A report on L'Oréal by analysts at Dresdner Kleinwort says fears of an negative effect on the company of US economic conditions have been over-estimated by investors. The group's North American division is nevertheless the smallest contributor to sales, accounting for 25% of the total in the first nine months of 2007 and contributing only 13.5% of sales growth in that period. However, the "rest of the world" - all countries outside the US and Europe - generated 63% of group growth in the nine-month period, expanding at 17% compared with a target of 15%.
The report adds that the negative scenario in the US is expected to have an impact of 30 base points on sales growth through 2008 but would have fewer consequences overall because L'Oréal is well defended against a downturn through its strong growth in Europe. L'Oréal's share price is currently around t90.39 giving a financial market capitalization of t55.9bn.