I'm Warren Ackerman, and I run the European Consumer Staples research team alongside some of my brilliant colleagues, some of which are in the room. Let me be the first to welcome you to Boston for the 19th Annual Barclays Global Consumer Conference. A fun fact, but this is actually the 36th year for the conference. It's been under Barclays ownership for 19 of those 36 years. If people are interested and want to grab me, I can explain the backstory, or Andrew Lazar can. Anyway, we're really excited that we have a first this year. This is the first year we're going to be adding luxury, leisure, and retail to the Staples roster. Really, you're getting the two conferences for the price of one, and we have 160 companies here this year. I know for some of you, the journey's been arduous with plane cancellations and other travel difficulties, so thank you everybody for making it here. I also want to thank and appreciate all the hard work that our management teams have put in to make these presentations and meetings possible year after year, and especially the Barclays events team for their hard work and late nights to make this event a success. Amber was telling me as I was walking in that we have a record 15,000 meeting requests over three days this year, and she's been burning the midnight oil to complete the puzzle of meetings, more her than me. She's outside for anybody that wants to change or any other requests, so please don't hesitate to swing by the desk. In keeping with tradition, we will be hosting unofficial hours in the bar for the next two evenings. Tomorrow, just want to flag to you from 5:00 P.M. to 7:00 P.M., Barclays is hosting a cocktail reception on the terrace. I think it's called Matria. Everybody is very much welcome for that. Three very small housekeeping things. Firstly, if everybody could wear their lanyards at all times. Security has been stepped up this year, so we don't want anybody having any issues. Secondly, a number of the presentations will have breakouts after the presentation, including L'Oréal. If you do want to hear more from management, there are two breakout rooms around the corner. Do please join us for those companies where there are breakouts. Then finally, we do appreciate any feedback about what you like about the conference and what can be improved. We're always trying to improve things. With that, I'm delighted to welcome L'Oréal to the stage to open the conference. Thank you, Christophe, for joining us. I think L'Oréal has a video that they want to show first, then Christophe's going to have a few minutes, and then we're going to have a fireside chat. Thank you, Christophe. Thank you. All right. So good morning to everybody. I am very happy to open the Barclays Back- to- School conference. As always, we start with a short video, and I am sure that this will bring a good dose of dopamine in this room. I will then make a few short remarks about the first half, and I also want to share my confidence about the rest of the year and beyond. So let us start with the video. We delivered a strong first half. Organic sales growth of 6.5% accelerated steadily from last year and significantly outpaced the market that we believe stand at +4.5%. It was fueled by our Beauty Stimulus Plan as the weight of innovation increased by another 250 basis points. Growth was very broad-based. All divisions grew, led by Dermatological Beauty and Professional Products division. All regions also grew, emerging markets around 10%, developed markets in mid- to high- single- digits, and all categories grew, led by fragrances and haircare, and with an acceleration in skincare. Last, we grew twice as fast as the market in e-commerce, double down on the winning channel. Our virtuous P&L was on full display as well. Our operating margin rose 20 basis points, and that was after a 70 basis point increase in our advertising and promotional expenses to support our innovation and new brand as we kept tight control of our SG&A. We are confident in the second half. We told you in late July that market growth accelerated from 4% in the first to 5% in the second quarter, and that the full- year should land between 4.5%-5%. This assessment has been confirmed during the summer. The market remained robust in Europe and North America. North Asia continued its recovery, driven by the selective market in mainland China. SAPMENA stayed dynamic despite short-term supply chain issues in the Middle East, as you know. The only area of disappointment was Latin America, our smallest region, where growth was below that in the first half. We have what it takes to continue to outperform the market in the second half. We have the full innovation pipeline in place. Our new fragrances, for example, are off to a very good start. We continue to drive our skincare reconquest with the rollout of Korean champion, Dr.G, and our red hot Medik8 brand, now in over 250 Sephora stores in the U.S.. We continue to leverage our recent acquisitions, including Creed. We continue to gain share in the selective market in mainland China. But also we are stronger than ever to tackle the future. R&I research is at the heart of our engine room. Every year, we dedicate, as you know, 3% of our sales to it and expand our ecosystem with new partnerships. That puts us in a unique position to keep exploring and winning in emerging fields like GLP-1 products and longevity. To do only beauty, but all beauty, we are expanding our category coverage as well. That includes body care, which is becoming increasingly valorized in a wellness-obsessed world, the mist, which allow us to bring our fragrances to a wider audience, and beauty supplements. We are obviously hugely excited about the adding of Kering Beauté. Creed is off to a great start. We are preparing the first launches of the Balenciaga and Bottega Veneta brands, and our teams have started to immerse themselves in the Gucci universe one year earlier than expected, with first products to launch in around 18 months. Last but not least, of course, AI. AI is profoundly shaping the consumer journey, and we are ensuring our competitive moat continues to widen. AI boosts all our [Non-English content], especially research and innovation, our accelerated innovation, and creativity, our augmented imagination. AI is allowing our employees to focus on the most value-added parts of their jobs. You can see that we have every reason to look at the future with confidence. In a dynamic market, we have what it takes to keep winning. With that, I am ready to be drilled by Warren. Do you want to join me on the chair, Christophe? Here we go. There is lots to pack in, and limited time. I have got to start, Christophe, on the global cosmetics market, because we are hearing a lot of doom and gloom about FMCG generally, but cosmetics seems to be bucking the trend, 4% growth in Q1, 5% growth in Q2. What is driving the acceleration in the category, and what gives you that confidence that that momentum can actually hold for the second half? Why is it different, I guess, from other stable sectors? First, what is important, of course, is to see that Q2 has been slightly accelerating compared to Q1. We are quite confident that this +5% on the exit rate of the growth of the market could be seen in the H2. This is driven by first, what we have seen after the months of June, because we have been observing the markets in July and August, and I was saying the market are still quite robust. Of course, there are some issues from here and there because of conflict, because of logistic disruptions, but for the time being, we see first big players investing, and we are probably the most active. Therefore, when we observe the consumers in the different big market, we have this confidence for the full- year. What I want to state here is that beauty is a market of really attractive growth. This is important to reassess. What makes this market different is the fact that we have ever said and spoken about the essentiality of beauty. I will tell you that when you look back at the last 35 years of this market, there is only one year when the market was negative. It was in 2020. Frankly speaking, it was more an issue of offer than demand, actually. It is a strong, resilient market. With all the innovation that we put in this market, some competitors as well, we are quite confident that Maybe we can dig into some of the categories, Christophe. I want to start with fragrance. Yeah. I think fragrance was growing above 10% in the first half for you guys. There are some fears that we are going to see a slowdown, and we have heard others talking about slower trends. But you seem to be taking more market share. I think you have the top three female fragrance brands in Europe at the moment. I guess the question is, within fragrance, are you confident on the outlook? Is your innovation engine in fragrance driving a structurally higher level of share gain in the category? Yes, maybe first how the market is going. It is true that in the past few years, the fragrance market was growing at a very high speed, like double- digit. It has been slowing down lately, but still at +5%, +6%, it is still a very dynamic one and well above the global market. At least what we are seeing in the market is a kind of polarization. A polarization between those affordable fragrances, and that is the reason why we are launching NYX, to address a new audience that are looking for more affordable fragrances, and the ultra-high-end fragrances. So very, very rising, very expensive, very prestigious brands. That is where a brand like Creed, of course, in the portfolio is helping. At least on our side, for the time being, we have seen no slowdown. We are still growing at double-digit growth, meaning twice faster than the market. Of course, always with the same mantra of innovation, bringing new products, and we have in the pipe, and it is already visible, the new launches of Armani, the fragrance called I Will. I have seen in the airports the launches of the new Valentino fragrance, the Vendetta. We have in the pipe what it takes to keep growing fast. Another category that is on fire is haircare. Haircare up 15.6% in the first half. I think Kérastase, I think it was some crazy number, high 20%s growth. Why is haircare so strong, and how much is the market accelerating versus L'Oréal taking market share? You have talked about some of the mega trends in the past in haircare, but do you actually think double-digit growth is sustainable for you? Well, first, again, I will start giving some key components of this growth, because the market is dynamic as well. There are some strong market fundamentals that are helping this growth. First, I will speak about a trend that we observe in all geographies. Women, they tend to have longer hair. Of course it helps. But also we have with the different ethnic components of the population, we see more and more curly hair, frizzy hair. Lastly, there is also a quest from most of the consumers to go for more care. Therefore, there was a space to bring more innovation and therefore to premiumize. That is where we have been playing to our strength because we are moving this market from a volume driven to a value driven. What we see for the time being, it is not stopping. You rightly mentioned Kérastase, it is well over 20% growth, but we see growth in three out of our four divisions because you know that we have haircare in our consumer, in our Professional Products division, but now also we serve it in our Dermatological Beauty. Maybe one category that is doing slightly less well is makeup. I think it is 18% of your portfolio. It grew, I think 2.5%. Are you kind of slightly dissatisfied with that performance? How can you move faster in makeup against super nimble players where trends are moving at light speed? I mean, how is a brand like Maybelline doing, for example? It is true that out of our five categories, the most cyclical category is makeup because it is a lot dependent on fashion trends, on color trends, and with this world that is becoming more and more digital, and those trends are shifting very quickly. It is true that currently we are slightly below the market, so of course we are not happy about that. But for L'Oréal, what we see is two different realities. On one side, we have now a robust momentum on the consumer division. So in mass, and it is still visible in the U.S., where brands like Maybelline, but mainly NYX, for example, are doing extremely well. On the other side, on luxury division, we have a more muted growth in the range of 2.5%. So that is where we are putting the focus, is bringing more innovation as soon as the second half. Of course, there will be much more coming in 2027. Finally, just on the categories and brands. One brand I want to ask you about is the Mixa brand. How big is Mixa now, and how big do you think it could become? What are your plans for the brand over the next, say, 12 months? There is a lot of noise about this very French brand. Mixa is a brand that has been for quite a while in the French market, and we decided to bring this brand out of this comfort zone. We have been launching this brand in Germany, more recently in the south of Europe, and in a few countries in SAPMENA. This is a way to respond to the consumer focus on more medicated skincare. It is a brand that has good formulas, a bit cheaper than CeraVe, so it has really a very good territory, and the truth is that it is doing extremely well. We have been growing very fast in Germany, and apparently the first result that I have seen from the U.K. are pretty encouraging. It is a brand that probably we will keep pushing in more territories. It is quietly growing at above 20% now for several years. Okay. The objective is to keep pushing it. Super. Maybe moving on to some of the geographies. For me, the standout has been SAPMENA. The growth in SAPMENA, I think 14%, despite the Middle East headwinds. I think you've told us Vietnam up 50% in the first half, India up 17%. Can you share why, maybe under that a little bit, we hear about the two big countries. What are you actually seeing in the cosmetics market in this region? What brands or channels are really driving this kind of, it seems like a bit of an inflection in the growth. Well, first, it's not a surprise because we've been telling already for a while that we consider Southeast Asia as an important focus for our development. It's first driven by, of course, the increase of number of consumers, the fact that those countries are quite stable, they are growing. All the elements for good growth were there. We decided, of course, to go faster into this region. The truth is that the growth is there. We still see low teens growth in this market, and it's really driven by new consumers, but also consumers that are trading up. There is a kind of sophistication in the routine for some consumers in this region. You already mentioned some countries that are growing extremely fast, Vietnam, you mentioned India, but Indonesia also is catching up very quickly. It is really driven by all divisions, but I would like to mention especially two of them, our Dermatological Beauty division, because there are huge needs in this part of the world, and also our Professional Products division, and both of them are growing by more than 20%. The key driver is not only the fact that we are bringing new brands, because we are still rolling out some of the brands, La Roche-Posay, CeraVe in some countries. But also we are really leading the game in the e-commerce. Yeah. In this region, we are growing at 40% in e-commerce. We master really well all the different segments of this important channel. Lately also, we have been playing very well with TikTok shop that is taking a lot of ground in some markets, Indonesia, for example. Yeah. Yes, we are growing fast, and we are quite confident for the near future. I am going to have to ask you about China. I think you grew 10% in L'Oréal Luxe in China, but the mass market remains tough. Can you just remind us, how does your portfolio split between mass and selective, and what is the outlook for China? Our team was in China last week. It does seem like since the summer, the industry has been a bit softer. It sounds like you are not seeing that. Can you animate a little bit about what you are seeing on the ground in China through the summer? China, as you know, for us, it is an important market. It is roughly 17% of our sales. Unlike Western or North America, what is interesting to know is that we, in China, we are extremely strong in Luxe. Luxe is well above 50% of the sales in China. We are close to 60%. We are really dependent on the growth of the luxury market there. The second biggest is, of course, consumer. Not far, we have our Dermatological Beauty business that is growing very fast, and Professional Products is still quite small. This is the market where the weight of e-commerce is the biggest. Today in China, roughly two-thirds, so more than 65% of our sales are in e-commerce. You need to master this equation, and this is something that we have been managing quite well, managing also the channel shift because as you know, recently we have Douyin, so the Chinese TikTok that has been growing pretty fast. It took us a while to understand what are the new rules to win into this important e-commerce channel. So far, at least when I see the result of the famous 618, this big promotional activity that we have in June, I have seen the growth of Douyin something like 55%. I consider that the brands, they have gaining a lot of knowledge on how to master not only the sale but also profitability. But how do you make margins with Douyin? Players actually struggle to make profits with— Well, it is not easy. But we started first with new brands, with different models. We have been observing what is working, what is not working. So it took us a while, to be honest. But some brands, they paved the way, and therefore it was easy after when we brought other brands to use the recipe to make it happen. So what is important is to understand that Douyin is the channel, of course, where you do sales, but also it is very important to attract young consumers. Okay. So— The other big geography, obviously, the U.S.. You have been outperforming in the U.S., Christophe, in quite a sluggish market, it seems. What are the key things you are focused on in the U.S. over the next 12 months, and what do you think is most different about winning in the U.S. today in cosmetics, say, versus five years ago? Well, U.S., strategic market, 25% of our business, key focus. And first we are quite happy because despite all we can sometimes read or listen, the market is robust. It's still in the mid-single- digits, a bit above. It's a market that is, of course, evolving with a lot of channel shifts that we have to master, and it's driven by innovation. It's very important to bring new brands, to bring new products. Also for us, it's not only a good momentum because of all I've been mentioning before, but in the long term as well. When we project the market, we estimate that there will be another 10 million to 20 million people joining the massive consumers in the U.S.. We never forget that one third of the most affluent people in the world are in the U.S., so very important for our luxury division. Yes, I could bring some more figures, but for us, it's still a strategic market. It's a growth market, actually, and also very dynamic because you have all those indie brands that are pushing the new boundaries. What is important, of course, is to have the good portfolio. As you know, in the U.S., we have nearly half of the sales that is driven by American brands, and that's very important. In terms of finishing the world tour, Europe, I know you get a lot of questions about it, but given how sluggish Europe is generally, you're accelerating from mid-single- digits to, I think, 7%-8% last quarter. Can you maybe kind of explain what's going on in Europe? Why are you accelerating when everybody else is decelerating? Well, to be honest, I am quite impressed by the results of our teams in Europe. They have been doing exceptionally well. It is not really new because actually we have been investing a lot in streaming our organizations in Europe. You know that Europe is more complex. You have plenty of countries and plenty of structures, so you need to address the efficiency of the organization. We have been managing a lot through reorganizations to lower our SG&A, and all the money was put back in the market in investment. I could even say that we were overkilling with innovation and investment, and it is still paying today. Yeah. Yes, it is still going on, and we still apply the same recipe. Of course, innovation plays its role. E-commerce, that is, as you know, one of the strengths of the group. E-commerce is really doing extremely well, including in Europe, where I think the growth is something like it is close to 20%. Yeah. Then in Latin America, I guess that is the one region where things are, I say slow, still mid-single- digit, which is not that slow. What are your plans to try and get LATAM moving? I think you talked about haircare in Brazil. Yes. It is true that the market first has been slowing down, definitely. We did not see this slowing market probably soon enough, but now it is visible, and I was reading some article this morning. Again, there are some signs, maybe because of inflation, the consumers are very slowing their purchases in this part of the world. That is the overall situation. Then we have a contrasted situation within the countries. On one side, we are overperforming in Brazil with a very strong growth, but it is not the case in Mexico. To be honest, we have some self-inflicted issues that we need to fix. We are not expecting, by the way, strong growth in the coming quarters in Latin America. Okay. I want to move on to M&A and scaling M&A because one of the things that's really stood out from L'Oréal is you scale brands super quickly. You 10x CeraVe, Valentino and Prada you've 7x'd. With YSL, it's now a bigger brand in cosmetics than it is in fashion. When you get the Gucci brand in June next year, is there any reason to believe that you can't do the same with that brand? Maybe can you give us a little bit of insight? You must be quite excited to get the brand. What the kind of plans are both in the short- and the long- term? Okay For Gucci? Well, as you know, we've been quite active in terms of acquisition in the past few years. What is important is to remind also that we have a very clear strategy when it comes to acquisition. We go for brands that can bring something different from what we have and also with the perspective of a long-term growth. Any acquisition has to match at least two things, accretive in terms of sales, accretive in terms of profit. Second, also what makes L'Oréal very strong is the fact that we have a very precise, very sophisticated playbook for integration. Because the first thing to ensure long-term growth is make sure that the integration within the company is well done. We have a very precise playbook that is the result of many, many acquisitions done in the past. Now, coming back to Gucci. Gucci stands inside the many brands that we have in couture brands that are managed by our Luxe division, and those brands is probably at the heart of what this division does very well. You know what is the story of Armani, what is the story of Yves Saint Laurent. Recently, you mentioned the multiples in terms of growth in Prada, Valentino, and we have teams that really have this ability to turn what makes a fashion brand successful into beauty. It's the sum of very specific know-how that this division has. When you think about Prada, it's really the ability to bring the heart of the DNA of this brand into the beauty. So bringing the triangle of Prada inside the fragrance of Paradoxe or even more sophisticated, to bring the Saffiano leather into the texture of the lipstick. All those details makes the difference between a brand that will be outstanding and with a brand that probably will not be noticed. Sure. I'm confident that the teams that we have today in luxury, they master the game. So I can tell you that many months already that they're working on the- Yeah specificities of Gucci, and I'm sure that in 18 months from now, you will see something very good coming in the market. I've got to ask you about AI, Christophe. I think you've announced a landmark collaboration with OpenAI, and you are also working with Meta and NVIDIA. You've got a CMD coming up on the topic later this year. Can you maybe just share a little bit about how you're developing your AI strategy with these partners? I know it's a big question. It's a big question. What is important is first to understand where we put the focus on AI, because AI is of course becoming visible in many parts of the company, but we try to really put the focus on what matters first for L'Oréal. The first area by far is research, and that's an area where today AI is really visible. It's something that is extremely important for any type of research. I think it's important for L'Oréal, but for any big pharma company, of course, and that's where you need capabilities today to compute. It's not only about computing capabilities, but also the software that goes with that. That's why you will not be surprised that we went to partner with IBM, the same with NVIDIA, OpenAI, because each of those players, they bring what we consider the best they have in terms of technology to help push our R&I, and therefore, be capable tomorrow to bring new formulas two times, three times, five times faster than before. One of the interesting things, if I look at your SG&A, it went from 18.7% in first half last year to 18.0%. You've used all of that, you mentioned earlier, to put into marketing spend, which was up EUR 700 million. I guess as you move from 20 SAP to one- Yep I'm sure you're looking at that SG&A line quite closely. How much potential do you think there is to still take the SG&A down, and will you then use that to keep spending more, to keep driving further outperformance? Just so I understand a little bit of the P&L, the leverage that's going on at the moment. Well, today we have a bit more than 18% of our P&L is SG&A. It's slightly reducing over the years, but it's still quite sizable amount of money. Yeah. When you look at big corporate and consumer goods, you will probably notice that they are more ranging in the 15%, sometimes even less. I know that we have capabilities to decrease. They are a source of synergies that we need to go for, and that's why we are investing in IT. IT will not bring all those synergies, but it's a must-have. Yeah. It's not sufficient, but once you harmonize all the processes, then you can set up strong shared services centers and mutualize the resources at the group level. That's what we are already doing. Yeah. It will take another three to five years to really go for all those potential savings. Okay, that's perfect. I do want to ask you about Galderma, because we're seeing Galderma, dermocosmetics, skincare science, longevity, the lines are blurring. So where do you draw the line on what L'Oréal should own, what L'Oréal should partner, what L'Oréal should avoid? I'm just trying to understand, going from 10% on Galderma to 20%, what you've learnt so far and what you still need to learn. Okay. First, to be true to our mantra, which is not only beauty but all beauty, we have always to assess how the consumer is evolving. Observing the trend of the past 5 to 10 years, what we've seen is a significant shift in aesthetics. First, it's cheaper, it's faster, it's less invasive, and without stigma. So there are more and more consumers that are going into this category of beauty, so aesthetics. What is interesting is that there are more and more people willing to try. Meaning that it's a trend that will keep increasing. So it's obvious that for us, among the potential new categories, it was important to go into this market. Of course, we've been looking about what were the opportunities and we went to the one that was leading the growth and leading in terms of initiative, Galderma. That's why we decided the first step to go for 10%, recently 20%. The objective is really to be capable or to be able to look under the bonnet. Yeah. We go step by step. The most recent step is, as you know, we have two of our L'Oréal colleagues that are now sitting in the Board, and it is very recent. It is from May, so they have been attending only one Board. But it is another step for us in understanding better this specific market. Final question for you, as we are on the buzzer. Just in terms of looking into the second half and into 2027, are there any moving parts on growth margins or comps we should be thinking about? It has been such a strong performance this year. I guess the question naturally then comes, can you do it again? Can you comp the comp? Can the Beauty Stimulus Plan, which has been a big driver, actually be bigger again in 2027, on 2026, which was bigger than 2025? Do you keep ramping it that needed? Big picture, I see a market that is dynamic. We changed the rules of the game at L'Oréal. We believe that today to over-perform, you need to be more innovative. So now it is really a key mantra within all our divisions and all the brands. That is why you keep seeing more and more products reaching the market. So we know that we have been increasing the weight of launches, and we will still do that, not only in the second half, but also for 2027. So we raise the bar. Of course, this means a sustained level of growth that we want to keep. As you can imagine, with the synergies that we are looking into our SG&A, we will keep investing, of course, behind this innovation and those new brands, because do not forget that we have new brands that just recently joined the portfolio, but a big one will be joining in less than one year. So we need to support the growth with investments. With that, we keep the promise to, of course, increase our margins by at least 20 basis points to 30 basis points every year. That is the recipe of L'Oréal. Okay. Okay, listen, we are on the buzzer. Thank you, Christophe, for that. My pleasure. If you want to hear more, Christophe will be in the breakout room. For those of you staying here, we have Nestlé on stage next. Thank you. Thank you.