oriflame cosmetics ppt_2009

© 2009 by Oriflame Cosmetics S.A. All rights reserved

Oriflame Cosmetics


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

Latin America, 5% Asia, 6%

EMEA, 30%

Sales by Region 2008

CIS & Baltics, 59%

€ million 2008 2007 Change

Sales 1,329.1 1,109.4 20%

Gross margin 69.7% 70.1% -

EBITDA* 216.6 182.4 19%

Op. profit* 187.3 155.4 21%

Op. margin* 14.1% 14.0% -

*) Before restructuring costs due to the new operational platform of €8.7m. (€25.8m)


A Long Term Growth Company

77 90132

181 188242

325 355 327 333395

447

544

652 671

766

918

1 109

1 329

0

200

400

600

800

1000

1200

1400

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

1990 - 2008: CAGR organic sales of over 17%€m


Togetherness, Spirit & PassionRespect People, Focus on Customers, Demand Quality,

Seek Simplicity and Cost-efficiency, Pursue Long-term Growth

To be the #1 BeautyCompany Selling Direct

Our Vision

Our Mission

Our Offer

Our Business Opportunity concept

Our Values &OperatingPrinciples

Our Strategy

Where we’re going

Our reason for being

What we offer

What we should be best in the world at

How we work together

How we create and build the business opportunity concept

Our Logotype & Slogan

To Fulfil Dreams

THIS IS ORIFLAME


Brands and Products

Natural Swedish Cosmetics

950 products of which 1/3 new each year

R&D

Product stories and catalogue communication

New product category

Wellness

Sales by Category 2008

Fragrances 20%

Colour C. 26%

Skin Care 25%

Accessories 9%

Personal & Hair Care 20%

WellnessBringing Beauty from Within

Skin CareTrust & Competence

Enhancer

Colour CosmeticsProfessional Up-trader &

Modernizer

FragranceEmotional & Prestige Booster

Personal & Hair Care

Energizer

AccessoriesSales Driver


The Oriflame Catalogue

Oriflame’s ”shop window”

New offers and catalogues every third week

35 languages

Forceful combination of product and catalogue development in Stockholm


OriflameIndependent sales consultantsConsumer

Our Business Model

Order Order

ProductsProducts

Payment Payment

Incentives


The Direct Selling Industry is divided into two camps:

Our Business Opportunity is Unique

“Make money today” opportunity

New recruits make money, but can’t go for their dreams!

“Fulfil dreams tomorrow” opportunity

New recruits spend money, while being told to go for their dreams!

“Make money today and fulfil your dreams tomorrow™”

New recruits make money, while they go for their dreams!


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


0

50

100

150

200

250

0 5000 10000 15000 20000 25000 30000 35000 40000 45000

Market Opportunity

Cosmetics and Toiletries Industry Dynamics

USA

UKFranceJapan

Spain

GreecePortugal

Czech Republic

Poland

MexicoRussia

Ukraine

IndonesiaIndia

2007 Cosmetics & Toiletries Spending per Capita EUR

2007 GDP per Capita EUR

Source: Euromonitor

China

Turkey

Brazil

Germany Sweden

North American average Western European average

Latin American average Eastern European average

Asian average


Projected Market Size and Growth by Region (Oriflame markets)

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

2007 2008 2009 2010 2011 2012

CIS & B. CEM WE LA Asia

Euro million

Source: Euromonitor

Region. Ori markets

CAGR

2007-2012E*

CIS & B. 4.2%

CEM 3.4%

WE 2.9%

Asia 9.3%

LA 2.5%

Ori markets

5.2%

World 3.0%

Fixed 2007 exchange rates. Value at current prices

First priority Defend market share in a more competitive environment Grow market share where we have a low penetration

Second priority Open markets where possible

*) Real Growth (fixed prices)


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

Direct selling channel categoriesDirect Selling Industry - Product categories

USD Billion

A $111bn industry with 62 million independent consultants (2007). Source: WFDSA 2008.


Financial Highlights 2008

Sales +20% in Euro +23% in local currency.

Operating profit* +21% to €187.3m (€155.4).

Operating margin* 14.% (14.0%).

Net profit* €133.1m (€116.0m).

€m Q4´08 Q4’07 Change FY’08 FY’07 Change

Sales 394.4 341.6 15% 1,329.1 1,104.9 20%

Gross profit 276.0 238.9 16% 926.1 777.8 19%

Gross margin, % 70.0 69.9 - 69.7 70.1 -

EBITDA* 276.0 238.9 14% 926.1 777.8 19%

Operating profit* 66.0 56.7 16% 187.3 155.4 21%

Profit before tax* 44.6 48.8 (8%) 150.2 131.7 14%

Net profit* 39.3 43.6 (10%) 133.1 116.0 15%

Diluted EPS, €* 0.69 0.77 (10%) 2.36 2.05 15%

*) Before restructuring costs of €14.0m in Q4’07, €8.7M in FY’08 and €25.8m in FY’08


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


Regional Overview, Jan - Dec 2008

2008CIS &

BalticsEMEA Asia

Latin Am.

Sales

Growth €767.8m

+25%

€390.9m

+9%

€82.4m

+32%

€58.5m

+19%

Op. Profit

Change€47.5m

+23%

€71.4m

+10%

€3.3m

+71%

€5.2m

+17%

Sales Force, avg

change1,585,800

+29%

685,500

+2%

339,300

+37%

116,700

+33%


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


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.

oriflame cosmetics ppt_2009

Business

oriflame cosmetics

operating profit

sales force

net profit

policies sales growth

market opportunity cosmetics

cosmetics company

operating margin