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LR RussiaInformation for partners

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5 x larger than Europe2 x more growth in the beauty segment than in Europe50% increase in income per year13 cities with more than

1 Mio. residents2 x higher consumption than

the world population

Your greatest Challenge

Welcome

– your greatestchance to change –

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The LR World

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Welcome to the first phase of your market entry to Russia

Online partner registration without sale of products

Sponsor sets (catalogue, GV Mappe etc.) for sale

Start of product sales

Reduced starter kit price

High LR meeting activity

Pre-launchphase

Launchphase

Leader meetings in existing markets

Info packages including different Power-points available for partners

Info phase in existing markets

16.4.2011Global Leader

Convention

1.6.2011

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Agenda

Information about Russia

Entry strategy

Next steps

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Country:2.000 km NS + 9.000 km EW (Land area is 17.08 million sq.km)

9.000 km EW

2.00

0 km

NS

886

km N

S

636 km EW

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Country:1/8 earth's surface

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Country:9 time zones

+6

+11+10+9

+8

+7+5+3+2UTC 1)

UTC 1)

1 2 3 5 7 8 9

4 6

1) Temps Universel Coordonné = Koordinierte Weltzeit

Moscow12:00 am

Berlin10:00 am

Vladivostok22:00 pm

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Country:Longest European river – Wolga

Wolga

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Country:Longest rail line worldwide (Moskau – Vladivostok)

Moscow

Vladivostok

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Country:Temperature -30° up to +50°

-30°

+50°

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Totally different ways of living

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Different Regions, Different Faces

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Russia provides you several cities even bigger than whole countries

People per Sq.Km.

0.0–3.0

3.1–13.0

13.1–32

32.1–50.0

50.1–8031.5

POPULATION DENSITIES IN RUSSIA'S REGIONS

Moscow is the main business center (23.8% of Russia’s GDP & 17% of retail turnover)

St. PetersburgSt. Petersburg

MoskauMoskau

Nischni NowgorodNischni Nowgorod

JekaterinburgJekaterinburg

NowosibirskNowosibirsk

SamaraSamara

OmskOmsk

KasanKasan

TscheljabinskTscheljabinskRostowRostowam Donam Don

UfaUfa

PermPerm

WolgogradWolgogradKrasnojarskKrasnojarsk

SaratowSaratow

142 mil. inhabitant 13 Mega-Cities High concentration West /

South West

<1,0 Mio.

1,0–2,0 Mio.

2,0–5,0 Mio.

>10,0 Mio.

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Russia is one of the leading economies of the world with a strongly growing BIP per head

GDP TOP 15 worldwide(nominal) in 1.000 trill. US$ 2008

# 8 worldwide

Quelle: credit suisse, global insight August 2009, cia world factbook 2008

0,9

1,1

1,1

1,2

1,6

1,7

1,7

2,4

2,8

3,0

3,8

4,2

4,8

 Netherlands

 Australia

 Mexico

 India

 Canada

 Brazil

 Spain

 Russia 1,7

 Italy

 United Kingdom

 France

 Germany

 China (PRC)

 Japan

 United States 14,3

Quelle: Statistisches Bundesamt, Länderprofil Russland 2009

GDP per head,respective prices, in US$

2005

2,096

2003

2,9752,377

4,105

5,326

20042000 2001 2002 2006 2007

9,103

11,807

2008

1,760

6,929

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Agenda

Information about Russia

Entry strategy

Next steps

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Direct Selling is growing strongly in Russia

DIRECT SALES TURNOVER IN MILLION EUR (NET)

Dynamic market growth

High awareness of Direct Sales

Market still not saturated in the regions

931

717

478

20032002

+26%

2009

2,440

2008

2,032

2007

1,900

2006

1,327

2005

1,413

2004

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This is also reflected in growing number of independent distributors

+22%

2009

4,9

2008

4,4

2007

3,3

Quelle: DSA Russia

DISTRIBUTORS IN MILLION (DSA MEMBERS)

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Russian market still holds huge potential

Russia has huge potential for manufacturers to tap into this growth, and according to a report from market researchers RNCOS, this potential extends to both domestic and foreign cosmetic manufactures.

The RNCOS report Russian Cosmetics Markets Forecasts 2008−2012, highlights the fact that the cosmetics industry is currently registering one of the highest growth of any industry segment in the country

This is highlighted by the fact that the beauty industry registered growth of 11 per cent during 2007, compared to growth of just 3 per cent in the more developed Western European market.

Indeed, the report highlights the fact that this rate of growth is set to surge even further, providing average market growth of 13.2 per cent during the period 2008 to 2012.

Source: http://www.cosmeticsdesign-europe.com/Financial

Skin Care FragranceMake-up

Beauty segment is a growing category in Russia

RUSSIA VOLUME FORECAST, UNITS MILL. xx%CAGR

Quelle: Datamonitor

295243

5,0%

2012………2008 ………2008

46.6 49.81.7%

2012

257198

6,7%

2012………2008

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The Russian Consumer is different!

World Proportion: 11%

Russia Proportion: 20%

World Proportion: 3.8%

Russia Proportion: 7.8%

Higher usage rate of beauty products than in other markets

Partly more extreme color choices

Source:Euromonitor

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Personal Care currently by far strongest segment of all LR products. Other segments with hugh growth potential

5.57%

Householdproducts 7.68%

PersonalCare

products77.67%

Others 1.65%

Accessories 3.03%

Food Supplements

4.40%

Detergents

Product Split Direct Selling Industry Russia (in %)

8%

80%

50%

Consumption of Nutrition% of people using supplements

Market growth 2000 − 2008(CAGR)

Quelle: Datamonitor

Nutrition currently under-represented but with enormous market growth

22%

5%

9%

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Individual business registration required in orderto receive bonus

Russia tax authorities are very strict, one has definitely to be registered as entrepreneur before receiving any money. Even interim arrangements are not given.

NO BONUS

NO CAR

NO REGISTRATION AT AUTHORITIES

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Partner Categories

Type of partnership

Bonus Where? How long?

APartners without Entrepreneurial Registration

Personal Bonus as discount/ voucher

Group Bonus is accrued

- -

B

Partners with Entrepreneurial Registration, but without VAT eligibility (Individual Entrepreneurs)

Payout of Bonus

Group Bonus without VAT

Tax- Authorities

Different from city to city (7-42 days)

C

Partners with Entrepreneurial Registration and with VAT eligibility (Entrepreneurs or Limited Liability Company)

Payout of Bonus

Group Bonus with VAT

Tax- Authorities

Different from city to city (7-42 days)

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All products have to pass a serious certification process

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Agenda

Information about Russia

Entry strategy

Next steps

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First class located headquarter with metro connection

Office

DSC

Meeting Rooms

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Top Team

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LR will start with a reduced product portfolio

Product Portfolio Russia 2011

Fragrance AV-Care Deco NutritionPlatinum /Nanogold

All statements under reserve of sucessful product registration

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Attractive pricing at FULL PV/BV

Exchange rate: 1€ = 42RUB

Retail price gross Russia (in RUB)

FULL PV / BV

1.799

749

1.059*

1.149

499499

999 749

*Rule for Nutritions: buying proce gros = retail price gross

Reason: reselling of nutritions is forbiden by law in Russia

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Wellknown documents to support your business

Collection(April 2011)

GV Mappe(April 2011)

Konzept zum Erfolg( Juni 2011)

Corporate Movie(April 2011)

Decobrochures(Juni 2011)

AV – Brochure(Juni 2011)

Collection Compact(Juni 2011)

Partnerapplication(Juni 2011)

Magazin

(special launch magazin

In June 2011)

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Starter kit from ~ 1.899 RUB (<50 EUR)

1.899 RUB

OR

1.899 RUB

ExtensivePackage of print material

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Different ways to place an order and pay it

Where? How? Payment

Place your order

or

pick up (reservation for 3 days)

Over the counter (cash, credit- or debitcard)

Decide on home delivery Via banktransfer + delivry fee(no creditcard)

Pick up your packet

Place your order Over the counter(cash, credit- or debitcard)

No Service Fee

Only prepayment possible

Important for Bonus calculation:

Only paid orders regarded

No mininmum order value

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LR Distribution Center is tailored to the needs of our prospective partners

Order taking

Pick up

Small Meetings

Business Presentations

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LR starts in Russia with one DSC

1.000km

Moscow

Other DSCs to comeChoice of location depending on regional development of turnover

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Due to the large size of the country delivery times vary

Irkutsk

Khabarovsk

Vladivostok

Barnaul

Krasnoyarsk

Voronezh

St. Petersburg

Moscow

Nizhny NovgorodYaroslavl Kazan Perm Ekatarinenburg UlyanovskIzhevsk

Saratov

Wolgograd

Rostov on Don

Krasnodar

Samara

Ufa

Chelyabinsk

OmskNovosibirsk

3–4 days3 days 5–6 days 7–8 days 9–10 days 11–12 days 13 days

Delivery to all regions

Delivery time may be up to two weeks

Shipping costs of service provider are to be passed

Shipping costs depend on the orderweight

Marketingplan fully implemented from day 1

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LR will definitly start the orgaleader car concept

Level 1

Level 2

Level 3LR Polo also

planned

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Two competitions will support Russian launch

Competition Qualification criteria Incentive

RUSSIAN LEADER

DEVELOPMENT

PROGRAM

Every Russian partner who qualifies until May 2012 for teamleader (standard 3 month qualification needs to be completed)

Trip to Ahlen including 3 hotel nights and flight

2 day seminar in HQ Tour through HQ

CROSS SPONSORING

AND EDUCATION INCENTIVE

All non-Russian TL or OL who develop a OL in Russia in their downline until May 2012 (standard 6 month qualification needs to be completed)

Payment of next 2 trips to Russia for further support of OL

Payment of flight + 3 hotel nights but no more than 1.000 EUR per trip

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Welcome to the second phase of your market entry to Russia

Online partner registration without sale of products

Sponsor sets (catalogue, GV Mappe etc.) for sale

Start of product sales

Reduced starter kit price

High LR meeting activity

Pre-launchphase

Launchphase

Leader meetings in existing markets

Info packages including different Power-points available for partners

Info phase in existing markets

16.4.2011Global Leader

Convention

1.6.2011

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Prelaunch Software inclusive User Manualand Support for free

Benefits:

Create your very own subdomain

Register potential partners directly in your downline

Use the downline navigator to check on your new russian structure

Contact & Inform all interested Partners

Details to follow In April 2011

Available in 6 languages

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Starterkit with a very special price – Only pre registered partners are allowed to order

1.399RUB

OR

Only for prelaunch partners

Delivery from June 2011

1.399 RUB

ExtensivePackage of print material

Special delivery fee rate of ~ 5 EUR for preregistered PartnersAll preregistered partners obtain the possibility to conclude a partnerapplication with

the special Starterkit from 01.06. till 30.06. The data of the other preregistered prospectives will be deleted at 01.07.2011

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Pre – sponsorpackage

Collection + GV-Mappe + Company DVD

EKB 4,00 EUR / > 10 Units 3,50 EUR

Prelaunch Phase 15.04.2011 − 25.05.2011

Homepage Russia Company Information in Russian

language

Prelaunch Softwarewww.lr-goes-russia.com

Opportunity for all existing partners to pre-register Russian partners

Sponsorsets available All partners joining in prelaunch phase

can get reduced Starterset from June1 Available in 6 languages

For free

No Product Sale

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Meeting Calendar

April May June July August Sept. … January

Show room opening

Info-Meetings

Official opening in Moscow

LR standard Meetings Moscow

Special Business Days

1x per weekin Moscow

28.05.

9.7. 6.8. 10.9.

Regular Sales / Company Presentations

All statements under reserve

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LR perfectly prepared your successful start in Russia

FAQs & Company presentations

All about

Russia

Marketingplan

presentation

Company

presentation

Image

presentation

From March 7th