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2021 ANNUAL REPORT - THE ESSENTIALS

NO.1

in beauty worldwide(1)

85,400	517
	employees	patents registered in 2021
35			150+
global brands			countries
32.28		6.16
billion euros of sales	billion euros in operating profit

Contents

Our Purpose

The desire for beauty has existed since the beginning of humanity. It's a universal aspiration which crosses time, countries, and cultures.

Beautyisapowerfulforcethat movesus. We know that beauty is more than just looking good.

Beauty gives us confidence in who we are, in who we want to be, and in our relationships with others.

For over a century we have been dedicated to one sole vocation: creating beauty. We remain true to the pioneering spirit of our founder and enjoy the unwavering support of his family, who have always accompanied our development.

Ourgoalistooffereachand everypersonaroundtheworld thebestofbeauty in terms of quality, efficacy, safety, sincerity and responsibility to satisfy

all beauty needs and desires in their infinite diversity.

Therefore:

Weacttoshapethefuture ofbeauty by leveraging the best of science and technology, increasingly inspired by nature.

Weacttodrivesocialinnovation by offering the best working conditions, training, and social protection for our employees.

Weacttobuildabusiness withinclusivityatitsheart by ensuring we are as diverse as the people we serve.

Weacttonurturelasting partnershipswithourclients andsuppliersbased on mutual trust and collaboration.

Weacttocreatevalueforall ourshareholders, by sustaining a robust business model.

Weacttochampionthecause ofwomenand to strengthen the communities with which we engage.

Weacttoprotectthebeauty oftheplanetby fighting climate change, respecting biodiversity and preserving natural resources.

At L'Oréal, we share

a common purpose to:

04	-  Chairman's message	B R A N D S
05 -  Interview with the Chief	14	- Acquisitions
	Executive Officer
	15	- Global brands
06	-  Board of Directors
16	- L'Oréal Luxe
07 -  Executive Committee
18	- Consumer Products
08	-  Strategy and
20	- Active Cosmetics
	Ethical principles
		22	- Professional Products
P E R F O R M A N C E

10 -  Financial performance

12 -  Social & environmental performance

C R E A T E T H E B E A U T Y T H A T M O V E S

T H E W O R L D

1. - Inclusive Beauty
2. - Responsible Beauty
3. - Innovative Beauty
4. - Beauty Tech
5. - Beauty Performance

Becausebeautyisapermanent quest,we harness the power of our innovation to continually enhance the performance of our products and services.

Becausewevaluediversity,

we leverage each of our brands to celebrate all expressions of beauty.

Becausewestrivetobeexemplary withalong-termvision,we anchor our actions in our strong values and demanding ethical principles.

And because we are the global leader in beauty, we are aware that everythingwedocan haveameaningfulimpact.

Create

the beauty that moves the world

(1) Source : Beauty's top 100, WWD, May 2021.

I have immense confidence in L'Oréal's future

JEAN-PAUL AGON

Chairman of the Board of Directors of L'Oréal

L'Oréal is uniquely positioned to succeed in 2022 and beyond

NICOLAS HIERONIMUS

Chief Executive Officer of L'Oréal

2021 was a decisive year for L'Oréal.

Firstly, both in the financial and extra‑financial spheres. Thanks to its robust and balanced business model, coupled with the strategic choices made over the past few years, the Group has come through the crisis remarkably well and continued its virtuous path. The exceptional financial performance achieved in 2021 - a combination of very strong sales growth, market share gains and a record increase in profitability - enables us to pursue our dynamic shareholder return policy.

L'Oréal has again made huge progress in sustainable development, gender equality and inclusion. It is vital to continue accelerating in tackling today's huge environmental and societal challenges. This is what we do particularly with L'Oréal for the Future. This programme, launched during the pandemic, aims at a more radical transformation of our company towards being an ever more exemplary, responsible, and supportive corporate citizen.

This dual excellence - financial performance and environmental, social, and societal exemplarity - forms the backbone of our strategy.

On behalf of the Board of Directors and myself, I would like to warmly thank and congratulate each and every one of L'Oréal's 85,400 employees.

It is they who - through their quality, creativity, engagement, and desire to act responsibly - create lasting, shared value.

structure, in order to strengthen L'Oréal's position in the years to come.

Following the separation of the functions of Chairman and Chief Executive Officer, in May Nicolas Hieronimus became

the sixth CEO in L'Oréal's 112‑year history. The transition, prepared long in advance, took place seamlessly and in the spirit of continuity, true to the tradition of our company. The two roles are complementary and clearly defined. As Chairman, I will oversee the definition of the strategic orientations and ensure effective governance. I am particularly honoured to continue serving the company I have devoted my life to.

I am convinced that our commitment to continuously improving our governance will be a fundamental asset for the Group in the long term. In this regard, receiving the 2021 Grand Prix Award for Corporate Governance from l'AGEFI is a source of great pride and encourages us to intensify our efforts.

Another strategic milestone was the reinforcement of the shareholder stability around the Bettencourt Meyers founding family and Nestlé. The agreement, approved by the Board, for the repurchase by L'Oréal of 4% of its capital held by Nestlé, is in the interest of L'Oréal and all its shareholders.

I have immense confidence in L'Oréal's future.

Driven by the vision, talent, and commitment of Nicolas Hieronimus and all our teams, a new era of the

2021 in three key words?

Historic: L'Oréal sales grew by +16.1%(1), twice the growth of the beauty market.

Balanced: we grew in all Zones, all Divisions and all categories, showing the true power of our unique business model.

Responsible: our strong financial results enabled us to share our success with our employees and invest in our social and environmental commitments.

What was behind the historic results in 2021?

2021 saw the beauty market bounce back to almost 2019 levels. As the world's leading beauty company, we continued

to drive the market with strong innovations. One of the most interesting things to note is our balanced business model

and our unique portfolio of brands.

Our success can also be explained by our virtuous growth model. We pursued investments in our brands and in game‑changing innovations, despite all the uncertainties of the market, fuelling more growth while still delivering on profit. In addition, we saw incredible agility and outstanding results from our teams. And we continued to leverage our digital edge. We accelerated in e-commerce, optimised consumer engagement in the new O+O(2) world and reinvented beauty experiences.

How are you approaching 2022?

I am confident in the continued growth of the beauty market. In the years to come, this growth will be further driven by expanding middle classes and increased premiumisation. L'Oréal will continue its transformation to become a Beauty Tech(3) powerhouse. By harnessing the power of data, AI(4) and strategic tech partnerships, we will redefine the future of beauty. And let's not forget Green Sciences(5). Already well underway, this approach will help us reconcile performance, safety and sustainability, and meet our L'Oréal for the Future commitments. L'Oréal is uniquely positioned to succeed in 2022 and beyond. In a global context that remains volatile at the beginning of the year, we are confident in our ability to outperform the market in 2022 and achieve another year of growth in sales and profits.

Watch the full interview with

the CEO by scanning this QR code or on lorealannualreport2021.com

2021 was also a year of change with regards to governance and shareholder

L'Oréal Adventure is beginning. It truly promises to be remarkable.

(1) Like-for-like: based on comparable structures	(4) Artificial intelligence.
and identical exchange rates.	(5) Wide range of disciplines, from agronomy to biotechnologies and green chemistry and including
(2) Offline + Online.	formulation science, which L'Oréal relies on to meet its sustainable development goals, while creating
(3) New technologies for the beauty industry.	safe, high-performance products.

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Board of Directors

The directors draw on a diverse, complementary range of industrial, entrepreneurial,

financial and non-financial expertise, ensuring swift insight into the

development challenges facing L'Oréal, the leader of a globalised, highly competitive

cosmetics market in which the need to innovate and adapt is crucial.

Executive Committee(1)

Executive Committee members are in charge of L'Oréal's Divisions, Functional Departments and Geographic Zones. They implement strategic guidelines and direct Group activities all over the world.

The diverse experience and expertise they bring foster free, informed and spontaneous discussions. The directors are committed and proactive, driven by the conviction that stringent governance creates value for the company. They play a tireless, dynamic role in the work of the Board

and its committees. Board committees

issue detailed, insightful, reasoned recommendations that feed into the Board's discussions and inform its decisions. The Board is constantly focused on ensuring the long‑term future and development of L'Oréal, taking into account its purpose

as well as the social and environmental implications of its activities.

Nicolas Hieronimus	Barbara Lavernos	Christophe Babule	Vincent Boinay
Chief Executive Officer	Deputy Chief Executive Officer, in charge	Chief Financial Officer	President
	of Research, Innovation and Technology		Travel Retail

Jean-Paul Agon	Nicolas Hieronimus	Françoise	Paul Bulcke
Chairman of the Board of Directors	Chief Executive Officer	Bettencourt Meyers	Vice-Chairman of the Board of Directors
(reappointed in 2018)	(since April 2021)	Vice-Chairwoman of the Board of Directors	(reappointed in 2021)
		(reappointed in 2021)

Ana Sofia Amaral	Sophie Bellon	Patrice Caine	Fabienne Dulac
(reappointed in 2018,	(reappointed in 2019)	(since April 2018)	(since April 2019)
tenure expires 21 April 2022)

Belén Garijo	Béatrice	Ilham Kadri	Georges Liarokapis
(reappointed in 2018)	Guillaume‑Grabisch	(since June 2020)	(reappointed in 2018,
	(reappointed in 2020)		tenure expires 21 April 2022)

Jean-Victor Meyers	Nicolas Meyers	Virginie Morgon	Alexandre Ricard
(reappointed in 2020)	(since June 2020)	(reappointed in 2021)	(since April 2021)

Cyril Chapuy	Myriam Cohen-Welgryn	Vianney Derville	Asmita Dubey
President	President	President	Chief Digital
Luxe	Active Cosmetics	Europe Zone	and Marketing Officer

David Greenberg (2)	Omar Hajeri	Blanca Juti	Jean-Claude Le Grand
President North America & Chief	President	Chief Corporate	Chief Human
Executive Officer L'Oréal USA	Professional Products	Affairs & Engagement Officer	Relations Officer

Fabrice Megarbane	Alexandra Palt	Alexis Perakis-Valat	Ersi Pirishi
President North Asia Zone & Chief	Chief Corporate Responsibility Officer	President	President
Executive Officer L'Oréal Asia	and CEO of the Fondation L'Oréal	Consumer Products	Latin America Zone

Frédéric Rozé	Vismay Sharma	Antoine Vanlaeys	(1) Composition as of 1 March 2022.
(2) David Greenberg has replaced
Chief Global	President South Asia Pacific,	Chief Operations Officer	Stéphane Rinderknech as of
Growth Officer	Middle East, North Africa Zones		25 February 2022.

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L'Oréal is the world leader in beauty,

its sole business, expertise and passion for more than 110 years.

Beauty for All

		L'Oréal relies on a single
			Strategy
	strategy- Glocalisation -
	meaning the globalisation
	ofits brands with a detailed
	understanding and respect for
local differences.The goal ofthe
Glocalisation strategy is to offer
	bespoke and inclusive beauty
	by responding to the specific
	aspirations ofconsumers
	in every region ofthe world.
	In contrast to standardisation,
	it is based on careful attention
	to consumers and a deep
	respect fortheirdifferences.

The mission that L'Oréal has set for itself, which inspires its teams, is to offer women and men around the world the best in cosmetics in terms

of quality, responsibility, efficacy, honesty and safety, in order to meet all their needs and all their beauty wishes in their infinite diversity.

Ethical principles

Ethics is at the heart of L'Oréal's governance and commitments. The Group is built on strong ethical principles:

Integrity: because acting with integrity is vital to building and maintaining trust and good relationships.

Respect: because we strive to have a positive impact on our stakeholders.

Courage: because ethical questions are rarely easy but must be addressed.

Transparency: because we must always be sincere and able to justify our actions and decisions.

These principles underpin the Group's culture and business model and our compliance, responsible innovation, sustainable development, corporate social responsibility, philanthropy, and human rights policies, alongside diversity, equity and inclusion.

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