This is Matt Reustle, and today we are breaking down the personal care giant, L'Oreal. Founded in the early 1900s by a French chemist, L'Oreal and its long list of iconic brands have been driving cosmetics innovation for over a century. To break down the business, I am joined by Zehrid Osmani - Head of the Long-Term Unconstrained team at Martin Currie. We cover the history of brand innovation, global expansion, and all of the dynamics that played a role in L'Oreal's success. I'd mention this episode is an excellent pairing with our Founders podcast episode 217 on Estee Lauder. The two dominant players in the beauty market have fascinating beginnings, and their stories clearly aren't over. Please enjoy this breakdown of L'Oreal.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.   -----   This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.   -----   Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt   Show Notes [00:02:27] - [First question] - Origins of L’Oreal and its scientific approach [00:04:01] - Structure and market share of L’Oreal today [00:04:36] - Outline of L’Oreal’s brands and consumer products [00:07:30] - Licensed agreements versus fully owned brands [00:08:48] - Market split between mass market, high-end, and professional products [00:09:31] - Strategy-driven growth by division since 2014 [00:11:03] - Reasons why acquisitions are a key part of L’Oreal’s strategy [00:14:26] - Noteworthy competitors in the same markets [00:16:03] - Sales and marketing strategies within stores and e-commerce [00:19:47] - How L’Oreal deals with the logistical challenges of e-commerce [00:21:59] - Margins and long-term growth [00:24:40] - Overhead costs and the proportion spent on advertising [00:25:57] - Advertising campaigns and legacy of L’Oreal’s advertising strategy [00:30:03] - L’Oreal’s R&D strategy and budget [00:33:09] - Breakthroughs in the development of new products [00:34:42] - L’Oreal’s global presence and price stratification to serve diverse geographies [00:39:59] - The company’s potential future growth opportunities [00:42:19] - Operating margin and profitability over time from an investor’s perspective [00:44:39] - Re-investment in the company versus dividend payout [00:45:14] - More on acquisitions as a piece of the overall model [00:46:25] - Key risk categories for the business  [00:51:43] - L’Oreal’s commitment on sustainability and ESG broadly [00:55:52] - Lessons learned from analyzing L’Oreal