Global beauty group L’Oréal has announced disappointing annual results for 2008.

Global beauty group L’Oréal has announced disappointing annual results for 2008, and avoided giving guidance for 2009.

With brands including Lancôme, The Body Shop, Kiehl’s and Biotherm, the French company reported its slowest annual profit growth in at least 10 years and saw its share price fall as much as 3% earlier today (Tuesday 17 February).

Operating profit for 2008 fell 3.5% to €2.73 billion (£2.42bn), below analysts’ estimates of €2.79bn, while sales rose 2.8% to €17.54bn. Net income after minorities fell 27% from the previous year, when L’Oreal had a €617 million gain from the sale of shares in drugmaker Sanofi-Aventis.

Commenting on the figures, Mr Jean-Paul Agon, Chief Executive Officer of L’Oréal, said: “In an environment made very difficult in 2008 by the economic crisis, L’Oréal is proving resilient and is continuing to grow in terms of sales, net earnings per share and market share.

“With annual sales growth of +3.1% like-for-like and +6.6% at constant exchange rates, L’Oréal continued to strengthen its position in 2008 and increased its worldwide market share.”

For the full year, the Paris-based group posted a 3.1% rise in revenues, below the 4% target it had set itself in October, cut from a forecast of around 6% in July and a previous target of 6-8%.

North America particularly suffered, showing -4.8% like-for-like revenue – and had a difficult end to the year, particularly in department stores, where sales were disappointing over the year-end holiday period, and in salons, as the number of visits continued to decline.

Mr Agon continued positively however: “In a year when the downturn in markets was combined with the adverse impact of currency fluctuations and costs in raw materials, the group’s net profit held up well, and growth in net earnings per share of +3.8% based on reported figures and +6.8% at constant exchange rates is practically in line with the target announced in October.”

Furthermore, to keep investors sweet, the Board of Directors decided to propose the payment of a dividend of €1.44 per share, at the Annual General Meeting on 16 April 2009, an increase of + 4.3% compared with 2007.