L'Oréal to buy back shares after sales rise

The world's biggest cosmetics group spent about 500 million euros last year on buying back shares after a break since 2008, signalling it was not looking to empty its coffers on a large acquisition. L'Oreal's net cash at the end of 2012 stood at 1.575 billion euros, up from 504 million euros last year, after dividend payments and settling the acquisitions of Urban Decay make-up and Cadum soap.

The Paris-based maker of Lancome creams and Garnier shampoo said turnover in the three months to Dec. 31 reached 5.7 billion euros ($7.63 billion), up 5.3 percent on a like-for-like basis, helped by strong demand in North America and solid growth in the Asia-Pacific region. The French group did not give a specific forecast but said it aimed to outperform the market and increase sales and profits further this year.

L'Oreal's performance marked a small rebound against the previous quarter during which like-for-like sales rose 4.6 percent and compared with revenue growth of 5.7 percent in the second quarter and 6.4 percent in the first.

However, the results pointed to a continued slowdown at its luxury arm which makes Kiehl's and Biotherm creams.

The luxury unit saw revenue growth slow to 6.2 percent in the fourth quarter from 6.6 percent in the third quarter, 8.7 percent in the second and 12.2 percent in the first quarter.

L'Oreal's results come after US rival Estee Lauder raised its full-year profit forecast last week on the back of expectations that strong demand in the United States and China would help make up for weaker markets in Southern Europe and South Korea.

Total comparable sales at the U.S. group, whose brands include Clinique and Mac, rose 7 percent in the fourth quarter.