Shareholders

B E A U T Y, A VA LU E F O R T H E F U T U R E

5 reasonsto take part in the L’Oréal adventure

Editorial by Jean-Paul Agon“ Investing in a share which achieves

sustainable and profitable growth ”

Registered shares sectionReceive a loyalty bonus +10%

“ Choosing the world beauty leader and investing in a share which achieves sustainable, responsible and profitable growth

“Editorial

02

Jean-Paul agonChairman and CEO of L’Oréal

Over a century, L’Oréal has been passionately committed to pursuing its adventure in beauty – an adventure we enjoy sharing.

Beauty is an eternal quest and a market that is constantly growing. Being a L’Oréal shareholder means choosing a leading company in a buoyant sector and investing in a share which achieves sustainable, responsible and profitable growth. But it is much more than that.

It also means providing long-term support for the development of a company which has all the assets required to further strengthen its leadership: a clear strategic project, the richest brand portfolio in the industry, a strong commitment to Research and Innovation, high standards of governance, loyal partners and the spirit of adventure that has always guided our choices and pushed us beyond our limits.

Our long-term strategic vision and constant pragmatism are the foundation for our continued desire to reinvent ourselves and quickly adapt to a changing world.

Offering the best in cosmetic innovations to women and men all over the world, while respecting differences is, for me, an exciting mission. At L’Oréal, we carry this mission out ethically and responsibly, as we are convinced that a strong culture of integrity creates long-term value.

Being a L’Oréal shareholder means sharing and supporting this great project, in a relationship of trust to which we are strongly committed.

Together, let’s write a new chapter in the L’Oréal adventure.

2015 ANNUAL REPORT

EXPLORE THE FULL VERSION OF THE 2015 ANNUAL REPORT

AT WWW.LOREAL-FINANCE.COM

04

L’Oréal in figures

(1) Source: WWD, “Beauty’s Top 100”, April 2016.

140countries

An international portfolio of

32complementary

brands

Commitments for

2020 “Sharing Beauty

With All”

1stcosmetics group

worldwide (1)

4.4bilion euros

in operating profit in 2015

497patents registered

in 2015

25.3billion euros

of sales in 2015

82,900employees

05

Strategy

5 ReaSonSTo TaKe PaRT In THe l’oRÉal aDVenTuRe

1 AN EXCITING MISSION, BEAUTY FOR ALL

2 A UNIQUE STRATEGY, UniVERsALisATiOn

3 AN INSPIRING AMBITION, WinninG OnE BiLLiOn nEW COnsUMERs

4 A RESPONSIBLE COMMITMENT, sHARinG BEAUTY WiTH ALL

5 A SOLID MODEL, CREATinG VALUE

Being a L’Oréal shareholder means sharing and supporting a clear strategic project for a new L’Oréal that is more universal, more digital and more sustainable, and investing in a profitable and high-growth share.

1REASON

AN EXCITING MISSION,BEAUTY FOR ALL

THE WORLD LEADER IN BEAUTY (1)

4 DIvIsIONs that develop a specific vision for each consumption universe and distribution channel:

• L’Oréal Luxe in the selective channel;

• Consumer Products in the mass market;

• Professional Products in hair and beauty salons;

• Active Cosmetics in dermocosmetics.

(1) Source: WWD, “Beauty’s Top 100”, April 2016.

06

L’ORéAL REsEARCH AND INNOvATION

794 million euros invested

in research and innovation

3,870 Research

and Innovation employees

497 patents registered in 2015

18 research centres worldwide

Beauty has always been present in the history of humankind. Beauty is rich in meaning, and helps everyone to build self-confidence and to open up to others.

For more than a century, L’Oréal has devoted itself solely to one business: beauty. Its mission is to offer all the women and men on the planet the best in cosmetics innovation in terms of quality, efficacy and safety.

Created by a researcher, Eugène Schueller, L’Oréal has constantly pushed back the frontiers of science to meet the infinite diversity of beauty desires.

2REASON

A UNIQUE STRATEGY,UniVERsALisATiOn

8 sTRATEGIC REGIONs

They bring together consumers around the world on the basis of their skin and hair types, climate, expectations and beauty routines.

1 sTRONG CORE France

6 REsEARCH AND MARKETING HUBs United StateS, Japan, china, india, Brazil, SoUth aFrica

Thanks to the group’s Advanced Research expertise, they develop and adapt technologies as close as possible to their consumers.

44 INDUsTRIAL PLANTs They are organised by regions to ensure they are close to the different markets, so that all opportunities can be seized.

WATCH THE “UNIVERSALISATION” VIDEO in the 2015 Annual Report at www.loreal-finance.com

07

Strategy

Universalisation is globalisation that captures, understands and respects differences.

To capture every kind of beauty aspiration, L’Oréal is extremely attentive to consumers’ views, and has profound respect for their differences in terms of needs, desires and traditions.

This unique strategy is the world vision that drives L’Oréal.

3REASON

AN INSPIRING AMBITION,WinninG OnE BiLLiOn

nEW COnsUMERs

(1) Source: L’Oréal 2015 estimates of the worldwide cosmetics market in net manufacturer prices. Excluding soaps, oral hygiene, razors and blades. Excluding currency effects. (2) Source: Google data. (3) Source: Aliresearch.com. (4) November 11th.

A sTRONG BEAUTY MARKETGrowth of the worldwide cosmetics market from 2006 to 2015 (1)

(estimated annual growth rate, as %)

08

4.9%

2015201420132012201120102009200820072006

5.0% 2.9% 1.0% 4.2% 4.6% 4.6% 3.8% 3.6% 3.9%

BEAUTY AND DIGITAL

6% e-commerce

share of worldwide

beauty market (1)

+20% growth

in worlwide online beauty sales (1)

Beauty is in the

TOP 3 Google search

topics (2)

68% of Alibaba purchases

made from a mobile (3) on Singles’ Day (4) in China

In a worldwide cosmetics market driven by the rise of the middle classes and the growth of consumer spending, L’Oréal has the ambition to attract one billion new consumers.

To succeed in this aim, the group draws on the vitality of its brands, their innovative power and their internationalisation potential.

4REASON

A RESPONSIBLE COMMITMENT,sHARinG BEAUTY WiTH ALL

INNOvATING sUsTAINABLY

74% of new products assessed have an improved environmental or social impact (1).

PRODUCING sUsTAINABLY

-56% of CO2 emissions in factories and distribution centres (2).

CONsUMING sUsTAINABLY

67% of the brands have evaluated their environmental and social footprint and took commitments to reduce it (3).

sHARING OUR GROWTH

86.6% of L’Oréal permanent employees have health insurance coverage in line with the best practices in each country.

(1) New formulas developed and produced in the group’s plants or whose packaging has been renovated in 2015. (2) In absolute value, 2005-2015. (3) Calculated as a percentage of consolidated sales 2014.

09

Strategy

LEARN MORE ABOUT THE “SHARING BEAUTY WITH ALL” PROGRAMME’S COMMITMENTSin the 2015 Annual Report at www.loreal-finance.com

Because it is not enough for a company to deliver strong economic performance, L’Oréal is committed to the “Sharing Beauty With All” programme to ensure the group’s long-term success.

This programme will be the main spearhead of our citizen commitment, which goes along with our economic and financial performance over the long term.

5REASON

A SOLID MODEL,CREATinG VALUE

(1) Diluted earnings per share, after non-controlling interests, excluding non-recurring items. (2) Net operating profit, excluding non-recurring items after non-controlling interests. Synthélabo consolidated fully up to 1998. Synthélabo equity consolidated from 1999 to 2004. Including Sanofi dividend from 2004. IFRS since 2005.

The announcement on February 11th, 2014, of the disposal of 50% of Galderma leads to account for this business in accordance with IFRS 5 accounting rule on discontinued operations. In accordance with IFRS 11 accounting rule, Innéov has been consolidated under the equity method of January 1st, 2014. All figures for earlier periods have been restated accordingly.

Past performance is not necessarily a guide to future performance.

10

0.0

0.6

1.2

1.8

2.4

3.0

Dividend per share (in euros) x89

0

1,000

2,000

3,000

4,000

5,000Net profit after non-controlling interests (in millions of euros) (2) x31

2015201020052000199519901985

€3.10

113515

1,639

3,490

A BALANCED AND sOLID BUsINEss MODEL

The economic performances of L’Oréal from 2010 to 2015

Sales

+30% Operating profit

+44% Net earnings per share (1)

+54%

Supported by the long-term vision of its shareholding structure, stable management and the expertise and commitment of its 82,900 employees, L’Oréal has always targeted profitable and sustainable growth. The solid balance sheet, financial situation and results confirm the strength of L’Oréal’s business model, which creates value and generates cash flow.

From 1985

CAC 40 (reindexed on L'Oréal)L'Oréal

09/30/1609/30/1509/30/1409/30/1309/28/1209/30/11

€73.38

2,981.96 pts

€168.10

4,448.26 pts

11

Performance

Return on an investment in L’Oréal shares Initial capital multiplied by 11.62 in 20 years (1) that is a TSR of +12.60% per year

A dividend at €3.10 (2), multiplied by 3.1 in 10 years,which has never declined in over 50 years

L’ORÉAL’S SHARE

Over

5 yearsthe L’Oréal share

has outperformed the CAC 40 index:

+129.08%L’Oréal share variation (3)

+49.17%CAC 40

variation (3)

L’ORÉAL shARe VeRsUs CAC 40

(1) Purchase of 75 shares on December 31th, 1995: 14,989.55 euros. Valuation at December 31th, 2015, including reinvestment of dividends (1,122 shares at 155.30 euros): 174,246.60 euros. (2) Dividend approved at the AGM of April 20th, 2016. (3) Period from 09/30/2011 to 09/30/2016.

Could you tell us more about the meetings with L’Oréal shareholders ?“We make a point of organising a number of events as a way for L’Oréal to come into close contact with its shareholders. Major events include the Annual General Meeting followed by shareholder meetings all over France, without forgetting our presence at the Actionaria Shareholder Fair. And since 2013, we have organised visits exclusively for registered shareholders to our laboratories, our boutiques, our hairdressing academies and our factories!”

Interviews

MeeT THe InDIVIDual SHaReHolDeR RelaTIonS TeaM

How would you define the relationship between L’Oréal and its shareholders?“With all those who share in the L’Oréal adventure – individual shareholders, investors, stakeholders – we want to maintain a close relationship of trust. The Financial Communications teams are committed to building a relationship based on listening and dialogue in order to best meet their expectations.

Being a L’Oréal shareholder means investing in a solid growth share and taking part in an ambition project – that of Universalisation and Beauty for All.”

Jean Régis CaROFDirector of Individual Shareholder and Market Authority Relations

jcarof@loreal-finance.com +33 1 47 56 83 02

VaLeRie BOasIndividual Shareholder Relations Manager

vboas@loreal-finance.com +33 1 47 56 72 06

12

13

a unIQue anD InTeRnaTIonal PoRTFolIo oF 32 CoMPleMenTaRY BRanDS

L’Oréal’s brand portfolio is organised by Division, which develop a specific vision for each consumption universe and distribution channel.

The strength and diversity of each brand – whether international or regional in scope – enable the group to meet the diversity of beauty aspirations around the world.

13

Brands overview

(1) Source: Panels and L’Oréal 2015 estimates.

CONsUMER PRODUCTsThe Consumer Products Division offers the best in cosmetics innovation to the greatest number of people. Its brands are available in mass-market channels (hypermarkets, supermarkets, drugstores, traditional stores and e-commerce).

PROfEssIONAL PRODUCTs

Thanks to education and advanced innovations, the Professional Products Division makes sure that with each passing day more and more people can take advantage of the highest standards of quality and expertise from beauty salon professionals all over the world.

14

L’ORéAL LUxEL’Oréal Luxe offers an array of prestigious and modern international brands with a unique heritage, which strive to offer high-quality products through a selective distribution channel, and provide excellent service that respects the diversity of its consumers.

ACTIvE COsMETICsThe Active Cosmetics Division’s mission is to help everyone improve the quality and health of their skin, in all healthcare channels worldwide, including pharmacies, drugstores, medi-spas, dermacenters and online sales. Thanks to its close links with health professionals, the Division is world No.1 in dermocosmetics (1).

THE BODY sHOPThe Body Shop has a unique positioning that complements the L’Oréal portfolio.

KEEP UP-TO-DATE ON L’ORÉAL’S LATEST FINANCIAL NEWS & EVENTS

DOWNLOAD THE L’ORÉAL FINANCE MOBILE APP TODAY!

KEEP UP-TO-DATE ON L’ORÉAL’S LATEST FINANCIAL NEWS & EVENTS

DOWNLOAD THE L’ORÉAL FINANCE MOBILE APP TODAY!

16

Registered Shares Section

Before the end of 2016

2017 / 2018

From 2019

+10%

You transfer your shares to registered form.

You keep your shares in registered form for two full calendar years.

You receive the first pay-out of the 10% loyalty bonus for your shares held in registered form since 2016.

You receive the 10% loyalty bonus in the following years if you continue to hold your shares in registered form.

BeCoMe a RegISTeReD SHaReHolDeR anD ReCeIVe

a loYalTY BonuS

WHAT ARE REGISTERED SHARES?Holding registered shares means that your shares are registered in your name, making it easier for you to receive information from L’Oréal.

(1) Up to a maximum of 0.5% of the capital for the same shareholder, at the closing date of the last fiscal year.

YOUR LOYALTY IS REWARDEDif you register your shares prior, L’Oréal offers you +10% on your dividend (1).

CHooSe BeTWeen ManageD RegISTeReD SHaReS anD DIReCTlY RegISTeReD SHaReS

REGISTERED SHARES AND A SHARE SAVINGS PLAN

If you hold your L’Oréal shares in a share savings plan (PEA) and you would like to benefit from the advantages of holding registered shares, in particular the loyalty bonus, while keeping the tax advantages offered by the PEA, you should choose to hold managed registered shares.

ADVANTAGES OF DIRECTLY REGISTERED SHARES

If you would also like to benefit from free management and custody fees, as well as preferential brokerage and bank fees, you should choose to hold directly registered shares. However this is only possible outside a share savings plan (PEA).

i

i

SHaReHolDeR VIeWS

WATCH THE VIDEO TESTIMONIALS Of SHAREHOLDERS WHO HAVE CHOSEN REGISTERED fORMwww.loreal-finance.com/eng/registered-shares-loyalty-bonus

RegISTeR oR TRanSFeR YouR SHaReS To RegISTeReD FoRM

IF You HaVe anY QueSTIonS, PleaSe ConTaCT uS!

EXCLUSIVE EVENTSWhen registering or transferring your shares to registered form, make sure to indicate your email address so that you can be invited to attend events organised especially for you!

TAXATIONRegistering your shares will not have any tax impact. The tax treatment of registered shares is identical to that applicable to bearer shares.

VISIT THE LOYALTY BONUS ANS REGISTERED SHARES SECTION ON OUR WEBSITE www.loreal-finance.com/eng/registered-shares-loyalty-bonus

IN THIS SECTION, YOU WILL fIND ALL THE INfORMATION YOU NEED AND THE fORMS fOR REGISTERING OR TRANSfERRING YOUR SHARES, OR OPENING YOUR ACCOUNT.

A DEDICATED SHAREHOLDER LINE IS AVAILABLE ON 0 800 66 66 66 from France or +33 1 40 14 80 50 from outside France

i

i

HoW To CHooSe THE METHOD OF HOLDING YOUR SHARES?Identify the advantages that interest you the most!

(1) Upon registration and within the limit of available places.

?YouR QueSTIonS WITH REGARD TO REGISTERED SHARES

“If I register my shares, can I sell them just as easily?”Yes, your registered shares can be disposed of at any time, just like bearer shares. You retain complete freedom to manage your shares.

“How long does it take to register my shares or to transfer them to registered form?”Time may vary depending on the financial institution. Remember that to qualify for the loyalty bonus from 2019, your shares have to be registered as managed registered shares or transferred to directly registered shares by December 31st, 2016 at the latest! To make sure that this is the case, we recommend that you transmit your order for registration by December 9th, 2016 at the latest.

“How can I obtain a reimbursement of the cost of transferring my L’Oréal shares to directly registered form?”

Some financial intermediaries charge fees to transfer shares to directly registered form, we therefore recommend that you ask your bank for information. We remind you that L’Oréal will reimburse you any transfer fees up to a maximum of €50. You simply have to send your request for reimbursement together with proof of the transfer fees and full bank account details to the following address:

BNP Paribas Securities Services C.T.S. Émetteurs Service Mouvements Titres Grands Moulins de Pantin 9 rue du Débarcadère 93761 PANTIN CEDEX – France

DiRECTLY REGisTERED sHAREs

MAnAGED REGisTERED sHAREs BEARER sHAREs

Custody of your shares

BNP Paribas securities servicesGrands Moulins de Pantin

relations actionnaires L’oréal9 rue du débarcadère

93761 PaNtIN CedeX – france

In the custody of your financial institution

MaNaGeMeNt of your shares

Call +33 1 40 14 80 50 from outside france or use the BNP Paribas securities

services secure website www.planetshares.bnpparibas.com

Managed by your financial institution

MaNaGeMeNt aNd Custody fees free depending on your financial institution’s fees

trade orderto be sent to BNP Paribas securities services

or placed online on the secure website www.planetshares.bnpparibas.com

to be sent to your financial institution

BrokeraGe aNd BaNk fees

Preferential fees: - Brokerage fee of 0.15%

with a minimum fee of €6.10 excluding tax - Bank fee of €7.62 excluding tax

depending on your financial institution’s fees

aNNuaL taXdeCLaratIoN

a single tax declaration form (Ifu in french) concerning trading

in L’oréal shares only is sent to you by BNP Paribas securities services

a single tax declaration form (Ifu in french) showing all the transactions on your share account

is sent to you by your financial institution

eNtItLeMeNt to LoyaLty BoNus

of +10%

Yes, for shares that have been held in registered form continuously for 2 full calendar years and until the date of payment of the dividend No

NotICe to atteNd the aNNuaL

GeNeraL MeetING

Automatic sending of the convening notice paper or electronic version

sending of the convening notice by your financial institution on request

L’oréaL aNd you

- Automatic sending of the Letter to Shareholders - Invitations to shareholder meetings in your region

- Participation in events arranged specifically for registered shareholders (e.g.: factory visits) (1)

sending of invitations and information on request

HoW To CHooSe THE METHOD OF HOLDING YOUR SHARES?Identify the advantages that interest you the most!

DiRECTLY REGisTERED sHAREs

MAnAGED REGisTERED sHAREs BEARER sHAREs

Custody of your shares

BNP Paribas securities servicesGrands Moulins de Pantin

relations actionnaires L’oréal9 rue du débarcadère

93761 PaNtIN CedeX – france

In the custody of your financial institution

MaNaGeMeNt of your shares

Call +33 1 40 14 80 50 from outside france or use the BNP Paribas securities

services secure website www.planetshares.bnpparibas.com

Managed by your financial institution

MaNaGeMeNt aNd Custody fees free depending on your financial institution’s fees

trade orderto be sent to BNP Paribas securities services

or placed online on the secure website www.planetshares.bnpparibas.com

to be sent to your financial institution

BrokeraGe aNd BaNk fees

Preferential fees: - Brokerage fee of 0.15%

with a minimum fee of €6.10 excluding tax - Bank fee of €7.62 excluding tax

depending on your financial institution’s fees

aNNuaL taXdeCLaratIoN

a single tax declaration form (Ifu in french) concerning trading

in L’oréal shares only is sent to you by BNP Paribas securities services

a single tax declaration form (Ifu in french) showing all the transactions on your share account

is sent to you by your financial institution

eNtItLeMeNt to LoyaLty BoNus

of +10%

Yes, for shares that have been held in registered form continuously for 2 full calendar years and until the date of payment of the dividend No

NotICe to atteNd the aNNuaL

GeNeraL MeetING

Automatic sending of the convening notice paper or electronic version

sending of the convening notice by your financial institution on request

L’oréaL aNd you

- Automatic sending of the Letter to Shareholders - Invitations to shareholder meetings in your region

- Participation in events arranged specifically for registered shareholders (e.g.: factory visits) (1)

sending of invitations and information on request

HoW To RegISTeR oR TRanSFeR YOUR SHARES TO REGISTERED FORM?Regardless of your current situation, the registration of shares or conversion to registered shares takes place in 2 stages!

You currently hold bearer shares of L’Oréal and you wish to convert them to managed registered shares…

send your financial institution a request to register your shares to managed registered shares (1).

the form is available on www.loreal-finance.com in the shareholders’ Corner, section on Loyalty Bonus and registered shares.

You currently hold bearer shares or managed registered shares of L’Oréal and you wish to transfer them to directly registered shares…

send your financial institution a request to transfer your shares to directly registered shares.

the form is available on www.loreal-finance.com in the shareholders’ Corner, section on Loyalty Bonus and registered shares.

You are not yet a L’Oréal shareholder and you wish to purchase directly registered shares…

send BNP Paribas securities services an agreement for account opening and stock market services (CoCPB in french).

the form is available on www.loreal-finance.com in the shareholders’ Corner, section on Loyalty Bonus and registered shares.to be sent to: BNP Paribas Securities Services C.T.S. Émetteurs - Service Mouvements Titres Grands Moulins de Pantin - 9 rue du Débarcadère 93761 PANTIN CEDEX – Franceor request it on the following number: 0 800 66 66 66 on outside france

(1) You will have to repeat this step when purchasing new shares.

1sT sTAGE

HoW To RegISTeR oR TRanSFeR YOUR SHARES TO REGISTERED FORM?Regardless of your current situation, the registration of shares or conversion to registered shares takes place in 2 stages!

your financial institution will send your registration form to BNP Paribas securities services and will continue to manage your account.

your financial institution will transfer your shares to BNP Paribas securities services which will become your unique point of contact.

BNP Paribas securities services will be your unique point of contact.

Only the FR0000120321 is a trading code.If you want to sell shares with the bonus codes FR0011149590, FR0012332245, FR0013053097, your financial institution will deal with modifying this code in order to execute your order.

The custody fees for managed registered shares may be increased.

The fees for transferring L’Oréal shares to directly registered form will be reimbursed by L’Oréal for up to a maximum of €50 and upon proof of payment.

HoW Can You FolloW YOUR REGISTERED SHARES?The introduction of the preferential dividend has made it necessary to create specific ISIN codes. These codes make it possible to determine each year whether the shares concerned will give the right to an ordinary dividend or a preferential dividend.

TRa

DIn

g

Co

De

Bon

uS

Co

De

fR0011149590L’oréal shares which were registered prior to december 31st, 2013 and which already benefit from the loyalty bonus are identified by this code.

fR0012332245L’oréal shares which were registered in 2014 and which will benefit from the loyalty bonus in 2017 are identified by this code.

fR0013053097L’oréal shares which were registered in 2015 and which will benefit from the loyalty bonus in 2018 are identified by this code.

fR0000120321the L’oréal share is listed and traded under IsIN code fr0000120321.

L’oréal shares, which have been registered during the current year, are identified by this code and will benefit from the loyalty bonus after 2 full calendar years.

1sT sTAGE 2nD sTAGE ?

Become a registered

shareholderand receive

a loyalty bonus

+10%

A preferential dividend :€3.41 (1)

instead of €3.10 (2)

(1) For shareholders who continuously hold their shares in registered form for a minimum of two full calendar years, up to a maximum of 0.5% of the capital for the same shareholder. (2) Dividend approved at the AGM of April 20th, 2016.

Published by the Financial Communications Department of L’Oréal - www.loreal-finance.com. Photograph credits : @nathaliemunozx3, @sonjdra, @sultrysuburbia, @_akfreestyle, @jerliciadotcom, @diamondmakeupgal, @iamamypham, @makeupbyjenny, @colour_obsession, @dirtymelodies, @lindasteph, @kimthainguyen, @ssssamanthaa, @mariamglambeauty, @lilacbat, @tenipanosian, @livingdeadmakeup, @babsbeauty, @dlishhhhh, @mdotmakeup, Thomas Gogny (p.1), Alain Buu (p.12), Okea/Imagehub88/Thinkstock, Kevin Dutton/GO Premium/GraphicObsession, Leonello Calvetti/Science Photo Library/ Photononstop (p.4 and 4th cover page), X. Designed and published by: Birdie Blue