Good afternoon from Paris, and welcome to the third edition of our Let's Talk Beauty. I'm delighted to be here today with Cyril Chapuy, President of L'Oréal Luxe Division. Over the next 30 minutes, Cyril will explain what makes L'Oréal Luxe truly unique in the world of luxury beauty. We will then have time for questions. As in previous years, please send us your questions written. You see the little box at the top right-hand of your screen. You will not see the questions, but be assured we can see them on our end. With that, over to you, Cyril. Thank you so much, Eva. Welcome to everyone there on the screen. We are live from Le Valnois, the HQ worldwide of L'Oréal Luxe. In my presentation this afternoon, I'm going to have three parts. First, I'm going to take you through the context in which we evolve and your market, our customers. Then I'll give you some key numbers regarding our results. I'll try to decode a bit for you, our secret sauce. Of course, we'll have time for Q&A. Let's start by the luxury market and the luxury client, the luxury customer. We are acting on the market of luxury personal goods, which is a market which has been dynamic over the last 10 years, + 4.8. We are actually the number one category of luxury personal goods. As you can see, we used to be the second category after fashion and apparel, and now beauty is the number one category of luxury personal goods, with a nice CAGR growth over the last 10 years of 6.3%. It is a nice market to be in. It is a nice category to be in, luxury beauty. Who are the customers? As you can see, the customers are pretty well split across different ages. You see here the weight of business of these different customers. What matters to me is that over the last 10 years, the number of customers increased by 3%. As I mentioned in the previous slide, the market grew itself by 6.3% CAGR, and half of the growth came from penetration, from new customers, and this across the different age groups. Luxury, obviously, is driven by young generation in terms of trends, but luxury is very much driven also by Gen X and boomers in terms of purchasing power. The regions of luxury, the regions of luxury are very well split around the globe. As you can see in the 2024 numbers, the number one region remains North Asia, even though this region has slowed down in growth since 2019, since COVID. The second region is North America, which tends to accelerate. It was at +5% during the first part of the decade, and now it's at +7%. The third region is Europe, which is pretty stable in growth, +3% during the first part of the decade and +4% in the second. A huge reservoir of growth, obviously, for luxury beauty is emerging countries, which are accelerating. They just represent today a rather small portion of the market, but they are accelerating very fast, and they are the fastest growing part of the luxury beauty market. The categories of luxury, interesting changes here too, but I'd like to spend a little time on. As you can see, over the decade, the two most dynamic categories were skincare and fragrance. Over the last five years, fragrance took over in terms of dynamism versus skincare, and it's today the second category. Obviously, this is linked also to the geographical footprint. You've understood it. When Asia slows down a bit, skincare slows down a bit. Fragrance took over, and it's now an extremely dynamic category, as you can see, plus 10% over the last decade. The weight of business is 40% for skincare, 34% for fragrance, and 26% for makeup. In this market, what are the results of L'Oréal Luxe? The results are results we are quite proud of because it has been a steady and progressive conquest. The division over the last 10 years went from EUR 7.2 billion to EUR 15.6 billion, i.e., a CAGR over these last 10 years of 9.3% versus a market at 6.3%. Over 10 years, the division has had an index of around 1.5% versus the market and has more than doubled size, as you can see on this chart. The market share of the division went from around 14% in 2015 to above 19% in 2024. We are close to weighing 1/5 of its market of luxury beauty worldwide. We have been outperforming the market for the 14th year in a row. This is very important. This is the signature of L'Oréal Luxe teams. This is the commitment, outperforming the market. We have been outperforming the market for 14 years in a row. We became the worldwide leader of this category of luxury beauty in 2023, as you probably know. You see the difference with our competitor number one in 2013. We were EUR 2 billion smaller than them, and today we are almost EUR 2 billion bigger than them. Probably at the end of this year, we will be EUR 2 billion bigger than them. I can tell you, even though obviously our publication is not that hard, I can tell you that in 2025, we are going to have yet another year of super performance versus the market. We are going to beat the market another time. I have the results until the end of October, and I'm confident we're going to beat the market for the 15th year in a row in 2025. The point I want to stress, because it also underlines the quality of our performance, is our profitability. L'Oréal Luxe has a profitability of 22.3% before non-allocated items, and it compares to the number two, number three, number four, and number five of the markets, which are here portrayed on this slide by descending order of net sales. As you can see, we are way more profitable than our key competitors, and this is a real pride also for the team to have become number one, to gain share every year, whilst developing a level of profitability which is, I think, of a decent level. What's our secret sauce? We call it like that internally. What's our secret or secret sauce? I'm going to try to give you a few insights on that. I won't reveal everything, obviously, but I'm going to try to depict a bit how we work. The first thing I want to insist on is L'Oréal Luxe is a mix of L'Oréal and Luxe. It seems obvious, but it's very important. L'Oréal Luxe is the unique combination of the L'Oréal Group powerhouse and the exceptional luxury know-how of its division. I'm going to try to depict that. Obviously, the L'Oréal Group powerhouse is first and foremost R&I. L'Oréal Luxe benefits from all R&I discoveries first. It's the famous strategy of cascading of a company, and we always have the best R&I discoveries first, be it in skincare. I'm going to mention a few of these last years, like Proxylane, that we now have at 50% in a formula like the new Replasti by Helena Rubinstein, be it Menazil, be it incredible new textures like the TTT, thin to thick to thin textures. R&I discoveries in skincare are benefiting to L'Oréal Luxe brands first. In makeup also, for instance, the very spectacular SMK technology for long wear, the famous UTF ultra thin film that allows to have on lipstick extremely beautiful color payoff with a very thin film. These are technologies which always benefit first to L'Oréal Luxe. I would mention also fragrances, because fragrances is not just a dream, far from that. Fragrances is also R&I, is also technology. All fragrances are superior to any other in intensity, in lastingness, in bloom, thanks to the work done by our R&I team from L'Oréal Group. This is the first secret of L'Oréal Luxe. The second is that we are obviously at the forefront also of L'Oréal Beauty Tech. Why? Because we have lots of corners, stores around the world where OBAs can harness the power of Beauty Tech to give our consumers the best service, the best service in terms of diagnosis, the best service in terms of performance. You have here on screen two examples of Beauty Tech we're using on Lancôme. The first one is the skin scanner, which is the Nexa technology, which is a technology which comes from the actually hospital world for the medical world, but allows to get incredible skin scan and a perfect diagnosis of your skin condition even under the regular appearance. The other one is the famous Cell Bioprint, which was introduced in Las Vegas at the beginning of the year, which allows to read your biomarkers, i.e., to really define the biological age of your skin. These are two very strong Beauty Tech innovations from L'Oréal Group that L'Oréal Luxe is benefiting from. It is also in the world of devices. Here are also two examples from Lancôme, but I could have shown some of Saint Laurent, La Croche sur Mesure, which allows to customize your lipstick. Here I have Le Portrait 2 of Lancôme, the micro-needling pen of Lancôme, which has hundreds of micro-needles that allow you to get your skin cream to penetrate much deeper into the skin. It is the equivalent of what you do in micro-needling in medical cabinets. On the other side, Apta, which is this device that allows people with handicaps to apply lipstick because it corrects the movement of your hand. If your hand is shaking because you have a handicap, this device allows to correct totally your movements and allow you to apply lipstick, mascara, etc. These are amazing prowess of L'Oréal Group Beauty Tech that are first applied by L'Oréal Luxe. The L'Oréal powerhouse is also extremely instrumental to our success in the world of operations. We have six L'Oréal Luxe factories around the globe. We produce almost everything in-house at L'Oréal Luxe. We control most of our production around the globe. It allows us to have great flexibility, great also cost-effectiveness, and also, which is critical in our métier, a sense of quality and safety, which is exceptional. I think our quality and our safety is probably unbeatable. Frankly, I do not think any indie or dupe around the world can ever reach this level of quality and safety. This is due to our strategy of in-house L'Oréal Group operations approach. The last but not least point of synergy between L'Oréal powerhouse and L'Oréal Luxe is obviously the talents. We have an incredible talent pool of people we can develop. We have 90,000 employees worldwide at L'Oréal Group, 33,000 out of them are at L'Oréal Luxe. There are 40 nationalities and from extremely diverse expertise, and they are obviously the ones who are behind the success. Our HR strategy of L'Oréal Group is one that is absolutely essential to the success of L'Oréal Luxe. What is specific to L'Oréal Luxe? We use obviously every day we harness the power of L'Oréal Group powerhouse, but we also have specificities and it's our luxury know-how, our savoir-faire, [Foreign language], as our French like to depict it. First, it's the obsession to build exceptional products, products that justify the price premium you have to pay when you buy a luxury beauty product. Yes, luxury beauty products are more expensive, more valorized than other products from the mass world or the dermal world. They have to justify this price. They have to be exceptional. Our products are of the greatest quality you can imagine. They have a sense of detail, which is something we work on every day. I'm, as the President of this division, extremely obsessed by the detail, be it, for instance, on this slide, on the design of the caps of our fragrances. For customer fragrance, the cap says it all in terms of the quality of a fragrance, the way it closes, the weight of it, the quality of its texture. We spend hours defining, getting the best quality, working with the best vendors around the world, working with the best designers around the world to get this level. It's the same for makeup, the way a lipstick closes, the way a boîtier of a cushion or a powder closes, the way it feels in the hand, the way it never gets any issues when it's in the bag. The quality of the bag doesn't get affected when it's in a bag. All of this is details of utmost quality that define luxury. In skincare, same story, the finishes and the air waterproofness of our packaging, the air tightness, the water tightness of our packagings have to resist all this to preserve the formulas. This is what I call ultimate quality, and this is part of the know-how of L'Oréal Luxe. The second element of this know-how, this is innovation. We are obsessed by innovation at L'Oréal Luxe. Every year, my teams around the world are delivering a double-digit level of innovation on the net sales. We need more than 10% of our net sales in innovation on each of our three categories. You have here on the side some of the latest innovations, for instance, in skincare, in makeup, or in fragrances. These innovations are absolutely essential also to justifying the luxury positioning. If you are luxury, if you're more expensive, you need to be more innovative. You need to surprise. You need to disrupt. You need to permanently create. This obsession of innovation, this obsession of the new, better, different is essential in our culture. Now, beyond products, in the L'Oréal Luxe luxury know-how, there is the portfolio management. We have an exceptional portfolio of brands. I would even say we have the best portfolio of brands on the market. It is crafted with a very strategic point of view, which is complementarity. Our portfolio has been built to cover all price levels of the luxury market around the world. Here you have a, I would say, simplified vision of a strategy with this pyramid that summarizes the way we see luxury. Very success luxury, below EUR 50, it is where some of our brands are positioned. It is the world of indies. You have prestige luxury. It is the world of historical legacy luxury brand. You have super premium luxury, which has developed very fast in recent years. The whole strategy of L'Oréal Luxe is to be strong on these three levels of the pyramid. This is across the three categories. In skincare, we want to be on the three levels. In makeup and in fragrance, we want to be on the three levels of the category, which obviously ties to the way we choose the brands that are in our portfolio to cover all these price levels, but also to balance our business. Very important. I do not want to be a fragrance player only. I want to be very balanced across the three metrics. Today, we are number two worldwide in skincare, number three in makeup, number one in fragrance. The objective is to balance very well these three categories across the different geographies where we operate. Our market share, I told you earlier, is slightly above 19% total luxury. It's 22% in fragrance. It's 20% in skincare, and it's around 15% in makeup. We are pretty balanced across the three categories, and it's very important in the way we see this business of luxury. Tied to the portfolio is another very important part of L'Oréal Luxe luxury know-how of my teams. It's our exceptional M&A power, M&A savoir-faire, M&A skills. We have 27 brands at L'Oréal Luxe, and they all were acquired in the history of L'Oréal. We have been built 100% through acquisition across the years. I want to show you some of our more recent ones. 2021, we acquired Takami, probably the most sophisticated medical luxury brand from Japan, an amazing clinic, luxury clinic in Omotesando. Don't show the best knowledge in the science of PR, very important in our skincare conquest for the world. In 2022, we acquired Youth to the People, organic luxury directly from Los Angeles, the art of cleansing, the art of squeaky clean skin, which is so dear to Americans. This brand is also a great tool for us in our skincare area. In 2023, Aesop is up, and it's 400 unique retail addresses around the globe, retail stores around the globe that are the epitome of design and wellness that get together. Incredible brand Aesop is up, and we are very proud to have it join the division. In 2024, we acquired the license of Miu Miu, the hottest fashion brand out there right now. You probably all have a look at the list index that allows you to see the hotness of the fashion brands. You probably attended the meetings, investors' meetings or this meeting of the Prada Group. As you know, the Miu Miu brand is exploding right now. We acquired the license in 2024, and we just launched new team, the first fragrance by Miu Miu. 2025, Medik8, medical luxury as well, like Takami, but from the U.K. this time, with a very specific knowledge in formulation of vitamin C and vitamin A, i.e., retinol. And it's the fastest growing luxury skincare brand in the U.K. and probably amongst the fastest growing in the whole Western Europe. A great new acquisition for the division also. 2025, Jacquemus, a very hot French fashion brand rooted in Provence, extremely aspirational, very successful in the U.S., very successful in Europe. More recently, of course, the Kering Beauté acquisition with Creed, number three fragrance brand in the top of the pyramid of France, i.e., the super premium fragrances, the exceptional fragrances, the high parfumery, haute parfumerie, a very beautiful brand, seventh generation of perfumers, a brand which has an incredible DNA, incredible history, and we think has an incredible potential. Bottega Veneta, exceptional artisanal know-how, extremely high level of sophistication that will translate very well into fragrances. Balenciaga, this audacious, subversive fashion brand that has a territory also that will work very, very well in fragrances. Obviously, when it becomes available, when the license expires, Gucci, which is part of the top four most famous fashion brands in the world and which has a great potential untapped yet in beauty. We are aggressive in acquisitions, yes. We also have a unique track record of success in acquisitions. Look at Saint Laurent. We acquired Saint Laurent in 2008. The brand was around EUR 300 million. It had been pretty stable. Under our management, Saint Laurent went from EUR 300 million to more than EUR 3 billion. It passed the EUR 3 billion mark last year. Obviously, this year, it is going to keep going up. I cannot give you a number, but it is a very good number for Saint Laurent this year. Unique track record, proven by Saint Laurent, proven by Valentino. Valentino, under the previous owner, was a EUR 50 million brand. It is a EUR 600 million brand, probably a digit higher in 2025. I mean, the first digit. A big, big success of Valentino also in the history. Prada, which under the previous owner of the license was EUR 100 million, is now EUR 500 million. Yes, we're aggressive in acquisition, but the whole strategy is to really potentialize these acquisitions, globalize them. We have a unique footprint. We are really global. This allows us to scale these brands and also define very clear DNAs for each of them and then potentialize this DNA. Great link with my next point within our know-how, which is our commercial cloud. We have a great global commercial cloud. We are number one. We were number one in three of the four publication regions. As you know, we've been a historical number one in Europe. As you know, we became number one in North America last year. We had become number one in emerging countries in 2022. We were until this year number two in North Asia. I can already announce to you that this year, L'Oréal Luxe will be number one also in North Asia. This is a unique commercial cloud. We are number one of luxury beauty across the four regions of publications. This is a know-how. This is a talent that the teams of L'Oréal Luxe around the world have. This applies to channels. We are number one in offline. We are number one in online. Online is growing fast in luxury. Online is around 30% of the luxury market. It's growing fast. You cannot discard online at all. You have to export online, and our teams are doing it. We are number two in travel retail. Across the three big channels of luxury around the world, we are well-positioned and well-balanced. All of these, obviously, are, I would say, objective know-hows, are factual know-hows. Now, there is one know-how, which is extremely unique and which is very L'Oréalian, which is our culture, the culture of seizing what's starting, [Foreign language], and being on the quest of the extraordinary. This is very deeply rooted in our DNA. This is very deeply rooted in the way all our teams around the world think. They always craft extraordinary customer experiences. Built offline, which is the natural territory of luxury, offline needs to be an incredible experience. It needs to be enchanting. It needs to be disruptive. It needs to be surprising. It needs to be entertaining. You hear about the examples of Miu Miu, which was just launched around the globe, or the example of Prada Paradigm, or an Aesop store, always an incredible moment of architecture, of design. When in the store, a unique moment of experience. Valentino at this store is probably, I think, is a Dubai store of Valentino, which is very spectacular. In this offline experience, it's not only design. It's not only architecture. It's not only a statement. It's also a service, which is incredible. We have more than 20,000 BAs around the globe that have the service of our customers worldwide and help them have a great diagnosis, a great moment, and get out of the store with a great product tailored to their needs and with a smile and hopefully with emotions, which is what we are trying to create always. We permanently try to replicate this online. Yes, online is 30% of luxury, but online cannot be a disappointing experience for luxury consumers. We are permanently upgrading the level of the online experience. You have here the beautiful D2C site of Aesop on screen, which is very spectacular. You have here the new Lancôme U.S. site, which has just shown the results of today, and they are spectacular because the level of experience is pretty incredible, but also the experience on Amazon. You know, we for years did not accept to go on Amazon before the experience was not elevated enough, magic enough for luxury. Amazon accepted to work with us. We were first movers with Amazon in luxury because we think now the experience is pretty outstanding and is at level versus what a luxury brand should be. Exceptional, extraordinary experiences offline and online, one of the channels. As mentioned, it's the obsession to seize what is starting, to seize what is beginning, which, as most of you know, is a very L'Oréalian value, but it's more important than ever in a business like luxury because obviously it also justifies your price to be ahead of the game, to be a pound avant. For that, we strategized a very specific culture, which is la culture de l'écart, which means the twist culture, which means the culture of always being one step ahead or one step aside. I propose to show you the trailer of a documentary on Cultever, which is available online that you can very well, if you desire, look in its entirety. It's around 45 minutes, but you're going to see a trailer of one minute, which has been crafted with some of our outside partners, the great creators, great crafters we work with on luxury. [Foreign language]. I often say, if you don't like failure, don't come working a lot. It's 99% of failure for one moment of magic. [Foreign language]. Always challenging, always asking questions, always pushing, never settling. Because everything we do answers one simple question. Is it extraordinary? We are back. Indeed. I think we start with a warm-up question, which is, if the global beauty market grows at 4%-4.5%, where do you see the long-term growth for the luxury beauty segment? Actually, I'm confident for the growth of the luxury beauty segment, very confident even. As I mentioned to you, over the last 10 years, it grew by 6%. Actually, this growth came, half of it came from new consumers. I have the precise number that I'm going to give you. In 2015, there were 410 million affluents buying luxury beauty. In 2024, 540 million. If we follow the evolution, the macroeconomic evolutions of the planet, there will be 700 million people who can buy luxury beauty on the surface of this planet by 2030, which means clearly that there is a big reservoir of growth, big reservoir of growth. In the emerging, for instance, it's only 10% of our business when it's around 17% of the total beauty market, not on a luxury only, total beauty market. Huge space in the emerging, huge space here in China, where at the end of the day, there is only 20 million people buying luxury beauty today. Huge potential of penetration across the categories. Yes, France is booming all over the planet. We all know this. The penetration of France is not even higher than 55% on a global scale. A lot of potential for luxury beauty. I'm really confident on the growth of this market. Obviously, when consumers are confident, the market goes even faster. When the consumers are a bit less confident, it goes a bit slower. Overall, structurally, it grows, it develops. Don't forget also that luxury beauty is very accessible luxury. At the end of the day, a lipstick is EUR 50-EUR 60. A fragrance is EUR 90-EUR 200. It is very accessible luxury. Even in moments of doubt, it is a treat that consumers are very happy to indulge into. Great, thank you. We have a very interesting question, which is about how do you decide where innovation goes first in terms of brands? It is very much based on our cascading approach. Obviously, I tend to give the best innovations to my most valorized brands, obviously, to amortize the cost of R&I first on the brands that have the most premium price. That is the first criteria. The second criteria is depending on the brand territory, the brand DNA. Each brand has a very different territory, and the innovation can correspond to this territory or not. For instance, when it comes to Proxilan, it's the territory of Helena Rubinstein. When there is a new amazing technology with Swiss Tips and Proxilan, it goes to Rubinstein more than Lancôme or another brand. Mix of cascading based on obviously the level where the brand is in the pyramid and relevance versus the brand territory. Great. Quite a few questions, as you can imagine, about fragrances. There is a question about growth in fragrances. We've seen the market slow. Where do you see the category land and how can you ensure that we continue to outperform that market? Alors, bon, this category is still very dynamic. It's going to end the year probably in the area of 6%-7% growth. It's still a very dynamic category. Last year it was 9%. It's a bit less dynamic than last year, but it's still super dynamic. How many markets as dynamic as that worldwide? Very few. We overperformed systematically. This year, I think we're going to end way, way above the market. We are growing double digit year to date. As you know, November, December is the peak season of fragrances. With the quality of the launches my team has crafted, with the quality of our portfolio, we land way, way above the market. We're going to still overperform and grow double digit in fragrances. I'm very confident in this market for, I would say, three reasons. New targets. Men who used to be, I would say, very classical consumers of fragrances. The new generations of men, they layer. They love having a fragrance wardrobe by several fragrances depending on the occasion, depending on the moments. They are no longer attached to just one fragrance, but they rebuy just every two months, three months. They have an overall fragrance wardrobe they play with. This young generation of men consumers has explained a big part of the growth. All the emerging world is adopting fragrances at high speed. The level of growth I have this year in fragrances in North Asia, in South Asia, in Latin America is extremely impressive. These are the two main reasons. The third reason why I think this market is going to keep growing is because it is a very creative market. A lot of surprises, a lot of new olfactions, a lot of new trends, a lot of new gestures. There was a great, for instance, move last year towards mists, which is another way of fragrancing during summer, for instance, that was successful. Overall, this category is innovative. This category is interesting, new targets, new geographies. It is going to keep growing very nicely. We are going to go a little bit niche on fragrances now. We asked about China. In the U.S. and in Asia, especially China, penetration rates are still quite low. Yes. Do you see these penetration rates catching up? In China, where we have seen a lot of focus on ultra high-end consumption, is that becoming a mainstream market for fragrances, or do you see that more as a niche market going forward? No, I have to say it is one of the most exciting fragrance markets in the world because the consumer is very demanding. The consumer likes original, high-quality fragrances, high-quality bottles, and the consumer is very playful in his consumption. Historically, Chinese consumers were offering fragrances. It was a gift, but people were not really wearing it. The new generation loves wearing fragrances and loves changing. What I was mentioning regarding the fragrance wardrobe is very much happening in China. They do not wear the same juice, the same choice depending on the season. They do not wear the same juice, the same choice depending on the day of the week, workday, weekend day, depending on the social occasions, be it an office situation, a dating situation. They love changing because they consider fragrance as part of their signature, as part of their personality signature. This is very interesting. Second, they also consider fragrance as a sort of a wellness gesture also when it comes to certain fragrances with essential oils like the one we have of Aesop, which are working extremely well. It is a new, interesting kind of consumption, very expert, very demanding. Only the best brands and the best quality slash technology will win in China. I have a lot of faith in this market in China. I think today it is smaller than skincare, obviously, but it can become a very big part of the market. Great. Very glad to hear it. Still on fragrances, obviously a lot of our portfolio in fragrances comes from licenses. Yes. However, you have just showed us that in the last few years, we have acquired brands like Aesop and now Creed, which are fully owned. How do you see the trend develop from here, why one or the other? I think licensed fragrance will always be a huge part of the market. Why? Because most fashion brands are extremely inspiring, extremely creative, and they allow us to create fragrance territories, fragrance stories, fragrance archetypes, which are very interesting, very exciting. Frankly, we have a unique way of working with our licenses, which is an extremely collaborative way. We see each other a lot. We take immense inspiration from them and we bring them immense knowledge of the category. This is a real win-win between our fragrance partners or fashion partners and us on fragrances. I think this will remain a huge part of the fragrance market. At the top of the pyramid, in what I call haute parfumerie, high perfumery, I think brands like Creed, like Margiela, like Aesop will remain dominant because here consumers do not buy a fashion projection. They do not buy the creativity, the imagery of a fashion brand translated into a fragrance. They buy artisanal compositions. They buy raw materials. They buy ingredients. They buy somehow the mastery of fragrance, the mastery of composing a fragrance. They even do not like when there is a storytelling that, I would say, cannibalizes the pure story of the ingredients and of the composition. It is a very interesting part of the market. It is already 20% of the market at the top of the pyramid. It is a part of the market on which L'Oréal Luxe was weak. I have to acknowledge and confess. That is why Creed is a perfect fit because it is the number three brand on the top of the pyramid. As I told you before, seven generations of perfumers, a brand which has been on the market ever since the 16th century, 220 incredible formulas in the archives with incredible compositions, secrets of composition, which are super precious. Very few brands have such archives. You know, it's a bit like an incredible fashion brand which has archives of the designer who created it, the archives of Chanel, et cetera. In this world of high perfumery, it's the same. They have 220 incredible formulas that we can today relaunch, re-purpose for consumers of today. Moving away from fragrances towards makeup. One of the questions is, are designer brands still gaining market share in makeup? If they are, where do we see potential to add a second axis to our couture brands? Makeup is the obvious second step for a couture house after fragrance because makeup is very close also to fashion, to style, to self-expression. Obviously, the territory, the DNA of a fragrance house can translate very well into makeup. The very young, edgy rock side of Saint Laurent translates very well into Saint Laurent makeup, which has become, by the way, number one in China and which is number three worldwide. The more minimalistic expression of the Prada femininity works extremely well also in makeup for face makeup, for instance, or eye makeup or lip balm instead of lipstick. Every fashion house has a vision of femininity, a vision of self-expression that we adapt into the world of makeup. Mr. Armani was the maestro of glow. This is what he was really obsessed with, women who glow. That is why the whole Armani makeup line is all about glow. It is working very well. Luminous Silk by Armani is at the very top of the Sephora rankings in the U.S., especially around this idea of glow. To translate a fashion house imagery into makeup, you need amazing technologies, beautiful packaging, incredible storytelling to make it a success. I think before we move on, there's one question on the third category, which is skincare. Nicolas Hieronimus has often said that skincare is an area where the group can do better. What role do you think luxury will play in that journey? Skincare is, as I showed you in my presentation, a critical category of luxury. It's 40% of the luxury market. It's still the biggest category of luxury. Skincare is especially critical in the eastern part of the world, i.e., the Asian part of the world, where their skin condition is a very strong element of sophistication for luxury customers. Obviously, we have a key role to play. As you all know, Helena Rubinstein, which is a very strong brand in Asia, went from less than EUR 50 million 10 years ago to more than EUR 1 billion today. All skincare brands can be very big. That is why we acquired Takami. It is going to be a very big skincare brand. That is why we acquired Medik8, as long as we keep justifying the prices of luxury skincare. What does it mean? It means superior performance. We need to do formulas with incredible level of actives, patented actives, exceptional actives, unique actives, incredible experience. We need to do textures which make the skincare moment a moment of pure bliss, including, by the way, fragrances in the skincare that make of this moment a real moment of a relaxing moment, a wellness moment. Exceptional performance, exceptional experiences, and exceptional service. Skincare is a lot about service, luxury skincare. A woman that comes into a corner in China, that comes to a store in Japan, that comes to a backwall in Korea has to have an incredible moment of experience. She needs to be diagnosed what product is right for her. She needs to be explained how to use it, what kind of routine, when, how, et cetera. This mix of performance, experience, service is what makes luxury skincare unique and what we focus on to improve our skincare numbers, which are much better this year, by the way, versus where they were last year. Great. Now, I think let's start a little journey of the globe, and let's start in China. Everyone was obviously very pleased to see that the market has been improving since the start of the year. Is your view that that's the beginning of a gradual recovery in the near term? How do you think about the potential in China in the longer term? The market is improving. It's a fact. It's not a radical improvement, but it's improving. To remind everybody of the facts, the market was negative on H1 in China, and on H2, it's positive in a nice way. Since, for instance, October, November, I just got the results of the market. The market is going to be around +5%. It is a very decent level of growth. It's not the level of growth that we had before COVID, where China was double-digit, but it's a very decent level of growth at +5%. I'm very happy to see these numbers, especially because they are, I think, structural. Chinese consumers are back into confidence. Although it can change, for now, they are back into confidence. I think the improvement of the stock exchange has helped this new level of confidence. Also, I think because we challenge ourselves to bring new surprises, new experiences that we are interested with, sorry. It is too early to say, "Oh my God, China is totally back." What I am sure about is that this market is for sure going to remain one of the biggest markets of luxury. As I told you, we have only 20 million people who buy luxury beauty in China. Imagine. The potential, imagine the potential in tier two, tier three, tier four cities. Imagine the potential in France. It is still tiny. China is going to be one of the key drivers of growth for the future, no doubt about that. We have a very similar question about the U.S. We've seen momentum improve after what was a fairly slow start to the year. Can you maybe talk a little bit about what you're seeing and again, how you think about the potential in the long term? Yes, the U.S. is improving every quarter on a low base because we started the year on a low base too. The more recent market numbers are more in the area of + 3% in the US. It means the market is progressively getting back on track. Here also, I think it's very linked to consumer confidence. If the consumers are confident, they love treating themselves to beauty, and especially to luxury beauty. I'm very encouraged by these last numbers, especially since, for instance, fragrances are really back big time in the recent weeks, for instance. The first numbers of Black Friday or Turkey 10 is no cold because it has 10 days. It is called Turkey 10 around Thanksgiving. The numbers are very encouraging. As you can decode between the lines of our discussion, I'm reasonably optimistic. I don't think our market is yet back into its pre-COVID times, but it is structurally improving without any doubt. Great. We've had a few questions asking about the competitive environment, especially the smaller brands. What do they bring to driving the market? What can you learn from them? How disruptive are they in the luxury segments? I have to say very loudly that I love competition. When you're a big company, L'Oréal Luxe is number one luxury beauty company in the world. You need the competition to stay alert, to never step on your laurels. It's very good competition. It allows us to permanently challenge us, to permanently avoid that we stay in the status quo mode. It's great. Amongst competition, these small indie brands are very interesting because they are local. They are very relevant towards generally local needs, and they are fast. It's very interesting to decode how relevant they can be, why they can be so relevant, and why they can be so fast. Obviously, they will never have what we have, which is scale. We are worldwide. We are most of the time local, which is capacity of innovating. We have an incredible AI that can help us innovate. Obviously, we have brands also which have awareness that is probably difficult to beat. It's very interesting to take inspiration from them on their creativity, speed, and capacity of being relevant. You've obviously shown us quite a few slides with recent acquisitions, and presumably the teams are busy starting to integrate some of those acquisitions. When you think forward, where do you see the white space opportunities in the market still? We did quite a few acquisitions in the last five years. I think the first thing is going to be to digest them, potentialize all of them at the level which I promised to my shareholders. This is the first step. Are there going to be new exciting opportunities? Yes, there always are. The question would be, are they complementary enough to what we have? Can they replace some of our existing brands? Because also, there is no taboo on saying that we may diverse some of our brands. You know, when you have a portfolio of 27 brands, if some of them are not at level, if some of them do not perform several years in a row, I think it's very healthy to diverse. I do not close the door at all to new potential acquisitions in complementary spaces to where we operate today. It needs to be complementary, and this is the name of the game. Very important when you have a portfolio of 27 brands to make sure the contour, the DNA, the territory of each brand is very different from another. It's my job to make sure of this. If we can find opportunities which are complementary, we'll always be curious. We'll always investigate, and we'll always make the best decision in the interest of our company. I have, before we conclude, one last question, which is very closely related to this. Everyone loves the Aesop brand. We had a question on where are we with the integration? What have we achieved so far, and what is coming next? We acquired definitely Aesop on September 1, 2023. Apologies, I am losing my dates. September 1, 2023. We are two years after, and 90% of Aesop is integrated today. It means the Aesop teams, great teams, who have an incredible knowledge in retail, in design, in capacity to develop spectacular customer experiences. The Aesop teams have joined us in 90% of the geographies. There is still 10% to integrate. The brand is doing great. It is growing double digits this year again. It grew double digits last year. It is going to grow double digits this year again. We're on track with Aesop. We have great successes at the moment in fragrances. They are very original, these Aesop fragrances, both the composition, extremely aromatic, based with a very specific charter of formulation. I think consumers find them very new, very interesting. I'm very happy we have Aesop. As I mentioned, when we acquired it, I think Aesop is going to be part of the next billionaire brands of L'Oréal Luxe. We are five billionaire brands today at L'Oréal Luxe: Lancôme, Yves Saint Laurent, Armani, Kiehl's, and Helena Rubinstein. I think Aesop will soon join this club together with Prada and Valentino, which also will join this club soon. Probably not this year, but soon we will have eight billionaire brands, and Aesop will be part of them. Great. Thank you very much, Cyril, for this fascinating tour of the luxury world. Thank you, everyone, for joining us for this session. Thank you, everybody. Thank you. you, everybody. Thank you.