Interim report 1 January – 30 June 2018

Important clarifying information IFRS

• Oriflame has implemented IFRS 15 Revenue from Contracts with Customers from 1st January 2018. An early adoption of IFRS 16 Leases has been made to allow for all changes being implemented at the same time.
• The application of IFRS 15 is impacting the income statement at different levels, both as a one-off adjustment and as reclassifications of costs. In order to facilitate the analysis of the company’s underlying performance and minimize the impact from the one-off adjustment, Oriflame has decided to recognise the new IFRS 15 standard in applying the cumulative effect method at the date of initial application, with no restatement of the comparative period presented.
• To facilitate the comparison with the 2017 figures, the company has prepared fully adjusted 2018 figures in the first section of the interim report (pages 1-17), excluding the impact of IFRS 15, IFRS 16 and related accounting alignments. The fully adjusted figures are comparable with the already reported 2017 figures.
• Please note that due to accounting principles and the chosen implementation options of the new IFRS standards, the condensed consolidated financial statements on pages 19-32 in the interim report is calculated in accordance with IFRS (following the adoption of IFRS 15 and IFRS 16). These figures are not comparable with the already reported 2017 figures. 
• Where not stated differently, the figures, graphs and comments in this interim report are based on the fully adjusted 2018 figures, to facilitate the comparison with the 2017 figures. 

Three months ended 30 June 2018

• Local currency sales increased by 1%, slightly negatively impacted by timing of catalogues. Euro sales decreased by 7% to €321.9m (€347.6m). Euro sales amounted to €309.2m* in accordance with IFRS.
• Number of registered actives decreased by 1% to 2.8m.
• EBITDA amounted to €51.9m (€47.9m) and to €51.5m* in accordance with IFRS.
• Operating margin was 12.0% (11.7%), negatively impacted by 270 bps from currencies, and operating profit was €38.5m (€40.5m). The operating margin was positively impacted by timing and one-off effects of above 100 bps. Operating margin was 12.3%* and operating profit was €38.1m* in accordance with IFRS.
• Net profit was €25.7m (€19.9m) and diluted EPS €0.45 (€0.35). Net profit was €24.5m* and diluted EPS €0.43* in accordance with IFRS.
• Cash flow from operating activities was €28.5m (€33.9m) and €28.5m* in accordance with IFRS.
• During the quarter, Oriflame successfully completed a €50m issue of Euro denominated US private placement notes, refinancing the private placement loan matured in July 2018. In addition, the final maturity of the company’s Revolving Credit Facility was extended by one year to 2023 during the beginning of the third quarter.
• In connection to the second quarter results, Oriflame is announcing changes to the company’s group management.
• The year to date sales development is approximately 4% in local currency and the development in the third quarter to date is approximately 5% in local currency.

Six months ended 30 June 2018

• Local currency sales increased by 4% and Euro sales decreased by 5% to €656.1m (€687.8m). Euro sales amounted to €640.0m* in accordance with IFRS.
• EBITDA amounted to €94.0m (€88.3m) and to €97.8m* in accordance with IFRS.
• Operating margin was 10.5% (10.2%), negatively impacted by 290 bps from currencies, and operating profit was €69.1m (€70.3m). Operating margin was 11.4%* and operating profit was €72.9m* in accordance with IFRS.
• Net profit was €44.4m (€39.4m) and diluted EPS €0.78 (€0.69). Net profit was €45.5m* and diluted EPS €0.80* in accordance with IFRS.
• Cash flow from operating activities was €53.4m (€32.5m) and €53.4m* in accordance with IFRS.
  *Figures following the adoption of IFRS 15 and IFRS 16.

 
CEO Magnus Brännström comments

“Despite facing significant currency headwinds, we are pleased to report an improved operating margin for the quarter. However, the overall sales development during the second quarter was weak due to challenging market conditions in key markets such as Russia, Indonesia and Turkey. Sales were in most regions further negatively impacted by less successful product launches as well as timing of catalogues and conferences. We are taking measures to enhance sales growth by emphasised focus on categories that help us drive activity and recruitment. Oriflame has a solid financial position and we are confident in our ability to return to sustainable growth.”

Other

A Swedish translation is available on www.oriflame.com.

Conference call for the financial community
The Company will host a conference call on Tuesday, 7 August 2018 at 9.30 CET.

Participant access numbers:
SE: +46856642664
DK: +4535445575
FI: +358981710491
UK: +442030089809
NO: +4723500265
US: +18558315945

The conference call will also be audioweb cast in “listen-only” mode through Oriflame’s website: www.oriflame.com or through http://oriflame-ir.creo.se/180807

This report has not been audited by the Company’s auditors.

August 7, 2018

Magnus Brännström
Chief Executive Officer

This information is information that Oriflame Holding AG is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 07:15 CET on August 7, 2018.

Oriflame Holding AG
Bleicheplatz 3, CH-8200 Schaffhausen, Switzerland
www.oriflame.com
Company registration no CHE-134.446.883

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