REGISTRATION DOCUMENT / L'Oréal 2016

1 ANNUAL FINANCIAL REPORTINTEGRATED REPORT2016 REGISTRATIONDOCUMENTC ontentDetailed chapter contents can be found at the beginning of each chapter.* This information forms an integral part of the Annual Financial report as provided in the Article L. 451-1-2 of the French Monetary and Financial INTEGRATED REPORT PRESENTATION OF THE GROUP 5 The L Or al Group: clear strategy: Beauty for *Good growth momentum for shared, lasting organisation that serves the Group s Control and risk management system GOVERNANCE *43governance principlesFramework for implementation of the corporate of the Board of and modus operandi of the Board of of the members of the Board of of the executive table of the recommendations of the Code which have not been applied98L Or al shares in 2016 Summary of trading by Directors and executive officers in factors and control auditors' *ENVIRONMENTAL AND SOCIETAL L OR AL S CORPORATE SOCIAL.

2 125societal policiesThe L Or al Group s corporate social, environmental and Sharing Beauty With All of by the Statutory * 2016 CONSOLIDATED FINANCIAL 209 Compared consolidated income statement of comprehensive consolidated balance statements of changes in consolidated statements of cash to the consolidated financial companies at December 31st, Auditors' Report on the consolidated financial STATEMENTS* 2016 PARENT COMPANY 271 Compared income balance in shareholders of cash to the parent company financial L Or al parent companyOther information relating to the financial statements financial (main changes including shareholding changes)

3 298 Statutory Auditors' Report on the financial CAPITAL STOCK MARKET INFORMATION 301 Information relating to the concerning the share capital * structure * Incentive plans * L Or al share/L Or al share GENERAL MEETING327 Draft resolutions and report of the Board of Directors (adopted on February 9th, 2017)general meeting to be held on April 20th, 2017 (statement of reasons) to the ordinary and extraordinary 328 Statutory Auditors' Reports financial information included by Financial ReportPerson responsible for the REGISTRATION DOCUMENT and the and the Annual Financial ReportDeclaration by the person responsible for the REGISTRATION DOCUMENT table of Financial Report table of of executive officersand DirectorsTable of concordance with the AMF tables on the of concordance of the Management use of the FSC (Forest Stewardship Council)

4 Label in this product is intended to signify that the paper comes from responsiblesources environmentally appropriate, socially beneficial and economically ORThis label recognises the most transparent REGISTRATION Documents according to the criteria of the AnnualTransparency DOCUMENT2016 Corporate and Social ResponsabilityAnnual Financial Report Integrated Reportits strategic orientations and its relationships with its stakeholders, particularly in the contextof an integrated communications approach and aims at presenting the well-balanced model of L Or al,This REGISTRATION DOCUMENT summarizes the activities and the results of the Group in 2016 .

5 It is partof the Sharing Beauty With All application of Article 212-13 of the General Regulation of the Autorit des approved by the AMF. The DOCUMENT has been prepared by the issuerand its signatories incur liability in this s Financiers (AMF), this REGISTRATION DOCUMENT was filed withthe AMF on March 14th, REGISTRATION DOCUMENT may be used in connection with a financialtransaction if it is accompanied by an information memorandumPROSPECTSby Jean-Paul Agon, Chairman and Chief Executive Officer2016 was another good year for L Or al.

6 We accelerated our growth, outperformed the market once again and increased our worldwide leadership of the beauty DOCUMENT / L'OR AL 2016 PROSPECTSby Jean-Paul Agon, Chairman and Chief Executive Officer2016 was another good year for L Or al. Three of our divisions, L Or al Luxe, Consumer Products and Active Cosmetics, made great progress and we gained market shares in each of our three strategic regions. 2016 was also a great vintage in terms of emblematic innovations and strategic acquisitions. With IT Cosmetics, CeraVe, Atelier Cologne and Saint-Gervais Mont-Blanc, we made four very diverse acquisitions that perfectly complement our global flotilla of brands and allow us to respond to new beauty desires.

7 And, last but not least, we delivered a compelling set of results that once again prove the robustness of L Or al s economic model and its powerful capacity to create value. 2016 was also a year of great progress in the transformation of our company, with the group becoming even more digital, efficient, agile and sustainable. We increased our digital lead. Our e-commerce sales grew by +33%(1) and are now equivalent to the group s 4th largest country. More than 30% of our advertising is now digital, with even more targeted and efficient communications.

8 We have recruited 1600 experts and trained almost ten times that amount in-house. Across all divisions, digital is amplifying the power of our brands and bringing them even closer to our also continued our Industry transformation program, which integrates all the new opportunities that digitalisation offers. There is a true industrial revolution taking place throughout our entire value also profoundly transformed ourselves to meet our sustainable development targets, set by our Sharing Beauty With All initiative.

9 2016 was a pivotal year for our 2020 objectives and a year of major achievements, particularly in sustainable innovation and sustainable production. We achieved and even went beyond our goal of reducing CO2 emissions by 60%, four years ahead of schedule(2). If we have been working hard to transform our company into a New L Or al it is because we believe that we are right now at the dawn of a Bright New World of Beauty. The world is changing around us at an amazing speed, the world of beauty is also changing radically. As digital and social media become omnipresent in our lives, we are entering into the era of social beauty.

10 An era where beauty is becoming even more essential. The way you look, the quality of your hair and skin, will be more important than ever in expressing your personality, crafting your image of yourself, and interacting positively with others. This Bright New World of Beauty is a unique opportunity for L Or al, since we are uniquely positioned to drive and lead this new era. First, because our superiority in Research and Innovation gives us an edge in quality, efficacy, safety and sincerity. These qualities are now, more than ever, required by consumers.