It is about "settling a dispute" related to the payment of the corporate tax between 2014 and 2018. L'Oréal group announced Friday that it would pay 320 million euros to the French tax authorities.
This sum represents a little less than 10% of the net profit recorded in 2018 (3.89 billion euros) by the French cosmetics giant, which ensures in a statement that the transaction will have no "significant recurring impact on the future ". Expenses will be recorded in the exceptional items of the 2019 financial year, adds the company which specifies that the agreement is not accompanied by penalties.
In detail, the charge amounts to 47 million euros for Lancôme Parfums et Beauté, 115 million euros for Cosmetics Active International and 158 million euros for Prestige and Collections International. A total of € 65 million per year during the period concerned.
Growth in full swing in 2019
The General Directorate of Public Finance in Bercy declined to comment, citing tax secrecy. An L'Oreal spokesperson was not available Friday night to give more details on this deal.
Lancôme is part of the luxury division of L'Oréal which is doing particularly well in the first half of 2019, with sales up 15.5% in one year to 2.47 billion euros. During the same period, the group as a whole also achieved its strongest growth for more than ten years, with a 10.6% jump in turnover to 14.81 billion euros.
The group has recently been qualified as the most "powerful" French brand by a study by Brand Finance, based in London. In the top 10 of this ranking, there are also Lancôme (5th) and Elsève (9th), two brands in L'Oréal's portfolio.