450 billion beauty giant L'OCCITANE (00973) officially delists, with increased revenue but no increase in profits in the 2024 fiscal year.

On September 13th, French beauty brand L'OCCITANE (00973) announced its official delisting from the Hong Kong Stock Exchange, ending its 14-year listing journey. The final financial report released before delisting showed that L'OCCITANE's net sales increased in the 2024 fiscal year, but "increased revenue did not increase profits." On the last trading day before delisting, L'OCCITANE closed at HK$33.7, with a total market value of approximately HK$49.7 billion, equivalent to approximately RMB 45 billion. In a previous statement, L'OCCITANE stated that delisting would provide the group with flexibility to make long-term business decisions. Chairman of the group, Reinold Geiger, proposed to acquire the remaining shares of L'OCCITANE at a price of HK$34 per share, with a transaction valuation of approximately 6 billion euros (approximately RMB 47.2 billion). Blackstone and Goldman Sachs Alternative Investments provided a commitment of 1.551 billion euros (approximately RMB 12.2 billion) in funding support for the privatization of L'OCCITANE. In 2010, the L'OCCITANE Group was listed on the main board of the Hong Kong Stock Exchange, becoming the first French company to be listed in Hong Kong. With the rise of domestic e-commerce channels, in the 2021 fiscal year, the Chinese market became L'OCCITANE's largest global market for the first time, contributing 17% of sales, and in the 2022 fiscal year, China's market share remained at 18.1% as the top market. However, in recent years, L'OCCITANE has gradually fallen from grace. Starting from the 2023 fiscal year, the Chinese market dropped to become the second largest market for the L'OCCITANE Group, with sales share decreasing from 18.4% to 14%, and further dropping to 12.9%. In contrast, the United States became L'OCCITANE's largest market, accounting for 27.2% of the group's total sales, compared to only 14.1% the year before. As early as July last year, news of L'OCCITANE's privatization circulated in the market, followed by a notice from its controlling shareholder, L'Occitane Group S.A., suggesting a potential comprehensive takeover at a price of HK$26 per share, which was soon terminated. In February this year, Blackstone Group was reported to be considering acquiring L'OCCITANE. Two months later, L'OCCITANE briefly halted trading to announce "insider information about acquiring and merging the company in accordance with acquisition and merger cost regulations," until April 29th when the company officially confirmed the privatization plan. On July 23rd this year, L'OCCITANE announced that 371 million shares had accepted the offer for privatization, with most shareholders having no objections to the privatization. Eventually, L'OCCITANE agreed to privatize, and all remaining shares will be forcibly acquired and transferred to the offeror on October 15, 2024. In terms of the acquisition price, this was a premium acquisition. Compared to the potential price of HK$26 per share last year, the final acquisition price of HK$34 per share seems "sincere and full of sincerity." Before privatization, the performance fluctuation of L'OCCITANE prompted a "trimming down." In April, L'OCCITANE sold off the sub-brand Grown Alchemist, a skincare brand that was acquired just two years ago, which had been in the Chinese market for less than a year with dismal sales. In the same month, L'OCCITANE officially changed leadership, with the new CEO Laurent Marteau taking office. Before delisting, the last financial report for the 2024 fiscal year (April 1, 2023 to March 31, 2024) was released, showing an increase in net sales for L'OCCITANE in the 2024 fiscal year, but "increased revenue did not lead to increased profits." During the reporting period, the L'OCCITANE Group achieved revenues of 2.542 billion euros (approximately RMB 20 billion), with operating profit decreasing by 2.5% compared to the 2023 fiscal year, reaching 233 million euros (approximately RMB 1.8 billion). Perhaps it was due to L'OCCITANE's declining performance that this privatization opportunity arose.