✨ Who is the beauty king? A look at the stars of the cosmetics stocks ✨
Company presentation
L'Oréal, the world's leading cosmetics group, is based in France and can look back on a history of over a hundred years. Founded in 1909, its portfolio today comprises more than 35 brands covering skin care, make-up, hair care and fragrances.
e.l.f. Beauty is an up-and-coming US cosmetics company that has stood for affordable yet high-quality products since it was founded in 2004. The brand is particularly popular with younger consumers.
Beiersdorf, a traditional German company founded in 1882, specializes in skin care products. The company is particularly well known for its NIVEA brand, which is synonymous with skin care worldwide.
Estée Lauder was founded in New York in 1946 and has developed into a leading provider in the prestige beauty segment. The company owns over 30 luxury brands and is an established player on the international market.
Historical development
$$OR (+3,35 %) has grown through constant innovation and strategic acquisitions and is now represented in over 150 countries.
$ELF (-0,85 %) has experienced rapid growth in recent years, driven by digital strategies and the development of new sales channels.
$BEI (+3,44 %) NIVEA has developed from a small pharmacy into a global company. The NIVEA brand was launched in 1911 and is now one of the best-known skin care brands in the world.
$EL (-1,75 %) NIVEA grew from a small family business into an international cosmetics giant. Through international expansion and acquisitions, the company has been able to diversify and constantly expand its portfolio.
Business model and core competencies
L'Oréal is based on a broadly diversified brand portfolio, intensive research and development and a strong global presence. The company operates in four divisions: Consumer Products, L'Oréal Luxe, Active Cosmetics and Professional Products.
e.l.f. Beauty focuses on affordable, trendy products and is increasingly using digital marketing strategies and e-commerce to appeal to young target groups.
Beiersdorf focuses on skin care and has extensive expertise in the development of innovative formulations. The company also operates a successful adhesives business with Tesa.
Estée Lauder specializes in prestige beauty products and excels in product innovation, luxury marketing and global distribution. The company is active in four main categories: Skincare, Makeup, Fragrance and Haircare.
Future prospects and strategic initiatives
L'Oréal is investing heavily in sustainability, digitalization and personalized beauty solutions. The company is also increasingly focusing on AI-supported technologies and expanding its portfolio in the area of "clean beauty".
e.l.f. Beauty plans to further develop its digital presence and expand into new product categories and international markets.
Beiersdorf is focusing on innovations in the area of skincare, particularly sustainable and natural products, while also investing in the digitalization of its brands.
Estée Lauder is aiming to expand into growth markets, particularly in Asia, and is focusing on strengthening its digital presence. The company is also investing in sustainable packaging solutions and "clean beauty" products.
Market position and competition
L'Oréal maintains its leading position in the global cosmetics industry with a market share of over 14%.
e.l.f. Beauty has established itself as a strong challenger in the mass market and continues to gain market share, especially among younger consumers.
Beiersdorf is a leading player in the European skincare market and competes directly with companies such as Unilever and Procter & Gamble.
Estée Lauder is the second largest cosmetics group in the world and dominates the prestige beauty segment. Its main competitors are L'Oréal Luxe and LVMH.
Total Addressable Market (TAM)
The global cosmetics market was estimated at around 430 billion US dollars in 2022 and is set to grow to over 700 billion US dollars by 2030. This growth is being driven by rising demand in emerging markets, the boom in e-commerce and the trend towards natural and sustainable products.
Development
L'Oréal is by far the largest cosmetics manufacturer in the world and covers a wide range of products. Although e.l.f. Beauty is growing faster in percentage terms due to its smaller size, the absolute figures seem almost insignificant compared to L'Oréal. Beiersdorf's sales may seem impressive at first glance, but it should not be forgotten that a significant proportion of these are accounted for by Tesa - which, incidentally, also belongs to Beiersdorf.
If you take a closer look at Estée Lauder, it becomes clear that the company's most important area is skincare and make-up, which also account for the majority of its operating profit. Regrettably, the company is even posting negative figures in the hair care sector. In general, it has to be said that the current business figures are not very impressive overall and many areas are in decline.
Although the majority of Beiersdorf's sales come from consumer goods products, Tesa continues to play an important role in the overall business. Interestingly, the Tesa segment even generates better margins than the consumer goods business, which further underlines its importance for the company.
At L'Oréal, the figures are remarkably stable in the various business segments, and there are only minimal differences in operations. This ability to maintain margins at a similar level in almost all areas is exceptional and in a class of its own. Although the luxury segment (Luxe) performs slightly better, the difference is not significant enough to change the overall picture substantially.
The growth of e.l.f. Beauty is impressive, but is largely due to the relatively small size of the company. Nevertheless, the brand is benefiting from major trends and so far shows little sign of slowing down, despite the current consumer weakness. L'Oréal should also be highlighted, which continues to grow above the market average despite its considerable size - and has done so for several years. Beiersdorf, on the other hand, is only growing just above the market average, while Estée Lauder continues to lose ground. Things have been going downhill here for years, which is also clearly reflected in the falling share price.
L'Oréal is also at the top in terms of gross profit, despite moderate share-based payments. Although the other companies are not far behind, Beiersdorf is clearly falling behind in this area and is lagging behind its competitors.
L'Oréal also leads the competition by a considerable margin in terms of net profit margin. Estée Lauder, as in other areas, is still on a downward trend, while e.l.f. Beauty has stabilized at around 11%. Beiersdorf's margin, on the other hand, is only half that of L'Oréal, which is simply disappointing in comparison.
In terms of earnings per share (EPS), L'Oréal dominates so strongly that the other companies hardly carry any weight in comparison. Only e.l.f. Beauty stands out positively, as it was able to continuously increase its EPS. The other competitors hardly have anything to counter this.
Although all companies are in positive territory in terms of free cash flow (FCF), they are largely stagnating at similar levels. None of the companies show outstanding growth in this area, which indicates that there is little momentum here.
American companies traditionally lead the field in terms of stock-based compensation, but it is unusual by European standards that L'Oréal also does not score as low in this area as one would expect from European companies. This shows that L'Oréal is also focusing more on modern compensation models.
Part 2:https://getqu.in/qp4p9t/
