Europe is at a turning point: Nicolas Hieronimus, CEO of the French cosmetics group L’Oréal, urges policymakers to act more decisively to strengthen the competitiveness of the European economy. Faced with increasing deregulation and economic momentum in the USA, Europe risks falling further behind.

It is crunch time now," said Hieronimus in an interview with the Financial Times. "We must ensure that we maintain our convictions while becoming more competitive at the same time." The manager referred to the proposals of former ECB President Mario Draghi to strengthen the European economy, which have so far been implemented only hesitantly.

L’Oréal, one of the most valuable companies in Europe with a market capitalization of 186 billion euros, presented mixed figures on Thursday. Revenue in the fourth quarter increased organically by 2.5 percent to 11.08 billion euros, missing analysts' expectations.

In the full year 2024, the company achieved organic growth of 5.1 percent to 43.48 billion euros. While Europe, North America, and emerging markets like India provided positive impetus, business in China remained weak.

The operating margin improved by 20 basis points to 20 percent. Despite the "very challenging market environment," Hieronimus was optimistic that growth would gradually pick up this year. Sales figures for the Chinese New Year indicated stabilization, but a strong upswing in China is not to be expected. "The era in which the Chinese market grew by 30 percent annually is definitely over," he said. However, growth of 4 to 5 percent is a positive signal.

Particularly affected by the weakening demand in China was the company's luxury segment, which recorded a decrease of 3.6 percent in the North Asia region in the fourth quarter. Nevertheless, the momentum improved compared to the previous quarter.

Hieronimus also commented on the potential impact of new US trade tariffs. Since L’Oréal produces the majority of its products regionally, the company is less susceptible to trade barriers. "I don't think it would be a good development if the world enters into a major tariff war - in the end, the consumer pays the bill," he said.

In addition, L’Oréal has already diversified raw material and packaging procurement since 2020 to safeguard against global supply chain disruptions. "It didn't take a US election to realize that the world has become more unpredictable and chaotic," said Hieronimus.