Top Companies Report

15. Oriflame

August 6, 2012

Sweden
www.oriflame

Sales: $2.0 billion

Key Personnel: Magnus Brännström, chief executive officer and president; Jesper Martinsson, chief operating officer; Gabriel Bennet, chief financial officer.

Major Products: Skin care, color cosmetics, fragrances, personal and hair care products, wellness and accessories.

New Products: Ecobeauty and Ecollagen 3D+ Deep Wrinkle skin care; Studio Artist color cosmetics, Jewel lipstick, Maxi Lash mascara; Architect, Delicacy, Eclat Weekend and Volare Magnolia fragrances.

Comments: Sales fell just over 1% last year. By region, CIS & Baltics accounted for 56% of sales, followed by Europe, Middle East and Asia (28%), Asia (10%) and Latin America (6%). Russia is far and away Oriflame’s largest single market, accounting for more than 25% of corporate sales.


Love Potion is a new scent from Oriflame.
By product category, sales were led by color cosmetics at 24% of sales, followed by personal care and hair care and skin care, each accounting for 21% of sales. Fragrance was next at 20%, followed by accessories (10%) and wellness (4%). Only personal care and hair care and accessories and wellness posted gains last year, at 3% and 10%, respectively.

Oriflame’s direct sales force now operates in more than 60 countries, having added Algeria last year. With the launch of Ecobeauty, Oriflame says it was the first company to introduce products certified by four independent environmental and fair trade organizations.

Last year, the company formed a partnership with the Women’s Tennis Association and tapped the world’s then No. 1 player, Caroline Wozniaki, as its global ambassador.

Also last year, the company redesigned its website, and attracted 20 million more visits than the previous year.

For the first quarter of 2012, sales rose 2% to $520 million. However, unit sales fell 5%, while the price/mix effect was 7%. During Q1, the sales force contracted 5% to 3.6 million consultants in Q1. CEO Magnus Brännström blamed the decline on a setback in recruitment that came during Q3 2011.


EcoBeauty has been certified by four environmental and fair trade organizations.
“Our efforts to return to growth and improve profitability have led to promising results on sales, productivity and margins—however, market dynamics remain challenging,” said Brännström. “It is also important to highlight the cash flow, further reducing the net debt. In addition to these achievements we will in the coming quarter focus on growth of the sales force and thereby lay a solid foundation for the future.”

By region, local currency sales increased by 16% in Asia, by 10% in Latin America and by 1% in CIS & Baltics while unchanged in EMEA. In April, Oriflame was selected as Brand of the Year in Russia.


 
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