Sales: $1.5 billion
Key Personnel: Magnus Brännström, chief executive officer and president; Jesper Martinsson, deputy chief executive officer; Gabriel Bennet, chief financial officer; Antonia Simon-Stenberg; Johan Rosenberg, senior vice president and head of commercial marketing and brand and communication, head of CIS; Jonathan Kimber, senior vice president and head of product range and research and development; Mats Palmquist, senior vice president and head of global operations; Michael Cervell, senior vice president, global direct sales; Thomas Ekberg, senior vice president and head of global business area, Turkey, Africa and Asia.
Major Products: Skin care, color cosmetics, fragrance, personal care and hair care, accessories and wellness products.
New Products: The One 5-in-1 Wonder Lash waterproof mascara, Tenderly Promise fragrance, SkinPro Cleansing System, Skin Care Routines and Wellness product sets, Divine Idol eau de parfum, Miss Happy Fragrance Mist, Go! Hot & Sexy fragrance spray, The One makeup and nail enamel.
Comments: Sales fell 10% last year as unrest in Russia and Ukraine, and the devaluation of their currencies, put a damper on results. Local currency sales were up 1%. The good news is that Oriflame posted gains in Turkey, Africa and Asia and continued to expand in Latin America.
By region, CIS still accounted for 44% of sales last year, but that was down from 50% in 2013. Turkey, Africa and Asia (TAA) represented 25%, followed by Europe (21%) and Latin America (10%). By product category, color cosmetics accounted for 24% of sales, followed by skin care (23%), fragrances (20%), personal & hair care (18%), accessories (9%) and wellness (6%). To get back on track, Oriflame is counting on the successful implementation of its Success Plan, which was rolled out in 2014. It’s designed to improve competitiveness and secure consultants’ income opportunities by offering better incentives.
In a nod to the digital age, Oriflame expects its new platform to reach full coverage this year. The move will help harmonize cross-channel communication, support brand alignment and user experience for consultants and customers visiting Oriflame sites, and also optimize mobile access of Oriflame’s online services. A new mobile application was also launched globally to top consultants to assist business results and leadership development.
In February, Oriflame opened a factory in Noginsk, Russia that globally supplies shampoos, deodorants, liquid soaps, lipsticks and other cosmetics. To make way for the new facility, Oriflame sold manufacturing sites in Ekerö, Sweden and Krasnogorsk, Russia. The company produces about half of its cosmetic products in-house and expects to increase that percentage.
For the first quarter of 2015, sales increased 1% in local currency, but fell 6% in euro terms—not bad when your core markets are in the highly volatile CIS region. The company noted that those difficulties were somewhat balanced by strong performance in the key growth regions of Latin America, Turkey, Africa and Asia, which accounted for nearly 45% of group sales in the quarter.
While the strong growth in these regions is encouraging, we focus our strengths on getting back to sustainable growth in CIS and Europe,” said CEO Magnus Brännström.