Report
Jehanne Leroy
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Proxy Report - 17/04/2018

On September, 21st 2017, Liliane Bettencourt, daughter of Eugene Schueller, founder of L’Oréal, passed away.

The shareholders agreement between Nestlé and the Bettencourt Family ended on March, 21st 2018 (6 months after Ms Bettencourt dies, in line with provisions). On February 15th 2017, Nestle published a press release: “The shareholders agreement between Nestlé and the Bettencourt family is due to expire on March 21, 2018. In order to maintain all available options for the benefit of Nestlé's shareholders, the Board of Directors has decided not to renew this agreement. We do not intend to increase our stake in L'Oréal and are committed to maintaining our constructive relationship with the Bettencourt family”.
Hence, L'Oréal could use the repurchase authorization (item 12) to buy Nestlé's shares, if Nestlé sells them (l'Oréal's Chairman already announced that if Nestlé sells its stock, L'Oréal would be ready to buy it (https://www.reuters.com/article/us-loreal-results-nestle/loreal-ready-to-buy-nestle-stake-in-cosmetics-leader-idUSKBN1FT101). This authorisation could be used to buy 43% Nestlé's shares (the authorisation allows the company to buy back 56,051,908 of its own shares and Nestlé owns 129,881,021 of L'Oréal's shares as of 31 December 2017).

Item 6: Mr Agon’s mandate renewal is proposed. Even though the board does not have a majority of independent members, we note that 2 independent members are to be elected and that the global performance of Mr Agon is satisfactory; hence we support his re-election.

Underlying
L'Oreal S.A.

L'Oreal acts as a holding company. Through its subsidiaries, Co. plays a strategic coordination role and scientific, industrial and marketing coordination role on a global basis. Co. develops, manufactures and commercializes products for Skin care, Hair care, Make-up, Perfumes, Toiletries and deodorants, and Oral cosmetics. Co. has three branches: Cosmetics, Body shop and Dermatology. Co.'s principal activities comprise four divisions: Professional Products, Consumer Products, L'Oreal Luxe and Active Cosmetics. The Body Shop branch offers various cosmetics and toiletry products. The Dermatology branch offers topical dermatology prescription, and corrective and aesthetic dermatology.

Provider
Proxinvest
Proxinvest

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Analysts
Jehanne Leroy

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