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L’OREAL EAST AFRICA CCEF - ETHIOPIA 10th-11th April 2014

L’OREAL EAST AFRICA – CONSUMER PRODUCT DIVISION AGENDA

• ONCE UPON A TIME IN EAST AFRICA

• KENYA MARKET OVERVIEW

• FROM CHALLENGER TO LEADER

• BEYOND BUSINESS, LOCAL TALENTS L’OREAL IN EAST AFRICA

Morocco Egypt 1943 2008

• L’OREAL WORLD WIDE TARGET: 1BN NEW CONSUMER BY 2020 Ghana Nigeria new subsidiaries 1996 2011 Kenya new brands 2011 Hub Tanzania Uganda • UNIVERSALISATION: Ethiopia BEAUTY FOR ALL S. Sudan Rwanda Burundi Malawi Zimbabwe DRC South Africa Angola 1954 L’OREAL IN EAST AFRICA

• 2000’s Exportations from RSA <1Meuros

• 2011 1 subsidiary in Kenya 1 Division (CPD) 1 person 7Meuros

• 2013 1 new entity 1 plant 1 3PM 350 persons 25Meuros P.

1st acquisition in Africa

2012 2012

2013 2012 L’OREAL IN EAST AFRICA

15 years • New markets 2 years Local • Enlarged portofolio International Local formulation Formulation in HQ f • Low cost 1 plant / 40Munits Importations • Deep trade 8Meuros Low cost • Negotiation power KA 24 employees 15Meuros 245 employees L’OREAL IN EAST AFRICA

• Complementary in Brand & positioning: MS + Image

BRAND TARGET GROUP DISTRIBUTION PRICE

KEY ACCOUNTS SELECTIVE BEAUTY Index 180 vs SEC A SHOPS market avg Avg Annual Income = USD 69 k PHARMACIES HIGH MARGIN Index LOW VOLUMES 150 vs

KEY ACCOUNTS Index 150 vs SEC A to B BEAUTY SHOPS market avg Index Avg Annual Income MEDIUM MARGIN = USD 20 k 90 vs Clean & LOW VOLUMES

SALONS, MODERN & Index 110 - SEC B to C+ TRADITIONAL TRADE 120 vs market LOW MARGIN avg HIGHER VOLUMES Avg Annual Income = USD 6 k

SALONS, MODERN & Index 90 SEC C+ to D TRADITIONAL TRADE vs market LOW MARGIN Avg Annual Income = USD 6 k avg HIGH VOLUMES KENYA MARKET OVERVIEW

• 300Meuros • Competitors – Manufacturers:

1 2 3 4 BEIERSDORF PZ CUSSONS HACO TIGER MS≈26% MS≈20% MS≈7% MS≈3%

Start date:1982 Start date:1930 Start date: 1990s Start date:2008

Subsidiary+Factory: Subsidiary: Subsidiary+Factory: Subsidiary+Factory: Beiersdorf East Africa Ltd Unilever East PZ Cussons East Africa Haco Tiger Brands (EA) & Southern Africa Ltd Ltd

Brands: Brands Brands Brands: Nivea Vaseline, ST.Ives, Venus, Imperial Cussons Palmer’s, Miadi, TCB, Limara , , Carex, Joy, Pressol Ingram’s, Motions

Categories: Categories: Categories: Categories: Body, Deo, Face and Body, Deo, Hygiene, Hair, Hygiene and Body Body and Hair Hygiene Face and Hair

Media investment Media investment Media investment Media investment: 35% SOI 23% SOI 1% SOI 3% SOI

Source: Loreal Nielsen 2013; IPSOS SYNOVATE KENYA 2013 Kenya; Nakumatt January sales 2013; Companies websites KENYA MARKET OVERVIEW

Supermarkets Salons Sales Contribution: Sales Contribution: est. 35% est. 5%

Beauty Shops Groceries Sales Contribution: Sales Contribution: est. 50% est. 10% BECOME LEADER

Market Share Brand Leadership Leadership

Business Performance

Consumer Intimacy Challenges Distribution (access deep / category mgt) Supply / logistic Cost of good Labor relations / Talents management

Parallel / counterfeits Competition (Bdf, UL investments) BEYOND BUSINESS

Segenet Kelemu Lupita Nyongo Director General, International Center for Insect Physiology Actress and Ecology (ICIPE), Nairobi, Kenya