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, 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.

2 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)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)

3 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. 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.

4 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. 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.

5 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. 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. 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).

6 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 . 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. Our capacity for innovation includes services too, like the Makeup Genius app, the My UV Patch or the connected brush by K rastase.

7 Furthermore, because we are able to track emerging trends and quickly offer products that meet these new aspirations, such as makeup, natural beauty, or personalization desires. Moreover, because of our proximity and the quality of our interactions with consumers. Digital, in particular, offers opportunities for an ongoing dialogue and personal advice. With over 1 billion viewers on our brand websites and social media pages, L Or al is clearly the champion of connected beauty. We are also currently exploring all the direct-to-consumer channels, from e-commerce to boutiques opened by some of our brands. Finally, our unique characteristics appear to be perfectly fitted to this New World of Beauty. Our global flotilla of brands, each of which addresses specific consumer needs; Our presence across all channels, categories, price points and regions; Our agile and flexible organization, strategically concentrated but operationally decentralized; And, last but not least, our entrepreneurial culture and highly engaged teams.

8 We at L Or al plan to make the most of this new golden age of beauty. More than any other company, since we are and will be the Beauty Company. The one that offers the best of beauty to all women and men living on this planet, thus fulfilling its mission: Beauty for all.(1) Sales achieved on the brands own websites and estimated sales achieved by the brands corresponding to sales through retailers websites (non-audited data). Like-for-like growth. (2) In the plants and distribution centres. Period 2005-2015. In absolute DOCUMENT / L'OR AL 20164 REGISTRATION DOCUMENT / L'OR AL 201615 REGISTRATION DOCUMENT / L'OR AL 2016 Presentation of the Group Integrated report The L Or al Group: clear mission and strategy, supported by governance6 Key clear strategy: Beauty for , to meet global demand for international beauty market, huge development portfolio of diverse and complementary and innovation adapted to the s markets16 Operations, expertise and services close to growth momentum for , lasting development *232016 Results* , shared organisation that serves the s development37L Or al of L Or al s executive Control and risk system 41* This information forms an integral part of the Annual Financial Report as provided in the Article L.

9 451-1-2 of the French Monetary and Financial Code. 1 Presentation of the Group Integrated report THEL OR ALGROUP: FUNDAMENTALS6 REGISTRATION DOCUMENT / L'OR AL 2016 THE L OR AL GROUP: CLEAR MISSION AND STRATEGY, BY STABLE GOVERNANCE superficial, cosmetics are full of meaning. They give everyoneself-confidence, enable them to blossom and open up toothers and contribute to individual and collective s raison d tre, because, far from being futile andFor over 100 years, L Or al has devoted itself to one business:beauty, in which it is the world s leading company. It is theBoasting an international portfolio of 34 diverse andcomplementary brands, the Group responds to all beautyaspirations worldwide. Present in all distribution channels,L Or al generated sales of billion in 2016 thanks to its89,331 employees across the Group s governance, the guarantee of stability in achanging world, makes it possible to work towards long-termobjectives and to ensure regular shareholders, stable capital structureTHE SHAREHOLDERS AT DECEMBER 31ST, 2016 French institutionalinvestorsIndividualsharehol dersTreasury stockBettencourt Meyersfamily Nestl institutional investorsEmployees(1) the employees and former employees of L Or al.

10 (1)L Or al Company savings plan (PEE) as defined by Article L. 225-102of the French Commercial to the French law of 08/06/2015, the percentage of sharesalso includes, in 2016, the free shares granted in accordance with thesystem provided for under Article L. 225-197-1, of which in theA balanced and committed Board of Directors, which plays its role of reflection and strategic impetus to the fullmanagement of both the financial and extra-financial aspects,and ensures the quality of the information provided to theshareholders and to the and ensures their implementation. It oversees theThe Board of Directors determines L Or al s strategicmajority shareholders (the Bettencourt Meyers family withaccount the specificities of its shareholding structure whileguaranteeing the interests of all its stakeholders. It comprises15 members, consisting of the Chairman and Chief ExecutiveOfficer, Mr.)