2025 Universal Registration Document

L'Oréal is under constant pressure from many competitors and players in the beauty industry in all countries due to:

• its size and the positioning of its brands in various markets in which major international groups operate;
• local brands and new players coming from the digital economy; and
• fast-changing technological developments, including in emerging fields of research by new market participants, both in terms of products and raw materials.

If the Group fails to anticipate or respond to changes in consumer expectations, especially in the areas of beauty, health and well-being, personalised services, smart objects and environmental goals, with innovative and adapted product offerings, its sales and growth could be affected.

The Group continually adapts its innovation model and is constantly increasing its investments in research and digital services.

L’Oréal Research & Innovation (R&I) innovates to meet beauty aspirations worldwide in their infinite diversity. Our presence in each major geographic Region means we can anticipate and react quickly to local needs. The Group has unique Advanced Research capabilities in cosmetics, enabling it to stay ahead of technological trends. The R&I team enters into research and development partnerships for new products, technologies and raw materials, particularly under the Group's Open Innovation programme, and the BOLD (Business Opportunities for L'Oréal Development) corporate venture fund invests in innovation companies. The Consumer & Market Insights Department, within the Innovation Department, constantly monitors changes in consumer expectations by product category and major regions of the world, and a tool has been introduced to measure consumer satisfaction with the Group's products. The Group also tracks changes in consumer aspirations and behaviour by analysing sales and monitoring social media.

All these research programmes are part of a long-term vision nurtured by the Strategic Planning Department within the Innovation Department, which equips the Group and its brands to address future developments. The programmes enable L'Oréal to rise to the challenges of innovation.

The Digital and Marketing Department is responsible for accelerating the Group's digital transformation by helping the brands create more conducive spaces for expression and supporting teams in forging more interactive, close-knit and bespoke relationships with consumers.

Consumer expectations with regard to sustainability are also at the heart of the L'Oréal for the Future programme (see chapter 4). These are taken into account in developing the Group's brand and product portfolio.

The Group's acquisition strategy always takes into account changes in the competitive environment.