Year-end report 1 January – 31 December 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.
• 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 1-15), 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 16-31 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 31 December 2018

• Local currency sales increased by 1% and Euro sales decreased by 3% to €370.3m (€380.1m). Euro sales amounted to €359.3m* in accordance with IFRS.
• Number of registered actives increased by 1% and amounted to 3.1m.
• Operating margin was 13.6% (14.8%), negatively impacted by 140 bps from currencies, and operating profit was €50.2m (€56.3m). Operating margin was 14.1%* and operating profit was €50.8m* in accordance with IFRS.
• Net profit was €32.9m (€35.8m) and diluted EPS €0.58 (€0.62). Net profit was €32.4m* and diluted EPS €0.57* in accordance with IFRS.  
• Cash flow from operating activities was €60.6m (€79.0m) and €60.6m* in accordance with IFRS.
• The first quarter to date sales development is approximately -7% in local currency, negatively impacted by timing.

Twelve months ended 31 December 2018

• Local currency sales increased by 3% and Euro sales decreased by 3% to €1,318.9m (€1,363.1m). Euro sales amounted to €1,278.8m* in accordance with IFRS.
• Euro sales in the largest market in each Global Business Area amounted to; China €206.2m (€190.4m), Russia €198.6 (€241.5m), Mexico €83.6m (€88.5m) and Poland €57.1m (€51.5m).
• Operating margin was 11.3% (11.7%), negatively impacted by 220 bps from currencies, and operating profit was €149.3m (€159.0m). Operating margin was 12.0%* and operating profit was €153.1m* in accordance with IFRS.
• Net profit was €96.1m (€92.6m) and diluted EPS €1.69 (€1.62). Net profit was €95.4m* and diluted EPS €1.68* in accordance with IFRS.  
• Cash flow from operating activities was €123.9m (€122.7m) and €123.9m* in accordance with IFRS.
• The Board of Directors will propose to the 2019 AGM a total dividend of €1.60 per share for 2018 (to be compared with 2018 AGM €1.60 ordinary dividend + €1.00 extra ordinary dividend). The dividend is to be paid in equal quarterly instalments of €0.40 respectively starting in the second quarter 2019.
  *Figures following the adoption of IFRS 15 and IFRS 16.

Significant events after the end of the quarter

• In accordance with the terms of the Company’s share incentive and retention plans, the Board has resolved to deliver achievement shares totalling 280,376 shares, out of which 191,672 will be issued as new shares under the Company’s conditional share capital and the rest from the Company’s treasury shares and/or up to 90,000 shares to be repurchased on Nasdaq Stockholm. Following the issuance, the Company’s total number of shares will amount to 56,634,038 shares.
• The Board of Directors has resolved to continue with its long-standing practice of offering key employees of the Oriflame Group to annually invest in a share incentive plan, and has resolved to during the first quarter 2019 implement a share incentive plan for the investment year 2019. The main terms and conditions of the new share incentive plan are consistent with those of the current share incentive plan.

CEO Magnus Brännström comments
“2018 has been a year of mixed performance for Oriflame. On one hand we faced challenging market conditions in some of our key markets and difficult comparables with the 50th Anniversary activities prior year. On the other hand, our strategic categories – Skin Care and Wellness – continued to increase their share of the overall sales and online activities remained on high levels. While the slower development in Asia & Turkey during the fourth quarter was disappointing, the improved sales momentum in most other regions demonstrates the strength of our balanced geographical footprint. Despite currency headwinds and a changed geographical mix, we are pleased to report a stable underlying profitability for the quarter. The sales development into the first quarter to date is negatively impacted by catalogue timing and public holidays. However, the underlying development still reflects the challenges we continue to face in some of our key markets. We are taking measures and 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 Thursday, 14 February 2019 at 9.30 CET.

Participant access numbers:
DK: +4578150109
FI: +358981710523
NO: +4723500236
UK: +443333009274
US: 18446251570
SE: +46 856642651 PIN: 28240569#

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/190214

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

February 14, 2019

Magnus Brännström
Chief Executive Officer

This 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 February 14, 2019.

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

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