LOREAL TRAVEL RETAIL PRESENTATION

Fasten your seatbelts and discover the world of Travel Retail, the 6th
continent for LOral!
LOral thinks of the Travel Retail market as a 6th continent because its
a market as large as a real continent!
A continent with:

its own borderless territory

its own economy
its own flow of inhabitants
its own population.

A 6th continent with its own capitals. Forget the geography you learned
in school: the capital cities of our world are Dubai, London, Hong Kong,
Paris, Singapore, Bangkok or Istanbul

What does Travel Retail mean ?

Travel Retail means the business undertaken in all the shops located in
duty free areas or any areas dedicated to travellers:
- With more than 50% in airports... But there are not only airports!
- A third of the turnover is made in downtown or border shops,
mainly in Asia and Latin America
- There are also the sales made on board in planes
- Finally, there is also the growing market of cruises in Asia, the
Caribbean and Europe

The main driver of this market is therefore passenger traffic, particularly

air traffic. Here, 24 hours of global air traffic. Each yellow point
represents a plane.

And air traffic is continuously growing, by 5% on average per year, and

represents over 6 billion international flights in 2013.

We closely monitor our consumers destinations, and particularly their

new preferred destinations. In 2014, the cities with top figures in terms of
passenger traffic are Istanbul, Doha, Kuala Lumpur and Dubai.

The Travel Retail market therefore fully benefits from the traffic growth.
But more importantly, it has already grown faster than the traffic over the
last 10 years and according to the forecast of the Generation Research
Institute, this market is expected to double in the 10 forthcoming years.

The BEAUTY segment is historically the leading category of this channel,

accounting for 30% of total turnover.
And it continues to experience strong growth: the estimated figure for
2013 is +7.4%.
L'OREAL is the historical LEADER in the Beauty category of the Travel
Retail market, with over 20% market share, and it has continued to
outperform again this year, with an estimated growth of 1.3 points in
2013.

In addition to turnover, Travel Retail is a strategic channel for the

development and the visibility of our brands.
Travel Retail is not only an opportunity to showcase our brands but, as a
historical leader in this channel, we have developed a precise
understanding of our travelling consumers, shop by shop, allowing us to
target the best locations.

An ideal location to come into contact with highly qualified consumers, on

our Lancme counter in downtown Hong Kong, for example, it is more
than 1.2 products is sold per minute.
Regarding ARMANI, our 2 counters at Dubai airport are among the best
performing points of sale for the Brand worldwide.
As for KIEHL'S, Travel Retail is, not only, one of the market that has the
most contributed to the brands growth in recent years, but it also gives
the brand the ability to recruit new consumers. In some of our points of
sale, there are more than 20% of travellers who discover the KIEHL'S
experience and buy the brands products for the first time.
Thanks to its historical bonds with retailers, LOral can negotiate prime
locations to establish new brands, such as this CLARISONIC space that
we opened in Macau four months ago.
With the collaboration of Brands and local markets, Travel Retail
therefore contributes to maximize the exposure of travellers from around
the world to our brands, to increase customer loyalty but also to recruit
new customers.

The Travel Retail market has undergone a profound change for several
years:
- Firstly, the business model of airports is changing.
In the 1970s, this business was limited to a few multi-category stores
around the boarding gates.
Today, it is the opposite: airports have become big shopping malls
surrounded by boarding gates.Passengers are invited to cross the shops
to arrive at the departure gate.

- The profile of travellers is also evolving, switching from businessmen of

the West to fashion addict consumers from emerging countries.

Today, these Travel Retail consumers, the inhabitants of this 6th

continent, are global shoppers: they are not only shopping where they
live... they shop wherever they are: in their local markets, when travelling
and also in the markets of their destination. First covering their region
and then extending their reach to other parts of the world:
- Paris is the first destination outside of Asia for Chinese tourists, but
there are also many Chinese tourists in Los Angeles or San
Francisco.
- It is well known that Russians are very likely to travel to Turkey but
in recent years, they have been visiting en masse our shops in the
Middle East and Thailand.
- Brazilians main destinations are Buenos Aires, Miami and Lisboa.
- Nigerians love London, the inhabitants of the Emirates are among
our best customers in India and, as for Koreans, they travel more
and more to South East Asia.

The in-depth analysis of these "nationality corridors" across the world

has allowed L'Oral to develop a tailor made approach, a personalized
approach to better engage these global shoppers, wherever they are:

with beauty consultants who speak their language and offer

services tailored to their national preferences
with specific product lineups that suit their needs
with multilingual support materials
with favorite products for each nationality
and also by celebrating key cultural events relevant to different
nationalities

Such as, for instance:

Celebrating the Chinese New Year in Paris CDG airport or in

Haiwai, where our Chinese customers travel to.
Celebrating the end of Ramadan at DOHA airport of course, but
also at Heathrow.
Celebrating DIWALI at Dubai airport, as Indians are the most
numerous travellers at this airport.

Finally, for global shoppers, travelling is always associated with

souvenirs and gifts. Once again, we target our products to provide them
with a tailor made experience:
- PREMIUM products such as the beautiful limited edition of
CRISTAL by ARMANI available in the most selective points of sale
of this distribution channel.

- Or our gift sets that our global customers traditionally offer when
they return from a trip.

In addition to global shoppers, the Travel Retail market is experiencing a

new phenomenon: the democratization of travelling. In all emerging
countries, the members of the middle class are keen to travel outside
their country.
This new influx of travellers will transform the Travel Retail market, which
is now evolving from a business model focused exclusively on the
LUXURY segment towards a more diversified range that can meet the
needs of customers of different levels in terms of purchasing power.

The L'Oral Paris brand is already present in the Travel Retail channel
and we have decided to expand and accelerate its deployment.

Similarly, we have recently introduced in this channel the Body Shop

Brand, which is very appreciated by travellers, and we have planned an
acceleration of new points of sale openings.

This acceleration must benefit all the brands of the Group and it is for this
purpose that the Group Travel Retail Multidivision was created in
November 2013.
Based on our expertise acquired after 30 years working in the Luxury
category, this will allow us to target the implementation of the various
Brands of the Group, from Luxury to Mass-Market, from dermocosmetics to hair care products, without forgetting The Body Shop Brand.

These are significant growth opportunities for our Travel Retail business,
and we can see how much this channel can contribute to the winning
over the one billion new consumers targeted by Jean-Paul Agon.

Thanks to the notoriety and diversity of its unique portfolio of brands,

L'Oral is ideally positioned to offer travellers from all over the world all
the products they want, whatever their beauty rituals or their purchasing
power.