«Technology and sustainability accelerate growth»- Corriere.it

Nicolas Hieronimus shows his computer screen, where a mysterious figure, the Unicornus Rex, appears. A mix between the past to keep and the future to invent. A dinosaur, indeed. And the future, symbolized on Wall Street by the Unicorn, to be accompanied with patents, innovation, without losing the roots of a group, L’Oréal, born 115 years ago. “This is the main challenge we have before us. A mix of history, tradition and agility in change, resilience and innovation». He has gone through all the stages of his career in the world beauty leader who has been present in Italy since 1909, the first investment outside France of the group, which today employs over 87,000 people of 150 nationalities worldwide.

Does the transformation start from the need to increasingly combine profits and sustainability?
«For a group like ours, first in the beauty world, these are now two inextricable dimensions. Economic and non-financial performance are strongly linked. And the role of companies, together with that of governments, is changing. Let me say that for us these are the founding values. This is why we have invested heavily since 2013, when we launched the “Sharing Beauty with All” program. We wanted 100% of our products to improve their environmental impact compared to 2005, we reached 97% and reduced CO2 emissions by 91%, increasing human resources by 39%. Of course, these objectives must go hand in hand with the income statement. And we’ve grown a lot over the years.”

A way to make shareholders feel more involved in the transformation?
«A way to achieve both objectives: economic sustainability and environmental sustainability. We plan to achieve full carbon neutrality by 2030, indeed we would like to achieve a positive impact. The Settimo Torinese plant, with its 14,000 photovoltaic panels, has already achieved these objectives in 2015, first in Europe. And since 2018 it has been a waterloop, i.e. it completely reuses the processing water, with savings of 40,000 cubic meters a year. We are working to ensure that our formulas have more and more biodegradable ingredients and to use recycled plastic for packaging. In some cases we have even reached 100%. But the real turning point must concern the entire ecosystem, from suppliers to transport».

Do leaders have more responsibility in this transformation?
«We have the task of being even more ambitious, involving our partners, employees, suppliers, logistics. For this reason, in 2020 we launched a second sustainability program called “L’Oréal For the Future”. Now we can no longer stop at reducing the impact, but we need to think about how to generate a positive contribution. On the environment and on people. We are committed to ensuring that our strategic suppliers guarantee an adequate salary. According to an international standard that allows for decent conditions, guaranteeing a sustainable life for workers and their families. We have created three funds and allocated 150 million euros. 100 of which go to projects to safeguard biodiversity and restore damaged natural ecosystems. 50 million go to support projects in favor of women in difficulty which has already supported 1.2 million people in many parts of the planet. The first NGO in the world that has enjoyed an important contribution is the Italian Pangea. The assistance network, for a group like ours, must be the DNA. Through our Solidarity Sourcing Program we work with local communities to open supply contracts with producers linked to social causes. Italy was one of the first countries to develop it, with the Quid association, which makes textile products by giving work to women in situations of serious economic hardship».

Is gender equality a crucial point, also for growth?
«For the sixth consecutive year we are top performers in the Bloomberg Gender-Equality Index. In our country, out of 300 top positions, 53% are held by women».

Only ethical choices?
“Not only. Investors are much more attentive than before to these values. Our Csr Officer is part of the executive committee and if we have received 1.3 million applications with a growth of 7%, it means that in order to attract skills and talents we need to go through this transformation and pay attention to the planet and people”.

You recently acquired Aesop in the United States, will you continue in the buying campaign?
«Our group out of 36 global brands has only four original brands, such as L’Oréal Paris and Kerastase. The other 32 are all the result of acquisitions. We identify brands that we consider unique, already established and complementary to our portfolio, which are already successful and which we help to make global. It happened with CeraVe which in five years has increased its value tenfold. We plan to do it now also with Aesop, bringing it from almost 500 million of current turnover to one billion. The demand for people’s well-being is growing at a very high rate and we know that luxury is a sector destined for even greater levels of growth»

Ingredients, beauty, luxury but also technology?
«Beauty has always been technology. Think of Cleopatra, in ancient Egypt: already for her mascara he used technology, chemistry. Our founder, Eugene Schueller, who invented the first permanent hair color in 1907, was a chemist. Today we invest over one billion, 3% of our turnover, in research and hi-tech, for example in the development of artificial intelligence. To create a new color or a new lipstick, AI can prove to be a very effective ally to speed up our formulas, also to take into account the rules that change from country to country. I’ll give you a fact: in 2022 we registered 561 patents, more than many European or American hi-tech companies. But it is increasingly necessary to combine human and artificial intelligence. Also to create inclusive tools, as we did with HAPTA, a technology that allows people with disabilities to take care of themselves. Here’s what we mean by beauty as the engine of the world and why our sense of purpose is “Creating the beauty that moves the world”. We have 2,000 people engaged in the beauty tech sector alone, 800 data scientists. When I spoke of the Unicornus Rex, I meant this: solid tradition and a commitment to the most advanced future. The culture of a company is based on agility and the ability to welcome and anticipate change».

Sounds like listening to a chip maker…
«To be a market leader you need to innovate continuously, in every field, not just in microprocessors. In a world that changes so rapidly, if you manage to combine size and power with agility and speed, then you become invincible» Italy? «For us it is one of the top ten markets in the world, we have a 16.6% share. For us it is a country of great inspiration. Here the group has 1,460 people. Among our global brands, four are Italian, there is Armani which is worth about 1.5 billion. We are licensed by Prada, Valentino and Diesel. We like working with Italian brands».

How are the numbers?
«Worldwide revenues grow a lot, by 18.5%, dividends are up 25% with a profitability of 30 basis points per year. It’s a very smooth performance.”

Your strategy for the future of L’Oréal?
«The world out there is transforming so fast that we have to do two things that are a kind of paradox: transform a company that has been successful for 115 years to adapt it to the new world, constantly. I have to embrace the great artificial intelligence revolution but at the same time protect its culture and values. Do you know Visconti’s film?».

The Leopard by Tomasi di Lampedusa?
“Yes. The protagonist says that everything must change so that nothing changes. It’s a very powerful phrase, we must constantly transform ourselves while maintaining the culture, passion, commitment, beauty and values ​​of a group which, thanks to the commitment of all its employees, is worth around 230 billion on the stock market».

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