Content PRESENTATION OF THE GROUP 5 2015 PARENT COMPANY 255 1.1. Mission and Strategy 6 FINANCIAL STATEMENTS * 1.2. History 7 5.1. Compared income statements 256 1.3. Business activities and strategic orientations 7 5.2. Compared balance sheets 257 1.4. Internationalization and the cosmetics market 13 5.3. Changes in shareholders’ equity 258 1.5. Key figures and comments on the 2015 financial year* 16 5.4. Statements of cash flows 259 1.6. Research & Innovation: excellence step-by-step 31 5.5. Notes to the parent company financial statements 260 1.7. Operations 34 5.6. Table of subsidiaries and holdings at December 1.8. Investment policy 39 31st, 2015 276 1.9. Risk factors* 40 5.7. Other information relating to the financial statements of L’Oréal parent company 279 5.8. Five-year financial summary 280 CORPORATE GOVERNANCE * 49 5.9. Investments (main changes including shareholding threshold changes) 281 2.1. Framework for implementation of the corporate 5.10.Statutory auditors' report on the financial statements 282 governance principles 50 2.2. Composition of the Board of Directors 52 2.3. The ways in which the Board’s work is prepared STOCK MARKET INFORMATION SHARE and organised 70 285 2.4. Remuneration of the members of the Board of Directors 87 CAPITAL 2.5. Remuneration of the executive officers 88 6.1. Information relating to the Company 286 2.6. Summary of trading by Directors and executive officers in 6.2. Information concerning the share capital* 288 L’Oréal shares in 2015 103 6.3. Shareholder structure* 291 2.7. Internal Control and Risk Management procedures 103 6.4. Long-Term Incentive plans* 295 2.8. Statutory Auditors' Report 111 6.5. The L’Oréal share/L’Oréal share market 302 6.6. Information policy 308 L’ORÉAL'S CORPORATE SOCIAL, ENVIRONMENTAL ANNUAL GENERAL MEETING 311 AND SOCIETAL RESPONSIBILITY * 115 7.1. Draft resolutions and report of the Board of Directors 3.1. The L’Oréal Group’s corporate social, environmental and statement of reasons to the Annual General Meeting to societal policies 117 be held on April 20th, 2016 (adopted on February 11th, 2016) 312 3.2. The Sharing Beauty With All programme 155 7.2. Statutory Auditors’ Reports 330 3.3. Methodological notes 178 3.4. Table of concordance in respect of social, environmental and societal matters 181 333 3.5. Table of concordance and additional reporting on the APPENDIX basis of the GRI reference 183 8.1. Statutory Auditors 334 3.6 Reports by the Statutory Auditors 186 8.2. Historical financial information included by reference 334 8.3. Person responsible for the Registration Document and the Annual Financial Report 335 2015 CONSOLIDATED FINANCIAL 8.4. Declaration by the person responsible for STATEMENTS* 193 the Registration Document and the Annual Financial Report 335 4.1. Compared consolidated income statements 195 8.5. Registration Document table of concordance 336 4.2. Consolidated statement of comprehensive income 196 8.6. Annual Financial Report table of concordance 338 4.3. Compared consolidated balance sheets 197 8.7. Table of concordance with the AMF Tables 4.4. Consolidated statements of changes in equity 198 on the remuneration of executive officers and Directors 338 4.5. Compared consolidated statements of cash flows 200 8.8. Table of concordance of the Management Report 339 4.6. Notes to the consolidated financial statements 201 4.7. Consolidated companies at December 31st, 2015 249 4.8 Statutory auditors’ report on the consolidated financial statements 254 Detailed chapter contents can be found at the beginning of each chapter. * This information forms an integral part of the Annual Financial report as provided in the Article L. 451-1-2 of the French Monetary and Financial Code. REGISTRATION DOCUMENT 2015 ANNUAL FINANCIAL REPORT CORPORATE AND SOCIAL RESPONSABILITY This Registration Document summarizes the activities and the results of the Group in 2015. It is part of an integrated communications approach and aims at presenting the well-balanced model of L’Oréal, its strategic orientations and its relationships with its stakeholders, particularly in the context of the Sharing Beauty With All program. In application of Article 212-13 of the General Regulation of the Autorité des Marchés Financiers (AMF), this Registration Document was filed with the AMF on March 15th, 2016. This Registration Document may be used in connection with a financial transactionif it is accompanied by an information memorandum approved by the AMF. Thedocument has been prepared by the issuer and its signatories incur liabilityin this regard. The use of the FSC (Forest Stewardship Council) label in this product is intended to signify that the paper comes from responsible sources — environmentally appropriate, socially beneficial and economically viable. This label recognises the most transparent Registration Documents according to the criteria of the Annual Transparency Ranking. 2 REGISTRATION DOCUMENT / L’ORÉAL 2015 INTERVIEW the dividend proposed to the Annual General Meeting. Once And have you also stepped up your again, these results demonstrate the quality and robustness of transformation into a more sustainable L’Oréal? our business model. Yes, our social and environmental responsibility programme, 1 Sharing Beauty With All, is making good progress. You can find Last year you spoke about a more universal, the details in our Progress Report, but here is just one example: more digital and more sustainable L’Oréal. our target of cutting greenhouse gas emissions by 60%. In 2015, the reduction was already 56% compared with 2005, while over strategic transformations? the same period our production increased by 26%. So we are In our sector, Beauty – and indeed in other industries – everything demonstrating what we have always believed: commitment to is changing at lightning speed: consumers, communications, protecting the environment and economic performance can go distribution and competition. So we have stepped up our hand in hand. We have also set ourselves another goal for 2020: metamorphosis: the New L’Oréal is more universal, more digital to be carbon balanced, that is to offset our greenhouse gas and more sustainable. emissions. We want to make our contribution to mitigating global warming by developing an innovative low-carbon business model. These are profound transformations that require huge efforts from our teams, but this is quite simply essential to enable us to adapt And all our teams are fully focused on making these challenges and strengthen our leadership over the coming years. In fact, this their own. Furthermore, I decided that the Sustainable Development is one of L’Oréal’s greatest strengths: we never stop challenging Department should report directly to me, because our commitment and reinventing ourselves. At the same time, we remain true to is transversal and strategic for all parts of the business, brands and our fundamentals: a clear mission statement, Beauty for all; a countries. distinctive strategy, Universalisation; a commitment to Research and Innovation; a diversified portfolio of brands; a unique corporate L’Oréal is a pure player, and has been number culture; and humanistic values. one in its market for many years. Will you be able to keep on expanding in the future? What does a “more universal L’Oréal” mean? Of course we will. First, because beauty is a dynamic market, which It means offering innovations perfectly adapted to local will continue to expand, driven by demographic, economic and social trends. Just look how the make-up category has skyrocketed aspirations and needs. All over the world there is a powerful over the last few years. In 2015, it grew almost twice as fast as the appetite for beauty. At the same time, people want products market. Clearly this is partly linked to the powerful upsurge in digital that are suitable for their skin and hair type, products that fulfil communications, selfies and social networks, prompting everyone their desires, and match their culture and beauty routines. to be visible and therefore to show themselves in their best light. Thanks to our regional Research and Marketing hubs, now at full speed, our brands can be both aspirational worldwide, And future growth also lies in our own potential. In 2015, we and totally relevant at local level. We will continue on the celebrated 30 years of leadership. But we are a leader that same path in 2016, with the opening of a new Research still has huge potential. Our global market share is only 12.5%. Centre in South Africa. In other words, we still have more than 87% of the market to aim for. I am sure that by offering products that are the best And in digital, what progress have you made? suited, the safest and the most effective, we will continue to We made swift and substantial progress in 2015. Our online sales attract more and more consumers. That is our goal. totalled 1.3 billion euros, an increase of +38%. E-commerce is now equivalent to the group’s number five country. And in China So you are confident about 2016? e-commerce already accounts for more than 20% of our Consumer Definitely. As ever, our objective is to outperform the market and Products Division sales. And a quarter of our media spending now continue to deliver solid growth and profits. And all the cards are in goes to digital communications. our hands. For the reasons I have just mentioned, but also because Our digital presence reinforces our competitive edge and extends we are confident in our balanced business model, which creates our leadership. It opens up thrilling new horizons for our industry in value, and in our ability to grow our market shares. direct and personalised consumer relationships. Just look at the One thing more: we feel proud and privileged to be part of a success of NYX Professional Makeup, our new digital native make- wonderful industry, helping people to feel good and self-confident.