Download - Oriflame Cosmetics Ppt 2009
© 2009 by Oriflame Cosmetics S.A. All rights reserved
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
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)
© 2009 by Oriflame Cosmetics S.A. All rights reserved
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
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600
800
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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
© 2009 by Oriflame Cosmetics S.A. All rights reserved
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
© 2009 by Oriflame Cosmetics S.A. All rights reserved
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
© 2009 by Oriflame Cosmetics S.A. All rights reserved
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
© 2009 by Oriflame Cosmetics S.A. All rights reserved
OriflameIndependent sales consultantsConsumer
Our Business Model
Order Order
ProductsProducts
Payment Payment
Incentives
© 2009 by Oriflame Cosmetics S.A. All rights reserved
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!
© 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
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
© 2009 by Oriflame Cosmetics S.A. All rights reserved
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)
© 2009 by Oriflame Cosmetics S.A. All rights reserved
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.
© 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%).
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
© 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
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%
© 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.