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Interim report 1 January – 30 September 2018

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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 1-14), 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 15-24 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 September 2018

  • Local currency sales increased by 4%. Euro sales decreased by 1% to €292.5m (€295.3m). Euro sales amounted to €279.4m* in accordance with IFRS.
  • Number of registered actives was stable and amounted to 2.7m.
  • EBITDA amounted to €43.4m (€40.0m) and to €42.8m* in accordance with IFRS.
  • Operating margin was 10.3% (11.0%), negatively impacted by 160 bps from currencies, and operating profit was €30.0m (€32.5m). Operating margin was 10.5%* and operating profit was €29.4m* in accordance with IFRS.
  • Net profit was €18.8m (€17.4m) and diluted EPS €0.33 (€0.30). Net profit was €17.5m* and diluted EPS €0.30* in accordance with IFRS.
  • Cash flow from operating activities was €9.9m (€11.2m) and €9.9m* in accordance with IFRS.
  • The year to date sales development is approximately 4% in local currency and the development in the fourth quarter to date is approximately 6% in local currency.

Nine months ended 30 September 2018

  • Local currency sales increased by 3% and Euro sales decreased by 4% to €948.6m (€983.0m). Euro sales amounted to €919.4m* in accordance with IFRS.
  • EBITDA amounted to €137.4m (€128.3m) and to €140.6m* in accordance with IFRS.
  • Operating margin was 10.4% (10.5%), negatively impacted by 250 bps from currencies, and operating profit was €99.1m (€102.8m). Operating margin was 11.1%* and operating profit was €102.3m* in accordance with IFRS.
  • Net profit was €63.1m (€56.8m) and diluted EPS €1.10 (€0.99). Net profit was €63.0m* and diluted EPS €1.10* in accordance with IFRS.
  • Cash flow from operating activities was €63.3m (€43.7m) and €63.3m* in accordance with IFRS.

*Figures following the adoption of IFRS 15 and IFRS 16.

CEO Magnus Brännström comments
“We entered the third quarter facing continued challenging market conditions in some of our key markets as well as difficult comparables with the 50th Anniversary activities prior year. Measures focused on driving activity and recruitment to enhance sales growth in CIS and Latin America have proven successful, yet had a negative operating margin impact in the quarter. The performance in Asia & Turkey was slower during the second part of the quarter, partly as a result of the macroeconomic conditions in Turkey and lower activity in China. Sales development into the fourth quarter is slightly above the previous quarter and actions focused on driving activity and recruitment are ongoing. We remain committed to return to long-term profitable 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 Wednesday, 7 November 2018 at 9.30 CET.

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

The conference call will also be audioeb cast in “listen-only” mode through Oriflame’s website: www.oriflame.com or through http://oriflame-ir.creo.se/181107/

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

November 7, 2018

Magnus Brännström
Chief Executive Officer

For further information, please contact:
Magnus Brännström, Chief Executive Officer Tel: +41 798 263 754
Gabriel Bennet, Chief Financial Officer Tel: +41 798 263 769
Nathalie Redmo, Sr. Manager IR Tel: +41 799 220 173

This information is information that Oriflame Holding AG is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07:15 CET on November 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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Oriflame Q3 2018

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