the letter Meeting SPECIAL EDITION 2011 Annual Review

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the letter N 55 JUNe 2012 SPECIAL EDITION 2012 Annual General Meeting L ORÉAL S MAJOR ANNUAL SHAREHOLDER EVENT, THE ANNUAL GENERAL MEETING WAS HELD ON APRIL 17 th AT THE PALAIS DES CONGRÈS IN PARIS.

In all, some 11,000 shareholders were present or represented, accounting for more than 79.94% of the company s share capital with voting rights.

1 the letter N 55 JUNe 2012 SPECIAL EDITION 2012 Annual General Meeting L ORÉAL S MAJOR ANNUAL SHAREHOLDER EVENT, THE ANNUAL GENERAL MEETING WAS HELD ON APRIL 17 th AT THE PALAIS DES CONGRÈS IN PARIS. A SPECIAL MOMENT FOR DIALOGUE BETWEEN L ORÉAL AND ITS SHAREHOLDERS. L Oréal s Annual General Meeting was attended by more than 1,600 shareholders. In all, some 11,000 shareholders were present or represented, accounting for more than 79.94% of the company s share capital with voting rights. An excellent attendance rate for an AGM which was particularly emotional, a few weeks after the end of Mrs Liliane Bettencourt s tenure as director. Research takes centre stage In a keynote address at the Annual General Meeting, L Oréal s Research and Innovation policy was presented by R&I Executive Vice-President Laurent Attal, who focused on the key principles of L Oréal s unique innovation model, and the way Research has reorganised itself, while interacting with marketing, to respond more effectively to consumers all over the world. A clear and ambitious strategic project Jean-Paul Agon, Chairman and Chief Executive Officer of L Oréal, presented the strategic approach, and his vision of the group s development prospects, particularly through the project of universalising beauty. He also presented the extensive Solidarity Sourcing programme, which reflects L Oréal s determination to reinforce its corporate citizenship commitment. Following his address, Mr Agon answered a number of questions from shareholders. Renewal of the Board of Directors All the resolutions put to the shareholder vote were adopted by more than 97%. The resolutions included the appointment as director of 3 new members: Mr Jean-Victor Meyers, grandson of Mrs Liliane Bettencourt, Mr Paul Bulcke and Mrs Christiane Kuehne Annual Review Read all the group s publications at annual-review-2011 Discover the special edition of your magazine: magazine.loreal-finance.com CONTENTS Address by Jean-Paul Agon...02 Governance, Results...02 Strategy, Outlook...03 Research...04 Highlights...05 Shareholders give their views...06 All shareholder events...08

the letter june 2012 Address Jean-Paul agon Chairman and Chief Executive Officer of L Oréal Closely involved directors Our governance is based primarily on the diversity of the profiles on the Board

2 the letter june 2012 Address Jean-Paul agon Chairman and Chief Executive Officer of L Oréal Closely involved directors Our governance is based primarily on the diversity of the profiles on the Board of Directors, together with the directors complementary experience and their extremely strong commitment to ensuring the development of L Oréal. This provides a synthesis of expertise which fosters dynamic and constructive exchanges on which the General Management can rely. The Board of Directors is fully playing its role of validating the strategic thrusts, and makes sure the company has all the necessary resources to take up the challenges of tomorrow. In 2011, the strategic approach was examined even more thoroughly, considering the development of the brands, countries and markets in which the group operates. The Board is also focusing very closely on the major trends in Research. It devoted a whole day to visiting laboratories, enabling the directors to exchange views with Advanced Research scientists. GOVERNANCE WE ARE ENTERING A NEW DEVELOPMENT PHASE FOR L ORÉAL, WITH AN AMBITIOUS PROJECT BACKED UP BY EXEMPLARY GOVERNANCE. Remits extended The Board is backed up by its 4 Committees, which prepare for the Board s work in an increasingly thorough way, and contribute to further improvements in its quality. The Committees have had their remits extended, and their composition enriched by new directors. The Strategy and Sustainable Development Committee, in line with the remits entrusted to it by the Board, reviewed the industrial strategy, particularly in the New Markets. The Committee was also given a presentation about the company s Sustainable Development policy, in view of its new remits. The Human Resources and Remuneration Committee examined the group s Resources in terms of talent in both brands and countries. First-quarter 2012 sales A promising start to the year The first months augur well for the year, as all divisions and all geographic zones are expanding. The worldwide cosmetics market remains strong, and trends are favourable for all brands. L Oréal Luxe is achieving remarkable growth, bolstered in particular by the dynamism of Lancôme, the success of the designer fragrances, and the vitality of Kiehl s. During the first quarter, the New Markets have become the number one geographic zone for the group, driven by very strong performances in Asia. These performances demonstrate the relevance of our strategic thrusts and the solidity of the L Oréal business model, based on excellence in Research and creativity in marketing. e5,643m e5,160m + 9.4% (1) 2012 First-quarter sales growth Read the news release at: (1) Based on reported figures; +6.4% like-for-like.

These countries should represent two-thirds of the worldwide market in 10 15 years time, and between now and then may on their own contribute more than 80% of world market growth.

3 Special EDITION 2012 Annual General Meeting STRATEGY OUR STRATEGIC PROJECT IS CLEAR: IT IS UNIVERSALISATION AND BEAUTY FOR ALL. A sustainably strong cosmetics market The growth of the market will be driven by the emerging markets. These countries should represent two-thirds of the worldwide market in years time, and between now and then may on their own contribute more than 80% of world market growth. In the developed economies, market growth is driven by innovation and quality, as shown by the resounding success of Visionnaire by Lancôme, Elsève with Arginine by L Oréal Paris, and BB Cream by Garnier. An ambitious project: to win a billion new consumers The priority is the accelerated internationalisation of the group, and particularly the conquest of the New Markets. The proportion of our total sales they represent has virtually doubled from 2000 to The first quarter in 2012 in fact marks a historic turning point: for the first time ever, the New Markets have become the number one sales zone, ahead of Western Europe and North America. Advantages: a rich and diversified brand portfolio, and localised resources The group has a unique portfolio of 27 international brands to satisfy all beauty desires in their infinite diversity. The internationalisation of Research laboratories and marketing structures is continuing, and they are working together to foster more targeted creation, better adapted to major strategic markets such as the United States, Japan, Brazil, China and India. Heading towards the digital revolution Thanks to the boom in digital media, social networks and online sales, our brands are inventing a new kind of proximity with their customers, for a more creative, targeted and effective marketing approach. This is particularly relevant in the New Markets, where our consumers are young and have grown up with the Internet. At group level, e-commerce sales thus rose by more than 35% in OUTLOOK WE ARE VERY CONFIDENT ABOUT OUR ABILITY TO BUILD SOLID AND SUSTAINABLE GROWTH WHICH CREATES VALUE. BUT WE ALSO WANT OUR GROWTH TO BE RESPONSIBLE AND INCLUSIVE, WHILE EXPRESSING OUR VALUES AND REFLECTING OUR CORPORATE CITIZENSHIP GOALS. A new model of globalisation, with more emphasis on respect and attentiveness The universalisation of beauty is based on a very detailed knowledge of the specific characteristics and expectations of consumers, so as to offer them tailor-made beauty, adapted to different lifestyles, beauty customs and the purchasing power of populations. This is an extraordinary change for our company, which marks the beginning of a new phase of development for L Oréal. Ethics, Sustainable Innovation and Solidarity The first challenge for responsible growth is ethics. At the start of this year, L Oréal was recognised by the Ethisphere Institute as one of the most ethical companies in the world. The second challenge is sustainable innovation. As the world beauty leader, the group has a greater duty than anyone else to help preserve the beauty of the planet. Thanks to everyone s efforts, since 2005 the group has already reduced its CO 2 emissions by 30%, its water consumption by 23% and its production of waste per finished product by 24%. And the last challenge is solidarity. For several years now, L Oréal has been considerably reinforcing its corporate citizenship commitment, particularly through the initiatives of its Foundation. In 2011, L Oréal decided to go one step further by contributing to the well-being of local populations, with Solidarity Sourcing, a global programme whose aim is to combat social exclusion both in France and other countries. 3

made its Research & Innovation policy the subject of one of the AGM keynote addresses, which was given by Laurent Attal, Executive Vice-President Research and Innovation.

4 the letter june 2012 Research 721 million euros expenditure, representing 3.5% of sales Keynote address by Laurent Attal Science in the spotlight 613 patents registered in 2011 Laurent Attal Executive Vice-President Research and Innovation For the first time ever, L Oréal made its Research & Innovation policy the subject of one of the AGM keynote addresses, which was given by Laurent Attal, Executive Vice-President Research and Innovation. Innovation levers at L Oréal L Oréal s unique innovation model relies on a worldwide organisation based on three major entities: advanced research synthesises the major active ingredients, and constantly increases knowledge of the world s skin and hair, applied research invents formulation systems which boost the performance of active ingredients and finished products, development creates, for each of the brands, innovative formulas whose superiority has been evaluated. Reinforced global presence The strategic target of conquering New Markets is offering new opportunities, and is driving an increase in the group s worldwide presence so it can serve all consumers more effectively. In 2012, Research & Innovation is present in six regional hubs in Europe, the United States, Japan, China, Brazil and India, sixteen evaluation centres, and around fifty scientific and regulatory departments. The France hub consists of the worldwide advanced research centres, and three business segments: skincare, makeup and hair. Laurent Attal, Executive Vice-President Research and Innovation Inauguration of Global Hair Research Centre On March 28 th, 2012, L Oréal officially opened its Global Hair Research Centre at Saint-Ouen in the suburbs of Paris. An investment of 100 million euros, 25,000 square metres, and a staff of 500, to meet consumers highly varied hair beauty expectations. Exclusively dedicated to hair research, the Centre is the headquarters of a network of six regional hubs worldwide. It draws its strength from collaborative platforms which foster innovation, and cutting-edge systems for automation and modelling. L Oréal has built its success on constant interaction between research and marketing, a permanent stimulus for creativity. 4

Special EDITION 2012 Annual General Meeting Highlights 1 RENEWAL OF the BOARD OF DIRECTORS Three new directors were appointed: Mr Jean-Victor Meyers, Mr Paul Bulcke and Mrs Christiane Kuehne.

Jean-Paul Agon expressed at length his gratitude, on behalf of all the group s shareholders and employees, for the commitment shown by Mrs Bettencourt, her support, her boldness and her new ideas.

5 Special EDITION 2012 Annual General Meeting Highlights 1 RENEWAL OF the BOARD OF DIRECTORS Three new directors were appointed: Mr Jean-Victor Meyers, Mr Paul Bulcke and Mrs Christiane Kuehne. The tenures of two directors, Mr Jean-Pierre Meyers and Mr Bernard Kasriel, were renewed. Jean-Paul Agon expressed at length his gratitude, on behalf of all the group s shareholders and employees, for the commitment shown by Mrs Bettencourt, her support, her boldness and her new ideas. 2 Mrs Liliane Bettencourt has always demonstrated her unfailing support for our company. I would like to pay a heartfelt tribute to this quite exceptional woman, who for decades has kept alive our founder s spirit, based on striving for excellence, insisting on the highest standards, and respect for the men and women of the company. Jean-Paul Agon New members of the ISCC Former and new members of the Individual Shareholder Consultation Committee (ISCC) were eager to exchange views with shareholders present at the Palais des Congrès to attend the AGM. This was an opportunity for committee members to share their experience, and for shareholders to find out more about this body and its richly informative exchanges. Attentiveness and dialogue were the watchwords on the stands of the Shareholder Village. RESOLUTIONS ADOPTED BY MORE THAN 97% Ratification of the co-opting and appointment of Mr Jean-Victor Meyers as director (97.59%) Appointment as directors of Mr Paul Bulcke (97.95%) and Mrs Christiane Kuehne (98.74%) Approval of the parent company financial statements (99.89%) and the consolidated financial statements for 2011 (99.88%) Allocation of the company s net income for 2011 and declaration of the dividend at 2 euros per share (99.17%) Renewal of the tenures as director of Mr Jean-Pierre Meyers (97.53%) and Mr Bernard Kasriel (98.86%) Authorisation for the company to buy back its own shares (98.75%) Authorisation for the company to reduce its share capital (98.89%) Modifications to the Articles of Association concerning the powers of the Board of Directors and Chairman, and the conditions of participating and voting at Annual General Meetings (99.87%) 1. Welcome to the L Oréal Shareholder Village. 2. Members of the Individual Shareholder Consultation Committee were present on the stand. Remuneration of corporate officers Mr Kasriel, Chairman of the Human Resources and Remuneration Committee, made a presentation about the remuneration of the Chairman and Chief Executive Officer. You can read all the details in the 2011 Registration Document, on pages 53 to 58. Strong increase of the dividend Dividend distribution rate as % of profit (1) % 41.1% 41.3% % % 2.00 (2) % 46.3% (3) (1) Dividend distribution rate based on diluted net profit excluding non-recurrent items per share. (2) Dividend voted at the Annual General Meeting of April 17 th, (3) Based on the dividend voted at the Annual General Meeting of April 17 th,

the letter june 2012 Questions & Answers Shareholders give their views The 2012 Annual General Meeting featured a highly informative Q&A session with shareholders.

6 the letter june 2012 Questions & Answers Shareholders give their views The 2012 Annual General Meeting featured a highly informative Q&A session with shareholders. After answering the written questions, Jean-Paul Agon spent almost an hour answering a number of questions from the audience. Read the excerpts. as hair, colourants and bodycare, and indeed we are doing very well. Last year we recorded a strong growth rate. But our goal is to try to change this market, to gradually increase the role of mass-market and store sales, which is something we know how to do wherever we operate. This means we are very confident. AFRICA Where do you stand with your development in Africa? PARITY Are you planning to achieve parity between men and women on the Board of Directors, and how long will this take, particularly as L Oréal represents the beauty world? Jean-Paul Agon: We fully intend to comply with the rules. Today, we have three women on the Board of Directors, and we will increase the percentage to 40% by 2016 at the latest, or perhaps slightly earlier. We will be considering this with the Appointments Committee, which is working hard in this area. BRAZIL What is your development strategy in Brazil? Jean-Paul Agon: Our development strategy is the same one that we apply everywhere: to try to become the market leader. Brazil is special in two ways. Firstly, there is not really any luxury business there, because taxes are very high, and so all Brazilians buy their luxury products duty-free, or in London, New York and Miami. Secondly, a large proportion of direct sales are made by competitor companies in make-up, skincare and fragrances. At the moment, we are fighting hard in the other categories, such Jean-Paul Agon: Africa is the final frontier for L Oréal. It is a very long-term project, which began when Sir Lindsay Owen-Jones acquired SoftSheen in the United States and Carson in South Africa, enabling us to become the market leader in South Africa, and providing us with a range specialising in products for people of African origin, Dark&Lovely. Now we are also rolling out our operations outside South Africa. We have established a subsidiary in Nigeria, and a subsidiary in Kenya, and we are also present in Ghana. Starting out from these development hubs, we will gradually build up our operations in the African market. This is a very interesting development, as demographers are forecasting that the population of Africa will double over the next generation, and some countries in this continent are also now emerging in economic terms. 6

Last year we launched an eau de toilette, Fleur d Osmanthus, which we call the essence of happiness.

7 Special EDITION 2012 Annual General Meeting ROGER&GALLET What are your ambitions regarding Roger&Gallet? Jean-Paul Agon: With Roger&Gallet, we want to win over a new generation of younger consumers, without losing older consumers in the process. Last year we launched an eau de toilette, Fleur d Osmanthus, which we call the essence of happiness. This is a major opportunity because brands with a strong heritage can also appeal strongly to young people. TAXATION In the profit and loss statement, you indicate that income tax amounted to some one billion euros. What proportion of this tax was paid to the French treasury? Christian Mulliez: The group s rate of tax ation is 28%, but we do not publish profit and tax figures by country. However, we can confirm that L Oréal pays very significant amounts of income tax in France, as this country is our second largest market, after the United States, and our holding company is based here. I would like to take up your question about our contribution to the French treasury, and extend it to include our contribution to France as a whole. In 2011, our contribution to French external trade, and to the French trade balance, was positive to the tune of some 2 billion euros, which is a very substantial amount. leadership Can you tell us whether, in relation to the previous year or possibly as a trend compared with recent years, you have strengthened your leadership compared with your competitors, or if the gap is being maintained? What is the group s situation in relation to the cosmetics market? Jean-Paul Agon: L Oréal is the world s number one cosmetics group*. Each year, L Oréal achieves growth which is greater than the market trend, and thus wins market share. But, while we are number one in the cosmetics market as a whole, we are not yet number one in each and every business segment, and this is precisely the objective of our divisions. In Professional Products, for example, we are by far number one, and our lead is growing. In Consumer Products, we are number three. In Luxury Products we are number two. And finally in Active Cosmetics we are number one. dividend The dividend distribution rate in 2011 was 46.3%. I would like to focus on the historic dividend growth curve, and remind you that your dividend strategy has been one of smoothing the growth rate. Are you going to set an upper limit on the distribution rate, for example, at 50%? Jean-Paul Agon: We do not consider the 50% figure as an article of faith. Today the conditions are in place for dividend distribution: a very high cash flow, an extremely solid financial situation, and highly promising prospects for the future. So there is no reason to set a limit of 50%. Watch the VIDEO webcast of the AGM HIGHLIGHTS at: 7 * WWD ranking August 2011.

8 LISTENING TO YOUR VIEWS PRACTICAL INFORMATION MAKE SURE YOU RECEIVE THE L ORÉAL SHAREHOLDER E-NEWSLETTER With the multimedia L Oréal shareholder newsletter, keep in touch with the latest essential L Oréal news. Several issues each year focus on L Oréal s results, the AGM, and topics such as Sustainable Development. Don t miss the next issue of the e-newsletter. Your shareholder e-magazine takes on the colours of the Annual Report! To mark the 2012 Annual General Meeting and the publication of the 2011 Annual Review, the shareholder magazine looks back in pictures at the highlights of last year. Focus on 2011: reports, interviews, shareholder views, photos and videos to relive the key moments of the L Oréal adventure in Take a look at: magazine.loreal-finance.com Shareholder Meetings in the second half of WE ARE CONSTANTLY IMPROVING OUR COMMUNICATION MEDIA, TO PROVIDE YOU WITH RICHER AND MORE ACCESSIBLE INFORMATION. Jean-Paul Agon at the AGM on April 17 th Share price 1 Marseille: September 24 th 2 Dijon: November 13 th 3 Nice : December 4 th January 1 st, 2007 to May 18 th, ,542 points L Oréal Cac 40 (reindexed on L Oréal) % CAC 40 variation since January 1 st, , % L Oréal share variation since January 1 st, ,008 points Strasbourg: December 11 th 5 Lille: December 17 th We value your opinion Do you have a point of view, a suggestion or a question? We would be pleased to hear from you at the following address: theletter@loreal-finance.com Registered in France as a Société Anonyme with registered capital of 120,596, euros RCS Paris - NAF Code: 2042 Z ISIN Code: FR Registered office: 14, rue Royale, Paris, France - Headquarters: 41, rue Martre, Clichy, France Tel For more information, please contact: L Oréal, Financial Communications Department, 41, rue Martre, Clichy, France or consult the Shareholders Corner on the Internet site or the mobile website loreal-finance.mobi from your mobile phone. Photograph credits: Stéphane de Bourgies for L Oréal (p.4), Alain Buu for L Oréal (p.1, 2, 5, 6 et 7), O. Nikishin/K. Sazonova/Epsilon/Getty Images for L Oréal (p.4), Philippe Jacob / Phénomène for L Oréal (p.4), Matteo/L Oréal R&I (p.4), Nathalie Oundjian for L Oréal (p.4), Bertrand Stark for L Oréal (p.3), X. / Creation and layouts: Publicis Consultants I Verbe

CAGNY FEBRUARY 23 rd, 2018

CAGNY FEBRUARY 23 rd, 2018 Jean-Paul AGON Chairman & Chief Executive Officer A GOOD YEAR FOR THE BEAUTY MARKET AND FOR L ORÉAL +4/+5%* A GOOD YEAR FOR THE BEAUTY MARKET *Excluding razors, soaps and toothpastes.