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    Top Companies Report

    13. Oriflame

    ...

    07.30.10
    Sweden
    www.oriflame.com
    Sales: $1.8 billion


    Key Personnel:
    Magnus Brännström, chief executive officer; Jesper Martinsson, chief operating officer; Gabriel Bennet, chief financial officer; Stefan Karlsson, senior vice president and head of Asia; Jonathan Kimber, executive vice president, global supply; Rolf Berg, executive vice president, global human resources; Michael Cervell, senior vice president, direct sales; Johan Rosenberg, executive vice president, global marketing and R&D; Thomas Ekberg, senior vice president and head of Europe, Middle East and Africa

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

    New Products:
    Skin care—Time Reversing in Tense Cream, Tender Care Caramel; Fragrance—Grace, Giordani Men and Glacier; Personal and hair care—HairX

    Comments:
    Sales fell less than 1% last year, but net income fell by more than 23%. By region, the Commonwealth of Independent States (CIS) and the Baltics accounted for 56% of sales; followed by Europe, the Middle East and Africa (EMEA), 30%; Asia, 9% and Latin America, 5%.

    Despite the economic turmoil in the world, Oriflame retained its spot as the No. 1 cosmetic brand in Russia and the best performing markets in the CIS and Baltics region were Ukraine and Azerbaijan.

    Fast Fact:
    Oriflame notes that word-of-mouth has the highest trust rating of any form of information channel.
    In EMEA, the strongest performing markets were Turkey and Morocco, according to the company.

    In Asia, the best performing regions were Iran and China, while in Latin America, where sales rose 7%, Mexico and Colombia led the way.

    By product category, skin care and color cosmetics each represented 25% of sales. Skin care sales fell 2% during the year. Tender Care remains the No. 1 skin care product in terms of sales and units.

    Color cosmetics sales fell 6%, but the company maintained that sales of Powershine lipstick and Wonderlash mascara held up well in the mid-price range, as did the premium-priced Giordani Gold.

    Personal care and hair care (20% of sales) fell 1%. The company credited the launch of HairX hair care range for boosting sales in all regions.

    Fragrance sales (19%) were flat—not bad considering the pounding that the global fine fragrance industry has been experiencing during the past few years. In 2009, Oriflame rolled out Grace featuring Eva Herzigova and the men’s fragrances Giordani Men and Glacier.

    Oriflame’s Accessories & Wellness (11%) category recorded a 10% jump in sales.

    The company boasts 3.2 million sales consultants around the world—a 21% increase over 2008 numbers.

    For the first quarter of 2010, sales rose 6% to $501 million. Sales in the CIS and Baltics rose 4% due to strong growth in Ukraine and Moldova. Sales in EMEA rose 1%, while sales in Latin America jumped 19% on strength in Mexico and Colombia. Sales in Asia surged 38% to due to strong sales gains in most markets.

    Despite the gain, company executives predict 2010 will be a challenging year due to lower sales force growth.
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