have been extremely dynamic in the 2nd part of the year. Active Cosmetics thanks to the amazing success of CeraVe. CeraVe globally speaking is at plus 80%.
Also the great success of SkinCeuticals. So the division is growing extremely fast in the U. S. And also, by the way, the Professional Products division was also doing extremely well. So many, many differences.
Thank you very much. Other question? So if there is no more questions, first I conclude that everything is very clear, crystal clear, but please don't hesitate if you have another question. And if you don't, I think that Eva thinks I think want to say a word now.
Yes. We have a new question. The next question comes from Guillaume Delmas from UBS.
Okay. So we take Guillaume, with pleasure.
Good morning, everyone. Thank you, Francois and Niel. Two questions for me. The first one is on skincare Because when I look back at when you became CEO, Jean Paul, skincare was only 26% of L'Oreal sales. 15 years later, it's by far your largest category with 40%.
So my question on this is Any reasons you could think of that would prevent skincare from becoming quite quickly half of your revenues And maybe even more than 60% of your revenues by the time Nicolas retires. And thinking about All the key trends in the category right now like personalization, more science, health, would it be fair to say that at least at this point in time, Skincare is the category in which L'Oreal has the greatest competitive advantages relative to other categories. And my second question, maybe for Christophe, on your balance sheet and your net cash position now of nearly EUR 4,000,000,000 I mean it seems that Since 2016, you've been adding around $1,000,000,000 in cash per annum to your net cash position. You mentioned in the past you were ready should Nestle decide to sell some of its shares, but should Nestle maintain at least for now the status quo? At what point would you be looking at returning some cash to shareholders above and beyond your ordinary dividend?
Nice question. Smart question. So I will start of course, I know that the question is for Christophe, but I will Just start answering 1 minute and then I will pass to Christophe. And I will do the same for you know, it's my last meeting, so I enjoy answering questions even if I share them with my friends. So and I will also share the second one with Nicolas.
You know, every year, we have a strong cash position on January on December 31. And every year, we use the cash that we have, I think, in a very reasonable, sensible and smart way. And in fact, the cash doesn't pile up. And what do we do with the cash? Very simply, every year, we give Dividends and they increase every year.
Secondly, we, of course, Do acquisitions. Last year, we did several important acquisitions like Mugler at Zarrow, Thayer's And certainly, we will do other this year. And 3rd, also we do some share buybacks regularly in order to compensate for the Dilution of shares linked to performance shares, etcetera, etcetera. So in fact, I'm just saying that to make Christophe comfortable with his answer is that in fact, we don't have any problem of cash piling up year after a year. But please, Christophe.
Well, I will just add that, of course, we were very happy At the very beginning of 2020, when we were entering the pandemic to have a good amount of cash because it helps L'Oreal to cross the crisis in a very serene mode. And as Jean Paul was saying, we have usually every year Some acquisitions and enough to use this cash properly. Some years, it's a bit less. Some other years, it's more important. But I'm sure we will have in the near future many opportunities and we will use it in a very wisely way And always with the same financial discipline.
And always, of course, in the interest of the shareholders, anyway. So regarding the skincare, thank you very much. It's a very interesting question. So I will take the first part, which is how do we explain that Skincare has moved from 26% when I joined as CEO. Thank you for the information.
I didn't have it. And to 40% today, and maybe Nicolas will explain how it will go from here. You're right that skincare has increased a lot. One important reason of this increase is also the increased penetration of the Chinese market. Skincare is by far the largest market in Asia and especially in China.
And obviously, the more We grow our business in Asia and especially in China, the more skincare becomes important in the total sales of L'Oreal. So that's for the first part of the explanation. The second explanation is that We'll let Nicolas also complement that. We have obviously we are the number one skincare manufacturer, But we are also the number one makeup manufacturer and we are also the number one hair color manufacturer. So skincare is not the only category on which we have the leadership and on which we have strong competitive advantages.
But regarding For the future, Nicolas, what can you tell us?
Well, it's clear that skincare will continue to grow. It will continue to grow, Thanks to the growth of the Chinese market, where it's the number one category. It will grow because of the aging of the population. It's the category that It's used the longest, and there are lots of expectations from consumers, from seniors in terms of skincare. And skincare will also grow because in the as beyond demographics, there is also the importance Of the UV exposure, which is becoming a health topic.
So being able to provide consumers with the right Protection against UV is one of the important missions of the L'Oreal R and I. And you're right to say that Our research gives us the upper hand in this category. So we it will probably reach 50% of the group's business. But as Jean Paul hinted, we clearly do not intend to let go of any of the others. We see That makeup, which was very small in China and in Asia 20 years ago, has become the One of the favorite categories of Chinese consumers, and I just saw the success of the YSL lip On Valentine's Day in China, it was just spectacular.
So there's a huge appetite for makeup. Hair care It's becoming a category where consumers expect more and more quality. And we see the premiumization, the valorization of this category, which is great for us. So we're going to be investing behind all these categories, including hair color. But you're right to say that probably in terms of weight, Skincare will continue to grow progressively.
And also, I would add, but it was also the presentation of Nicolas that we are very attached on the fact that we are a multi category, multi channel, multi country, company. We don't want to be some of our competitors have decided that they want to specialize in only one category, for Only prestige or only skincare or only whatever. And I don't know if it's right or wrong for them, but it's not at all what we want to do. What is the uniqueness and because we are now becoming the only company having this So multiple, multifaceted footprint, as Nicolas said. This is really the uniqueness of the L'Oreal model.
So the fact that we are on all categories, skincare, haircare, hair color, makeup, fragrances, all channels, All price brackets, all geographies is I think is super important in terms of the business The sustainability of the business, the L'Oreal business model and its strength year after year. And it has, by the way, proven again It's resilience, solidity and success in 2020. And it will, I'm sure, under Nicolas' captainship in the years to come. Thank you. Any other question?
The last question comes from Eva Kiera Hogarth from Bank of America. Madam, please go ahead.
Please, Eva.
Thank you very much. And as you suspect, Jean Paul, this is not a question. I just wanted to say a few words on behalf of our analysts, given that this is the last time. We will speak to you before you retire later this year. I remember when I first met Jean Paul, it was at an investor lunch with his predecessor.
And at the time, Lindsay Owen Jones said, You think Jean Paul is a charming one and I'm the tough one. Just wait a little and you'll see that the tough one really is him. No offense to Mr. Owen Jones, But after his first appearance in the Cagney graveyard slot, which is Friday's breakfast, Jean Paul was declared the most charming and the most passionate CEO by far But more than one investor present. Now don't get me wrong, we've also seen plenty of determination, as Jean pointed out, to ensure that lawyers We've seen Asia become the single largest region by far 15 years ago.
It was barely a 5th the size of Europe. We've all looked in awe at the speed and the breadth of the digital transformation under the leadership, And we have followed the implementation of sharing beauty with all, which has made L'Oreal ever more responsible and ever more sustainable And that's ensured that there are now a lot more women on the executive board than 15 years ago. Surely, this is not what we envisaged. Duane Jean Paul first On to the podium back in 2006 and declared where we should not expect we should expect only evolution, not revolution from him. Well, thankfully, his forecasting skills have improved a lot since these days.
On behalf of all of us analysts, I would like to thank you, Jean Paul, for your generosity with your time, for your passion for the business and the industry And for your patience with our never ending doubts and questions. We would always like to raise more than just a virtual coup de champagne to see you off. We wish you all the best for your next endeavors. That likely include a boat floating around the Greek islands, but probably also impromptu store visits to make L'Oreal brands look good at their very best. Needless to say, we also look forward to discovering the next chapter under the leadership of Nicolas [SPEAKER MARIA ALBERTO PEREZ DE SOLAY:] And L'Oreal's very own first team of Vice President, Barbara.
Thank you very much.
Thank you very much, Thank you very much. It's very touching. And I so much regret the fact that this last The meeting is remote and not physical. I wish you could all be In front of us here, we have in front of us empty chairs. It's absolutely terrible.
And it would have been so much better to for all this year, for your patience, your understanding, your trust and confidence in L'Oreal and in me. You know, I also learned a lot, thanks to all of you. I can tell you that every meeting that we are having with you It's not only, of course, a kind of challenge, but it's more importantly a way to learn about Ideas, topic, issues, and so it's a great learning experience. So I will definitely We miss you, all of you. I hope that Nicolas will invite me when we will be back to normal in the roaring 'twenty one, 'twenty two years for a champagne for the cocktail.
Of course, I not interfere with the meeting, but maybe he will invite me for a cocktail to see all of you again. And I can say also one last thing is that you are in supremely good hands with Nicolas. Nicolas is a fantastic, super gifted, super talented and also super charming by the way man. And I'm sure that with him you will also have a fantastic years for the future. So thank you very much.
Again, hope to see you again soon. Be careful. Take care. Be safe. And see you again soon.
Bye bye. Thank you very much.
Thank you.
Thank you.