oriflame holding ag · 2016 deutsche bank global consumer conference 14 june 2016 gabriel bennet,...
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2016 Deutsche Bank Global Consumer Conference
14 June 2016
Gabriel Bennet, CFO
Nathalie Redmo, IR Manager
ORIFLAME HOLDING AG
• Beauty company selling direct
• Around 3 million beauty consultants
• €1.2 billion in sales annually
• 95% of orders online
• 1,000 cosmetic products, of which 1/3 are new
each year
• New catalogues every third week adopted to
the local market
• Manufacturing in Poland, Russia, China &
India
• Around 6,500 full-time equivalent employees
• Listed on Stockholm Nasdaq exchange and
domiciled in Switzerland
• Co-founder of the World Childhood
Foundation
6/13/2016 2Copyright ©2016 by Oriflame Cosmetics AG
ORIFLAME IN BRIEF
Q1 HIGHLIGHTS
6/13/2016 Copyright ©2016 by Oriflame Cosmetics AG 3
€m
0%
5%
10%
15%
0
200
400
600
800
1000
1200
1400
Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16
Net Sales LTM Adj. Op Margin % LTM
• Sales 10% in local currency, -1% in €
• Active consultants -9%
- Lc productivity +19%
• Price/mix +16%
- Unit decline -6%
• Operating margin 6.9% (5.6%)
- Currency impact -370 bps
- Net profit €10.7m (€11.2m)
• Q2 update: 13% YTD and 17% QTD lc sales
Q1’16 Q1’15 Change LTM'16 YE‘15
Sales, €m 305.8 307.8 (1%) 1,209.6 1,211.6
Lc sales - - 10% - -
Adj. Operating profit, €m
21.1 17.2 23% 104.1 100.2
Adj. operating margin
6.9% 5.6% - 8.6% 8.3%
Active Consultants ‘000
3,105 3,429 (9%) 3,105 3,246
CASH FLOW AND NET DEBT
6/13/2016 Copyright ©2016 by Oriflame Cosmetics AG 4
0
25
50
75
100
125
Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16
Operating cash flow LTM Capex LTM€m
0.0
0.5
1.0
1.5
2.0
2.5
0
50
100
150
200
250
300
350
Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16
Net Debt at hedged values* Net Debt at hedged values* / EBITDA LTM€m
THE ORIFLAME BRAND
– OUR SWEDISH ATTRIBUTES
Copyright ©2016 by Oriflame Cosmetics AG 5
ACCESSIBLE NATURAL
PROGRESSIVE TRUSTWORTHY
6/13/2016
SUSTAINABILITY
6/13/2016 Copyright ©2016 by Oriflame Cosmetics AG 6
PRODUCTS PLANETPEOPLE
• Consultant bonus and recognition
payout of more than €320M in 2015
• More than € 1.1M donated to Oriflame
foundation
• 87% of employees recommend
Oriflame as a good place to work
• More than 40 markets participating in
Charity activities
Creating opportunities to improve
people’s lives
• First in the world RSPO segregated
certified product
• Green palm credits covering 100% of palm
oil consumption
• 85% of the product cartons & leaflets FSC
certified
• Only natural origin exfoliants in new
developments (replacing microbeads)
Bringing beauty & wellbeing
through responsible products
• LEED® certification of factories in Russia
and India
• 98% of catalogue paper credibly certified
in 2015 (50% in 2011)
• Scored 99B on CDP Climate change
evaluation in 2015
Driving environmental
sustainability
+
• ~ 50% produced in house
• Insource more volumes
• Technology expansion
• Establish commercial relationships
NEW OPPORTUNITIES IN GLOBAL MANUFACTURING
6/13/2016 7Copyright ©2016 by Oriflame Cosmetics AG
GEOGRAPHIC FOOTPRINT 2010
6/13/2016 Copyright ©2016 by Oriflame Cosmetics AG 8
2010 YTD Split
SALES ACTIVE CONSULTANTS OPERATING PROFIT
CIS &
Baltics
Other
markets
57%
(56%)
43%
(44%)
60%
(59%)
40%
(41%)
70%
(61%)
30%
(39%)
Asia &Turkey
Europe & Africa
Latin America
CIS
Q1 Regional Split
GEOGRAPHIC FOOTPRINT TODAY
6/13/2016 Copyright ©2016 by Oriflame Cosmetics AG 9
SALES ACTIVE CONSULTANTS OPERATING PROFIT
8% (7%)
25% (23%)
36% (45%)
31% (25%)
10% (10%)
27% (27%)
29% (36%)
34% (27%)
7% (5%)
32% (34%)
20% (36%)
41% (25%)
6/13/2016 10
STRATEGIC FOCUS AREAS
Copyright ©2016 by Oriflame Cosmetics AG
STRATEGIC FOCUS AREAS
6/13/2016 Copyright ©2016 by Oriflame Cosmetics AG 11
4 DIGITALIZATION OF
THE BUSINESS MODEL
STRENGTHENING THE
BUSINESS OPPORTUNITY21 FOCUS ON
PRODUCT CULTURE
3 CUSTOMER EXPERIENCE
WITH A HUMAN TOUCH
23%
20% 25%
17%
7%8%
Colour Cosmetics
Fragrances
Skin Care
Personal & Hair Care
Wellness
Accessories
6/13/2016 12
Sales by Category 2015
1. FOCUS ON PRODUCT CULTURE
2. STRENGTHENING THE BUSINESS OPPORTUNITY
3. CUSTOMER EXPERIENCE WITH A HUMAN TOUCH
4. DIGITALIZATION OF THE BUSINESS MODEL
Copyright ©2016 by Oriflame Cosmetics AG
13
• Product portfolio reinforcing the Oriflame brand
• Strengthening the product culture – driven by the
Oriflame routines
• Skin Care and Wellness
• Better sales mix and price increases – increased
gross margin
• Continuing to offer a wide assortment and driving the
activity in the sales force
Copyright ©2016 by Oriflame Cosmetics AG6/13/2016
1. FOCUS ON PRODUCT CULTURE
2. STRENGTHENING THE BUSINESS OPPORTUNITY
3. CUSTOMER EXPERIENCE WITH A HUMAN TOUCH
4. DIGITALIZATION OF THE BUSINESS MODEL
BUSINESS
OPPORTUNITY
OFFER
6/13/2016 14
• Improved earnings opportunity
• Increased sales of routines
• Secure earnings for Sellers & Leaders through
the Success Plan
• Locally attractive opportunity communication
• Personal and professional development
• Belonging to the global Oriflame community and
recognition
• Conferences and events
Copyright ©2016 by Oriflame Cosmetics AG
1. FOCUS ON PRODUCT CULTURE
2. STRENGTHENING THE BUSINESS OPPORTUNITY
3. CUSTOMER EXPERIENCE WITH A HUMAN TOUCH
4. DIGITALIZATION OF THE BUSINESS MODEL
RECOMMENDATION
15
NPS – Satisfied consultants and consumers will recommend us to others
6/13/2016 Copyright ©2016 by Oriflame Cosmetics AG
1. FOCUS ON PRODUCT CULTURE
2. STRENGTHENING THE BUSINESS OPPORTUNITY
3. CUSTOMER EXPERIENCE WITH A HUMAN TOUCH
4. DIGITALIZATION OF THE BUSINESS MODEL
6/13/2016 Copyright ©2016 by Oriflame Cosmetics AG 16
+ ONLINE SELLING
& RECRUITING
Offline orders Online orders
1968 1998 2008 2015
1960s -1970s 1980s 1990s 2000s
HOME PARTIES + PERSON TO
PERSON SELLING
+ NETWORK
MARKETING
+ ONLINE ORDERING
+ BUSINESS TOOLS
2010s
1988
2008
2015
0 Facebook fans
>7 million Facebook fans
38% of all orders online
95% of all orders online
1.5 billion page views
3.3 billion page views
21 million visitors
60 million visitors
45 million site visits
175 million site visits
1. FOCUS ON PRODUCT CULTURE
2. STRENGTHENING THE BUSINESS OPPORTUNITY
3. CUSTOMER EXPERIENCE WITH A HUMAN TOUCH
4. DIGITALIZATION OF THE BUSINESS MODEL
6/13/2016 Copyright ©2016 by Oriflame Cosmetics AG 17
Nadia MeutiaGold Executive Director (Indonesia)
1. FOCUS ON PRODUCT CULTURE
2. STRENGTHENING THE BUSINESS OPPORTUNITY
3. CUSTOMER EXPERIENCE WITH A HUMAN TOUCH
4. DIGITALIZATION OF THE BUSINESS MODEL
18
GOING FORWARD
6/13/2016 Copyright ©2016 by Oriflame Cosmetics AG
6/13/2016 19
A COMPANY IN TRANSFORMATION
Copyright ©2016 by Oriflame Cosmetics AG
Where we are heading
• Brand and value driven organization with a human
touch
• Improved business opportunity
• Social selling business model with online as
catalyst
• Larger focus on Skin Care and Wellness routines
• Increased sales and operating profit from key
growth regions
6/13/2016 Copyright ©2016 by Oriflame Cosmetics AG 20
6/13/2016 21
CAUTIONARY STATEMENT
Some statements herein are forward-looking and the actual outcome could be materially different.
In addition to the factors explicitly commented upon, the actual outcome could be materially affected by other factors like,
for example, the effect of economic conditions, exchange-rate and interest-rate movements, political risks,
impact of competing products and their pricing, product development, commercialisation and supply disturbances.
Copyright ©2016 by Oriflame Cosmetics AG
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