The change in this caption in 2023 can be analysed as follows:
| € millions | 31.12.2021 | 31.12.2022 | Charges(2) | Reversals (used)(2) | Reversals (not-used)(2) | Other(1) | 31.12.2023 |
|---|---|---|---|---|---|---|---|
| Provisions for restructuring | Provisions for restructuring 31.12.2021 182.5 |
Provisions for restructuring 31.12.2022 146.1 |
Provisions for restructuring Charges (2)52.0 |
Provisions for restructuring Reversals (used) (2)(74.7) |
Provisions for restructuring Reversals (not-used) (2)(22.4) |
Provisions for restructuring Other (1)(0.7) |
Provisions for restructuring 31.12.2023 100.3 |
| Provisions for product returns | Provisions for product returns 31.12.2021 405.9 |
Provisions for product returns 31.12.2022 395.3 |
Provisions for product returns Charges (2)384.8 |
Provisions for product returns Reversals (used) (2)(367.6) |
Provisions for product returns Reversals (not-used) (2)(77.7) |
Provisions for product returns Other (1)3.4 |
Provisions for product returns 31.12.2023 338.2 |
| Other provisions for liabilities and charges | Other provisions for liabilities and charges 31.12.2021 698.7 |
Other provisions for liabilities and charges 31.12.2022 732.0 |
Other provisions for liabilities and charges Charges (2)322.9 |
Other provisions for liabilities and charges Reversals (used) (2)(371.4) |
Other provisions for liabilities and charges Reversals (not-used) (2)(82.8) |
Other provisions for liabilities and charges Other (1)6.9 |
Other provisions for liabilities and charges 31.12.2023 607.5 |
| TOTAL | TOTAL 31.12.2021 1,287.1 |
TOTAL 31.12.2022 1,273.3 |
TOTAL Charges (2)759.7 |
TOTAL Reversals (used) (2)(813.7) |
TOTAL Reversals (not-used) (2)(183.0) |
TOTAL Other (1)9.6 |
TOTAL 31.12.2023 1,046.0 |
| € millions | Charges | Reversals (used) | Reversals (not used) |
|---|---|---|---|
| Operating profit | Operating profit Charges 707.7 |
Operating profit Reversals (used) (547.6) |
Operating profit Reversals (not used) (156.4) |
| Other income and expenses | Other income and expenses Charges 52.0 |
Other income and expenses Reversals (used) (266.1) |
Other income and expenses Reversals (not used) (26.6) |
| Net financial income | Net financial income Charges — |
Net financial income Reversals (used) — |
Net financial income Reversals (not used) — |
L’Oréal is party to several material disputes, described below.
Some of these disputes give rise to the creation of provisions according to the principles described in note 12.1. Other disputes are considered as contingent liabilities, either because no reliable estimate of the amounts likely to be charged to the Group can be provided based on the information available, or because the Group's management has determined, in particular in light of the opinions of advisors and experts assisting it in these disputes, that the probability that the dispute will give rise to a payment by the Group is low.
In January 2015, decree 8.393/2015 stated that commercial companies in Brazil would be liable for the indirect IPI tax on certain products as from 1 May 2015. L’Oréal is challenging the legal grounds of this decree and its application. In light of changes in market practices and a favourable change in the opinion of its advisers, since 1 January 2018 L’Oréal has recognised the IPI collected under income.
L’Oréal received tax reassessment notices regarding the indirect IPI tax for financial years 2008 and 2011 to 2015 totalling €673 million, including interest and penalties. The Brazilian tax authorities are questioning the ex-works sales price to the commercial arm used to calculate the IPI tax base. After consulting with its tax advisors, L’Oréal considers that the Brazilian tax authorities’ position is unfounded and has challenged these notices. L’Oréal continues its legal proceedings with the tax and legal authorities.
In light of the negative developments in administrative court decisions on the same matter for other Brazilian groups, L’Oréal funded a provision for €45 million to partially cover this risk.
L’Oréal received several tax reassessment notices regarding financial years 2007/08 to 2017/18 and 2019/20 to 2020/21 for the most part concerning the tax deductibility of advertising, marketing and promotional expenses for a total amount of €208 million including interest and penalties. After consulting with its tax advisors, L’Oréal decided to contest these notices and continues the legal proceedings with the administrative and legal authorities.
Mutual agreement procedures were instigated vis-à-vis the French, Indonesian and Singaporean tax authorities in order to eliminate double taxation following disagreements between these authorities.
The national competition authorities in several European countries have launched investigations targeting the cosmetics industry in particular.
In Germany, after the German competition authority filed a lawsuit in 2008 in the area of personal care products, which was definitively closed in 2015, distributors filed a lawsuit seeking damages against L’Oréal Germany which has resulted in dismissals by the courts at this stage. These proceedings are still ongoing. L’Oréal Germany is contesting the merits of these claims and denies that any damages occurred.
In France, on 18 December 2014, the French competition authority handed down a fine of €189.5 million against L’Oréal in the hygiene products sector for events that took place in the early 2000s.
This amount was confirmed by the Court of Cassation on 18 October 2023.
This final ruling has no impact on the Group's income statement and no cash flow impact, as the fine was paid in 2015.
Following this ruling, the distributors filed lawsuits for damages against L’Oréal. These proceedings are in initial stages or resulted in dismissals by the courts. These proceedings are still ongoing. L’Oréal contests the merits of these claims and denies that any damages occurred.
