We're about on time. Good morning, everyone. Thank you for coming. It's not that early in the morning, but you heard the announcement sort of late, and I know it's difficult to travel across the city of Paris these days. So we're delighted to see you this morning together with Peter Brabeck, Chairman of Nestle, Paul Bilke, CEO of Nestle as well as Christian Mollier, L'Oreal's CFO, as you well know.
A few words of introduction and then we will take any questions you may have. The clock is ticking. We have limited time at our disposal for this press conference. As you well know, we have a Financial Analyst Meeting. Some of you will take part in that meeting, and it is supposed to start at 9 a.
M. Sharp. We don't want to be running late. I'd like to start by saying that we have received a proposition from Nestle, which was submitted to the attention of L'Oreal's Board of Directors yesterday. The proposal was approved unanimously.
Without further ado, allow me to hand over to Peter Brebeek. He will explain the backdrop behind this proposition and the reasons for it, and then I will give you more detailed information about it. And then Peter and I will explain what the idea is and also the strategic interest of this transaction for both companies. Thank you very much. On behalf of Nestle, welcome.
The Board of Directors of Nestle had a number of sessions during which it developed and improved a strategic thrust, which is broader and more long term for Nestle. It relies on Nestle's historical strength that is research. Nestle is a company that was created on the basis of research in the areas of nutrition, health and well-being. This strategic guideline was recently shored up as you well know by the creation of Nestle Health Science Company as well as the creation of a Health Sciences Institute. 2 years ago, Nestle's idea was to help consumers lead healthier lives using nutritional solutions based on food, beverages as well as scientific products designed to improve quality of life and also longevity.
Very quickly, we learned that from the point of view of research, but also from the consumer's point of view, there is a growing demand for holistic health, for a more holistic aspect than mere nutrition. And this is why Nestle has brought in its activities to encompass medicalized skincare via the creation of a new business called Nestle Skin Health. This business will globally pioneer efforts to meet growing skincare and skin health needs across the world. As part of this strategic guideline, this the Board of Directors has approved the proposed acquisition of a 50% stake from L'Oreal, a 50% stake in Golderma. Once the transaction has been approved and completed, Galdurma will provide the basis for this new company, Nestle Skin Health, and we will be able to aggregate a number of Nestle businesses and activities.
So much for strategy. Jean Paul, would you like to explain the deal further? Yes. A quick reminder about the transaction itself. We sent out the announcement this morning at 6 a.
M. So maybe you haven't had time yet to absorb all of this information. L'Oreal will buy back 48,500,000 of its own shares. That's about 8% of its share capital. So we'll buy back those shares from Nestle.
Part of the buyback will be financed by L'Oreal's disposal to Nestle of its 50% stake in the Galderma business. Galderma is a pharmaceutical business, a dermatology business in Switzerland, which is fifty-fifty owned by L'Oreal and Nestle for an amount of €3,100,000,000 in enterprise value, €2,600,000,000 of equity value paid by Nestle in L'Oreal shares that is 21,200,000 shares. As for the remainder to get to the €48,500,000 the amount would be €3,400,000,000 in cash. Now the price per share selected for this transaction is the average of its closing prices between November 11, 2013 February 10, 2014. That was last night.
So the average closing price is €124,480 All the shares to be bought back by L'Oreal will be canceled. As a result, this will alter Nestle's stake in L'Oreal, which will be reduced from 29.4% today to 23 point 2 9%. And the Betel Commergeuse family's stake will increase because there's an accretive impact will increase from 30.6 percent to 33.31 percent. In order to reflect the change of Nestle stake in L'Oreal's governance, the number of Nestle representatives on L'Oreal's Board of Directors will be adjusted from 3 to 1. Directors, another important aspect is the ownership ceiling provisions of the shareholders agreement between Nestle and the Bettencourt Meyers family will apply to their respective new holdings.
The transaction will be accretive by more than 5% On L'Oreal's recurring earnings per share on a full year basis, also the buyback will be exclusively financed with L'Oreal's available cash and through the issuance of commercial paper. Therefore, the transaction will not require the disposal of Sanofi shares. The planned transaction will be subject to the prior consultation of Galderma's and L'Oreal's Works Councils and of course is subject to the clearance of relevant antitrust authorities. I don't think this should be a problem. The transaction is expected to close before the end of the 1st semester of 2014.
Peter, would you like to take over and explain the strategic interest of this transaction? Well, I think that I have. I hope that I have. I would like to highlight, however, that over the past 40 years, Nestle has supported L'Oreal's growth. It is true that we slightly reduced our holding in this company.
However, our stake remains substantial 23.24 versus 4.6 percent 12 years ago. That is last time we signed the agreement. And I would like to emphasize that our commitment to support L'Oreal as well as our relationship with the Betancurmajes family remains stable. We maintain our full trust in the teams in charge. We have a strong relationship with the Bedanko Myers family.
And as you may know, a joint press release was issued at 7 a. M. I think issued by the Betancur family as well as by Nestle in which we clearly indicate we have signed a rider to the shareholders agreement dated February 3, 2004. Now once the transaction is complete, of course, the only change, as I already mentioned, is the fact that the number of directors is being adjusted from 3.22 and also that new percentages have been set. The rest of the contract as known by the public remains unchanged.
The Betancou Myers family as well as the Nestle Group will work will continue to work together to support L'Oreal until the shareholders agreement runs out. Allow me to say it again. As far as Nestle is concerned, clearly, our stake in Nestle has a financial component, but also a strategic aspect. We're in here for the long haul. With regard to Galderma, this dermatology business will play an important role in the newly created businesses and this will promote the growth and development of our teams.
I am delighted to welcome them on board, welcome them to the Nestle family. And as far as that's concerned, there will be no change in terms of Galderma's management. It is the same team that will be in charge of NSH, the new entity, Nestle Skin Health. A quick summary. As we mentioned yesterday, the operative word behind this project is freedom, Nestle's freedom to implement a broader strategy as adopted by the Board of Directors.
I believe that as far as Gulderman is concerned, this means increased freedom to grow more independently with a single shareholder that has all of the wherewithal necessary. Now Jean Paul can tell you more about this new sense of freedom. But also I believe that for our family, this means better freedom to increase our stake to 33.1%. I believe that this agreement is based on freedom. I love the phrase, thank you.
Its own way and also continue with this beautiful adventure in full independence. What is important for L'Oreal is that this transaction is a highly positive strategic milestone, as I indicated already. It's a positive highlight for L'Oreal, L'Oreal staff and shareholders. So yes, the L'Oreal group will focus 100% on its cosmetics business, which is its core business. This is part of our mission statement, beauty for all, as you well know.
This is part of a strategy that we also put together recently making beauty universal through locally attuned strategies. This is our word, we coined it. And this is part of our new objective to win over an additional 1,000,000,000 consumers. Now as part of the strategy, we will enjoy the steadfast support of the Betacomayers family. Their support is growing.
And their commitment to our company is both long standing and complete. And Nestle has been a loyal and constructive shareholder for the past 40 years and they will continue to give us their active support and we're happy with that. And of course, all of their shareholders will benefit because of the accretive impact on earnings per share due to the cancellation of the shares bought back by L'Oreal. Another operative word we could use to qualify this transaction is that it is a quadruple winning solution. It is a winning solution for the L'Oreal Group.
For all of L'Oreal's shareholders, it is also a winning solution for Nestle as Peter well said. And lastly, it is a winning solution for Galderma. A wholly owned business by definition has better freedom to build its future as you well said. I think we've covered all of the bases. We are now ready to take your questions.
Ivan Le Teucer from Le Figaro Newspaper. I have a question for Mr. Brebeek and Mr. Barker. As regards the 3rd division you're now creating within Nestle.
If I understand correctly, it's called Nestle Skin Health. What are your objectives? What are your ambitions? When you created Nestle Health Science, the sales revenue long term was CHF100 1,000,000 if I remember correctly. Now you're saying that you're maintaining a strategic long term stake in L'Oreal.
To what extent is that compatible or very different than your ambitions for Nestle? I can say a few words about strategy and you can discuss Golderma. We have emphasized our commitment to support L'Oreal in line with our strategy over the past 40 years. And I hope I think that this has had a positive impact on L'Oreal and that this will continue into the future. Just to preempt any other questions, together with Jean Paul, we made a decision.
The Aynaeov JV will continue to operate as such because EYNEA's existence is based on collaboration between L'Oreal as the number one beauty player and Nestle as the number one nutrition player, it would have made no sense to split the 2. INEOV only works because it brings together Nutrition and Beauty. It makes no sense to split the 2. And this is a clear demonstration of our long standing commitments to support L'Oreal that we have maintained our stake in this fifty-fifty joint venture, INE Off. Clearly, when we listen to consumer feedback across the world, there's a lot of emphasis on health concerns.
Consumers show growing demand for a more holistic kind of health. And this is why we laid the groundwork. The institutes are based on a scientific foundation that applies to nutrition, food as well as skin, skincare. Galderma will have 3 different clusters, one of which will focus on medical treatment of the skin. Paul, would you like to say a few words about Galderma?
Well, good morning. First of all, let's put things back into perspective. This agreement is It's a winning solution for all. It helps us maintain our strong commitment to L'Oreal. But also as part of Nestle's well known strategy, which is based on Nutrition, Health and Well-being.
A couple of years ago, we created Nestle Health Science. It is another growth business that we are building. So Nestle Skin Health is part and parcel of that. All we're doing is broaden our horizons in the areas of health and well-being. Now 100% owned Gulderman is like a bird, a bird spreading its wing and taking flight.
So 1.6 €1,000,000,000 which is the equivalent of CHF2 1,000,000,000. That is a good foundation for creating a strong growth cluster. A couple of years ago, we ensured growth in excess of 10%. This is an average, but this average is supported by a whole pipeline of products, products that are underway and they're extremely promising. This new business will be based on our core values, research and development as well as innovation.
And I believe the future is looking really good. The future of skin health and dermatology is a global buoyant market, a very promising market. If we look at existing global trends, Global population is aging. Developing markets are opening up. So clearly, this new business has a promising future and we're laying the groundwork for future growth.
It is a new business that is part and parcel of our strategy.
This is Sam.
Let me just say an additional word on this, why we're also discussing mentioning freedom for Galderma. You all know that according to the new accounting standards that are now in force, the fifty-fifty joint venture can no longer be consolidated by 1 or other of the 2 parties. So an activity that is no longer reflected be it in the L'Oreal accounts or in the Nestle accounts will never have the same attention as if it's 100% in one so it obtains the full support. This is an additional factor that I view as key because unfortunately these 50 JVs you won't find them anywhere in the council consolidation right at the bottom line with the earnings. So this gives Galderma once again its full place and support that it needs to have.
Galderma will be treated by Nestle as an independent subsidiary. It will have its own Board of Directors as we did for Nestle Health Sciences. I will chair the Board. Paul will be the Vice Chairman, so you clearly see the importance that we are giving to this new entity. It's based in Lausanne.
It won't be integrated. It's not a division. It will be a 100% independent subsidiary with its own Board of Directors. And everyone at Geldem are of course responsible for the management of Nestle Skin Health. Let me add here that we also have a business, Pian, for children in Germany which will be added to Guldemo.
It wasn't designed for, it was small, but now it has very promising growth opportunities. Du Christian? Frank Fodor Algemeiner, two questions. You said that it's a freedom agreement. Does that mean that in the past there was slightly less freedom?
So what strategic choice wasn't possible in the past? And what strategic decisions will be possible henceforth for both L'Oreal and Nestle? 2nd question Mr. Agon, why are you no longer interested in dermatology? Well, I'll start as I usually do with answering the second of your two questions.
It's not that we're no longer interested in it, but it's true that it's not part of our core business Galderma. We know the business very well because we've been co managing it for a very long time now from day 1. And this is a very interesting business indeed a very fine business, but whose activity is fully parallel to that of cosmetics. And we've been able to see over the years that there was in fact no operational synergies, no sales synergy, no product synergy and hardly save a few exceptions, very few R and D synergies. So it really is a parallel activity.
Our well defined strategy that we clearly set out is beauty for all, beauty in all channels for all men and women of this world with best quality, efficacy and safety. So this is it's an activity that's different. And in terms of freedom, well, freedom as you know by definition freedom means viewing one's future in a totally open way. So freedom will be defined going forward by definition. But just picking up on Peter's point, it's true that it's a fine opening for the 3 companies for Nestle, L'Oreal and Galderma.
No. No, no, no, not at all. In fact, I've always said to all those of you in the room that I've had occasion to meet various interviews is Nestle has always been an extremely loyal, supportive shareholder. So no quite the contrary, it's true that it's a new milestone in the adventure in the life of L'Oreal and life of Leslie, it's a key milestone. I think that there's actually if you look at Galderma, if talking about acne, rosacea, onychomycosis, skin cancer in the context of a beauty leader.
I mean, they're really the activities that from time to time, somewhat limited. So I think freedom for Galdomo is now that it can concentrate itself fully on this 100% without being part of that in L'Oreal. I mean it's different and that's the big advantage here that Nestle with Nestle Skin Health is not becoming a competitor with L'Oreal. Far from it. I mean this is our growth business.
It's health medical section that we wish to develop with Galderma. So there's absolutely no confrontation which allows our commitment to continue with L'Oreal as leader in beauty in the sense that I'm speaking of freedom for Guldemer. It gives it greater freedom because from time to time it was rather restrictive. Radio Classe, first question for you Jean. Why only 8% because Nestle still holds 20 I mean has 21.5% to dispose of for Mr.
Brager, 21.5%. What are you going to do with that stage? You're going to keep it as is? The preemption clause runs out at the end of April. Do you plan between now and then to buy shares, sell them to someone else, retain them?
Well, firstly, the new position adopted by Nestle won't be 21%, but 23.29% because mathematically we go from 25.8% to minus a 25% cancellation of shares accretion. So rises to 23.29%. So this is an amount that we've set in light of various criteria. One of the criterion being a lightening of Nestle's significant lightning I would say in Nestle's stake that allows Nestle to be a key shareholder for L'Oreal. And it's also clear that it's the level that affords maximum accretion for the Betancourt Meyers family below the 33 percent threshold, which would constitute breaking the ownership ceiling provision.
So for all those reasons that amount was set and we view it as extremely balanced. Oh, I mean this is actually the 1st round here, but it doesn't necessarily require lead to a 2nd round as in politics. Well, as I said for us, the 23 point 23% means a major substantial shareholding both financially and strategically. So I don't view this venture as a first step of Nestle pulling out of L'Oreal? Not at all.
We've won what we were seeking that is the freedom to implement a long term policy and strategy for Nestle in order to take part and create a new sustainable profitable growth business called Nestle Skin Health. That's the objective. We were prevented from doing that thus far. And now we have this opportunity to grow. The stake in L'Oreal continues important for us I said and it's a long term shareholding.
It's absolutely not a sign of disengagement of our interest or change of interest. No, it remains. It's at 23.23%. And 10 years back when we had the last contract, we were at 24.6%. So we're not really far from where we were 10 years ago during that transaction almost at the same level, but freedom to act in a sector where thus far where we had an agreement to act together.
There you have it. Hello, I'm from Alvestre. Two questions. What who will be the 2 Nestle Board members who will remain on the L'Oreal Board? And why fund the transaction cash through commercial paper and not by lightening the stake in Sanofi as you did back in 2,008 for YSL Butte?
Always very specific question. So Pete, I'll let you answer for the Board members and the Board. Well, clearly, we're talking about the stake of Nestle, the Board, of course, we must consider corporate governance. And here in France that requires that there be a minimum of number of women sitting on the Board. So Nestle is duty bound to make that contribution.
So it will be a man and a woman. So it won't be you 2. No, it won't be the 2 of us. It'll be a man and a woman. No.
No. We're already with Chris Guernacune. We already have a woman on the Board. Christian will remain on the Board and I will in all probability remain for a little while longer. What's important?
The reason is that Nestle will provide a fifty-fifty balance in men and women. Christian, commercial paper, Wells on the funding. I mean, things are very simple. As Jean Paul Agon indicated earlier, there's a cash disbursement of the order of €3,400,000,000 last night in the press release for the results. We have just over €2,200,000,000 surplus cash.
We need to find €1,000,000,000 So it'll be commercial paper and debt will be fully reimbursed before the end of the year. So it's just really just short term financing. Yes, for those of you who will stay for the meeting, you'll see that L'Oreal's cash flow was very strong in 2013 in terms of cash flow generation. So we have a very sound financial position. It allows us to complete this transaction without touching Sanofi.
Yes, final question. From Les Ecorp. So this business could also be expanded through acquisitions the new Health division, what you've established in terms of scientific, will also contribute to this new business? Or will it develop its own R and D addition? Well, our strategy has already been a combination of things, but we do have a preference for internal growth.
Galderma has shown in the past that they have that ability and they had a combination through acquisitions, but they have strong internal growth capability. That's why they have an R and D base that's very considerable in excess of 10% of sales in terms of R and D. And it's really a combination, but more in house internal growth that we're favoring. So today no competition between Nestle Skin Health and L'Oreal businesses. Have you planned agreements to prevent going forward be it in L'Oreal's or Nestle Skin Health Grid, there's no overlap where you might become competitors.
One point, for example, SkinCeuticals cannot be viewed as skin health. Well, first off, we haven't specifically planned. I mean, there's no secret agreement. I mean, by definition here that limits this competition, but there won't be any competition. What's important to understand is that the 2 companies are now embarked on parallel tracks.
And we see Nestle's strategy, if I can comment it, is a strategy of going from food towards nutrition and health and in health as an extension that can go to skin health. And the big strategy really is beauty, the major track. And these 2 strategic tracks are parallel tracks as it were. And in some cases, they're not very far removed from one another. And it's true that certain brands of Galderm are not very far removed from certain L'Oreal brands, SkinCeuticals or La Roche Posay in certain product categories.
But what's important is the strategic direction should be clearly defined, clearly parallel and don't converge which will avoid any issues. In any event, these are directions that are well defined parallel that are not the same and we have a relationship such that allows us to split any pressures. I mean, absolutely, we have excellent cooperation between us, excellent relations and this type of problem won't arise? Well, yes, for some time now. Some time, some time.
I inform the Board of Nestle that really hasn't discussed this venture. It's actually spent some time discussing the broadening of Nestle activities from its core business and this started a fair while back. I read the press, it started for the first time in the year 2000. I already presented a broader vision not approved at that time, but we continue to discuss. And it's clear with the creation of Nestle Health Science Company, we created a first base to move in that direction that was slightly further than it's merely food and beverage that was the 1st building block.
And then the setting up of a Nestle Life Sciences Institute that was non strategic. I mean we said that it would have consequences Nestle would find for the 21st century activities whilst respecting our core business from where our roots, but it's beginning to broaden. And a large company such as Nestle, which is the world leader in consumer goods. I mean it's not the consumer has changed. It's not the same consumer in the past.
For opportunities in food and beverage. But if you want to assure long term leadership, we have to track with the consumer. That was our position that was discussed at length within the Nestle Board. Once we received the approval of this strategy that's where we began to discuss with Jean Paul because we found in Galderma Because we found really the best position. I mean had Jean Paul or the Board said no we'd have looked at something else but I found that it wasn't normal.
We have something that exists already. And with this venture, we really do have the possibility of something that's really a fourfold winning proposition and therein lies the merits of this transaction. You don't have to answer all the questions. That was a good try, I'm from Bloomberg. Two questions.
So what bank have you hired for the transaction? Second question for Mr. Agon. What does it mean for your stake in Sanofi? Do you have the same view maybe to use your stake for other acquisitions?
I'll start by answering them. We've worked with friends from Lazard who some of whom are in the room here today and who've given us excellent support. And we've worked for a very long time on these matters with BNP that's also supporting us successfully. Those are our 2 partners at point in time? Second question was remind me.
Sanofi. Well Sanofi, we're happy not to have to sell any Sanofi shares. I'd say it's a bit like Nestle. I mean we have a stake in Sanofi. It's a bit like Nestle.
In L'Oreal, if I can put it that way, we have a shareholding in Sanofi. How many years now? 41 years. You see there are interesting parallels between Nestle's stake in L'Oreal and L'Oreal stake in Sanofi. For 41 years now, we've been shareholders of Sanofi because L'Oreal was really contributed to the foundation of Saint El Abort, the history, we have a shareholding that's quite considerable, 9% of Sanofi's share capital.
We have 2 L'Oreal Directors on the Board, Mr. Mullier and Mr. Attal, and we are a major shareholder of Sanofi. So we're very happy with that situation for the time being. Peter, yes, the bank.
We're supported by Rothschild here in Paris. Any further questions? Very quick one from revenue. Can we expect an adjustment, a natural adjustment in the dividend in terms of this accretion at L'Oreal at L'Oreal well, Christian. Well, you've seen that this year, the Board yesterday decided to propose to the shareholders meeting a dividend €2.50 up 9%, 8.7%.
That's already significant. And for 2014, in a year's time, in 2015, it's a little early to say, but I don't think you'll be disappointed by the dividend. But it is rather, rather early since we only decided yesterday from the Board the proposed dividend for this year. So it's a little early for the next one. One final question perhaps and then we'll leave it at that.
You plan to extend the shareholder agreement between Nestle and the Bettencourt family. What's in the rider to the agreement, Nestle committing itself for several more years to remain a shareholder in L'Oreal? No. I have here in writing. So the Betancourtz, Meyers and Nestle concluded a rider to their shareholders agreement, 3rd of February to apply to the new shareholders situation once the transaction concluded.
Just the number of representatives, Nestle on the Board will be adjusted from 3 to 2 and the ownership ceiling provisions of the shareholders agreement will apply to their respective new holdings. That's what it says and nothing else. And this of course Ryder will be disclosed to the Financial Markets Authority and the Bettencourt's Mayans family will continue to act in conjunction with L'Oreal for the and transparent. No microphone. All this is clearly set out in the agreement.
No, it's not ending. There's actually a huge confusion about that. If you read the agreement, in fact, it's public, as I've said. Nowhere is it said that it ends in April. It's an agreement that's continuous.
The only thing that ends in April is the first right of refusal. That's the only thing that expires on the 28th April. Now the agreement that we have with the family to acting in consent. That's what we had to renew. We're renewing it.
That's why we say we continue to work in to act in consent. Otherwise, it's exactly what it was before. Nothing changes, simply the shareholding and the number of Board members. That's all. Okay.
One final question, Yvan, because it's you. So the plan for the €3,400,000,000 cash in cans. Okay. Share buyback, bolt on acquisition, exceptional dividend. Well, we said that we plan to return the cash proceeds to shareholders to that's what ends in the agreement, but we've already expressed that intent.
Thank you all very much for joining us so swiftly.
We're almost on time. Good morning, everybody. As you probably know, we have important news for you. I hope you've received the press release and we set up a press conference earlier this morning to talk to our journalist friends and that press conference is now over. And I'm sure that very matter will be discussed at great length this morning.
So let us present L'Oreal's performance in 2013. Jean Regis will be in charge of the usual housekeeping announcements. Good morning, ladies and gentlemen. And before we get the ball rolling, a few housekeeping announcements as to the practical arrangements we have set up, a quick reminder of the safety instructions, which we need to bring to your attention. I suggest that you look at the last page of the leaflet you found on your seat.
Headphones are available at the to the simultaneous translation, switch to channel 1 for French, channel 2 for English, I suggest that you select your preferred channel right now. Also, the campus has Wi Fi coverage, which means you can go online and type in the login and the password that you can see on the screen. Of course, we ask that you please turn off your smartphones or cell phones. Thirdly, as I indicated earlier, you must have found on your seats a leaflet containing the charts that Mr. Muly will present later.
And also at the entrance to this room, you probably found the press release on the 2013 annual financial statements, which was shared with the entire financial community last night at 6 p. M. This room is packed. And so we outfitted a second room for the over And of course, the conditions will be the same in terms of Q and A between the two rooms. I'm going to ask Aurelie Ghesnier to please confirm that the people in the second room can hear us all right.
Yes, Regis, we can hear you fine. Thank you. We can hear you fine as well. See you later Aurelie. On your seats, you found a card, so you can ask questions.
Ask your questions in writing at least at first, but please don't hesitate to do so. Throughout the presentations, the hostesses will pick up the cards. And of course, after the break, you'll get other opportunities to ask questions directly. But please, before you ask a question, state your name and business. Item 5, of course, the entire meeting is being All of the presentations as well as the webcast recording will be available under the Presentations and Webcast heading on that same website starting 4 p.
M. At the end of the meeting, cocktails will be served in the guest lounge where you had breakfast this morning. Thank you for your attention. Thank you, Jean Regis, cocktails, so early in the morning, you may stop at nothing. Sorry about this room.
It's not the best. You probably noticed we are busy remodeling our usual premises. It will be ready for next time. As usual, Christian, of course, will present the financial statements and then we will ask each division head to summarize the highlights for 2013 as well as prospects for 2014. And we have a guest speaker for you today, Ms.
Barbara Lavernos. We have asked her to give a presentation on Travel Retail. As you well know, Ms. La Vernaise was appointed late last year. She was appointed as the Multi Division Head of Travel Retail.
This is no small matter, more than €1,000,000 in revenue, double digit growth, highly profitable growth. And so Travel Retail is becoming an important aspect of L'Oreal's business model. And I will also share with you my thoughts on 2013 and of course, what you care the most about prospects for 2014. Christian, you're on. Good morning, 1 and all.
Now this presentation will include information pertaining to revenue, income, changes in cash flow, the balance sheet and also dividends. We'll also discuss the financial impact of the transaction we announced this morning. Consolidated revenue came to nearly €23,000,000,000 up 6% in a like for like ForEx basis. Like for like revenue was up 5%. The scope differences are slightly positive, up 1%, mostly due to the acquisition of Urban Decay, a U.
S. Makeup brand. Following ForEx difference of a negative 3.7 percent. The change is a positive 2.3% on a reported basis. With regard to the ForEx difference, it is of course too soon to foretell what will happen in 2014.
At this point, we do not wish to give a figure. But using the current rates, you won't be surprised to hear that the impact in 2014 will be negative. As regards scope differences, it is difficult to be specific because there remains uncertainty as to the date at which they clear KARITA and Magic will be consolidated. However, we can expect about 0.7% positive impact on a reported basis for 2014. Currencies.
The euro accounts for 26 percent versus 29% in 2012 and versus 40% in 2005, the U. S. Dollar accounts for 23.7% of our billings, down 3.2% against the euro. The Chinese yuan, 7.1 percent of our billings, down 0.7 percent relative to the euro. Sterling, 6.1 percent of our billings, down 4.5% against the euro.
And the Brazilian real, 3.6 percent of our billings, down 12% against the euro. So the euro has gone up against pretty much every other currency in 2013. Our revenue per branch and per division on a like for like basis, all of our divisions are growing. Professional products are up 2.1%. Consumer Products have grown by 4.9%.
L'Oreal Luxury is up 6.8%. Strong growth in a brisk market and also Active Cosmetics is leading the way, up 7.8%. The Body Shop had a disappointing year, up only 1.2%. And lastly, dermatology, Galderma, up 3.9% after Q2 and Q3 were strongly impacted by generification in the U. S.
Geographic areas, they're all growing. Western Europe is up 1.9% and North America up 3.8%. And the new markets going strong up 9.4% and even up 10% excluding Japan. Now within the new markets, every zone has posted steady growth. The Asia Pacific region, up 8.4% and excluding Japan, up 9.5% South America, up 11% Eastern Europe, 8.2% and lastly, Africa and the Middle East, up 14 0.3%.
The new markets have, since 2012, become the leading geographic area for the group, accounting for nearly 40% of revenue. That is more than twice the level in 2000, which was 19%. Revenue per business line, we're seeing strong balanced growth for all of our business lines. This year again, a strong performance in skincare, up 7.5 percent, excellent performance for makeup and hair care. P and
L.
There's a significant growth in profit from operations as you can see on the screen, up by more than 40 points reaching 16.9% of revenue. That is a record year. Let us start by analyzing gross profit. Gross profit comes to 71.3 percent of revenue versus 70.7% in 2012, which is a 60 point improvement. This improvement is the result in particular of a number of positive impacts: better cost, price and product mix and also ForEx.
On the negative side, the consolidation of U. S. Companies Urban Decay consolidated into L'Oreal Luxe and also Emiliani, which is now part of the Professional Products division. These two consolidations have had a negative impact. Research costs have increased by 3 point from 3.5 percent to 3.7% as a percentage of sales or rather revenue growing 8.4%.
This increase reflects the group's unwavering determination to support its research and innovation investments. A and P expenses come to 30% of sales, which is close to the 2012 level. Excluding acquisitions, A and P expenses are stable as a percentage of revenue. Our share of voice is flat or up, and we're still capitalizing on our improved buying terms combined with the positive impact and growing positive impact of the development in Digital Media. Sales and administrative costs represented 20 point 7% of revenue and come to slightly 20 points or rather the level of sales administrative cost is slightly 20 points higher than in 2012 as anticipated mid year.
This is mostly the result of currency translation impacts to the tune of about 10 points and also decisions to strengthen our sales teams in China, Brazil and Russia. Productivity gains are ongoing in the administrative areas. By and large, operating profit comes to €3874,000,000 up 4.8%, also standing at 16.9 percent of revenue. On the like for like ForEx basis, growth in operating profit comes to 7 point 8%. You're going to find the next chart interesting.
Well, every chart is interesting, but particularly this You are all familiar with the announcements that we made this morning with regard to our stake in Galderma. The entry into force of the new IFRS 11 accounting standard, which removes the possibility for proportional consolidation of joint ventures would, in any case, have meant that Galderma and the smaller JV in EOFT can no longer be consolidated either into revenue or into operating charges. Now to help you with your projections for 2014, let me present here the P and L for the L'Oreal Group. Pro form a that is without taking into account Gilderma and Inayev on the operating side of the P and L. What we find here is an even stronger growth in gross profit for 2013, up by more than 70 points.
Cosmetic research costs are growing steadily, coming to 3.4 percent of sales. And advertising and promotional expenses are growing at slightly less than 30% of revenue. Record operating profit 17% of revenue. Profitability by divisions. Professional Products division has a profitability of 20.5%.
This is in line with 2012 and 2011, a pretty palatable performance for a division that has been operating in a difficult market over the past 3 years, profitability of the Consumer Product division has further improved, significantly improved 19.9% of revenue, which is up 80 points. L'Oreal Luxury's profitability has surged in 2013, up 70 points. Active Cosmetics profitability has further increased 21.2%. Also on the profitability front, Active Cosmetics is leading the pack. Profitability of The Body Shop has crumbled by 50 points in 2013, only 8.6% of revenue.
This is expected to improve in 2014. And lastly, BILDERMA's profitability is 14.1 percent of revenue. Dermatology was impacted by a difficult year on the U. S. Market.
Every geographic area has improved its profitability. Western Europe profitability has improved by 90 points coming to 22.2%. North America, profitability has improved by 30 points, 18.7%. And the new markets profitability has improved by 70 points at 19.2%. The new market contribution to the group's operating profit on the cosmetics front has further improved 38%, which is twice the level 8 years ago.
Let's keep analyzing the P and L. Financial expense comes to €42,000,000 In the absence of financial debt, we're talking mostly commissions on standby credit lines and also taking into account the impact of the IAS 19 standard on calculating employee benefits. As you may know, this standard was modified starting in 2013, which means that the discount rate and the rate of return expected for investments intended to finance the pension funds. Those two rates have been aligned. And also as we indicated, in 20 13, we reclassified a part of the pension expense, which until then was entirely posted as an operating expense.
So the reclassified 2014, we can expect the same amount of interest expense in the same order as in 2013, close to €40,000,000 all other things being equal. Sanofi dividends came to €327,000,000 with regards to building up to 2014, you may have noticed that Sanofi announced last week that dividends would grow by 1%. Tax came to €1038,000,000 I. E, a 25% tax rate, slightly lower than in 2012, which was 25.6%. At this juncture, for 2014, even though it is too premature to take a stance right now, we can expect a slightly higher tax rate in the order of 26%.
Net profit excluding nonrecurring items comes to €3,170,000,000 and net earnings per share €5.13 up 4.4%. For those of you who would like to run a simulation for 2014, it might be relevant at this stage to select an average diluted number of shares in the order of 608,000,000 or 609,000,000. But this number should factor out the share buyback that we announced this morning, 48,500,000, which means a pro form a balance of 560,000,000 shares. Clearly, under IFRS accounting standards, the impact of the share buyback will be taken into account pro rata Temporis in 2014. Now nonrecurring items came to €159,000,000 mostly we're talking restructuring costs in Europe, asset impairments and also expenses incurred following a decision to shut down the CCB Beauty Creators Club and also a French tax rate of 3% on dividend payouts.
Most of these items were posted at the end of June 2013. Cash flow. Cash flow came to €3,906,000,000 up 6.7%. Working capital requirement increased by €155,000,000 in 2013. As we already announced at the beginning of the year, inventory is slightly up as a percentage of revenue.
So up from 9.1% at end 2012 to 9.4% at end 2013. Receivables are slightly down from 14.3% to 14.2% of revenue. For 2014, we can expect yet another year during which working capital requirement will increase in the order of €100,000,000 to €200,000,000 Investments came to 4.6% of revenue, slightly up from 2012, where the level was 4.3%. For 2014, we can expect an investment level in the order of 4.5 percent of revenue. Operating cash flow stands at €2,689,000,000 that is up 4.4%.
Lastly, after paying out dividends, factoring in acquisitions and taking into account the exercising of stock Our balance sheet is particularly strong. Our balance sheet is particularly strong. Shareholders' equity has been shored up relative to the end of 2012. This is mostly due to retained earnings and also revaluation of Cenuifi shares marked to market. Our financial situation at December 31, 2013, we had net cash flow of €2,215,000,000 up by EUR 640,000,000 This has been invested into very safe instruments, I.
E, bank deposits with top ranking banks as well as short term money market funds. In a couple of minutes, I will say a few words about the impact of today's announcement on our debt. Our healthy balance sheet has led the Board of Directors to suggest a further increase in the dividend bringing it to €2.5 per share, up 8.7 percent. This dividend increase leads to a further increase in the payout rate 48.7% this year, which testifies to L'Oreal's ongoing determination to maximize shareholder return. The announcement that we made this morning, let me say a few words about the financial aspects of the transaction.
Let me say a few words about the structure of the transaction. On the left hand side of the screen, this is a share buyback of 6 €1,000,000,000 worth of shares from Nestle. So 48.5 1,000,000 L'Oreal shares, that is 8% of our share capital. And we're buying it at a share price of €124.48 The share price of €124.8 is an average of closing prices between November 11 February 10. Now how do we finance this?
We're selling our 50% stake in Galderma to Nestle for an enterprise value of €3,130,000,000 The EBITDA multiple is 15. 2013 is an atypical year for Galderma. And considering Galderma's debt, the share price would be or rather the amount would be approximately €2,000,000,000 And secondly, payment would pay cash of €4,200,000,000 approximately. Now what about the financial impact? On the right hand side, debt, we're starting the year with a cash flow positive of 2 point €2,000,000,000 I saw a cash surplus.
The cash outlay will be €3,400,000,000 Galdurma has debt of about €1,500,000,000 vis a vis L'Oreal and €500,000,000 vis a vis Nestle. So Galderma will pay us back the €500,000,000 In other words, our debt our net debt will be €700,000,000 which is 7.2x EBITDA in 2013. This will be financed mostly by commercial paper. As we indicated in the press release, we do not have to sell any Sanofi shares and the debt will be paid back entirely by the end of 2014. Are the impact on earnings per share on a full year basis percent?
I'm specifying on a full year basis because as I said before from an accounting point of view, there will be a prorated and porous impact in 2014 will be closer to 3% than 5%. But you can do the math, 5% accretion rate. This transaction, as you can see on the next document, is leading to changes in the shareholding structure and also to the governance system. The Betancourt Myers family will benefit from the accretion and the entire cancellation of all of the shares bought back 48.5%. It currently holds 30.5 percent of capital and this will be increased to 33.3%.
Nestle's stake will increase from 29.5% to 23.29%, so much for the shareholding structure. As for governance, L'Oreal governance, the governance system will be adjusted to reflect the new shareholding structure. There will be 2 new Nestle representatives on the board versus 3 today. And also, the ownership ceiling provisions will continue to apply, but to the new owning ceiling, so 33 point 3%. This goes without saying.
You're aware of the regulations. And also, Nestle, 23.29%. Another important aspect, the Nestle Group and the Bettenkommayers family have decided to continue working together. Last document and future steps. With regard to the disposal of Galderma, the transaction is subject to customary conditions including the prior consultation of Galderma and L'Oreal's was canceled and so the clearance of relevant anti trust authorities.
We're not expecting any problems on this front. The implementation of the share buyback will take place against the backdrop of the current program. And also, simultaneous, the share buyback and disposal will wind down by the end of the first half of twenty fourteen? Thank you for your attention.
Thank you, Christian. That's all very clear. So we're now going to move to the presentation by division, starting with, of course, the largest, the the Consumer Products division. Mark, over to you. Thank you, Jean Paul.
Hello, everyone. Good morning to you all. The Consumer Products division ended 2013 with a growth rate of 4.9%. We're outperforming the market, which grew less quickly than last year by around 3.9%. 2013, another year of strengthening our positions in mature markets.
A good year in Western Europe where our sales grew by 2.5%, our best performance for 5 years. Our main markets posted good growth figures Germany, 9.9 percent U. K. 25 percent France 25 percent Furthermore, the situation is improving in Southern Europe. Overall, in this zone, we've reinforced our leadership with a record market share 29%.
North America, the division recorded sales growth up 2.8 percent. In sellout, we are up 4.1 percent outperforming the market at 1.6%. Difference between our sales and our sellout is mainly the result of inventory adjustments by our distributors in a market that has slowed by half. Overall, we confirmed our number one position in our categories with record market share growth of 19.8%. 2013 is also a year that saw acceleration in new markets where the division grew by 8 0.4%.
This dynamism is visible across regions. In Eastern Europe, we're growing by 6.7% even though the market was sluggish in Russia. Note the very good performance in Turkey. In Latin America, our growth rate stands at 8.9% driven by double digit growth in Brazil. In Asia Pacific, our growth rate stands at 8.1% with India and Indonesia leading the way.
And finally, Africa, Middle East is growing at 15.5% with strong growth in the Gulf States. This dynamism reflects significant gains in distribution in new markets. Turning now to the performance of our brands. In 2013, all the divisions international brands posted growth and grew faster the world's number one beauty brand recorded very good growth up 5.8%. The substantial work performed on the brand allowed it to score major worldwide victories in 2 strategic categories.
Heker Lviv range achieved strong growth of more than 15%, topping the €1,000,000,000 mark, confirmed its number one position in Europe accelerating in the markets it is looking to conquer in China with the argan oil franchise in Brazil with Keraliso in India with Total Repair 5. And finally, the major event for the brand in 2013, the launch in the U. S. Under the name Advanced Hair Care was the best hair care launch in the U. S.
Over the last 5 years. Now I'd like to show you our commercial featuring our new ambassador Blake Lively.
Reveal your most extraordinary hair every
transformation awaits. L'Oreal presents volume filler shampoo, our first hair care with the luxane to actually increase the diameter of your hair with volume filler. Hair's instantly thicker, feels like 2 times more hair, a transformation that lasts wash after wash. More than beautiful, extraordinary. New volume filler from L'Oreal Advanced Hair Care.
The
Facial skincare by L'Oreal Paris is also recording double digit growth and represents more than €1,000,000,000 A lot happening in this category in 2013, the global rollout of Revi Live laser the successful launch of Age Perfect Cell Renew and the very good start made by skin perfection in Western Europe a new facial skincare for perfect skin down to the last pixel dedicated to a new group of consumers in their 30s. L'Oreal Paris has reinforced its skincare offering to better meet the expectation of women of all ages. Lastly, L'Oreal Paris, the number one beauty brand in China recorded double digit growth in the country performed particularly well in the strategic Chinese skincare market, thanks to the highly innovative launches of Hydra Fresh Mask in Lotion and the premium range Age Perfect Lumiere. Garnier, number 2 brand of the division and the group recorded growth up 4.5%. Garnier posted double digit growth in hair colorants.
The major event for the brand in 2013 was the launch of Olia. Olia is the 1st mass market permanent hair colorant with no ammonia ODS2 oil technology, the best launch this category has seen in Europe for several years. The global rollout is continuing. It's proving successful and will keep on driving the brand forward in 2014. Garnier is also continuing its worldwide conquest.
In Brazil, Frigti Solier Reparacao Major hit in 2013 with its Cote de Sao effect for damaged hair. In India, the success of Garnier men with Acnophyte ideal for the cleansing of men's skin. Finally, in South Asia, Light Complete a very efficient whitening care allowed us to become number 1 in 2,030 in whitening in Thailand. And here's the commercial for this product in English.
That's
efficacy than vitamin c. From snow prime and pure lemon extract, it helps dissolve 3 types of spots, deeply inside skin, acne marks, sun spots and freckles.
Skin becomes 2 tones fairer.
New Garnier Light Complete.
No more spots, my best solution.
In 2013, Maybelline, the world's number one makeup brand posted sales growth of 4.2% with strong volume growth up 7.3%. The priority in 2013 for Maybelline was to innovate in the most accessible categories to win over new consumers. And this led to great success of the new Color Show nail varnishes, enormous global success for Baby Lips color lip balms and a major breakthrough for Maybelline eyeliners category in which we generated new worldwide dynamism. Note also the brand's fine performance in lipsticks with color elixir currently rolling out. Furthermore, the brand is continuing its global adventure by educating women in all countries about makeup.
In China with Baby Skin, a perfect one step makeup base that hydrates provides UV protection and instantly gives a rosy complexion. In India, in deep trade, the tremendous success of Colasalle Cajal a modern interpretation of a traditional beauty routine, but also in Brazil where Maybelline is inventing a new distribution model with kiosks that are winning over new consumers in the country's extremely popular shopping malls. Finally, a word about SE, which is continuing its global growth up 8.2%. And Soft Sheen casts an our brand dedicated to women of African origin growing thanks to the success of Amla Legend skincare and hair relaxers. Other highlight in 2013, the digital ramp up of our brands.
It's a key component of our growth strategy. 2013 media investments in digital increased sharply accounting for 11% of net total media spend. We took great care to measure the effectiveness of our investments. Digital Media also a source of inspiration and innovation. A fine example is the magnificent adventure of Ombre hair colorants by Preference born out of a new hair color trend that sprang up in California picked out by our teams monitoring search engines.
Product was widely developed by our labs and successfully launched globally. E Commerce, the division is continuing to grow primarily on the websites of our distributor partners, but also on the sites of pure players such as China. Tmall in China online sales already account 5% of the division sales. So we can say that 2013 was a strong year from which the division has emerged even stronger than before with good performance across regions and brands. So we're therefore fighting fit for 2014.
And to succeed in 2014, 3 priorities. Firstly, major global innovations on our key brands starting right away in the Q1 L'Oreal Paris Fibrology by LV, 1st hair care product to increase hair diameter thanks to a new active ingredient Filoxane results 17 years research to visibly provide more volume and body to the hair. And then this Color riche L'Extradinerle new generation lipstick for which the first time ever combines the color intensity of a lipstick, the shine of a lip gloss and the comfort of a bar. Take a look at the commercial. It's great.
At Garnier, the big news is Swami Raj Revolutionizing Anti Aging with its 2 stage action. 1, immediate transformation of the skin, thanks to optical care patented technology 2, long term anti line anti blemish and radiance action. Maybelline at the moment we're launching SuperStay Better Skin the 1st long lasting foundation to provide perfect coverage and improve the quality of the skin visibly. 2nd priority for 2014 acceleration of our growth in new markets. A major component of our strategy throughout 2013, we strengthened our marketing developing teams in the new markets to make sure we do even better in meeting customers' needs.
And finally, this new regional force will allow us to complete global launches with priority for 2014 continued to improve the efficacy of our growth drivers. We're going even further in improving our media buying by systematically putting up our contracts for competition, continuing to optimize the efficiency of our marketing spend, thanks to ramping up of our econometric models to measure ROI. And lastly, digital more than ever at the heart of our strategy for greater media efficiency, more customized services and the rapid rollout of our e commerce. Overall, we're starting 2014 with determination and confidence. Thank you for listening.
Thank you, Marc. Well done. Now the Luxe division, which as you know delivered another very fine year, great growth outperforming the market, also great end of year. Nicolas, tell us all about it. Good morning to you all.
For L'Oreal Luxe 2013 was another splendid year. The division has clearly outperformed a selective market that is growing at a rate of over 4% growing 1.5 times faster with comparable growth of 6.8 percent of turnover that stands at €5,867,000,000,000 L'Oreal Lou shown stronger steady growth in market share accelerated during the year with the second half up 7.2%. It was an overall success and we can take pride in seeing every major zone above its market: North America, the new markets, particular China which continues to drive growth at division as well as Western Europe without forgetting travel retail our 6th continent. Each category is moving forward with an impressive consistency. I can point out skincare success up 10% with strong 2013 innovations in face care with breakthrough products like Dream Tone by Lancome, Blue Therapy serum in oil by Biotome, super multi corrective cream by Kiehl's, the premium offer of our designer like Cremaneira by Giorgio Armani and strong growth of Clarisonic instrumental cosmetics with the Deep Pork facial cleansing kit and the PediFoot Care kit.
A year ago announced 2013 will be a fine year for fragrances, be the case for Lancome and Armani, more about that later. Flowerbomb by Victor and Rolf has become number 4 of the female fragrance market in the U. S. The Diesel recently launched its youth initiative, Love A Dose tattoo in a masculine market. Spicebomb by VNR continues its unstoppable climb to the summit and Polo Red by Half Lorraine one of the most impressive launches of the past few years moving to the top stop in Latin America at launch and in 3rd place in the U.
S. For end of year holiday season. The Polo franchise has become the leading men's fragrance line sold on this market. Turning now to the performance of 2 brands, in particular Lancome, the world's luxury leading brand for women, repeated another year of fine growth above the market. La Vie Belle confirms unprecedented sales success for its full 1st full year.
This fragrance is now among the top best selling women's fragrance extremely rare occurrence dates back to 2000. The brand's iconic fragrance benefited from exceptional ad campaign featuring Penelope Cruz, which showed immediate results. On the beauty side, Lancome received the industry flagship award, the Marie Claire Prize for Excellence Dream Tone Revolutionary Treatment for Pigmentation Emblem of diversity. Advanced Unifique from L'Oreal Research was one of the high points of the year up 13.5%, while absolutely the brand's best of the best is the leading Lancome beauty care line in Asia. Finally, the smart spirited Lancome makeup range had some high moments in 2013 with the launch of Hypno's drama palette Visionaire Foundation and the collection created by Elbaz.
2013 was
also the Giorgio Armani year. Giorgio Armani, the division's 2nd leading brand has confirmed that it's one of the world's most sought after luxury beauty brands with turnover up 8.3%. The brand has clearly made another step forward towards ultimate luxury with new beauty sites around the world packaging materials both subtle and sophisticated sumptuous textures for its ultra premium products and the Privet fragrance collection Armani Neils perfection. On fragrances in addition to the consolidating the position of classics such as Aqua Di Gio and World Leaders along with Cote Homme, Armeni has above all, succeeded in opposing Chead's new women's fragrance among the top 5 European bestsellers at launch. A very fine fragrance and a distillation of emotions that has spoken to the heart of today's women.
Finally for Giorgio Armani, 2013 represents a year of strategic beauty orientation with growth of 30% for makeup and extended line with a range of subtle shades signed by Linda Cantelo, one of the world's best makeup artists exceptional packaging and successful launches such as Roger Stasi. Giorgio Armani has entered the very select club of great beauty brands. Operational success can be found everywhere in the U. S. In Asia, the brand is rising in all rankings.
This step forward for Armani Beauty also illustrates the return of color throughout the luxury division. 1 year later, we can confirm that we have made one of the industry's most outstanding acquisitions with Urban Decay. Urban Decay showed breathtaking growth up 42% globally 2013 with an explosion of colors which were a hit as young makeup vistas. Naked palettes the brand's Kull product featuring tone on tone shade harmonies for eye shadows sells at a rate of 1 every 13 seconds globally. The brand's just extended its expertise to lipstick with the arrival of Revolution Lipstick an instant hit.
For us, Urban Decay represents the missing link in makeup and global rollout of the brand has just begun. Shuemuh has also reviewed its positioning and now proposes fully updated Tokyo style makeup artistry. A new point of sales identity with spectacular sales impact, a collaboration with Murakami and a new star product with light bulb foundation and its ergonomic sponge for optimal application with this year's highlights. Also emphasizing color, Yves Saint Laurent firmed its vision with a great campaign in the fashion sphere featuring Cara Delvin, 2013 star model. The glossy stain phenomenon continues with the successful Rebel Nudes collection.
And lastly, YSL Oso launched a top performing novelty with Baby Doll Mascara. Thus, we approached 2014 with serenity and we have many reasons to feel confident. Firstly, the quality and health of our brand portfolio that's impressive. L'Oreal Luxe is running on all cylinders great global brands like Lancome, of course, Giorgio Armani as well as Kiehl's a well oiled machine which has added an average of €100,000,000 in sales annually for the past 3 years. Next come the growth drivers like YSL that has extended to all Asian countries.
Clarisonic adapted by the division for export to 30 countries just 2 years after its acquisition of Edmond Decay, which will apply the same rollout solution and designer fragrances Ralph Lauren, Victor and Rolfe and Diesel. Finally, certain brands are reinventing themselves finally, like Shuamura, Biotherm or Yussai in China. Secondly, the strength of L'Oreal Research is outstanding and is implied in priority to the L'Oreal Luxe division the group's spearhead in innovation. 3rd strength the geographical footprint is great. There's dynamism and strength in high growth areas: the Americas, Middle East, Eastern Europe and Asia including China in which we are confident for 2014.
Travel retail is also key leveraging global shoppers in the areas they visit such as airports of course as you'll see later the large flagship department stores in global capitals. L'Oreal Luxe in the most dynamic of L'Oreal Luxe in the most dynamic distribution areas is a reality, which includes assisted self-service, ultra, Sephora, e commerce, self standing stores and top department stores. We pay particular attention to be agile in the most modern distributions where our customers shop. Finally, the increase in the luxury level of our brands remains a priority with respect to products, services and the customer experience. In parallel, we have a pool of entry level luxury brands such as Kiehl's, Biotherm and Urban Decay.
This way we can meet all needs and everyone's dreams of luxury. To conclude, what's the outlook and the launches for 2014? In a market that should maintain a growth rate of around 4%, our strategy to gain share rests on continuity in skincare firstly with initiatives in Q1 across brands here on the street Reneger French Lift the whitening renovations plus UV protection by Lancome in Asia the launch of L'Orange Premium Care by Yves Saint Laurent Kiehl's Micro Blur and Skin Best Care by Biotherm. Profitable growth on fragrance, the division should be buoyed by the impetus of success in 2013. Several high quality initiatives planned for the start of the year the launch of Bonbon by Vienaar, the Ralph Lauren Midnight Romance Annais, Homie de Lis by Cacharel.
Only the Brave Wild by Diesel and Eau d'Arrome by Armani will be featured on the masculine side as well as a new YSL Lonseboque embodied by Olivier Martinez. Finally, look for an acceleration in makeup where we'll see an explosion of color in 2014 with numerous initiatives for each of our brands. L'Oreal Luxe strides into 2014 with the results, confidence and the weapons to ensure another year of strong growth. Thank you for your attention. I'll leave you in the company of Penelope Cruz in the latest Trezor film clip.
Thank you.
Super, super, Nicolas. Beautiful.
This is the perfect transition into our presentation on professional products where we're showing much energy and ambition on a difficult market. Ann, you have the floor. Ladies and gentlemen, good morning. 2013 was off to a difficult start, then took off with 3 quarters of growth, including 3.3% growth in the last quarter. So the division ended 2012 with 2 0.1% like for like growth.
We improved our market share in all regions worldwide and accelerated our growth in new markets with an increase of 11.3%. Our challenge is to win the next 1,000,000 hairstylists. Well, this challenge was taken up successfully since more than 53,000 new hairstylists joined us in 2013. Our ambition, of course, is to grow even faster and to attract another 1,000,000 stylists over the next 10 to 15 years. Let's look at some of our major achievements in 20 13.
Hair Care grew by 4.2%, representing the division's largest contributor to growth. This business experienced a robust 10% growth in the luxury hair care market, thanks to Kerastase in Shu Uemura Art of Hair. Kerastase grew 5 times faster than the market at 7.5%, particularly through its new Couture Styling segment. The brand has confirmed its expertise in hair skincare with the Densifique treatment. Our hair care business also benefited from the continued success of hair oils, which grew by 48%, including Redken's Diamond Oil and the launch of Matrix Biolage Advanced including repair inside, which was developed by our hub in Brazil.
On the coloring front, we use ODS, oil delivery system technology in our 3 main brands and ODS technology has grown by 25%. At the end of the year, the very trendy launch of Hair Chalk was well received by hairstylists. In Nail Care, in color, the rollout of Essie has been fast tracked. The brand grew by 28% and the latest product Essie Gel was successfully launched in the U. S.
And will debut in Europe this year. Our ambition for 2014 is to fast track our growth by pursuing our leadership strategy, relying on 3 main drivers: 1st of all, developing the Professional Hair Care business in new markets secondly, boosting growth in mature countries and thirdly, forever promoting the professional difference to men and women across the world. Let's discuss the new markets first. They account for just 25% of our business, and our division is growing strongly. 8 of the 10 countries that contribute the most to our growth are new markets, and these include Brazil, which has grown by 12.7% and Russia, which has grown 15%.
These markets rank 1st and second respectively. Our strategy is based on increasing our penetration of distribution networks and also winning over new consumers as well as promoting the hairstyling expertise. Expanding our distribution network also involves micro distribution in Brazilian favelas with a specific range called Master Results by Matrix. Training in hairstyling and promoting the hairstyling expertise represents a strategic challenge for our division particularly in new markets. Some 3,600,000 hairstylists were trained worldwide in 2013.
With our training institutes in India, in Brazil, in South Africa and in Saudi Arabia, we're going one step further in enabling populations without access to education to learn a new job, to learn hair markets. Mature markets. Mature markets currently account for 75% of our business and our aim is clearly to boost our growth by helping the profession regain its attractiveness. Thanks to our leadership position and with our pioneering Salon Emotion project, we intend to help hairstylists improve quality of service and upgrade their salons so that women feel good there and want to return often. In Spain, for example, the Risos chain saw revenue go up by 23% in just 6 months.
Product sales increased by 125% and coloring services by 32%. We intend to build on these initial results and roll out Salon Emotion in France as well as in the rest of Europe and our aim is to upgrade some 20,000 salons over the next 5 years. Another approach for attracting consumers to hair salons is to reconnect hairdressers, hairstylists with fashion. This means offering hairstylists ways to create looks that women want and associating our brands with celebrity ambassadors. For example, actress Kirsten Dunst for L'Oreal Professionnel or Top Model Kate Moss for Kerastase or Sky Ferreira, who is the face of Redken.
Reconnecting hairdressers also means using social media and working with bloggers and studio hairstylists to be at the forefront of trends and share backstage news from the 900 fashion shows that our division attends. Thirdly, we will increasingly promote the professional difference to men and women worldwide. But to do this, we need to continue to offer professional innovations as well as exclusive services that are based on what customers want that are inspired by trends, but that also require the skills and know how of hairstylists. Take our new and exclusive professional services for example of Beach Waves by L'Oreal Professionnel or Splashlights by Redken. In 20 14, we will maintain our rate of innovation in our 3 main areas color, hair care and styling.
For example, Absolute Repair Liquidium by L'Oreal Professionnel, Discipline by Keri Stays, Blonde Idol by Redken or Color Graphics by Matrix. Each of these launches will boost professional innovation and help draw traffic to salons once again. Finally, more than ever 2014 will be the year of professional beauty. Up until now, we've been operating in 2 of the 3 professional beauty markets, hair care for more than 100 years and nail care and color with our product Essie. The upcoming acquisition of Kurita and Dicleer, 2 major names in facial and body skin care, will establish the division's presence on the 3 professional beauty markets: hair care, nail care and color as well as skin care.
But with conclusion, we are fully confident and determined to fast track our growth across the world. Men and women are more and more keen to trust professionals with their looks. Our mission is to offer the best of professional beauty and to support the growing number of professionals in promoting their expertise. Thank you for your attention. Thank you very much.
Ann, congratulations. Now the division that showed the best growth in 2013 was Active Cosmetics. What's your friend, Brigitte Liberman? For Active Cosmetics, things really picked up in 2013. We experienced a faster growth in the dermocosmetic market, which grew worldwide by around 5%.
This was clearly faster than in 2012. This growth rate owes mainly to continued strong sales across the board, particularly in South America and also too fast to growth in Europe. The European market grew by 3%. And did you know that in 2013, over 25% of total skincare sales in Western Europe were made in pharmacies and consumer health stores. Now there are 3 main reasons behind this buoyant growth.
First of all, the efficacy and safety of dermocosmetics, which is in line with consumer expectations. Also, dermocosmetic products that provide good value for money and thirdly, experts provide quality guidance. The Active Cosmetics business grew Feltor up 7.8% versus 5.8% in 2012. We clearly outperformed the market by growing 1.6x faster. In fact, the division generated nearly 40% of the worldwide dermocosmetic market growth.
What has been driving this growth? Well, the first driver, we shored up our positions not only in Europe, our legacy market, but also in new markets. In Western Europe, the division increased business considerably during the year with record breaking sellout in both Northern and Southern Europe. We are moving almost twice as fast as the market. And this was thanks to our successful product innovations across all our brands and also our high quality partnerships with pharmacists.
This has resulted in enhanced visibility for our brands and better guidance provided by pharmacy staff. On our major developing markets, it's been a year of great satisfaction for us. Sales to Cofigan in Russia increasing by 12%. Brazil once again produced very dynamic growth, up 21%. The Gulf States and Saudi Arabia grew by 25%.
And China grew noticeably faster during the second half of the year, up by 15%. Now the second factor driving growth in 2013 has been the strength and the relevance of our brand portfolio. Vichy confirmed its recovery with excellent performance in the anti aging segment, thanks to effective and aspirational product launches such as Adelia Life Serum, Lift Active Eyes and Lashes or even Neovadiol Magistral. Another example was the success of Neogenec, a breakthrough product in anti hair loss. The repositioning of VICI as a premium health and beauty brand has attracted new consumers who are looking for their own ideal skin.
For this new communication strategy, its new packaging and its renewed identity at points of sale, Vichy has once again become a desirable and modern brand. La Roche Posay again achieved a double digit growth for the 4th year running. Its mission is a better life for sensitive skin. And it has a business model based on prescriptions by dermatologists. And thanks to its mission and its business model, the brand is now a major skincare player.
Using its know how in skincare, the brand is also innovated in the area of pathological skin problems with the launch of its Iso Urea Balm for psoriasis as well as its daily skin care Nutritic Intense product for dry and sensitive skin. Finally, SkinCeuticals has ridden on the back of the expansion of aesthetic medicine and has continued to develop its business outside of its original market. In only 1 year, Brazil has become the 2nd SkinCeuticals market behind the U. S. SkinCeuticals today is a benchmark for professional medical brands, thanks to its exceptionally effective skincare products, which can be used either before or after plastic surgery.
And this is the case for our BodyCorrect range, which we just successfully launched. The 3rd driver, ongoing diversification of our distribution channels alongside pharmacies. This began with consumer health stores in Western Europe. We now sell through 2,400 consumer health stores, which account for 13% of our revenue, up 10% in 2013. And more recently, the division has shown its pragmatic and flexible approach by adapting its legacy distribution model based on pharmacies, adapting it to the realities of new markets.
We now sell through drugstores in the U. S. A. And in Asia where we generate more than 20% of our sales. Dermacenters have been created in shopping malls or department stores, which enables us to display and showcase our brands in a high quality context with heavy emphasis on health and safety and with the presence of specialized skincare advisors.
Finally, we are strengthening our online presence mainly in the U. S. And China where e commerce already accounts for 15% of our sales. Now the outlook for 2014 is looking very good for our division. Today, we have a brand portfolio that is more clearly defined, better balanced and built around 2 major global brands Vichy and La Roche Posay.
Right at the beginning of the year, we will be launching major new initiatives for all our brands based on our core business, skin care. A couple of examples, Neo Valle Magistral Elixir, a concentrate in omega rich vital oils for menopur skin. Tain Ideal, a new line of light foundation cream for sensitive skin and also Pigment Klar, a dermatological corrector for dark spots clinically proven to prevent recurrence. Resveratrol BE by SkinCeuticals is a new generation of antioxidants a strong concentration of pure resveratrol. We are fully confident in our ability to move into new markets in Asia, South America and the Middle East.
Finally, we are riding on the back of growing and universal demand for health, safety and medicalized beauty in the face of new enemies such as pollution, climate change and allergies. In conclusion, I can assure you that the Active Cosmetics division has great ambitions for 2014. Thank you for your attention. Thank you very much, Christine. Thank you so much.
As you can see, we have quite an innovation plan for all 4 divisions for 2014. As promised, let's board the plane of Travel Retail and hear this presentation by Barbara Laverneaus. Let's take off at a wonderful land of growth and profitability, Travel Retail. Good morning, ladies and gentlemen. It is a great pleasure to share with you our results and opportunities within the Travel Retail channel.
We at L'Oreal consider the travel retail market as the 6th continent. This new continent is a territory without borders. It has its own capital cities, its own economy, its own traffic, its own population. It is a 6th continent in which L'Oreal once again outperformed the market in 2013. Travel Retail refers to business undertaken in shops located in 2 different areas or in areas dedicated to travelers with more than 50% of that business in airports.
But not only that, a third of revenue is generated in downtown or border shops mostly in Asia or South America. Not forgetting in flight sales. Finally, the fast growing cruise market in Asia, the Caribbean and Europe. Therefore, the main market driver is passenger traffic, particularly air traffic. You can see on the screen a 24 hour satellite view of global air traffic.
Air traffic is growing continuously by 5 percent on average every year and represents over 6,000,000,000 international flights in 2013. Therefore, the travel retail market fully benefits from growing traffic. But more importantly, it has already grown faster than traffic over the past 10 years. And according to the Generation Research Institute forecasts, this market is expected to double in the next 10 years. The travel retail market has undergone profound changes in recent years.
Firstly, traveler profiles have shifted are shifting from Western businessman to fashion savvy consumers from emerging countries.
But the
business model of airports is also changing. In the 1970s, this business was limited to a few multi category stores around the boarding gates, but it's the opposite today. Airports have become large shopping malls surrounded by boarding gates. Historically speaking, the beauty segment is the leading category for this channel accounting for 20 5% of total revenue and the segment continues to experience strong growth. The estimated figure for 2013 is a growth of 7.4%.
L'Oreal is the historical leader in the beauty category of the travel retail market with over 20% market share. L'Oreal has continued to outperform the market again this year by a factor of 1.3. In addition to revenue, travel retail is a strategic channel for brand development and visibility. Not only is Travel Retail an opportunity to showcase our brands, but as a historical leader in this channel, we have developed a fine understanding of our traveling consumers shop by shop and this allows us to target the best locations. An ideal location to come into contact with our highly consumers is our Lancome counter in downtown Hong Kong, where more than 1.2 product is sold per minute.
As regards our money, we have 2 counters at Dubai Airport, which rank among the best performing points of sale for the brand worldwide. As for Kiehl's, not only is travel retail one of the top growth contributors in recent years, but it also gives the brand the ability to attract new consumers. In some of our points of sale, more than 20% of travelers discover the Kiehl's experience and buy the brand's products for the first time. Thanks to our long standing ties with retailers, L'Oreal is able to negotiate prime locations to establish new brands. For example, the Clarisonics space that we opened 2 months ago in Macau.
Thanks to the collaboration of brands and local markets, Travel Retail, therefore, helps maximize the exposure of international travelers to our brands, improve customer loyalty but also win over new customers. Today, these travel retail consumers who inhabit our new in 6 continents, they're global shoppers. They don't only shop where they live, they shop wherever they are, they shop in their local markets while traveling and also wherever they go. Let's first cover the region and then extend the reach to other parts of the world. Paris, for example, is a top destination outside of Asia for Chinese tourists, followed by Los Angeles and San Francisco.
Turkey is a popular destination with Russians, but in recent years, they have been flocking to our shops in the Middle East and Thailand. Top destinations for our Brazilians include Buenos Aires, Miami and Lisbon. Nigerians love London. Emirati tourists rank among our best customers in India and ask for Koreans to travel more and more to Southeast Asia. L'Oreal has conducted an in-depth analysis of these nationality corridors across the world, and this has enabled us to develop a bespoke personalized approach to better engage these global shoppers wherever they are.
For example, by celebrating the Chinese New Year in Paris, Charle de Gaulle Airport or in Waikiki, where our Chinese customers travel to. We're celebrating Ramadan at Doha Airport, of course, but also in Heathrow Airport or celebrating Diwali Dubai Airport since most travelers there are from in there. Finally, for global shoppers, traveling always comes with souvenirs and gifts. Once again, we target our products to provide them with a customized bespoke experience. Premium products such as the beautiful limited edition of CRYSTAL by Armani available in our most selected points of sale are gift sets, our gift sets that our global customers traditionally bring home from trips.
In addition to global shoppers, the travel retail market is experiencing a new trend. Traveling is now accessible to more and more people. The middle class in all emerging countries is keen to travel outside the country. This new influx of travelers will transform the travel retail market, which is now evolving from a strictly luxury driven business model towards a more diversified range of purchasing power. The L'Oreal Paris brand is already sold via their travel retail channel, and we have decided to expand and fast track its deployment.
Similarly, we recently introduced The Body Shop brand which is very popular among travelers and we have planned more point of sale openings. This acceleration should benefit brands across the group. And it is for this purpose that in 2013, the group has created a cross division travel retail department Based on our expertise acquired after 30 years of working in the luxury category, this will allow us to target the implementation of the various brands from luxury to mass market, from dermocosmetics to hair, care products, not forgetting the body shop. These are significant growth opportunities for our travel retail business, and we can see how much this channel can uniquely robust and diverse portfolio of brands, L'Oreal is uniquely robust and diverse portfolio of brands, L'Oreal is ideally positioned to offer travelers from around the world all the products they want in respect of their beauty routines or purchasing power? Thank you for your attention.
Thank you, Barbara. That was great. That's it's very important. It's one of the major developments marking the start of the 21st century, the emergence of a new channel, a new continent as we call it because it really does have the economic dimension. And it's only a beginning.
It will become absolutely key. And it's a significant competitive edge for L'Oreal because L'Oreal was the first company and here all credit where credit is due to the pioneers of L'Oreal 30, 40 years back who were the first to take a close look at this channel to partner these customers. L'Oreal is the number one supplier to these stores number one partner. And the multi division approach that we now have is extremely promising for growth and profitability. So I'll also be very brief.
The presentations have given you a good overview. I think it's good for once a year that you should delve into the life of the divisions, their business models, their prospects, their opportunities. You've seen actually that their outlook is very upbeat. Overall 2013 L'Oreal Group achieved another good year, fine year by making market share gains reinforcing our positions across divisions across regions, which isn't always easy by growing faster than the market and achieving as you've seen significant growth in its earnings and profitability. I'd like to begin with a few words about the cosmetics market.
It's always important for you. In 2013, as you saw, the market remained solid even though it has slowed down slightly. According to our estimates, it grew by 3.8%. We always said between 3.74%. We haven't got it wrong and well below last year's growth.
By region, briefly, market was flat in Western Europe as in previous years. Southern Europe, difficult situation. Northern Europe, positive, but we have high hopes that we're seeing the end of the tunnel in Southern Europe because we're beginning to see signs of improved Southern Europe markets which will be a great thing for us because Lorient was oversized in Southern Europe was heavily impacted to the past 5 years by the economic difficulties in those Southern Europe countries and of course would benefit more than others from a rebound at least stabilization and bounce back of these countries. North America, the surprise, the market slowed considerably. We're expecting a market in 2013 pretty strong of the order of 4.4%.
It slowed considerably plus 2.6% in spite of the U. S. Consumption upturn, but as you know is not focused involving all consumers, but favored initially consumer durables. In Japan, market trend was slightly positive. And once again in 2013 new markets proved to be the most dynamic, although they did slow down a little in 2 regions in Asia excluding Japan with a slowdown in India and South Korea and to a lesser extent China and in Eastern Europe where growth weakened particularly in Russia.
Good growth however in Latin America and in Africa Middle East which are maintaining their lively momentum. In terms of channels, as you'll have gathered from the presentations, luxury channel remained buoyant with a slight slowdown in H2. Mass market slowed a little in North America, Asia, Eastern Europe. Hairdressing professional hairdressing remains difficult, but some encouraging signs at the end of the year. Domocosmetics market has really division has really accelerated.
And finally, if we're not there, the direct sales channel seems to be slowing globally. 2013 L'Oreal outperformed the market in all regions and across all divisions. Western Europe, good progression. We're delivering growth. Isn't the case of everyone and of course beneficial to our profitability.
As you saw, that's increased well performance noteworthy in Northern Europe, strong in Germany, the U. K, Scandinavia, but also in France where we're up with a degree of improvement in Southern countries giving us optimism for 2014. Return to growth in Eastern Europe after a few difficult years as you know. We've significantly outperformed the market in sellout terms in North America where we're making market share gains although in the end we've not achieved the growth we were hoping for because of a clear slowdown in the market and a reduction in distributors' inventories, fine growth in Latin America particularly Brazil, strengthened our positions in Asia excluding Japan where let me remind you we've been number 1 in the Asian cosmetics markets in 2010. Lastly, strong growth in Africa Middle East where huge potential remains.
By division, as you've heard, strong outperformance by both active cosmetics divisions, global strengthening of consumer products division and significant and market share gains for professional products in the context of depressed market. Body Shop performance was objectively disappointing. We're counting on changes we've made and on its integration into our selective divisions to put it back on the road to growth and give this brand all the success it deserves. 2013 was also a good year as you've seen in terms of growth in earnings and profitability once again confirmed the strength of L'Oreal's business model which creates value and strong cash flow generation. The quality and solidity of our results as the favorable prospects of the company led the Board of L'Oreal to propose the next shareholders meeting a further significant increase in dividend at €2.5 2013 was also and above all another year of progress in all areas of the company to adapt it to a changing world to make it more efficient boost its performance and to enable it to continue building dynamic sustainable and profitable growth.
It's on that that I wish to focus for a few moments. We've continued to build on our innovation Firepower, it's our firm belief crucial in our business. Cosmetics is a supply led market in which leadership is primarily built on the appeal and superiority of its products. It's our determination to wager on innovation and superior quality and performance that makes the difference for consumers enables L'Oreal to stay one step ahead. Our innovation headed by Grand Hotel is continuing its transformation.
Its budgets have risen faster than sales in 20 in all areas. Advanced research has in formulation both in France as well as in our five regional hubs that are strategic for the universalization process. Secondly, we've continued to renew our major brands. Very important success is delivered by major products, major innovations built on major brands. These major brands must always be fully attuned to consumers who are constantly evolving.
L'Oreal Paris, the world's number one beauty brand is accelerating and posted its best performance for 5 years. Lancome, the world's number one women's luxury beauty brand is growing strongly and scored a success with La Vie est Belle Vichy, the world's number one dermocosmetics brand has successfully reinvented itself once again making market share gains. Kerastase is transforming itself to conquer the world of luxury hair care. More than ever, our brand portfolio is the most varied, richest and most powerful in the industry. In 2013, we've made some very interesting acquisitions which will supplement our brand portfolio, our geographic footprint.
Nicolas mentioned Urban Decay. It's a tremendous addition to our luxury brands really achieving spectacular growth. Its globalization is only just beginning. Declaire and Carita will enable us to start up a new business for the group Professional Skin Care which will open new growth potentials for the Professional Products division. And regionally, as you know, we made some acquisitions such as Vogue in Colombia, Nice and Lovely in Kenya Emporio Body Store for The Body Shop in Brazil enabling us to accelerate locally spectacularly our penetration of these markets.
Lastly, Magic is the brand that we needed to conquer the mass market skincare segment in China which would have been very difficult and costly for Garnier in China with L'Oreal Paris, the number one beauty brand in China. Maybelline New York, the number one makeup brand in China, magic. We will have the ideal combination to conquer the Chinese skincare mass market. In 2013, we've also profoundly transformed, as you know, the organization of the group to make it more agile, more efficient and better tailored to our universalization strategy. As you know, we've combined under the same leadership of Nicolas, Euronymous, the selective divisions Luxury Active Cosmetics, Professional Products and The Body Shop so that they can share their know how and their best practices.
And in parallel, we've organized zone responsibilities into 8 uniform strategic hubs and located the management of distant regions. I have to say that this reorganization decided announced and implemented within 3 months is a fine illustration of the company's flexibility and responsiveness. 5thly, we've continued to transform our marketing models. It's crucially important because I believe it's one of the key drivers of opportunity for L'Oreal today. The marketing world is undergoing major transformation transformed our marketing models to leverage the extraordinary opportunity offered by digital media.
All our divisions, all our brands across all our regions are rapidly making the digital shift in the U. S. For example, Lancome, Kiehl and L'Oreal Paris hold the top three slots in the IQ. Digital rankings are the brands that are setting the pace on the net. Our brands have worked incredibly hard to offer their consumers the best information content, service and relations on the web.
Our vision of online and off line media is now totally integrated. At the same time, we're very proactive to make our investments in growth drivers A and P more effective 30% of our P and L that's devoted to A and P obviously all these progresses and transformation that will generate greater productivity very important news for the company. And finally, we set ourselves new ambitions very important in terms of corporate social responsibility, societal and environmentally. We've launched a major program very defining, very strategic for the group sharing beauty with all. It's a new corporate paradigm.
These new commitments will lead us to radically rethink the way we design, manufacture, source and advertise our products. We pledge that by 2020, 100% of our products provide an environmental or societal benefit, in other words a positive contribution to the world. It's a defining change, a new paradigm for our brands. Sharing beauty with all includes pledges for 2020 in terms of sustainable innovation, sustainable production, sustainable consumption, but also in terms of employee relations with our suppliers and the communities around us. We believe not only that this ability to serve the general good will make a real difference for a company such as ours in the 21st century, but that the resulting transformation will also have a positive impact on the company.
And of course, we've continued to upgrade our industrial facilities to boost efficiency and productivity implementing a major supply chain action plan to modernize our processes from which we expect substantial efficiencies in terms of performance over the coming years. And we've continued as with every year the optimization and pooling process is underway in our organizations to boost productivity. So in all areas of the company, we're reinventing to build the new L'Oreal perfectly attuned to the world's major transformation, economic, digital, societal and a new L'Oreal that is fully equipped to implement its mission of beauty for all in its universalization strategy and advancing towards its target, as you know, 1,000,000,000 new consumers. As to 2014, we're beginning the year as we do every year with confidence and determination despite an economic backdrop that remains unstable and unpredictable. We believe the growth of the cosmetics market should be of the same order as that seen in 2013 that is between 3%, 5% and 4%.
Currency effect should once again in 2014 be unfavorable. For us, we're less exposed than others to certain countries that have suffered strong devaluations in their currency. Growth in sales probably won't be uniform across the 4 quarters because of disparities in comparison basis and initiatives, we expect the Q1 to be lower than the annual average because of the strong comparison base effect in the U. S. Consumer Products divisions which last year launched major initiatives Advanced Hair Care and Olia which is adversely impacted at the start of this year by U.
S. Market that is slowing sharply and tight inventory controls by distributors. Be that as it may, we're deeply confident in the dynamism of our market share gains and strengthening our positions in this American market as indeed across all markets. Our new organization is in place. Our divisions are fighting fit and the quality of the new products in 2014 vintage will be high.
So once again this year, we're confident in our ability to deliver a performance that will out perform the market and increase our earnings. Lastly, I'm very pleased with the draft of the proposed strategic transaction that was approved by the boards of Nestle and L'Oreal yesterday. It's L'Oreal buys back 48,500,000 of its own shares. That's 8% of its shares from Nestle funded by the disposal of our 50% stake in Galmera, the rest in cash. As I indicated in the press release this morning, this transaction will be a strategically defining milestone for L'Oreal for its employees
for its
shareholders. L'Oreal will devote itself fully to its cosmetics business as part of its Mission Beauty for all its strategy of universalization and of 1,000,000,000 new consumers. L'Oreal will benefit in this new configuration from the very significant stake of the founding family Betancourt Meyers that will be even further strengthened and whose commitment towards the company is both historical and total. And furthermore Nestle that's always been a loyal and constructive shareholder will continue to provide its active support. And transaction, thanks to accretion of the EPS because of the buyback and cancellation of L'Oreal shares held by Neste.
Here, I've tried to be as concise as possible. Thank you for your attention. And with Jean Regis, it's time for coffee and possibly cakes right behind me. How long is the break? Jasmine.
15, 20 minutes. Take full advantage of it.
Ladies and gentlemen, we are on hand to ask any questions you may have. Who wants to go first? I can see somebody raising their hand. That would be Celine. Celine is always first.
Thank you. Question number 1, market growth. You said that market growth is probably going to be pretty much the same as last year. What is your take on emerging countries? Other competitors have indicated a decline in those emerging markets?
A decline in those emerging markets along the same lines,
do you expect a slight
increase in business on the U. S. Market? Question number 2. With regard to the new shareholding structure, considering the thresholds that have been met, could we possibly contemplate future share buybacks assuming the 2 shareholders are willing to sell of course?
Your questions are always easy, aren't they? Question let me say in answer to your first question, we don't have a crystal ball. And so the global economy is becoming more and more unpredictable. And as a result, it is more and more difficult to predict what the cosmetics market would look like 1 year ahead of time. So I don't think I'm taking too much of a chance by saying that the growth rate is expected to range between 3.5% 4%, hopefully more.
Now what about the growth of each market segment? That's much tougher to predict. What we can say as the year begins that we expect good surprises in Western Europe. And as far as we're concerned that's both important and profitable because we have an established leadership in the Western part of Europe. And as you know, this is where our profitability is the highest.
So the fact that the Western European market has taken off and that we're still gaining market share in Western Europe, that's strategically important for us. As far as Northern Europe is concerned, that's a great unknown, isn't it? Last year, we did not expect a slowdown. And it caught us by surprise. It caught everybody by surprise.
We did not expect the slowdown in the North American market because the economy was back on track and we expected the cosmetics market to follow suit, but the opposite happened. So one potential explanation would be that in the U. S, when the economy is back on track, then consumers go into debt to buy consumer durables, which means that they pay more attention to how much they spend on those superfluous. As far as Asia is concerned, we expect that by and large, the Asian market business in the Asian market will remain brisk. There should be a slowdown.
There was a slowdown last year relative to previous years, but I think that this particular pace of growth is sustainable. And as far as the other regions of the world are concerned, there is uncertainty in markets such as South America. We don't know what countries such as Argentina will do. So as you can see, there's economic uncertainty and this is reflected in market uncertainty. But as I said before, those markets do not make a huge contribution to our revenue.
When you add it all up, yes, those markets are interesting, but they're not major contributors to our revenue. So by and large, we expect global market conditions to stay pretty much the same. As regards to your second question, you want more share buybacks, Celine? We just completed 1 to the tune of 6 €1,000,000,000 And you want more? That's pretty palatable already.
I think we should rest a little bit.
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Into your mic, please.
The answer is no, we don't have a lot. But we need to pay for those shares, don't we? So we will tap into our cash flow. An easy answer would be, yes, this has been a major transaction. So let's catch our breath.
We'll see what the future brings. Loic Morvan, Brand Garnier. Hello, Loic. Could you please elaborate on China? And more specifically on your penetration strategy into smaller cities in the Chinese market?
2nd question, as a subscript to Celine's question, the Betenco family now owns 33% of the company's capital. You have not requested We don't have an opinion about that because we didn't request it. And clearly, this is why we stand below the 33.33% threshold. No, there are no plans to that effect over the short term, no plans to change anything. What I can say, however, is that this transaction is going to help a new shareholding balance emerge.
This is a major change when you think about it. Previously, rather at the moment, until the transaction is completed, the family the Betancur family had about what 35% of shares? 30.5% versus 28 point 3 percent. And now Nestle will hold 23.3 percent. So there's going to be a 10 point gap between Nestle's 23.3% and the Betancur family 33%.
So the Betancourt family, they're the founded L'Oreal. They have a strong commitment to the company and they have clearly expressed their intention to maintain their support to the company over the very long term. But I wouldn't want to be I wouldn't want to hog the mic. So I'm going hand over to my colleagues here. The question is how can we support our penetration of the Chinese market?
Very good question. Take the luxury segment. Should we start with the luxury segment Nicolas? Yes. As regards to luxury segment, our pioneering brand in the luxury segment is Lancome.
It is the division's leading brand in China. We sell our products in 86 different cities in China, Tier 2, Tier 3, very few Tier 4 cities. We opened up a dozen of those this year, bearing in mind that our approach mostly boils down to opening up new stores and also maintaining a growth in our like for like sales. So this is in line with our penetration strategy, but we also want to continue to strengthen our existing prints of sale. Now the other divisions are following suit.
So we're starting out with brands such as Kiehl's or Biotherm and their penetration rate is far from being as high as Lancome's. As far as Luxury is concerned, Nicolas is absolutely right. There are prospects for growing our categories in Luxury Stores in China, but we're just getting started. We go there twice a year and every time we visit a different city and we clearly see that those are cities where it didn't used to be luxury stores, but department stores are making an appearance and major brands such as Lancome are quite a hit because they are new consumers, they have money and they're very happy to spend their money on products such as ours. Yousai.
Yousai is a Chinese brand that operates in as many as 190 different cities. It's a more prestigious brand, a middle luxury type brand. The mass market segment is a different story. Last year, we reorganized we over hold our sales force in China. 1 sales force is now dedicated to makeup and facial skincare.
So L'Oreal Paris and Maybelline, because we're trying to tap into this amazing opportunity in China, personal care stores are emerging and we're creating products that are specifically that specifically cater to this new market. Secondly, we created another sales force for mass market, mass market hair care, L'Oreal mostly and also men's care. And men's care is growing nicely. Now what's interesting is that part of our sales forces are concentrated on the mass market segment that started to pay off. In the second half of twenty thirteen, we penetrated an additional 150 Tier 3 and 4 type cities.
So major gains have been made in terms of distributor networks being penetrated and hair care is a strategic challenge for us. Sell out and sell through has improved significantly from 25% to 35% or 40% today. So an amazing pocket of growth we can tap. And also the MAGIC acquisition, it has yet to be fully complete, but we're hoping this will happen. MAGIC is a platform that will help us penetrate entry level luxury market segments.
LG means immediate beauty. They have tremendous expertise in a very buoyant market segment, facial masks and facial skincare. So they have this tremendous local expertise and we fully trust their ability to fast track our penetration of the mass market skincare segment. Thank you, Mark. More questions?
Eva? Yes. Still on China or rather the mass market segments in China and also the Magic brand, do you think that this brand can stretch beyond the mass market segment and become the new Garnier for skincare? Secondly, maybe Christian can tell us more about the great improvement in profit margin in Western Europe. What have been the main drivers?
And also dermatology, you just sold Golderma to Nestle. Is this going to have an impact on what you intend to do for Active Cosmetics and the development of new networks and also what you intend to do for skincare? Okay. Let's start at the end. Actually, it makes no difference in terms of the tremendous potential, the sale of Galderma to Nestle.
It makes no difference whatsoever in terms of the tremendous potential of Active Cosmetics. You got to understand that implementation is very different. The scope of implementation is very different depending on whether you're talking about dermal special treatment or maybe they need the medicalized channels or they prefer to have skincare prescriptions, they prefer to go to pharmacies as opposed to medical products intended for diseased skin. It's very different. Rather that we're basically no synergies between our two businesses.
We're talking about 2 very different lines of work. So together with Brigitte Lieberman, who's overseeing the development of Active Cosmetics, we have further potential for developing medicalized treatments via pharmacy guidance, pharmaceutical care for women who want special care, the kind of care they're not getting from the mass market segment or even the luxury segment or anywhere else. So we're fully confident in our ability to travel along this yellow brick road. What we saw in 2013, the channel that has grown the most in Western Europe in 2013 is the pharmacy channel, at least in our line of work. So expectations are high.
And this is our core business. We deal in healthy skin, not diseased skin. Healthy skin requiring special treatment. 2nd question? Profit margin has increased significantly for the 3rd or 4th year running in Western Europe, but this is due to a variety of factors.
Revenue has grown by just 1.9%, but still good. Very few players in Western Europe are gaining significant market share. We're one of them. And also there's a slight value a slight positive value effect in terms of revenue. And thirdly, as you can well imagine, all of our affiliates in Western Europe have kept a tight lid on expenses.
We're pooling expenses and costs as much as we can. We're developing indirect purchasing policies that are paying off. And also Western Europe is one of the regions of the world where the mass market and the luxury segments are trying hard to optimize marketing expenses in general and media buys in particular. And all of these efforts are paying fruits, not forgetting digital media. So again, Western Europe has made a huge contribution this year.
And this is probably this probably bodes well for 2014. I'm not issuing the guidance here, but the fact that L'Oreal has a strong presence in Western Europe in 2014. Now there may be turbulence in Argentina, Venezuela, the Ukraine or even Thailand. And I'm forgetting a couple more countries, but it might turn out to be an asset. L'Oreal is, after all, a well balanced company.
With regard to the Magic acquisition, let me get back to that. It is an important aspect. Meninos is a very small brand. It's almost nonexistent in China and Garnier at the time was launched on the mass market skincare segment. But it never broke through and the decision was made to shut down the brand for two reasons.
First of all, it was a very small time thing. It was losing money. And secondly, we knew that the Magic acquisition was in the pipeline. So clearly Magic is going to be the top Chinese mass market brand. It's going to improve our footprint there.
It is the number one facial mask player in China, but maybe one day it can stretch itself and broaden its range. Allow me a comparison. To the Chinese skincare is the is what makeup is to the U. S. Market, not in terms of income, but in terms of market size.
Makeup is the largest product in the U. S. Mass market segment. And we're number 1 in the U. S.
Market today because we've been able to tour around with our brands. And also the Mavenlin acquisition has been helpful. As a U. S. Brand, specialized in eye care, and we turned it into a multipurpose makeup brand and now it has more than 20% market share.
It is thanks to the Maybelline acquisition that we gain a strong foothold in the U. S. Market. So the idea is to use the pretty much the same strategy on the Chinese market using the Magic acquisition with perfect MSG between 3 different brands L'Oreal Paris, a premium brand. Now number 1 on the beauty market in China, Maybelline.
For makeup, Maybelline New York and lastly, Magic. Magic will be the leading skincare brand for the Chinese mass market.
Yes, very good business, Very
clear vision, very good business decision with very promising prospects for the market. Next question please. I see a hand over there. Yes, hello from ODDO. Sorry, I'm going to return to the Nestle deal.
Three questions. Don't be sorry. It's a very fine transaction. Of course, naturally, very sure of that. First question more for Christian.
The impact to be expected the exit of Galderma on the balance sheet just to give us more color on that and you have a small idea to have your take on that. Ditto impact on interest expense, the cash that you'll have to use to try and see what impact this might have on the interest expense 8% as part of the share buyback which is 10% over 18 months. Could you just recall when your share buyback stops? And as of when you could perhaps have another 18 month share buyback? 3rd question, does your attitude change regarding your stake in Sanofi as to its usefulness?
That's always been strategic. Okay. We'll try and give you our take on that. Okay. Well, I'll give you my take, my sound of the bell.
So the balance sheet, Calderma in our balance sheet consolidated is worth of the order of €420,000,000 okay, all in. Had we consolidated it with the new accounting standards proportional €420,000,000 in our books. Hence, what I indicated on the chart that's to say that at disposal enterprise value €3,100,000,000 given the debt equity value €2,600,000,000 if you remove the €400,000,000 of value in our books. €1,000,000 of value in our books, you have a consolidated capital gain of €2,000,000,000 €200,000,000 with a tax of €120,000,000 approximately that's one thing. Interest expense actually modest because we'll derive say between €701,000,000,000 commercial paper.
Commercial paper costing in something like €0.25 full year should cost us €2,000,000 in interest expense. So if the deal goes ahead in May or June, it'll cost us €1,200,000 The guidance I gave €40,000,000 goes with or without this transaction. Next, yes, the 8% board as part of the existing resolution authorizing us to buy up to 10%. So and then you had a question on an NAIC stage, but since there's no NAIC stage there's this stage. And Sanofi Jean Paul it said in the press release, I mean, we need just under €1,000,000,000 in commercial paper.
Why would you want us to sell Sanofi shares? Yes. Next question. No, I said this morning let me just return to this. I said at my press conference this morning that we too were a shareholder a major shareholder in Senofi.
So Nestle says that they're a major shareholder of L'Oreal and we too are also a major shareholder of Senafis. So it's true that when we don't need to sell we don't sell. We took part I mean here again. I mean there are a lot of points in common here. There's a common history of 40, 41 years shared history.
L'Oreal was absolutely really there. The creation of the adventure, Saint El Abbot followed by Sanofi. And so we've been supporting the growth of this company. It's important for us. We're a major shareholder.
We also have 2 board members on the Sanofi Board, a lot of parallels. Yes. I'd like to return to your margin trends regionally. Question about Western Europe, same question on emerging markets, fine margin increase, despite the fact that it these remain highly competitive markets where you don't necessarily have the same market share as in Western Europe? And also conversely why in the U.
S. Margin increase that's more sluggish than in other regions. Is that true to lower growth? 2nd, on Luxury, you mentioned the fine performance of Giorgio Armani. Could you give us the performance in terms of sales growth of Lancome and YSL?
Nicolas will answer. As to the margin of the various regions, well, North American margin is clear. It's due to 2 factors. 1st factor significant investment. In fact, we warned last year that there'd be a significant investment in the U.
S, which was the launch of Advanced Hair Care. And Olia, let me remind you, I mean, it looks nothing. Advanced Hair Care is probably the biggest launch in the history of L'Oreal all markets, all countries all time. So it's not a small launch and we're happy. Latest market shares, let me tell you, 4.1% in January this year.
It's for us, it's like D Day in the other direction. I mean it's a landing of L'Oreal haircare, landing on the U. S. Market against the major competitors in Hecke like D Day costs a bit of money. So we invested last year significantly.
Second reason growth wasn't as we anticipated. So we deployed the resources to make it. We made it growth expected. That's why profitability was didn't grow as sharply as in the 2 other regions. And in the other regions, it's growing strongly and that's encouraging for you, for L'Oreal shareholders to see that our conquest of the global cosmetics market is furthermore conquest with increased profitability.
And we've explained this. We're starting now in many countries to have critical business masses that are very significant. Many of our affiliates including in highly competitive markets that are very profitable. Some are even more profitable than certain European markets. So we're very confident as to our ability to Now Nicolas, yes, we've chosen to discuss Armani growth.
Lancome, as I said in my presentation, Lancome delivering in high single digits above market. Lancome brand continues to grow market share whilst being the number one women's luxury brand. In particular, as highlight the exceptional success of La Vie est Belle perfume, 1 Worldwide, 2 most widely sold in spearhead of Lancome Growth delivered another fine year, which as per usual the power of R and D allowing us to make a breakthrough in Care. Dreamtone very fine launch with all the technology supplied by L'Oreal Tailen is A fine, Lonc, on YSL, the year was more modest in terms of growth. For us, it was the year 20 13, it was a really watershed year for YSL.
We wanted to kind of shift this brand from an exclusively European brand, high European focus to a global brand, a brand rooted in Asia. So last year we launched Care, allowed us to open one after the other the major Asian geographies. We opened China this year. We're accelerating strongly, very good rankings in sales stores. Why a sale that really went up up range, up market.
As you've seen, if you've traveled a bit, it's where up 11% of travel retail. Chinese visitors are beginning to see the range and buy it up 30%. It's a watershed year not a great growth year in billings, but nevertheless up. It's a watershed year for this brand offering great promise for the future. That's why I spontaneously rank YSL as a growth driver for this division.
The world is its oyster. Thank you, Nicolas. Question from the room next door. The light's blinking here. Maybe we could have a question take question from room number 2.
Okay. Go ahead, sir. The technology is working. Managed to get the microphone. Yes.
Couple of follow ups. The first easy answer. I see that depreciation and provisions item has increased sharply 20% this year. Any particular reason for that? I mean, it's just the technical detail.
2nd, more interesting question. Last year I raised the problem, the possibility of finding a low cost market in your activity. And you indicated if memory serves that you looked at a number of products to target revenue or income, lower incomes. You speak of mass market, does it mean that it's the same thing as that it's in your range of products you have various levels from luxury down to the low cost and that after the difficulties that you may have encountered in China recently, you're going to continue to address the three levels. A follow-up question, if I may.
It's one that's just been broached. Growth driver for the margin of late has been the increased profitability of what you call the new markets, new regions. When we look at your figures, we have about the same profit ratio between the 3 types of regions Europe, U. S. As well as new markets.
So we're kind of losing this factor of a general increase in the margin. What's going to take up the slack? What's going to grow the margins? Will it be innovation in terms of products, R and D? Is there something really new on that front?
Or is it just going to be the usual business of marketing? Well, thanks for that. I'll start with the last point. I believe that quite the contrary, the fact that the prospect for margin growth, the good in 3 regions for different reasons is in fact very encouraging. And the outlook is good because in Western Europe an uptick in the market would lead to greater growth and by definition that's where we have the best leverage on very positive profitability in North America.
The D Day is behind us. And so we should return to levels of profitability that will be on the up. And in new markets, the momentum that we've had will continue to kick in. So the fact that the 3 regions now making money is rather more good news than bad. First question was on price cascading.
Yes, we'll explain a bit. I mean, I can tell you that we sometimes have a slide to hand. I don't know if that's the case this time showing our scale of prices for skincare. And we show I mean I know this one off by heart, so never mind. Our most expensive skincare is Armani product of €400, and our cheapest skincare product is a Garnier sachet for India at €0.4 or even less.
So the scale, the fact that we have at L'Oreal all these divisions and brands allows us to cover all markets from the highest to the lowest. And in China, it's also the case. Absolutely. And we practice cascading across all our brands, particularly Garnier Maybelline. Could perhaps give you two examples to illustrate this.
So Maybelline in my presentation you saw we've grown sharply in volume. We're very strong in mascara and foundation, the most value creating products of makeup. We wanted to be more aggressive on makeup categories that are more affordable, nail varnish, eyeliners, lip balms to recruit. I mean not just to offer products to people with lower incomes, but to attract to the brand younger women who will subsequently become loyal to the brand and move up scale. That's on Maybelline.
2nd example on Garnier. Hair color and Spain is a case in point in a challenging market remains difficult in terms of growth. Garnier has progressed well in hair colorant both by pushing its Nutris range which is a mid range launching color sensation which is an affordable range and also launching the value added range Olia with a premium price. So it's really this practice of cascading allowed us to cover all need and boots the brand. Cascading, yes.
Low cost, no. L'Oreal's strategy is is research, innovation, value added. And we're always more in the additional performance, additional quality, additional customer satisfaction based strategy. But we're not going to attack our peers from below with products that are less good and cheaper. On the amortization, yes, the items increased resulting from an increased investment for 3 years now in industrial, spheres, R and D, IT and also advertising on point of sale.
So that's normal and that's part and parcel of the group's growth drivers. Question over there?
Jean, Armin de Venzeman, Raymond James. I have three questions. Number 1, what about growth in BRIM countries? You only mentioned Brazil. Secondly, what is your strategy for Niccolo, De Cliar and Kirita?
And third question, every observation that you make or rather every brand within your group looks extremely dynamic. Any disappointments this year except for The Body Shop? Nicholas or maybe Ewen, would you like to say a few words about Decleor and Carita? Good morning. Clearly, our ambition is to provide further impetus to those 2 beautiful brands, Declior and Carita and Upscale.
This is the 2nd leading professional beauty market segment. It is more dynamic than the hair care segment. That's what I can say for now because the acquisition has yet to be fully complete. It's very interesting as far as they're concerned. This is one of the very few cosmetics market segments in which we did not operate, well, except for direct sales, which shows not to go in this direction.
We covered every channel except for that. And now professional skincare, beauty institutes, spas, professional beauty channels, that is there's nobility to it. And it's very much in line with our expertise in terms of the product quality, beauty education. This is in line with the know how of our professional division. And yet, we did not operate in this channel, which is not really consolidated.
There aren't major players in this channel, the kind of major players you find in other channels. So this is a brand new world as far as we're concerned. And we're hoping to repeat the successes that we scored 30 years ago in the Care sector. Now nickel, we'll talk about that next time. We're keeping that a subpar sleeve for now.
And also BRIM countries, the 5 countries growth was 9% in 2013, pretty much on a par with our 12% slightly more than 9%. Brazil 13.5% growth. Russia 7% India 15% Mexico a negative 3%. We had to make adjustments to our sales policy in Mexico. China, slightly over 10% growth.
So in total, the Brim's contribution to cosmetics revenue grew further this year. In total, Brim countries account for 18% of our revenue. Other questions? Thank you.
Hello,
there. A couple of questions for me if I could. Firstly, within China, could you talk a little bit about what your growth rate might have been in Coastal China and also in Interior China or Tier 1 China and ex Tier 1 China, however you guys split it? Secondly, in new markets, clearly a very strong margin improvement there. If you could give us a little bit of color on any particular countries within the new markets, the way you're particularly happy with the margin progression?
And then just lastly, we've seen you exit a couple of small businesses over the last 6 months after quite a long time in which I don't believe you've exited any. Is this sort of symptomatic of a bit of change in how you view your portfolio and perhaps exiting some more sort of small tail things we might see over the next few years? Thank you very much.
Okay. So the first sorry, the third question again. What's clear is that we are reviewing very seriously all our businesses around the world, and we are doing that altogether. And we are really questioning businesses regarding their long term potential, their growth potential and their, of there is no growth potential, no growth at all and no profitability, I mean, definitely, we question this business. That's what we did with Club Decatur de Boute.
And we took the decision of stopping this business because this business was going nowhere, was highly dilutive in terms of growth and highly dilutive in terms of profitability. And so that's what we are doing. We are doing it, I would say, the L'Oreal way, which means that we are keeping a long term strategic vision on the thing. But when we think that there is no potential, I mean, there is no reason to keep a business that lose money and goes nowhere. The first question was about Coastal China, Central China, Tier 1, Tier 2, Tier 3.
Honestly, I won't give you that. First, because it's private information and I don't want our competitors to have all that. What I can tell you is that globally, we estimate the market growth in China around probably 7%, a bit higher than 7% last year, and we grew above 10%. And what we want to achieve in China is the same type of rhythm of growth that we want to achieve globally, which is the 1.5 times the market. It's an ambition, it's not a guidance.
It's an ambition, but it's the ambition that is shared with all divisions and all countries around the world. And this is what is given to all our managers around the world, which is to grow in their markets and their objective is to grow in their market at 1.5 times or above the rhythm of the market. So and we are pretty confident that we will be able to do that in China in the year to come. And the third question was I lost it. Christian, do you want
Some color on new markets.
Color on new markets. In fact, we were quite happy with several strategic markets this year. I mean, Christian told you about Brazil. Brazil, after several years, where we were not at the level of the market, we had a good year and catching up and now we are growing above the level of the market. We are pretty also confident about Russia.
Russia had been difficult Russia had been a great story for 10 years, difficult for 2, 3 years and then we are back to growth to Russia and growing market shares. What else? India, we are pretty also doing pretty well in India, countries like Indonesia and some stars like Turkey. Turkey is a fantastic country with a huge potential. We are still pretty small and we are growing above 20%.
So it's very, very positive. Also Middle East, in the new zone of Jeff Skinsley. We have some very many new territories to conquer like Dubai, like Saudi Arabia, where we grew our business very strongly. And of course, all the new markets in Africa where we are really starting from 0. But in fact, we had many, many good stories in 2013, and we expect the same in 2014.
Okay? Yes.
Hi. It's Rose Edwards from Goldman. Could you please just give the volume value split of growth over the full year? And then any comments you can make on the outlook for 2014 both in terms of pricing but also competitive pressures? There's a lot of stories regarding the U.
S. In particular about seeing increased competitive pressures there in Q3 and Q4.
Okay. So the number for volume value was on the total cosmetic of 5.2 in 2013, volume was 3.6 and value was 1.6 with a good Q4, so which means that we are keeping our ability to have a value effect, increase the value of our product. Regarding the promotional pressure, I would say it's pretty similar to what we had last year. It's obviously especially in the consumer division. It has been hair care absolutely, hair care has been a tough battle in 2013 for obvious reasons because there has been a fight between 2 of our competitors who love promotions and on top of that, they were not totally happy with the D Day of L'Oreal Hair Care.
So definitely, it was a tough competitive environment. In Europe, it's no major change and but it's part of the game. It's we don't see that as a major problem. I mean, we just have to take it into consideration. Yes.
Question? Well, if you don't want more questions, we can stop and have a drink. No more questions?
Una Phillips, BW Confidential. Can you give an indication of the brands apart from those in the luxury division that you think have the most potential in travel retail?
Yes, good. All of them.
Really all of them. That's I think that's what Baba explained is that now there's such a diversity of consumers in airports or in downtown shops that frankly all our brands as long as they have consumer appeal have a great potential in travel retail. So some are already there and already big and some haven't even started. I mean you saw the first shop of Clarisonic, which is off to a great start. Obviously, Urban Decay is not there yet.
So there's more to come. But frankly, I think all our brands are really up to a great future in the travel retail world, which is very dear to our heart.
Good.
Excellent.
Drinks await. We get to enjoy them earlier than planned. Without further ado, let's close the session. Thank you very much and Happy New Year.