Oriflame Cosmetics
2009 by Oriflame Cosmetics S.A. All rights reserved
Introduction to Oriflame
Founded in 1967
Cosmetics company selling direct 2.8 million sales consultants Operations in 61 countries of which: Franchisees in 13 countries Production facilities in Poland, Sweden, India, China and Russia 7,500 employees
million
Sales CIS & Baltics, 59%
Sales by Region 2008
EMEA, 30%
Latin America, 5%
Asia, 6%
2008
1,329.1 69.7% 216.6 187.3
2007
1,109.4 70.1% 182.4 155.4
Change
20% 19% 21%
Gross margin EBITDA* Op. profit*
Op. margin*
14.1%
14.0%
*) Before restructuring costs due to the new operational platform of 8.7m. (25.8m)
2009 by Oriflame Cosmetics S.A. All rights reserved
A Long Term Growth Company
m
1400
1990 - 2008: CAGR organic sales of over 17%
1 109
1 329
1200
1000 766 652 600 395 327 333 447 544 671
918
800
400 242 200 77 0 1990 1991 1992 1993 1994 1995 90 132 181 188
325
355
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009 by Oriflame Cosmetics S.A. All rights reserved
THIS IS ORIFLAME
Our Logotype & Slogan Our Vision
To be the #1 Beauty Company Selling Direct
Where were going
Our Mission
To Fulfil Dreams
Our reason for being
Our Offer Our Business Opportunity concept Our Strategy Our Values & Operating Principles
Look Great
Make Money
Have Fun
What we offer What we should be best in the world at
Brands & Products
Network Marketing
World Class Service
People & Culture
How we create and build the business opportunity concept How we work together
Togetherness, Spirit & Passion
Respect People, Focus on Customers, Demand Quality, Seek Simplicity and Cost-efficiency, Pursue Long-term Growth
2009 by Oriflame Cosmetics S.A. All rights reserved
Brands and Products
Natural Swedish Cosmetics
Sales by Category 2008
Fragrances 20%
Skin Care 25%
950 products of which 1/3 new each year
R&D Product stories and catalogue communication New product category
Accessories 9%
Colour C. 26% Personal & Hair Care 20%
Wellness
Skin Care
Trust & Competence Enhancer
Colour Cosmetics
Professional Up-trader & Modernizer
Fragrance
Emotional & Prestige Booster
Personal & Hair Care
Energizer
Accessories
Sales Driver
Wellness
Bringing Beauty from Within
2009 by Oriflame Cosmetics S.A. All rights reserved
The Oriflame Catalogue
Oriflames shop window
New offers and catalogues every third week
35 languages
Forceful combination of product and catalogue development in Stockholm
2009 by Oriflame Cosmetics S.A. All rights reserved
Incentives
Our Business Model
Consumer Independent sales consultants Oriflame
Order
Order
Products
Products
Payment
Payment
2009 by Oriflame Cosmetics S.A. All rights reserved
Our Business Opportunity is Unique
The Direct Selling Industry is divided into two camps:
Make money today opportunity
Make money today and fulfil your dreams tomorrow
Fulfil dreams tomorrow opportunity
New recruits make money, but cant go for their dreams!
New recruits make money, while they go for their dreams!
New recruits spend money, while being told to go for their dreams!
2009 by Oriflame Cosmetics S.A. All rights reserved
Production and Supply Chain
Over 700 million units sourced annually of which approx. 50% in-house Own factories in Poland, Sweden, India, China and Russia
Product Fulfilment Project
2009 by Oriflame Cosmetics S.A. All rights reserved
Market Opportunity
Cosmetics and Toiletries Industry Dynamics
2007 Cosmetics & Toiletries Spending per Capita EUR
250
200
Japan France Spain UK
150
Germany
Sweden
USA
Portugal
Greece
Western European average North American average
100
Brazil
Czech Republic
Latin American average Eastern European average
50
Ukraine
Poland Russia Mexico
Turkey
Asian average
0 0
Indonesia India
China
5000
10000
15000
20000
25000
30000
35000
40000
45000
2007 GDP per Capita EUR Source: Euromonitor
2009 by Oriflame Cosmetics S.A. All rights reserved
Projected Market Size and Growth by Region
(Oriflame markets)
Euro million
Fixed 2007 exchange rates. Value at current prices
70 000 60 000 50 000 40 000
Region. Ori markets CIS & B. CEM WE
CAGR 20072012E*
4.2% 3.4% 2.9% 9.3% 2.5% 5.2% 3.0%
30 000
Asia
20 000
LA
10 000 0 2007 2008 2009 2010 2011 2012
Ori markets World
CIS& B. CEM WE LA Asia
*) Real Growth (fixed prices)
First priority Defend market share in a more competitive environment Grow market share where we have a low penetration
Source: Euromonitor
Second priority Open markets where possible
2009 by Oriflame Cosmetics S.A. All rights reserved
Direct selling channel categories
Direct Selling Industry - Product categories
USD Billion
A $111bn industry with 62 million independent consultants (2007). Source: WFDSA 2008.
Source: Oriflame estimation based on Euromonitor data and other sources *Selected products in major markets **Includes skin care, make up and other cosmetics ***Other includes jewellery, gift items, auto care, pet products, various services (e.g. flower delivery) and other consumer goods items not accounted for elsewhere
2009 by Oriflame Cosmetics S.A. All rights reserved
Financial Highlights 2008
Sales +20% in Euro +23% in local currency. Operating profit* +21% to 187.3m (155.4). Operating margin* 14.% (14.0%).
m Sales Gross profit Gross margin, % EBITDA* Operating profit* Q408 394.4 276.0 70.0 276.0 66.0 Q407 341.6 238.9 69.9 238.9 56.7 Change 15% 16% 14% 16% FY08 1,329.1 926.1 69.7 926.1 187.3 FY07 1,104.9 777.8 70.1 777.8 155.4 Change 20% 19% 19% 21%
Profit before tax*
44.6
39.3 0.69
48.8
43.6 0.77
(8%)
(10%) (10%)
150.2
133.1 2.36
131.7
116.0 2.05
14%
15% 15%
Net profit* 133.1m (116.0m).
Net profit* Diluted EPS, *
*) Before restructuring costs of 14.0m in Q407, 8.7M in FY08 and 25.8m in FY08
2009 by Oriflame Cosmetics S.A. All rights reserved
Balance Sheet and Cash Flow Highlights
Net debt: 196.3m (182.0m) Net debt/EBITDA: 0.91 (1.00) Full year interest cover: 7.0 (7.5) Operating cash flow 91.3m (102.2m) Cash flow from investing activities: -34.4m (-36.8m) Retained dividend of 1.25 (1.25) per share
2009 by Oriflame Cosmetics S.A. All rights reserved
Regional Overview, Jan - Dec 2008
2008 CIS & Baltics
767.8m +25% 47.5m +23%
EMEA
Asia
Latin Am.
58.5m +19% 5.2m +17%
Sales Growth Op. Profit Change Sales Force, avg change
390.9m +9% 71.4m +10%
82.4m +32% 3.3m +71%
1,585,800 +29%
685,500 +2%
339,300 +37%
116,700 +33%
2009 by Oriflame Cosmetics S.A. All rights reserved
Financial Outlook and Policies
Sales growth for 2009 is expected to be above 10% in local currency and the operating margin is expected to be around 11%. Long term financial targets are to achieve local currency sales growth of around 10% per annum and to reach 15% operating margin. Dividend policy is to distribute at least 50% of net profit annually
2009 by Oriflame Cosmetics S.A. All rights reserved
Cautionary Statement Some statements herein are forward-looking and the actual outcome could be materially different. In addition to the factors explicitly commented upon, the actual outcome could be materially effected by other factors like for example, the effect of economic conditions, exchange-rate and interest-rate movements, political risks, impact of competing products and their pricing, product development, commercialization and supply disturbances.
2009 by Oriflame Cosmetics S.A. All rights reserved
