L'Occitane International S A : Annual Results Announcement for the Year Ended 31 March 2019

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L'OCCITANE INTERNATIONAL S.A.

49, Boulevard Prince Henri L-1724 Luxembourg

R.C.S. Luxembourg: B80359

(Incorporated under the laws of Luxembourg with limited liability)

(Stock code: 973)

ANNUAL RESULTS ANNOUNCEMENT

FOR THE YEAR ENDED 31 MARCH 2019

HIGHLIGHTS

• Group's net sales were €1,426.9 million, recording growth of 8.7% at constant exchange rates and 8.1% at reported exchange rates.
• Gross margin remained high at 83.2%.
• Operating profit grew by 6.9%. Despite an unfavourable brand mix effect, mostly from LimeLife, operating margin was stable at 10.6% as a result of improved sales momentum and the Group's targeted investments.
• Excluding LimeLife, the Group's operating profit margin in fact improved by 0.8 points.
• Net profit increased by 21.8% to €117.6 million.
• Earnings per share increased by 22.7% and the Board proposes a final dividend of €0.0297 per share.

ANNUAL RESULTS

The board of directors (the "Board") of L'Occitane International S.A. (the "Company" or "L'Occitane") is pleased to announce the audited consolidated annual results of the Company and its subsidiaries (the "Group") for the year ended 31 March 2019 ("FY2019") together with comparative figures for the year ended 31 March 2018 ("FY2018"). The following financial information, including the comparative figures, has been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board as adopted by the European Union ("IFRS").

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CONSOLIDATED STATEMENTS OF INCOME
For the year ended 31 March		2019		2018	%
	Notes	€ '000	€ '000	Change
Net Sales	2	1,426,874		1,319,366	8.1
Cost of sales		(239,901)	(220,968)	8.6
Gross profit		1,186,973		1,098,398	8.1
% of net sales		83.2%		83.3%
Distribution expenses		(700,374)	(639,457)	9.5
Marketing expenses		(186,042)	(179,195)	3.8
Research & development expenses		(17,879)	(17,548)	1.9
General and administrative expenses		(132,542)	(123,048)	7.7
Share of profits from joint venture
accounted for using the equity method		-	150	-100.0
Other gains, net	3	611		1,687	-63.8
Operating profit	4	150,747		140,987	6.9
Finance costs, net	5	(3,596)	(806)	346.2
Foreign currency gains/(losses)		1,073		(4,222)	-125.4
Profit before income tax		148,224		135,959	9.0
Income tax expense	6	(30,655)	(39,453)	-22.3
Profit for the year		117,569		96,506	21.8
Attributable to:
Equity owners of the Company		118,186		96,313	22.7
Non-controlling interests		(617)	193	-419.7
Total		117,569		96,506	21.8
Effective tax rate		20.7%		29.0%

Earnings per share for profit attributable to

• the equity owners of the Company during
• the period(expressed in Euros per share)

Basic		0.081	0.066	22.7
Diluted		0.081	0.066	22.7
Number of shares used in earnings
per share calculation
Basic	7	1,461,052,171	1,460,682,471	0.0
Diluted	7	1,465,920,934	1,461,891,614	0.3

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
		31 March	31 March
As at	Notes	2019		2018
		€ '000	€ '000
ASSETS
Property, plant and equipment, net		198,662		175,920
Goodwill		1,011,139		226,646
Intangible assets, net		80,109		76,556
Deferred income tax assets		61,051		62,882
Other non-current receivables		57,581		40,253
Non-current assets		1,408,542		582,257
Inventories, net	9	202,827		156,479
Trade receivables, net	10	143,392		109,401
Other current assets		64,758		68,485
Derivatives financial instruments		50		155
Cash and cash equivalents		144,442		385,712
Current assets		555,469		720,232
TOTAL ASSETS		1,964,011		1,302,489
EQUITY AND LIABILITIES
Share capital		44,309		44,309
Additional paid-in capital		342,851		342,851
Other reserves		(93,524)	(105,376)
Retained earnings		724,132		649,189
Capital and reserves attributable to the equity owners		1,017,768		930,973
Non-controlling interests		66,464		7,828
Total equity		1,084,232		938,801
Borrowings		569,378		80,595
Deferred income tax liabilities		4,050		3,473
Other financial liabilities		14,011		13,158
Other non-current liabilities		34,448		31,743
Non-current liabilities		621,887		128,969
Trade payables	11	141,247		125,455
Salaries, wages,related social items and other tax liabilities		70,078		68,785
Current income tax liabilities		10,731		5,532
Borrowings		8,562		7,434
Other current liabilities		19,301		17,330
Derivatives financial instruments		849		493
Provisions for other liabilities and charges		7,124		9,690
Current liabilities		257,892		234,719
TOTAL EQUITY AND LIABILITIES		1,964,011		1,302,489
NET CURRENT ASSETS		297,577		485,513
TOTAL ASSETS LESS CURRENT LIABILITIES		1,706,119		1,067,770
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NOTES

1. Basis of preparation
   The consolidated statements of income and the consolidated statements of financial position have been prepared in accordance with International Financial Reporting Standards ("IFRS").
   The amended standards and interpretations that are effective for the first time for the Group for the financial year ended 31 March 2019 do not have any material impact on the consolidated financial statements.
2. Net Sales and Segment Information
   The management assesses the performance of the two operating segments, which are Sell-out and Sell-in:
3. • Sell-outcomprises the sales of products directly to the end customers. These sales are mainly done in the Group's stores and/or through the Group's websites;
   • Sell-incomprises the sales of products to intermediates. These intermediates are mainly distributors, wholesalers, and travel retailers. This segment also comprises sales of products to corporate customers, airline companies and hotels.

2.1. Performance by operating segment FY2019

					Other
					reconciling
In thousands of Euros	Sell-out	Sell-in	items	Total
Net sales	1,075,598		351,276		-	1,426,874
In % of total	75.4%		24.6%		-	100.0%
Gross profit	935,670		251,800		(497)	1,186,973
% of net sales	87.0%		71.7%		-	83.2%
Distribution expenses	(583,324)	(59,714)	(57,336)	(700,374)
Marketing expenses	(55,611)	(11,451)	(118,980)	(186,042)
Research & development expenses	-	-	(17,879)	(17,879)
General and administrative expenses	-	-	(132,542)	(132,542)
Other (losses)/gains-net	466		(66)	211	611

Operating profit	297,201		180,569		(327,023)	150,747
% of net sales	27.6%		51.4%		-	10.6%
FY2018
					Other
					reconciling
In thousands of Euros	Sell-out	Sell-in	items	Total
Net sales	987,788		331,578		-	1,319,366
In % of total	74.9%		25.1%		-	-206.3%
Gross profit	865,080		233,961		(643)	1,098,398
% of net sales	87.6%		70.6%		-	83.3%
Distribution expenses	(534,114)	(55,089)	(50,254)	(639,457)
Marketing expenses	(51,966)	(9,675)	(117,554)	(179,195)
Research & development expenses	-	-	(17,548)	(17,548)
General and administrative expenses	-	-	(123,048)	(123,048)
Share of profit from joint operations	-	-	150	150
Other (losses)/gains-net	797		(91)	981	1,687
Operating profit	279,797		169,106		(307,916)	140,987
% of net sales	28.3%		51.0%		-	10.7%

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2.2. Performance by brand

The management also evaluates the sales performance by brand.

		Sales and % of total sales
	FY2019			FY2018			Growth	Growth (1)
	€ '000	%		€ '000	%	%	%
L'Occitane en Provence	1,247,153			87.4	1,210,610			91.8	3.0	3.5
LimeLife (2)	83,780			5.9	19,119			1.4	338.2	325.6
Others (3)	95,941			6.7	89,637			6.8	7.0	10.8
Total	1,426,874			100.0	1,319,366			100.0	8.1	8.7

1. Excludes the impact of foreign currency translation effects.
2. LimeLife sales were consolidated starting January 2018. When comparing the full years of FY2018 (April2017-March 2018) and FY2019 (April 2018-March 2019), LimeLife USA recorded sales growth of 18.2% in local currency (unaudited).
3. Others include the emerging brands Melvita, Erborian and L'Occitane au Brésil.

2.3. Performance by geographic area

From a geographical perspective, the management assesses the performance of different countries. Net sales are allocated based on the country of the invoicing subsidiary.

	FY2019	FY2018
In thousands of Euros	Total	In % of total	Total	In % of total
Japan	222,119	15.6%	218,932	16.6%
United States	232,404	16.3%	172,160	13.0%
Hong Kong (1)	136,973	9.6%	124,584	9.4%
China	178,072	12.5%	159,118	12.1%
France	102,952	7.2%	102,177	7.7%
United Kingdom	60,659	4.3%	59,837	4.5%
Luxembourg (2)	65,495	4.6%	67,301	5.1%
Russia	51,247	3.6%	50,493	3.8%
Brazil	57,589	4.0%	60,208	4.6%
Taiwan	38,186	2.7%	39,433	3.0%
Other countries	281,178	19.7%	265,123	20.1%
Net sales	1,426,874	100.0%	1,319,366	100%

1. Includes sales in Macau and to distributors and travel retail customers in Asia.
2. Sales invoiced by the Company to distributors and travel retail customers in Europe,Middle-East and Americas.

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3. Other gains, net
	FY2019	FY2018
	€ '000	€ '000
(Loss)/Profit on sale of assets	(781)	432
Government grants	1,392		1,255
Other gains, net	611		1,687

4. Operating profit

Operating profit is arrived at after charging the following:

		FY2019	FY2018
		€ '000	€ '000
Employee benefit expenses	402,464		385,098
Rent and occupancy	242,359		234,954
Raw materials and consumables used	145,414		113,599
Change in inventories of finished goods and work in progress	(28,762)	(13,822)
Advertising costs	148,390		142,739
Auditor's remuneration	1,695		1,574
Professional fees*	131,295		90,638
Depreciation, amortization and impairment	65,660		64,309
Transportation expenses	61,686		51,713
Other expenses	106,537		109,412
Total cost of sales, distribution expenses, marketing expenses, research
and development expenses and general and administrative expenses	1,276,738		1,180,216
*	included sales commissions to beauty guides of LimeLife.
5. Finance costs, net
		FY2019	FY2018
		€ '000	€ '000
Interest on cash and cash equivalents	479		2,207
Finance income	479		2,207
Interest expense on:
	- Borrowings	(3,726)	(2,366)
	- Finance lease	-	(97)
- Unwinding of discount on financial liabilities	(349)	(550)
Finance costs	(4,075)	(3,013)
Finance costs, net	(3,596)	(806)

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6. Taxation

The components of income tax expense are as follows:

	FY2019	FY2018
	€ '000	€ '000
Current income tax	(26,722)	(28,323)
Deferred income tax	(3,933)	(11,130)
Total income tax expense	(30,655)	(39,453)

Reconciliation between the reported income tax expense and the theoretical amount that would arise using a standard tax rate is as follows:

Profit before income tax	148,224	135,809
Income tax calculated at corporate tax rate (Luxembourg tax rate of
26.01% as at 31 March 2019 and 2018)	(38,553)	(35,324)
Effect of different tax rates in foreign countries	14,156	5,343
Changes in tax rates	569	(5,484)
Effect of unrecognized tax assets	(7,200)	(1,588)
Expenses not deductible for taxation purposes	649	(1,118)
Provision for tax risks	(250)	-
Effect of unremitted tax earnings	(842)	(1,246)
Recognition of previously unrecognised tax assets	1,049	499
Minimum tax payments	(233)	(535)
Income tax expense	(30,655)	(39,453)

In FY2019, the net effect of changes in tax rate mainly concerned the USA where the enacted tax rate decreased from 39.5% to 27.7%.

1. Earnings per share
   The calculation of basic and diluted earnings per share is based on the profit attributable to equity owners of the Company of €118.2 million for FY2019 (€96.3 million for FY2018) and the weighted average number of shares in issue of 1,461,052,171 (basic) and 1,465,920,934 (diluted) for the year ended 31 March 2019 and 1,460,682,471 (basic) and 1,461,891,614 (diluted) for the year ended 31 March 2018.
2. Dividends
   At the Board meeting held on 17 June 2019, the Board recommended a distribution of gross final dividend of €0.0297 per share for a total amount of €43.4 million or 36.7% of the net profit attributable to the equity owners of the Company.
   The amount of the proposed final dividend is based on 1,461,052,171 shares in issue excluding 15,912,720 treasury shares as at 17 June 2019.

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9. Inventories, net

Inventories, net consist of the following items:

As at 31 March	2019		2018
	€'000	€'000
Raw materials and supplies	28,390		24,784
Finished goods and work in progress	184,059		140,528
Inventories, gross	212,449		165,312
Less: allowance	(9,622)	(8,833)
Inventories, net	202,827		156,479

10. Trade receivables, net

Ageing analysis of trade receivables from due date at the respective balance sheet date is as follows:

As at 31 March	2019	2018
	€'000		€'000
Current and past due within 3 months	142,249	108,816
Past due from 3 to 6 months	1,098	449
Past due from 6 to 12 months	36	47
Past due over 12 months	9	89
Trade receivables, net	143,392	109,401

The Group's sales to end customers are retail sales and no credit terms are granted to the end customers. For customers in the Sell-in segment, sales are made with credit terms generally from 60 to 90 days.

11. Trade payables

Ageing analysis of trade payables from due date at the respective balance sheet date is as follows:

As at 31 March	2019	2018
	€'000		€'000
Current and past due within 3 months	140,323	123,591
Past due from 3 to 6 months	388	1,036
Past due from 6 to 12 months	462	801
Past due over 12 months	74	27
Trade payables	141,247	125,455

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MANAGEMENT DISCUSSION & ANALYSIS
Summary:
	FY2019	FY2018
	€ million	€ million
	or %	or %
Net sales	1,426.9	1,319.4
Operating profit	150.7	141.0
Profit for the year	117.6	96.5
Gross profit margin	83.2%	83.3%
Operating profit margin	10.6%	10.7%
Net profit margin	8.2%	7.3%
Net cash inflow from operations	168.7	170.3

Definitions:

Comparable Storesmeans existing retail stores which have been opened before the start of the previous financial year, including Company owned ecommerce websites and excluding renovated stores.

Non-comparableStores & othersmean all stores that are not Comparable Stores, i.e. stores opened, closed and renovated during the previous or the current financial period under discussion, together with other sales from marketplaces, mail-orders and services.

Comparable Store Salesmeans net sales from Comparable Stores during the financial period under discussion. Unless otherwise indicated, discussion of Comparable Store Sales excludes foreign currency translation effects.

Non-comparableStore Salesmeans net sales from Non-comparable Store Sales during the financial period under discussion. Non-comparable Store Sales also include sales from a limited number of promotional campaigns usually held at temporary common areas of shopping malls. Unless otherwise indicated, discussion of Non-comparable Store Sales excludes foreign currency translation effects.

Same Store Sales Growthrepresents a comparison between Comparable Store Sales for two financial periods. Unless otherwise indicated, discussion of Same Store Sales Growth excludes foreign currency translation effects.

Overall Growthmeans the total worldwide net sales growth for the financial period(s) presented excluding foreign currency translation effects.

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REVENUE ANALYSIS

The Group's net sales reached €1,426.9 million, representing growth of 8.7% at constant rates for the year ended 31 March 2019. Sales grew 8.1% at reported rates over last year. LimeLife by Alcone ("LimeLife") became a subsidiary of the Group in January 2018 and its sales are consolidated since. On a like-for-like sales basis (excluding LimeLife, Le Couvent des Minimes and at constant currency rates), the overall growth was 4.2%, an improvement from 3.7% last year.

In FY2019, net sales in Sell-out and Sell-in segments (representing 75.4% and 24.6% of total net sales, respectively) increased by 9.4% and 6.5% respectively, excluding foreign currency translation effects. The Company increased the total number of retail locations from 3,285 as at 31 March 2018 to 3,420 as at 31 March 2019, an increase of 135 or 4.1%. The Company maintained its selective global retail expansion and increased the number of its own retail stores from 1,555 as at 31 March 2018 to 1,572 as at 31 March 2019, representing a net increase of 17 own stores or 1.1%. The net own store openings included 9 openings in Asia Pacific, 9 openings in the Americas and 1 closing in EMEA (Europe, Middle East and Africa). The Group had accelerated the expansion of the emerging brands, with net 19 openings, while L'Occitane en Provence had a net closing of 2 locations. At the end of March 2019, the emerging brands had a total of 159 own stores (Melvita: 60, L'Occitane au Brésil: 86 and Erborian: 13).

Sales from Comparable Stores, Non-comparable Stores and others and Sell-in segments grew at constant exchange rates by 1.8%, 26.1% and 6.5% respectively. Geographically, the US, China, Other countries and Hong Kong were the key contributing markets to Overall Growth.

Performance by Business Segment

The following table provides a breakdown of the net sales year-on-year growth (including and excluding foreign currency translation effects as indicated) by business segment for FY2019:

Year-on-year growth
							Contribution
								to Overall
	Growth		Growth		Growth(2)		Growth(2)
	€'000	%	%	%
Sell-out	87,810	8.9	9.4	81.3
Comparable Stores	5,871	0.9	1.8	10.7
Non-comparable Stores & others (1)	81,939	26.4	26.1	70.6
Sell-in	19,698	5.9	6.5	18.7
Overall Growth	107,508	8.1	8.7	100.0

1. Others include marketplaces,mail-orders, other service and LimeLife sales
2. Excludes the impact of foreign currency translation effects.

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Sell-out

The Sell-out business segment accounted for 75.4% of the Group's total sales and amounted to €1,075.6 million, an increase of 8.9% as compared to FY2018 and an increase of 9.4% at constant exchange rates. This growth was primarily contributed by other sales, principally LimeLife and marketplaces in China, the US and Korea. Non-comparable stores contributed 9.6% to overall growth, thanks to the net addition of 17 own stores during FY2019. There were net additions of 16 stores in Brazil (8 of which were L'Occitane au Brésil stores), 10 stores in Japan (including 3 for Melvita), 4 stores each in Russia (all for Erborian) and France (3 for Melvita and 1 for Erborian), 2 stores in Hong Kong (1 for Melvita) and 1 store in Taiwan. In the US, 12 net stores were closed as planned. China had 7 net closings (including 4 Melvita stores). Other countries had 1 net closing.

As compared to last year, sales of the Group's Web Sell-out channels (including own E-commerce and marketplaces) grew 11.2% at constant exchange rates, equivalent to 13.9% of the total Sell-out sales. Overall Same Store Sales Growth improved to 1.8%, compared to 1.7% last year and contributed 10.7% to Overall Growth. Major contributing markets were China, Other countries, Brazil and Russia. China posted the highest Same Store Sales Growth rate for the year at 6.9%, followed by Brazil with 5.9% Same Store Sales Growth, with contribution from both L'Occitane en Provence and L'Occitane au Brésil. Russia also posted healthy growth rate at 5.4%.

Sell-in

The Sell-in business segment accounted for 24.6% of the Group's total sales in FY2019 and amounted to €351.3 million, an increase of 5.9% as compared to FY2018 and an increase of 6.5% at constant exchange rates. Sell-in segment contributed 18.7% to Overall Growth. The increase was primarily driven by the dynamic growth in web partner, travel retail and distributor channels of the L'Occitane en Provence brand. Erborian and L'Occitane au Brésil brands also expanded in the segment.

Performance by Brand

The following table presents the net sales and net sales growth (including and excluding foreign currency translation effects as indicated) by brand for the year ended 31 March 2019:

		Sales and % of total sales
	FY2019			FY2018			Growth		Growth (1)
	€'000	%		€'000	%	%	%
L'Occitane en Provence	1,247,153			87.4	1,210,610		91.8	3.0	3.5
LimeLife (2)	83,780			5.9	19,119		1.4	338.2	325.6
Other (3)	95,941			6.7	89,637		6.8	7.0	10.8
Total	1,426,874			100.0	1,319,366		100.0	8.1	8.7

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1. Excludes the impact of foreign currency translation effects.
2. LimeLife sales were consolidated starting January 2018. When comparing the full years of FY2018 (April2017-March 2018) and FY2019 (April 2018-March 2019), LimeLife USA recorded sales growth of 18.2% in local currency (unaudited).
3. Others include the emerging brands Melvita, Erborian and L'Occitane au Brésil.

L'Occitane en Provence remains the Group's core brand, accounting for 87.4% of total net sales. Sales growth of the brand in FY2019 was a healthy 3.5% at constant exchange rates, compared with 2.7% in FY2018. Sales momentum strengthened since the launch of the Immortelle Resetserum in the third quarter. Key contributing channels were retail, marketplaces, web partners and travel retail. LimeLife's sales were consolidated starting in the final quarter of FY2018. The brand accounted for 5.9% of the Group's total net sales. When comparing the full years of FY2018 (April 2017-March 2018) and FY2019 (April 2018-March 2019), LimeLife USA recorded sales growth of 18.2% (unaudited) in local currency. Other emerging brands altogether accounted for 6.7% of the Group's total net sales and posted 10.8% growth at constant exchange rates. Erborian and L'Occitane au Brésil performed particularly well.

Performance by Geographic Area

The following table presents the net sales growth for FY2019 and contribution to overall sales growth (including and excluding foreign currency translation effects as indicated) by geographic area:

			Sales and % of total sales
																		Contribution
																			to Overall
	FY2019			FY2018				Growth	Growth	Growth (1)		Growth (1)
	€'000	%		€'000	%	€'000	%	%	%
Japan	222,119			15.6	218,932			16.6	3,187		1.5	0.1	0.3
Hong Kong (2)	136,973			9.6	124,584			9.4	12,389		9.9	8.6	9.4
China	178,072			12.5	159,118			12.1	18,954		11.9	12.1	16.8
Taiwan	38,186			2.7	39,433			3.0	(1,247)	(3.2)	(2.7)	(0.9)
France	102,952			7.2	102,177			7.7	775		0.8	0.8	0.7
United Kingdom	60,659			4.3	59,837			4.5	822		1.4	1.5	0.8
United States (3)	232,404			16.3	172,160			13.0	60,244		35.0	31.8	47.7
Brazil	57,589			4.0	60,208			4.6	(2,619)	(4.4)	11.1	5.8
Russia	51,247			3.6	50,493			3.8	754		1.5	12.2	5.4
Other countries (4)	346,673			24.3	332,424			25.2	14,249		4.3	4.9	14.1
All countries	1,426,874			100.0	1,319,366			100.0	107,508		8.1	8.7	100.0

1. Excludes the impact of foreign currency translation effects and reflects growth from all business segments, including growth from the own retail store sales.
2. Includes sales in Macau and to distributors and travel retail customers in Asia.
3. Growth in the US excluding LimeLife and the impact of foreign currency translation was-2.0%.
4. Includes sales from Luxembourg.

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The following table provides a breakdown, by geographic area, of the number of own retail stores, their contribution percentage to Overall Growth and the Same Store Sales Growth for FY2019 compared to FY2018:

			Own Retail Stores					% Contribution to Overall Growth(1) (2)
		Net openings		Net openings		Non-							Same
		YTD 31 Mar		YTD 31 Mar	comparable	Comparable	Total		Store Sales
	FY2019	2019		FY2018	2018		Stores		Stores	Stores	Growth % (2)
Japan (3)	154	10		144	10	4.1		(0.4)	3.8	(0.3)
Hong Kong (4)	36	2		34	-	(0.5)	(0.6)	(1.1)	(2.6)
China (5)	190	(7)	197	(5)	(0.1)	6.2	6.1	6.9
Taiwan	53	1		52	(4)	(0.3)	(0.4)	(0.7)	(2.7)
France (6)	86	4		82	2	3.6		(0.7)	2.9	(2.1)
United Kingdom	74	-		74	-	(0.8)	(0.0)	(0.8)	(0.1)
United States	184	(12)	196	(11)	(2.6)	(0.0)	(2.6)	(0.0)
Brazil (7)	182	16		166	43	2.1		2.0	4.2	5.9
Russia (8)	107	4		103	(1)	1.6		1.5	3.1	5.4
Other countries (9)	506	(1)	507	7	2.4		3.1	5.5	2.2
All countries (10)	1,572	17		1,555	41	9.6		10.7	20.3	1.8

1. Represents percentage of overall net sales growth attributable toNon-comparable Stores, Comparable Stores and Total Stores for the geographic areas and periods indicated.
2. Excludes foreign currency translation effects.
3. Includes 33 and 36 Melvita stores as at 31 March 2018 and 31 March 2019 respectively.
4. Includes 3 L'Occitane stores in Macau and 8 Melvita stores in Hong Kong as at 31 March 2018 and 3 L'Occitane stores in Macau and 9 Melvita stores in Hong Kong as at 31 March 2019.
5. Includes 7 and 3 Melvita stores as at 31 March 2018 and 31 March 2019 respectively.
6. Includes 3 Melvita and 1 Erborian stores as at 31 March 2018 and 6 Melvita and 2 Erborian stores as at 31 March 2019.
7. Includes 78 and 86 L'Occitane au Brésil stores as at 31 March 2018 and 31 March 2019 respectively.
8. Includes 5 and 9 Erborian stores as at 31 March 2018 and 31 March 2019 respectively.
9. Include 4 Melvita and 1 Erborian stores as at 31 March 2018 and 6 Melvita and 2 Erborian stores as at 31 March 2019.
10. Include 55 Melvita, 78 L'Occitane au Brésil and 7 Erborian stores as at 31 March 2018 and 60 Melvita, 86 L'Occitane au Brésil and 13 Erborian stores as at 31 March 2019.

- 13 -

Japan

Japan's net sales for FY2019 were €222.1 million, an increase of 1.5% as compared to FY2018. In local currency, the growth was 0.1%. The flattish performance was due to a sluggish retail market. Nonetheless, retail sales of L'Occitane en Provence grew at a low single-digit rate as compared to last year, thanks to the new stores opened, the large-scale "Balloon Journey" marketing event and successful face care campaigns during the year. The Immortelle Resetserum was also well received in the market. Yet overall retail sales were affected by a change in the café business model and the pull-out of QVC. Melvita kept a double-digit growth rate, but was more challenged than last year due to a high base and staffing issues.

Hong Kong

Hong Kong's net sales for FY2019 were €137.0 million, an increase of 9.9% as compared to FY2018. At constant exchange rates, the growth was 8.6%, contributing 9.4% to Overall Growth. Sell-out segment growth was -2.9% at constant exchange rates, with Same Store Sales Growth at -2.6%. Macroeconomic uncertainties continued to erode consumption sentiment, reflected in a marked downturn in the Hong Kong retail market after the first quarter of FY2019, notably in the average ticket value (ATV). Meanwhile, the increase in mainland tourist traffic brought by new infrastructure did not uplift Hong Kong retail sales. However, ATV stabilized towards the end of the year, benefiting from the sustained marketing support for the Immortelle Resetserum. Travel retail sales remained strong with mid-teen growth rate. It was particularly dynamic in Korea and the Greater China region.

China

China's net sales for FY2019 were €178.1 million, an increase of 11.9% as compared to FY2018. At constant exchange rates, the growth was 12.1%, contributing 16.8% to Overall Growth. Sales momentum in China was dynamic throughout the whole year. Sell-out sales remained strong even though trading with 7 fewer stores than last year, posting a growth of 9.6% at constant exchange rates, and with Same Store Sales Growth at 6.9%. The marketplace channel continued to drive growth, with impressive performances recorded during key festivals such as Singles' Day, Chinese New Year and Women's Day. Sell-in sales also posted encouraging results, with growth of more than 30.0%, thanks to the launch of JD.com and dynamic B2B sales.

Taiwan

Taiwan's net sales for FY2019 were €38.2 million, a decrease of 3.2% at reported rates or 2.7% at constant exchange rates as compared to FY2018. The retail market remained competitive. The decrease in Sell-out was largely explained by the -2.7% Same Store Sales Growth together with the typhoon hits and poor weather during the summer season. Web sellout channel, however, recorded double-digit growth, thanks to the revamped own e-commerce platform as well as the development of marketplace.

- 14 -

France

France's net sales for FY2019 were €103.0 million, an increase of 0.8% as compared to FY2018. On a like-for-like basis (excluding Le Couvent des Minimes), growth was 2.3%. Retail shops in Paris had been affected by the ongoing weekend demonstrations since the third quarter of FY2019. Yet Sell-out remained dynamic and posted a growth of 6.9%, thanks to the flagship opened last year and the new stores this year. Wholesale sales of L'Occitane en Provence and Melvita, however, were affected by the closing of non-profitable points and wholesale team change. Erborian brand was well on track and ended the year with double- digit growth.

United Kingdom

United Kingdom's net sales for FY2019 were €60.7 million, an increase of 1.4% as compared to FY2018. At constant exchange rates, the growth was 1.5%. Sales saw improvement towards the end of the year despite an overall declining beauty market environment. Retail remained sluggish, and Same Store Sales Growth was flat. The overall sales growth was driven by successful QVC programmes, the launch of LimeLife and further development of Erborian in wholesale and e-commerce channels.

United States

United States' net sales for FY2019 were €232.4 million, an increase of 35.0% as compared to FY2018. At constant exchange rates, the growth was 31.8%, contributing 47.7% to Overall Growth. LimeLife's sales were consolidated in the final quarter last year. When comparing LimeLife's sales for the full year in FY2018 and FY2019, the unaudited sales growth was 18.2%. For the L'Occitane en Provence brand, after a difficult fourth quarter of the year which was affected by hostile weather and sluggish consumer spending, sales posted a slight decrease for the whole year. The decrease was mainly due to the close of 12 retail stores. Same Store Sales Growth for the year ended flat. For Sell-in channels, wholesale sales decreased as the Group pulled out of Sephora USA, yet the loss of sales was largely covered by web-partnering with Amazon.

Brazil

Brazil's net sales for FY2019 were €57.6 million, a decrease of 4.4% as compared to FY2018. At constant exchange rates, the growth was 11.1%, contributing 5.8% to Overall Growth. Both Sell-out and Sell-in channels recorded double-digit growth. Same Store Sales Growth ended the year at 5.9%. Retail posted good growth in ATV, thanks to the well-acceptedImmortelle Resetserum and L'Occitane au Brésil's new fragrance range. L'Occitane en Provence posted healthy growth while L'Occitane au Brésil continued the strong momentum throughout the year. L'Occitane au Brésil has 86 stores as at the end of March 2019.

- 15 -

Russia

Russia's net sales for FY2019 were €51.2 million, an increase of 1.5% as compared to FY2018. At constant exchange rates, the growth was 12.2%, contributing 5.4% to Overall Growth. Russia delivered impressive growth for the year, thanks to the healthy Same Store Sales Growth, new stores opened this year and dynamic wholesale and B2B channels. Retail sales of L'Occitane en Provence saw healthy growth with growth in both number of tickets and ATV. Erborian continued its strong performance, propelling Russia to become the second largest market after France. At present, there are 9 Erborian stores in Russia.

Other countries

Other countries' net sales for FY2019 were €346.7 million, an increase of 4.9% at constant exchange rates, contributing 14.1% to Overall Growth. The Sell-out segment grew by 5.9%, mainly contributed by development of LimeLife in a few countries, impressive growth of the marketplace channel in Korea, and a healthy 2.2% Same Store Sales Growth. Malaysia, Canada and Australia contributed most to Overall Growth with dynamic growth rates of 33.0%,14.5% and 9.4%, respectively.

PROFITABILITY ANALYSIS

COST OF SALES AND GROSS PROFIT

Cost of sales increased by 8.6%, or €18.9 million, to €239.9 million in FY2019. The gross profit margin remained high at 83.2%, which slightly decreased by 0.1 point as compared to FY2018, reflecting the following factors:

• reduction in production costs and freight & custom charges for 0.3 points; and
• price increase and product mix effects for 0.1 points.

This improvement in gross profit margin was offset by:

• increase in use of Mini Products & Pouches ("MPPs") & boxes for 0.1 points;
• unfavourable brand mix (mainly from LimeLife) for 0.2 points; and
• other factors and rounding for 0.2 points.

- 16 -

DISTRIBUTION EXPENSES

Distribution expenses increased by 9.5%, or €60.9 million, to €700.4 million in FY2019. As a percentage to net sales, distribution expenses increased by 0.6 points to 49.1%. The higher cost percentage is attributable to a combination of:

• unfavourable brand mix from LimeLife for 0.6 points;
• investment in compensation and incentives in retail teams and travel retail workforce for 0.4 points;
• investment in large store rental and impairment for cafés for 0.3 points;
• increase in promotional tools and others for 0.2 points; and
• increase in logistics costs in Asia warehouse and in freight costs in Japan for 0.1 points. This deterioration was partly offset by:
• favourable channel mix for 0.5 points, driven by lower proportion of retail channel and healthy growth inSell-in channels; and
• lowerpre-opening and closing costs this year for 0.5 points.

MARKETING EXPENSES

Marketing expenses increased by 3.8%, or €6.8 million, to €186.0 million in FY2019. As a percentage of net sales, marketing expenses decreased by 0.6 points to 13.0% of net sales. The decrease was attributable to:

• favourable brand mix effect for 0.3 points (due to LimeLife for 0.4 points, and partly net off by other brands for 0.1 points);
• lower spending in overall advertising, marketing events and promotional tools for 0.2 points despite increased investment in China; and
• higher leverage of sales for 0.2 points.

This improvement was partly offset by:

• reclassification for 0.1 points.

- 17 -

RESEARCH & DEVELOPMENT EXPENSES

Research and development ("R&D") expenses increased by 1.9%, or €0.3 million, to €17.9 million in FY2019, due mainly to the investments in the new innovation lab, eco-certification, sustainability improvements and dedicated IT System. As a percentage to net sales, R&D expenses remained stable at 1.3%.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses increased by 7.7%, or €9.5 million, to €132.5 million in FY2019. As a percentage of net sales, general and administrative expenses remained the same at 9.3%, as a result of the following factors:

• higher leverage for 0.2 points in particular from the L'Occitane en Provence brand;
• lower personnel incentive costs due to decrease in bonus,share-based incentives and profit sharing for 0.2 points;
• reclassification and rounding for 0.2 points; and
• favourable exchange rates for 0.1 points.

These improvements were offset by an unfavourable brand mix from LimeLife for 0.6 points and miscellaneous items for 0.1 points.

OTHER GAINS AND LOSSES

Other gains were €0.6 million in FY2019, being tax credits on research expenditures offset partly by capital losses. In FY2018, net other gains were €1.7 million.

OPERATING PROFIT

Operating profit increased by 6.9%, or €9.8 million, to €150.7 million. The operating margin reduced by 0.1 points of net sales to 10.6%. The slight decrease is explained by the factors below:

• unfavourable brand mix, mostly LimeLife, for 1.1 points; and
• investment in large stores and beauty advisor wages and incentives for 0.7 points.

- 18 -

The increase in costs was largely offset by the following:

• higher leverage and efficiency for 0.5 points;
• lower storepre-opening costs compared to last year for 0.5 points;
• favourable channel mix for 0.4 points, driven by the decreased share of retail and café which have higher operating costs;
• lower overall and more focused marketing spending for 0.1 points as a result of more efficient use of samples and free products and lower spending in marketing events;
• beneficial price & product mix for 0.1 points; and
• favourable FX impact for 0.1 points.

FINANCE COSTS, NET

Net finance costs were €3.6 million in FY2019, which consisted of net interest expenses of €3.2 million interest expenses on borrowings netting off interest income on cash balances, and €0.4 million non-cash accrual and adjustments. The increase in net interest expenses was due mainly to lower cash balance and higher bank borrowings on the revolving facilities and term loan from the cash needs at some subsidiaries.

For FY2018, the net finance costs consisted of €0.2 million interest expenses on borrowings netting off interest income on cash balances, and €0.6 million non-cash accrual.

FOREIGN CURRENCY GAINS/LOSSES

Net foreign currency gains amounted to €1.1 million in FY2019 (FY2018: net losses of €4.2 million) and were composed of €0.4 million realized gains and €0.7 million unrealized gains.

The realized gains were the net result of some gains from financing activities (including a one-off gain in USD hedging), netting off losses generated from the intercompany trade and current accounts settlements during the year, notably in Chinese yuan, Canadian dollar and Hong Kong dollar.

The unrealized gains were the net result of year-end conversion of foreign currency bank accounts, intercompany trade and financing balances and syndicated loan outstanding amounts into euro. The unrealized gains were largely related to US dollar, Swiss franc, Canadian dollar and Korea won, being partly netted off by unrealized losses in South African rand, Chinese yuan, Mexican peso and Russian ruble.

- 19 -

INCOME TAX EXPENSE

The effective tax rate decreased from 29.0% in FY2018 to 20.7% in FY2019, a decrease of 8.3 percentage points due to:

• one-timeeffects in FY2018, principally explained by the tax reform in the US for 5.5 points;
• favourable country mix effects for 3.2 points;
• favourable exchange rates effect impacting the deferred tax assets related to the intercompany margin elimination in the inventories, for 1.0 points; and
• other effects for 0.8 points.

Such favourable impacts were mitigated by changes in unrecognized deferred tax assets for -2.2 points, essentially explained by the derecognition of certain tax credits in Brazil.

PROFIT FOR THE YEAR

For the aforementioned reasons, profit for FY2019 was €117.6 million, increased by 21.8% or €21.1 million as compared to FY2018. Basic and diluted earnings per share in FY2019 were €0.081 (FY2018: €0.066), and increased by 22.7%. The numbers of basic and diluted shares used in the calculations of earnings per share in FY2019 were 1,461,052,171 and 1,465,920,934 respectively (FY2018: basic 1,460,682,471 and diluted 1,461,891,614).

BALANCE SHEET AND CASH-FLOW REVIEW

LIQUIDITY AND CAPITAL RESOURCES

As at 31 March 2019, the Group had cash and cash equivalents of €144.4 million as compared to €385.7 million as at 31 March 2018. The reduction was mainly explained by the financing for the Elemis acquisition. As at 31 March 2019, total borrowings, including term loans, revolving facilities, bank borrowings, finance lease liabilities, and current accounts with minority shareholders and related parties, amounted to €577.9 million. As at 31 March 2019, the aggregate amount of undrawn borrowing facilities was €161.9 million.

- 20 -

SUMMARIZED CASH-FLOW STATEMENT
For the year ended 31 March	2019		2018
	€'000	€'000
Profit before tax, adjusted for non-cash items	219,786		202,111
Changes in working capital	(33,859)	1,926
Income tax paid	(17,240)	(33,703)
Net cash inflow from operating activities	168,687		170,334
Net cash outflow from capital expenditures	(86,302)	(92,894)
Free cash flow	82,385		77,440
Net cash (outflow) from investment in new ventures	(814,216)	(109,834)
Net cash inflow/(outflow) from financing activities	501,451		(35,104)
Effect of exchange rate changes	(10,890)	459
Net (decrease) in cash, cash equivalents and bank balances	(241,270)	(67,039)

Free cash flow generated for the year was €82.4 million, as compared to €77.4 million in FY2018. Net cash outflow from investment in new ventures was €814.2 million, as compared to €109.8 million in last year. The sharp increase this year was mainly explained by the acquisition of Elemis. In FY2019, net cash inflow from financing activities amounted to €501.5 million, as compared to a net cash outflow of €35.1 million in FY2018. The net inflow was largely explained by the increase in borrowing in FY2019, mainly for the financing of Elemis acquisition.

CAPITAL EXPENDITURES

Net cash used in capital expenditures was €86.3 million in FY2019, as compared to €92.9 million in FY2018, representing a decrease of €6.6 million. The capital expenditures for FY2019 are primarily related to:

• additions of leasehold improvements, other tangible assets, key moneys and changes in deposits related to stores for €41.8 million;
• additions of machinery and equipment, enhancing production lines for new products, building a new factory in Brazil and improvements in warehouse and offices at subsidiaries for a total of €24.4 million; and
• additions in information technology software, licenses and equipment for €18.6 million, including various projects for CRM,e-commerce, sales and commission systems and upgrade of current systems.

- 21 -

INVESTMENT IN NEW VENTURES

Net cash used in investment in new ventures was €814.2 million in FY2019, as compared to €109.8 million in FY2018, representing an increase of €704.4 million. The investing activities for FY2019 primarily related to the acquisitions of subsidiaries including Elemis and its subsidiaries for a total of €800.5 million.

FINANCING ACTIVITIES

Financing activities in FY2019 ended with a net cash inflow of €501.5 million (FY2018: outflow of €35.1 million). Net cash inflow during the year mainly reflected the following:

• net inflow from drawings under a term loan and revolving facilities for a total of €489.4 million, mainly for financing the Elemis acquisition;
• transactions withnon-controlling interests relating to the sale of 7.7% of Elemis for €55.8 million;

partly offset by the outflows:

• payment of dividend for €43.4 million.

INVENTORIES

The following table sets out a summary of average inventory days for the periods indicated:

FY2019 FY2018

Average inventory turnover days (1)	273	243

1. Average inventory turnover days equals to average inventory divided by cost of sales and multiplied by 365. Average inventory equals to the average of net inventory at the beginning and end of a given period.

Inventory value increased by 29.6%, or €46.3 million, to €202.8 million as at 31 March 2019. Inventory turnover increased by 30 days as a result of:

• increase in inventory of LimeLife for 17 days, due mainly to anticipation of future sales growth and low inventory last year as a result of stock clearance for rebranding LimeLight to LimeLife;
• inclusion of the inventory of Elemis subsidiaries at year end but no cost of sales consolidated for the year, resulting in an increase of 12 days, including FX impact(note that the Elemis acquisition was completed in March 2019, so its balance sheet was consolidated to the Group's in FY2019 but not the income statement); and
• for the existing brands, the inventory of raw materials, finished goods and MPPs in fact dropped by 7 days, yet the improvement was more than offset by lower inventory provision and rounding for 3 days and unfavourable FX impact for 5 days, ending at a net increase of 1 turnover day.
• • 22 -

TRADE RECEIVABLES

The following table sets out a summary of turnover days of trade receivables for the periods indicated:

FY2019 FY2018

Turnover days of trade receivables(1)	32	30

1. Turnover days of trade receivables equals to average trade receivables divided by net sales and multiplied by 365. Average trade receivables equals to the average of net trade receivables at the beginning and end of a given period.

Turnover days of trade receivables increased by 2 days to 32 days for FY2019 as compared to FY2018. The increase was due mainly to inclusion of Elemis trade receivables without consolidating the corresponding sales for the year.

TRADE PAYABLES

The following table sets out a summary of average trade payables days for the periods indicated:

FY2019 FY2018

Turnover days of trade payables (1)	203	188

1. Turnover days of trade payables equals to the average trade payables divided by cost of sales and multiplied by 365. Average trade payables equals to the average of trade payables at the beginning and end of a given period.

The increase in turnover days of trade payables of 15 days was due mainly to inclusion of Elemis' trade payables at year end without consolidating the corresponding cost of sales for the year. Out of the 15 days increase in trade payables turnover, 13 days were from Elemis, and 2 days were from FX impact on the existing brands.

BALANCE SHEET RATIOS

Return on capital employed in FY2019 was 15.9%, improved by 0.8 points as compared to FY2018, as a result of an increase in net operating profit after tax by 24.0% accompanied by an increase of 17.8% in capital employed, excluding the goodwill on Elemis. Note that the acquisition of Elemis was completed in March 2019, its balance sheet items were consolidated at year end; however, its profit and loss items will only be consolidated in FY2020 onwards. Hence the return on capital employed ratio excluded the goodwill on Elemis to avoid distortion. The capital and reserves attributable to the equity owners increased by €86.7 million for the year ended 31 March 2019, due mainly to the profits retained for the year and a lower reserve required for foreign currency translation. Return on equity ratio in FY2019 was 11.6%, increased by 1.3 points as compared to FY2018.

- 23 -

The Group turned from net cash position to net debt position in FY2019 after the loan financing for the Elemis acquisition. The gearing ratio also increased to 29.4% for the same reason.

		FY2019	FY2018
Profitability
EBITDA	€'000	217,480	201,074
Net operating profit after tax (NOPAT)(1)	€'000	120,421	97,078
Capital employed(2)	€'000	755,397	641,118
Return on capital employed (ROCE)(3)		15.9%	15.1%
Return on equity (ROE)(4)		11.6%	10.3%
Liquidity
Current ratio (times)(5)		2.2	3.1
Quick ratio (times)(6)		1.4	2.4
Capital adequacy
Gearing ratio(7)		29.4%	6.8%
Debt to equity ratio(8)		40.0%	Net cash
			position

1. (Operating profit + foreign currency net gains or losses) x (1 - effective tax rate)
2. Non-currentassets* - (deferred tax liabilities + other non-current liabilities) + working capital** * excluded goodwill on Elemis
3. • excluded current financial liabilities to show only working capital relating to operations
4. NOPAT/capital employed
5. Net profit attributable to equity owners of the Company/shareholders' equity at year end excluding minority interest
6. Current assets/current liabilities
7. (Current assets - inventories)/current liabilities
8. Total debt/total assets
9. Net debt/(total assets - total liabilities)

FOREIGN EXCHANGE RISK MANAGEMENT

The Company enters into forward exchange contracts to hedge anticipated transactions, as well as receivables and payables not denominated in its presentation currency, the Euro, for periods consistent with its identified exposures. As at 31 March 2019, the Company had foreign exchange derivatives net liabilities of €0.8 million in the form of forward exchange contracts (in accordance with fair market valuation requirements under IFRS). The notional principal amounts of outstanding forward exchange derivatives as at 31 March 2019 were primarily sale of Hong Kong dollar for an equivalent amount of €22.6 million, Japanese yen for €17.2 million, Chinese yuan for €15.1 million, Great British pound for €3.3 million, Thai baht for €2.6 million, Russian ruble for €2.5 million and Brazilian real for €2.3 million.

- 24 -

DIVIDENDS

At the Board meeting held on 11 June 2018, the Board recommended a gross dividend distribution of €0.0297 per share for a total amount of €43.4 million or 45.0% (as compared to the Group's usual payout of 35.0%) of the net profit attributable to the equity owners of the Company. The amount of the final dividend was based on 1,460,682,471 shares in issue as at 11 June 2018 excluding 16,282,420 treasury shares. The shareholders of the Company (the "Shareholders") approved this dividend at a meeting held on 26 September 2018. The dividend was duly paid on 19 October 2018.

The Group remained solid in generating operating cashflow. In view of the healthy cash position, the Board is pleased to recommend a gross dividend of €0.0297 per share (the "Final Dividend"), same as of FY2018. The total amount of the Final Dividend is €43.4 million.

The Final Dividend is based on 1,461,052,171 shares in issue as at 17 June 2019 excluding 15,912,720 treasury shares.

EVENTS SUBSEQUENT TO THE END OF FINANCIAL YEAR

There are no events subsequent to the end of financial year required to be reported.

STRATEGIC REVIEW

FY2019 was a watershed year for the Group. The year was marked with new management, a new strategy, a new brand, and most importantly, a renewed sense of focus on sustainable growth and profitability.

During the year, the Group enacted its new "Pulse" strategy to achieve long-term growth. The strategy is anchored by five pillars: empowering teams; executing fundamentals especially in a retail context; adopting an omni-channel, mobile and digital approach; engaging customers; and strengthening brand commitments. By focusing on each of these priorities collectively, the Pulse strategy aims to revitalise the Group's future profitability and sustainable growth, while building trust and brand resonance among its customers.

In the first year of implementing the Pulse strategy, the Group has witnessed early results. The Group accelerated sales growth for its namesake brand, L'OCCITANE en Provence, and maintained profitability despite broad macroeconomic uncertainties and the investment in LimeLife's development. In fact, excluding LimeLife, the operating profit margin improved significantly by 0.8 points. This was achieved through a Group-wide effort to invest in a disciplined and targeted manner, and seek efficiency gains.

On top of the initiatives to improve the existing business, the Group also sought to unlock new markets and sales channels through its acquisition of ELEMIS, its largest acquisition to date, extending its efforts to build a leading portfolio of premium beauty brands.

- 25 -

ELEMIS acquisition reinforces multi-brand strategy and skin care positioning

The Group's acquisition of ELEMIS, a global distributor and innovator in the fields of premium beauty and skincare, in January 2019 added a new dimension to its multi-brand strategy. The brand sells directly to consumers through its websites, as well as wholesale to various distribution channels, including digital, retail distribution, QVC, professional spa and maritime - a proposition that both complements and expands the Group's existing omni- channels, as well as its growing skin care positioning. The brand is also very profitable and offers good growth potential beyond its current markets - currently just North America and Europe - especially in the Asia-Pacific.

The Group also strengthened the face care image of its core L'OCCITANE en Provence brand with the highly successful launch of a new hero product, Immortelle Resetserum, which supported the brand's stronger sales momentum in FY2019.

All of the Group's other emerging brands - Melvita, Erborian, L'OCCITANE au Brésil and LimeLife - continued to grow well during FY2019, particularly in markets such as Japan, France, Brazil and the U.S.

Despite some short-term challenges towards the end of FY2019, Melvita maintained decent Same Store Sales Growth, supported by the focus on signature beauty oils and floral waters, such as the Argan Oiland Rose Floral Water, allowing the Group to fully leverage on the brand's high level of repurchases.

Erborian's Korean roots and French flair continued to prove its appeal in western countries. The brand occupies a niche positioning that bridges skin care and makeup, helping it achieve double-digit sales growth and remain profitable for the second year in a row.

Meanwhile, L'OCCITANE au Brésil helped drive overall sales growth for the Group in Brazil during FY2019. Following the launch of a new flagship store in São Paulo, the brand has adopted a new visual brand identity based around a 'Casa Brasileira' concept, which is inspired by the Brazilian approach to creating cosy, simple and hospitable homes. The brand also continued to excite customers with new product launches, supporting its double-digit sales growth.

FY2019 also saw Limelife expand beyond its home market in the U.S. to new markets including Canada, United Kingdom, France, Italy and Brazil, among others. This expansion was slowed somewhat by recent changes to Facebook's algorithm, which impacted Limelife's business model that combines online sales with peer-to-peer marketing. Nonetheless, Limelife continued to grow strongly in the U.S. and the Group remains convinced about the brand's global growth potential.

- 26 -

Record-breaking hero product launch supports the sales momentum of L'OCCITANE en Provence

The Group continued to boost the performance of its core brand, L'OCCITANE en Provence, through its 'hero product' strategy, which involves undertaking fewer, but larger scale product launches synchronised across countries and sales channels. At the centre of this was the hugely successful launch of the Immortelle Resetserum, with over 800,000 units being sold globally throughout FY2019, making it the Group's best-ever selling face care product.

Most importantly, the launch of Immortelle Resetdelivered on the main objective of the 'hero product' strategy, namely to recruit and bridge, with many customers going on to purchase products in other categories. The product launch also greatly improved the association between L'OCCITANE en Provence and face care, another key objective.

Given the fantastic success of the new product, the Group is planning new hero product launches to reinforce its positioning in skin care. It will also continue to balance these with novelty product launches and timeless bestsellers to keep the L'OCCITANE en Provence brand fresh while maximising sales traffic and loyalty.

Engaging customers through content creation and collaborations

The Group bolstered its performance in key markets with targeted and innovative marketing campaigns. In culturally diverse countries such as the U.S., the Group's marketing revolved around content creation, such as the highly successful #NoFilterNeededcampaign for its SPF cream lines, including the Immortelle Divine Light Creamand Immortelle Precious Light Cream. The campaign featured the faces and unique stories of ten actual North American employees, celebrating women who live their lives unfiltered.

In the Greater China region, including its key travel retail channels, the Group combined the use of aspirational Chinese celebrities, Lu Han and Liu Shishi, and a 360-degree marketing campaign to greatly improve its brand exposure and relevance with target audiences. Through the use of eye-catching and relevant marketing campaigns, China kept its place as one of the fastest-growing markets for the Group with 12% overall growth and close to 30% growth in web sell-out channels.

The Group also continued to work closely with beauty bloggers and vloggers, as well as with social media platforms including WeChat in China, Kakao Talk in South Korea and Line in Japan, to reach different streams of customers.

Memorable omni-channel customer experiences provide a path to purchases

The Group continued to invest in memorable online and offline customer experiences that offer a convenient and seamless path-to-purchase. Throughout FY2019, the Group unveiled unique retail concepts for L'OCCITANE en Provence in key cities such as New York, Tokyo and Singapore, such as new café concepts, interactive VR experiences and art installations, among other innovations, establishing the Group's flagship stores as must-visit destinations within the world's premier shopping districts.

- 27 -

The Group continued to invest in its own e-commerce websites, as well as online platforms particularly in China where the Group opened an official store on JD.com, one of the country's biggest e-commerce sites - driving further sales in this key market. In FY2019, sales of the Group's web sell-out channels grew by 11.2% at constant rates, equivalent to 13.9% of total sell-out sales.

A highly efficient organisation that is investing in the future

One of the main aims of the Pulse strategy is to create an internal entrepreneurial culture, tying incentives to growth and profitability while empowering teams to make decisions based on their local expertise. The Group is also supporting entrepreneurship in other ways with the launch of OBRATORI, a start-up studio in Marseille, France in FY2019. Encouraging new concepts, ideas, products, services and brands, OBRATORI is targeting start-ups in the cosmetics and well-being sectors, as well as those seeking to digitalise retail solutions.

In FY2019, the Group rolled out a new "ship from store" initiative (i.e. to ship web orders from stores) in Western Europe. The Group's extensive store network allows it to map the most efficient route, thereby offering same day delivery and the flexibility to choose a specific two-hour delivery timeslot. Through this omni-channel service, the Group improved customer experience and lowered logistics costs. In the coming year, the Group plans to extend this enhanced service to other countries in Western Europe and North America.

Meanwhile, the Asian Central Distribution Centre opened in FY2018 began to operate at full speed, delivering its first savings and enhanced service to distributors and subsidiaries in the region. The Group also commenced operations at its new factory in Brazil for the L'OCCITANE au Brésil brand, delivering better production efficiency and tax advantages in that market.

Sustainability makes business and branding sense

The Group remains highly committed to meeting its ambitious goals for plastic use, biodiversity, fair trade, craftsmanship, eyesight, and women empowerment, driven by a deep passion and respect for nature that has been part of its DNA for more than 40 years.

In FY2019, the Group sought to better signal this commitment with specific initiatives, such as entering into a multi-year supply agreement with Loop Industries as part of its transition to 100% sustainable PET plastic packaging by 2025. As part of its movement towards this goal, the Group also recently signed the Ellen MacArthur Foundation's New Plastics Economy Global Commitment, further cementing its commitment to reduce plastic pollution and promote a circular economy.

For more information on the Group's social responsibility and environmental sustainability, please refer to its annual 'Environmental, Social and Governance' report.

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OUTLOOK

The Group now operates as a multi-brand entity, where unique brand identities are celebrated and common values shared - respecting nature, creating authentic and genuine experiences, promoting entrepreneurship, and bringing a human approach to beauty. The Group encourages its brands to stay agile and autonomous, yet synergies are also being identified and capitalized.

With the material improvements delivered by the core L'OCCITANE en Provence brand, combined with the largely accretive consolidation of ELEMIS, the Group expects to see enhanced profitability in FY2020 and beyond.

The Group is also looking forward to its upcoming product launches - part of its ongoing hero product strategy - that will continue to energise its brands and underpin its sustainable growth, including an Immortelle Reset eye serum, a premium 86 Champs-Élysées fragrance, and a new hair care range.

Despite the ongoing risk to consumer sentiment posed by macroeconomic developments, the Group is confident the steps it has taken to improve its fundamentals, prioritise an omni- channel approach and empower its teams will safeguard its future profitability and ability to deliver value to its shareholders.

AUDIT COMMITTEE

As required under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules"), the Company has an Audit Committee comprising of three non-executive Directors, two of whom are independent non-executive Directors. The Audit Committee together with external auditor has reviewed the accounting principles and practices adopted by the Group and has also discussed auditing, internal controls and financial reporting matters including the review of the consolidated results and the consolidated financial statements of the Group for FY2019. This annual results announcement is based on the Group's audited consolidated financial statements for the year ended 31 March 2019 which have been agreed with the auditor of the Company.

CORPORATE GOVERNANCE

The Board reviews its corporate governance practices regularly in order to meet the rising expectations of shareholders, to comply with increasingly stringent regulatory requirements and to fulfil its commitment to excellence in corporate governance. The Board is committed to maintaining a high standard of corporate governance practices and business ethics in the firm belief that they are essential for maintaining shareholders' return.

The Company has complied with all of the code provisions of the Corporate Governance Code and Corporate Governance Report (the "CG Code") set out in Appendix 14 to the Listing Rules throughout FY2019 save as disclosed below:

Code provision A.2.1 of the CG Code provides that the roles of chairman and chief executive should be separate and should not be performed by the same individual.

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The role of the Chief Executive Officer ("CEO") of the Group has been assumed by Mr. Reinold Geiger ("Mr. Geiger"), the Chairman of the Board. This deviation is deemed appropriate as it is considered to be more efficient to have one single person to be the Chairman of the Company as well as to discharge the executive functions of a CEO and it provides the Group with strong and consistent leadership. The Board believes that the balance of power and authority is adequately ensured by the operations of the Board which comprises highly experienced individuals. There are four independent non-executive Directors in the Board. All of them possess adequate independence and therefore the Board considers the Company has achieved balance and provided sufficient protection of its interests. Moreover, Mr. Geiger is not a member of any of the committees (Audit Committee, Nomination Committee, and Remuneration Committee) and each committee is composed of a majority of independent non-executive Directors. Nevertheless, the Board will regularly review the management structure to ensure that it meets the business development requirements of the Group.

Furthermore, Mr. Geiger is supported by the Group Managing Director, Mr. Silvain Desjonquères ("Mr. Desjonquères"), appointed on 25 April 2018. Mr. Geiger is responsible to the Board and focuses on Group strategies and Board issues, ensuring a cohesive working relationship between members of the Board and management. Mr. André Hoffmann ("Mr. Hoffmann"), Vice-Chairman of the Board, works closely with Mr. Geiger on all important Board issues. Mr. Hoffmann and Mr. Desjonquères have full executive responsibilities in the business directions and operational efficiency of the business units under their respective responsibilities and are accountable to Mr. Geiger.

Code provision F.1.3 of the CG Code provides that the company secretary should report to the Chairman and CEO.

Mr. Karl Guénard ("Mr. Guénard"), company secretary of the Company, is based in Luxembourg and reports to Mr. Thomas Levilion ("Mr. Levilion"), an Executive Director and the Group's Deputy General Manager whose primary responsibility is to oversee the Group's finance functions worldwide. The Company believes this is appropriate because both Mr. Guénard and Mr. Levilion work closely together on a day-to-day basis including dealing with matters relating to corporate governance and other Board-related matters.

DIRECTORS' SECURITIES TRANSACTIONS

The Company has adopted the Model Code for Securities Transactions by the Directors of Listed Issuers (the "Model Code") set out in Appendix 10 of the Listing Rules as the code of conduct for dealing in the Securities of the Company by the Directors of the Company. Having made specific enquiry of all Directors, they have confirmed that they have complied with the Model Code during FY2019.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

During FY2019, the Company transferred out of treasury a total of 369,700 Shares held in treasury pursuant to the employees' free share plan of the Company. The Company held 15,912,720 shares in treasury on 31 March 2019. Save as disclosed above, neither the Company nor its subsidiaries has purchased, redeemed or sold any of the Company's listed securities during FY2019.

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CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company will be closed from Friday, 20 September 2019 to Wednesday, 25 September 2019, both days inclusive, during which period no share transfers can be registered. The record date to determine which Shareholders will be eligible to attend and vote at the forthcoming annual general meeting of the Company (the "AGM") will be Wednesday, 25 September 2019 (the "AGM Record Date"). All transfers accompanied by the relevant share certificate(s) must be lodged with the Company's Hong Kong Share Registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong not later than 4:30 p.m. on Thursday, 19 September 2019.

Subject to the Shareholders approving the recommended Final Dividend, if any, at the AGM, such Final Dividend will be payable on Friday, 18 October 2019 to Shareholders whose names appear on the register of members on Tuesday, 8 October 2019 (the "Dividend Record Date"). To determine eligibility for the Final Dividend, the register of members of the Company will be closed from Wednesday, 2 October 2019 to Tuesday, 8 October 2019, both days inclusive, during which period no shares can be registered. In order to be entitled to receive the Final Dividend, all transfers accompanied by the relevant share certificate(s) must be lodged with the Company's Hong Kong Share Registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong not later than 4:30 p.m. on Monday, 30 September 2019.

PUBLICATION OF FINAL RESULTS AND FY2019 ANNUAL REPORT

The final results announcement of the Company is published on the websites of the Hong Kong Stock Exchange (www.hkexnews.hk) and the Company (group.loccitane.com). The annual report will be dispatched to the Shareholders and will be available on the websites of the Hong Kong Stock Exchange (www.hkexnews.hk) and the Company (group.loccitane.com) in due course.

ANNUAL GENERAL MEETING

The AGM will be held on 25 September 2019. A notice convening the AGM will be published, on the websites of the Hong Kong Stock Exchange (www.hkexnews.hk) and the Company (group.loccitane.com) and will be dispatched to the Shareholders.

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BOARD OF DIRECTORS

As at the date of this announcement, the Directors of the Company are:

Executive Directors

Reinold Geiger(Chairman and Chief Executive Officer) André Hoffmann(Vice Chairman)

Silvain Desjonquères(Group Managing Director)

Thomas Levilion(Group Deputy General Manager, Finance and Administration) Karl Guénard(Company Secretary)

Non-executive Director

Martial Lopez

Independent Non-executive Directors

Valérie Bernis

Charles Mark Broadley

Pierre Milet

Jackson Chik Sum Ng

By Order of the Board

L'Occitane International S.A.

Reinold Geiger

Chairman

Luxembourg, 17 June 2019

Disclaimer

The financial information and certain other information presented in a number of tables have been rounded to the nearest whole number or the nearest decimal. Therefore, the sum of the numbers in a column may not conform exactly to the total figure given for that column. In addition, certain percentages presented in the tables reflect calculations based upon the underlying information prior to rounding and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.

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