Oriflame Hits Profit, Beats Revenue Expectations in First Quarter

Oriflame’s (ORI—Stockholm) first-quarter sales rose 10 percent in local currency and dipped 1 percent in euros to €305.8 million*, from €307.8 million a year ago, the Swedish cosmetics maker said Wednesday.

The results reflect a 19 percent increase in productivity among Oriflame consultants, countered by a 9 percent decrease in total consultants, management said. The skincare and wellness categories logged the strongest performance in the quarter.

On a regional basis, Asia and Turkey posted the largest gain, with local currency sales up 31 percent. Latin America revenue rose 13 percent, while Europe and Africa edged up 2 percent in local currency. CIS (Commonwealth of Independent States) revenue stabilized, reversing a negative sales trend that followed economic and political uncertainty in the region.

The Switzerland-based company cleared a profit of €10.7 million, or 19 cents a share, compared to €11.2 million, or 20 cents a share, in the first quarter of 2015. Operating profit was €21.1 million versus the year-ago €17.2 million.

On average, analysts polled by Reuters had predicted operating profit at €21.1 million and net sales at €293 million.

“The underlying business and financial performance is encouraging, although we continue to be heavily impacted by persistent currency headwinds and deteriorating macro across many of our regions,” said CEO Magnus Brännström. “Efficiency initiatives are ongoing and are delivering desired results.”

The company also said it is still seeking a reason for local authority visits to its offices in Moscow, which took place in April, and remains fully transparent to the authorities.

Following its annual shareholder meeting on May 17, Oriflame announced a dividend of 40 cents a share, to be paid out in two installments set for November 2016 and February 2017.
*At the time of this writing, €1.00 was equal to $1.12.

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Direct Selling News Honors Oriflame Chief with 2016 Bravo Leadership Award

Photo: Magnus Brännström, CEO and President of Oriflame, addresses his direct selling peers at the 2016 DSN Global 100 Celebration. (Jason Kindig)


Direct Selling News on Thursday named Magnus Brännström, CEO and President of Oriflame, the recipient of the 2016 DSN Bravo Leadership Award.

Each year, the award goes to one direct selling executive who embodies exceptional leadership qualities—providing inspirational vision for their company, motivating their teams toward a common goal, serving others by equipping them to do the best job possible, and especially by empowering them to reach new heights.

Lauren Lawley Head, Publisher and Editor in Chief of Direct Selling News, and John Fleming, the publication’s Ambassador, presented the award to Brännström at the 2016 DSN Global 100 Celebration, held Thursday evening in Dallas. Brännström delivered the keynote address at the event, which marked the unveiling of the DSN Global 100, a list of the top revenue-generating direct selling companies in the world, as well as a regional subset of the list known as the North America 50.

This year’s Global 100, led by Ada, Michigan-based Amway, hail from 17 different countries and represent aggregate revenue of $82 billion. Under Brännström’s leadership, Oriflame has perennially ranked among the top companies on the list, and this year is no exception. The Swiss beauty company came in at No. 14 with annual revenue of $1.35 billion.

Brännström began his direct selling career in 1997, serving in executive posts in Russia, the Baltics and Asia as he worked his way up the corporate ladder. He became CEO of Oriflame, a legacy direct selling company, in 2005 and has continued to lead the business through a dynamic period of technological and geopolitical change. Oriflame now operates in 60 countries—Russia being its biggest market—through a network of more than 3 million consultants.

Like all Bravo Leadership honorees, among them Ambit Energy’s Jere Thompson and Amway’s Doug DeVos, Brännström has exhibited a vision for the future that extends beyond any one company. He is a fierce advocate for the direct selling channel as a whole, and former Chairman of the Board for Seldia, the European Direct Selling Association.

Direct Selling News Unveils Industry’s Top Companies in Seventh Annual DSN Global 100

In recognition of those companies that lead the way in offering an unparalleled opportunity for individuals to start their own businesses, Direct Selling News today unveiled its seventh annual DSN Global 100, an exclusive ranking of the top revenue-generating companies in direct selling.

The DSN Global 100 is a collective effort to show the impact and potential of the $182.8 billion direct selling channel. Unveiled online at DirectSellingNews.com and featured in the June issue of Direct Selling News magazine, this year’s Global 100 companies hail from 17 countries and represent aggregate revenue of more than $82 billion.

The DSN Global 100 tells a story of impressive growth in 2015, exhibited by the fact that 20 companies surpassed $1 billion in annual revenue,” said Lauren Lawley Head, Publisher and Editor in Chief of Direct Selling News. “These exceptional companies represent not only corporate staff, but millions of lives impacted by the products and opportunity they offer.”

Many direct selling companies had an incredible year of growth and success in 2015. For the first time, 20 companies each reported annual revenue of $1 billion or more. For the fourth consecutive year, Ada, Michigan-based Amway claimed the No. 1 rank, with $9.5 billion in revenue. Avon, Herbalife, Vorwerk and Infinitus rounded out the top five on this year’s list.Best Places To Work 2017

DSN also presented a regional subset of the Global 100: The North America 50, which was first introduced in 2015. As its name implies, the North America 50 ranks the most significant players in one of the world’s largest direct selling markets.

The annual event celebrating the Global 100 took place on April 7, 2015, at the Omni Hotel in downtown Dallas. During the dinner and awards ceremony, DSN also presented its Bravo Awards for excellence. Wellness and lifestyle brand Le-Vel received the Bravo Growth Award for its extraordinary 254 percent year-over-year growth, amounting to revenue of $349 million in 2015. Magnus Brännström, CEO and President of Switzerland-based Oriflame Cosmetics and keynote speaker for the evening, received the Bravo Leadership Award for leading his company to annual revenue of $1.35 billion amid a period of great economic and geopolitical turmoil in many of its top markets.

DSN created the Global 100 list to acknowledge the successes of individual direct selling companies and provide a clear picture of the magnitude of the industry. In its seventh year of undertaking this project, DSN continues its commitment to create a fair ranking that will showcase a transparent industry, thus providing credibility and consumer confidence as well as research support for those seeking information on direct selling companies.

Oriflame CEO Talks Potential Expansion into U.S., Brazil

Expansion into the United States and Brazil could come in the not-too-distant future for Oriflame, the Swedish cosmetics maker that currently counts Russia as its largest market.

The Swiss company’s CEO, Magnus Brannstrom, who will keynote the DSN Global 100 Celebration in April, told Reuters that Oriflame is looking to enter the two major markets within a few years. In 2014, Brazil was the fifth-largest market for direct sales, according to the latest data from the World Federation of Direct Selling Associations. The market accounted for 7 percent of global revenue, trailing only the U.S. and Asia-Pacific powerhouses China, Japan and Korea.

The focus on new markets comes as Oriflame seeks to recover from turmoil in Russia and Ukraine, another key market. Brannstrom said he is “cautiously optimistic” about 2016, after the company’s mid-February report that local currency sales in the first quarter were up 9 percent from a year earlier. Management last month released fourth-quarter profits that beat expectations and discussed bringing back a dividend in the fourth quarter, after cutting the payout for the past two years.

As the company eyes the U.S. and Brazil, emerging markets will continue to drive growth in the long term, with China or India likely surpassing Russia as Oriflame’s biggest market, said Brannstrom. Turkey and Mexico also are top markets for the company, which sells its beauty products through more than 3 million Consultants worldwide.

Oriflame Discloses Reorganization Effective in 2016

Swedish cosmetics seller Oriflame has undergone a reorganization aimed at leveraging digital opportunities and maximizing efficiency throughout the business.

The Luxembourg-based company has formed a global Commercial Division led by Jesper Martinsson, newly appointed Senior Vice President and Head of Commercial Division and Deputy CEO. The division aligns Oriflame’s sales, marketing and supply chain operations.

To focus strategy execution, the company has decentralized its Regional Organization, with separate teams coordinating strategy in the regions of Latin America, Europe & Africa, CIS (Russian Commonwealth), and Asia & Turkey. Oriflame’s reporting will reflect the new split as of the first quarter of 2016.

Additionally, the company has established a Global Manufacturing division, looking to optimize an area formerly within the scope of Global Operations.

“In a constantly changing global environment, we need to become more agile,” President and CEO Magnus Brännström said in a statement. “The organisational change we announce today is a vigorous step to further strengthen our position in a more digital world. In addition, it will facilitate improved succession planning as well as promote talent within the company.”

As a result of the fine-tuning, which takes effect Jan. 1, 2016, Oriflame expects one-time restructuring charges of approximately 6.5 MEUR (US$7.1 million) and, beginning in 2016, about 4 MEUR (US$4.3 million) in annual savings.

2015 DSN Global 100 List

DSN 100

DSN Announces the 2015 Global 100!

Since 2004 Direct Selling News has been dedicated to telling stories focused on relating the opportunities direct sellers provide to millions of independent business owners around the globe. So it seemed only fitting for DSN to further recognize the industry by compiling a comprehensive list, starting in 2010, of the top direct selling companies in the world.

The DSN Global 100 list offers a unique perspective on the global impact of the industry on economic and social realms. It provides a range of mutual learning not only for industry members but also for researchers, investors and—most important—those seeking opportunities within the industry.

We thank all the companies that willingly participated in our survey as well as our dedicated team of researchers who helped us present to you the remarkable achievements of direct sellers around the globe.

The following contains the ranking for the 2015 DSN Global 100 (based on 2014 revenues), our annual list of the top revenue-generating direct selling companies in the world. The list is published in the June issue of Direct Selling News.


2015 Rank

Company Name

2014 Revenue

1 Amway $10.80B
2 Avon $8.90B
3 Herbalife $5.00B
4 Mary Kay $4.00B
5 Vorwerk $3.90B
6 Natura $3.20B
7 Infinitus $2.64B
8 Tupperware $2.60B
9 Nu Skin $2.57B
10 JoyMain $2.00B

Click here for the rest of the 2015 DSN Global 100 list.

Oriflame Consolidates Russia Operations in New Production Plant

Oriflame Cosmetics S.A. has completed another step toward streamlining its Russia business with the inauguration of a new production facility in Noginsk. The Swedish beauty and hygiene products group sold its production site in Krasnogorsk to consolidate operations in the turbulent market. The new facility dovetails with Oriflame’s strategy to focus and simplify its business amid geopolitical tensions in Russia and Ukraine.

The $170-million complex, including production facilities, warehousing and a LEED-certified distribution center, enables Oriflame to cut down on lead times and prices in Russia, where it draws a third of its business. The company has scrambled to increase prices in the region, and it anticipates further increases this year as the devaluation of the ruble continues to impact its core business. Oriflame has also retooled its compensation plan and ramped up promotion of its skincare and wellness offerings, particularly the brand’s daily skincare regimen and products sets.

“We continue our ambition of providing the most attractive offer in the markets—both when it comes to our beauty offer and business opportunity offer,” said Johanna Palm, Oriflame’s Senior Director of Investor Relations & Finance Projects, of the company’s strategy in Russia and Ukraine. “The improvements we have made to our compensation plan have definitely strengthened our position in the region, and will constitute a competitive advantage given the current challenges.”

In the quarter ended Dec. 31, 2014, Oriflame’s adjusted operating profit totaled 29.8 million euros ($33.7 million). Adjusted operating margin fell to 8.4 percent from 12.6 percent, slightly above the forecast. For 2014, the company posted net sales of 1.27 billion euros ($1.41 billion), down 10 percent from 2013 and up 1 percent in local currency.

Oriflame is working to counter economic uncertainties by working closely with its consultants and leaders and maintaining a well-managed product portfolio, said Palm. “This, in combination with price increases and administrative and organizational efficiency measures, should help us manage the challenges we see in CIS and Europe while ensuring continued strong momentum in Latin America, Turkey, Africa and Asia.”

90 Days of Direct Selling – Day 64

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Oriflame Cosmetics SA

2013 Net Sales: $1.95 billion

Country: Luxembourg

Oriflame is a beauty company selling direct in more than 60 countries. Its wide portfolio of Swedish, nature-inspired, innovative beauty products is marketed through more than 3 million independent Oriflame Consultants, generating annual sales of around €1.5 billion. Respect for people and nature underlies Oriflame’s operating principles and is reflected in its social and environmental policies. Oriflame supports numerous charities worldwide and is a co-founder of the World Childhood Foundation. Oriflame is a Luxembourg company group with corporate offices in Luxembourg and Switzerland.

 

2012 Rank: 9
2012 Net Sales: $2.0 billion
Sales Method: Person-to-person
Compensation Structure: Multi-level
Products: Cosmetics, personal care
Markets: 66
Salespeople: 3.5 million
Employees: 7,340
Headquarters: Luxembourg, Luxembourg
Executive: Magnus Brännström
Year Founded: 1967
Stock Symbol: ORI-SS—Stockholm
Website: www.oriflame.com

Direct Sellers Make up 15% of Beauty Industry’s Top 100

Fashion, beauty and retail hub Women’s Wear Daily has published its annual Beauty Inc Top 100, and the list shows direct selling companies are sitting pretty. The Top 100 ranks the world’s largest beauty manufacturers based upon annual sales. In an industry that generated $204.61 billion in revenue last year, direct selling companies represent 15 percent of the Top 100.

“For most in the Top 100, 2013 was positive, with 77 companies posting increased revenues, 18 reporting declines and three remaining flat,” WWD reports.

Generating nearly 15 percent of all cosmetics sales, French behemoth L’Oréal sustained its prominent leadership position within the industry. Avon Products claimed the No. 6 spot, despite major restructuring within its U.S. business and a dip in the company’s active representative numbers. The New York-based firm reported total beauty sales of $7.1 billion in 2013.

Direct selling companies ranked on this year’s Beauty Inc Top 100 include:

6. AVON PRODUCTS
15. MARY KAY
17. AMOREPACIFIC CORP.
18. NATURA COSMÉTICOS
19. ALTICOR (AMWAY)
21. BELCORP
22. ORIFLAME COSMETICS
24. POLA ORBIS HOLDINGS
26. LG HOUSEHOLD & HEALTH CARE
31. NU SKIN ENTERPRISES
46. JAFRA COSMETICS INTERNATIONAL
49. TUPPERWARE BRANDS CORP.
62. NOEVIR HOLDINGS CO.
88. FABERLIC
99. HERBALIFE

Oriflame’s Sustainable Products Win 2014 Eco Beauty Award

In an industry where many companies are moving toward greater sustainability, Oriflame’s Ecobeauty product range edged out the competition for this year’s CEW(UK) Eco Beauty Award.

Presented by Cosmetic Executive Women, the CEW Beauty Awards have been dubbed the “Oscars of the beauty industry.” CEW is a nonprofit professional organization with over 5,000 member executives in the beauty, cosmetics and fragrance industries. Mary Kay and Avon are both among the finalists in the U.S. Beauty Awards, which will take place in New York City on May 16.

Swedish cosmetics maker Oriflame created its Ecobeauty line with a focus on sustainability in each step of the production process. The product standards listed on the Ecobeauty website include responsibly sourced raw materials, a minimum of 95 percent ingredients from nature, 100 percent recyclable packaging and formulas free from a litany of harmful but commonly used substances.

The products launched with a stamp of approval from four leading independent ethical, natural and environmental global organizations—Fairtrade, Ecocert, The Vegan Society and Forest Stewardship Council (FSC). Ecobeauty led the industry as the first global, cross-category cosmetics range to attain that standard.

Read more on this year’s CEW(UK) Beauty Award winners.