Production facilities in Poland, Sweden, India, China and Russia
Latin America, 5% Asia, 6% EMEA, 30% Sales by Region 2008 CIS & Baltics, 59% *) Before restructuring costs due to the new operational platform of €8.7m. (€25.8m) € 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% -
A Long Term Growth Company 1990 - 2008: CAGR organic sales of over 17% € m
Togetherness, Spirit & Passion Respect People, Focus on Customers, Demand Quality, Seek Simplicity and Cost-efficiency, Pursue Long-term Growth To be the #1 Beauty Company Selling Direct Our Vision Our Mission Our Offer Our Business Opportunity concept Our Values & Operating Principles 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
Product stories and catalogue communication
New product category
Sales by Category 2008 Fragrances 20% Colour C. 26% Skin Care 25% Accessories 9% Personal & Hair Care 20% Wellness Bringing Beauty from Within Skin Care Trust & Competence Enhancer Colour Cosmetics Professional Up-trader & Modernizer Fragrance Emotional & Prestige Booster Personal & Hair Care Energizer Accessories Sales Driver
The Oriflame Catalogue
Oriflame’s ”shop window”
New offers and catalogues every third week
Forceful combination of product and catalogue development in Stockholm
Our Business Model Oriflame Independent sales consultants Consumer Order Order Products Products Payment Payment Incentives
Our Business Opportunity is Unique
The Direct Selling Industry is divided into two camps:
“ 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
Cosmetics and Toiletries Industry Dynamics
2007 Cosmetics & Toiletries Spending per Capita EUR 2007 GDP per Capita EUR Source: Euromonitor China Turkey Brazil Germany Sweden Asian average North American average Western European average Latin American average Eastern European average
Projected Market Size and Growth by Region (Oriflame markets) Source: Euromonitor Fixed 2007 exchange rates. Value at current prices
Defend market share in a more competitive environment
Grow market share where we have a low penetration
Open markets where possible
*) Real Growth (fixed prices) 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%
Direct Selling Industry - Product categories 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 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).
*) Before restructuring costs of €14.0m in Q4’07, €8.7M in FY’08 and €25.8m in FY’08 € 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%
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)
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.