Sales: $1.3 billion
Key Personnel: Magnus Brännström, chief executive officer and president; Jesper Martinsson, senior vice president and head of commercial division and deputy chief executive officer; Gabriel Bennet, chief financial officer; Michael Cervell, senior vice president, group strategy and business development; Thomas Ekberg, senior vice president, global business area, Asia and Turkey; Johan Rosenberg, senior vice president, global business areas and franchisees; Antonia Simon-Stenberg, vice president, sustainability, quality management, packaging and artwork.
Major Products: Skin care, color cosmetics, fragrance, personal care, hair care, accessories and wellness products.
New Products: NovAge Time Restore skin care, Colourbox color cosmetics, and Eclat Lui, Elcat Mademoiselle, Venture Beyond and Amber Elixir Crystal fragrances.
Comments: Oriflame is marking its golden anniversary this year. Brothers Jonas and Robert af Jochnick founded Oriflame in Sweden in 1967 and a member of the family remains at the helm.
“I am proud that we concluded the first 50 years of Oriflame with a strong 2016,” said Alexander af Jochnick, chairman. “We have a solid foundation and strategy for the future and I am looking forward to the journey.”
Despite challenging market and macro conditions, Oriflame returned to Euro growth, delivered double-digit local currency growth and increased profitability during 2016. The strong performance continued in the growth regions of Asia, Turkey and Latin America, and a stabilization could be seen in Europe and Africa. In CIS, Oriflame raised prices in an effort to achieve sustainable growth and improve profitability.
During the year, the company focused on five operational topics:
- Strategic product categories;
- Driving sustainability across the business;
- Continuing online development;
- Digital business transformation in the IT and finance areas; and
- Capturing manufacturing opportunities.
Last year, Oriflame implemented a cloud-based e-commerce platform and added several apps, chief among them was Oriflame Makeup Wizard, which enables users to virtually try on Orflame’s range of products. In a related move, the company outsourced IT and financial operational services to IBM to facilitate its digital transformation. According to Oriflame, the move will bring new levels of customer focus, productivity and automation to its technology and internal processes, not to mention cost savings.
Finally, to boost production, Oriflame launched Cetes Cosmetics AG, a separate manufacturing company that will improve efficiency and capacity utilization.
These initiatives helped boost sales by 3% last year. By product category, skin care accounted for 27% of sales, followed by color cosmetics, 23%; fragrance, 20%; personal and hair care, 16%; wellness, 8% and accessories, 6%. By region, Asia & Turkey represented 44% of sales. That’s ahead of Europe and Africa, 27%; CIS, 17% and Latin America, 12%.
While some have questioned the long-term validity of the direct sales model, CEO Magnus Brännström has a decidedly different take, insisting that, in the future people “are more likely to have multiple income streams (rather) than relying on a full-time job.”
If so, Oriflame will be ready to help them get started with social selling techniques, plenty of online tools and, of course, effective products.
For the first quarter, sales rose 11% and net income soared 80%, as skin care wellness and accessories led the way. Profits got a boost from online sales and an ongoing effort to reduce manufacturing costs. By region, Latin America, Asia and Turkey all turned in strong performances, but results felt in India after the government’s demonetization policy went into effect and lower sales in CIS.