Oriflame 2012 Sales Down But Profit Up

Oriflame reported fiscal 2012 sales of €1.48 billion, down from €1.49 billion in 2011. Its gross profit, however, was up from fiscal 2011's €1.01 billion to  €1.05 billion. The adjusted net profit amounted to €121.5 million.

"In 2012, Oriflame implemented a process to define more closely its brand with the aim of making it stronger and more aligned, and to raise brand attractiveness among Oriflame consultants, consumers and employees," said company CEO and president Magnus Brännström. "As we now stand a few months into 2013, we expect, once more, weak markets in many regions to persist for a while. We have already adapted to this, and Oriflame’s clear ambition is to restore growth with sustained strengthened margins." 

European sales were impacted by difficult conditions in southern European markets. Northern African markets continued the strong development, and Oriflame expanded further on the African continent by acquiring the former franchisee businesses in Kenya, Tanzania and Uganda.

The development in the Latin America region was solid, helped by a favorable exchange rate development, with especially strong growth in the strategically important Mexican market, and the Asian market continued to deliver strong sales development—led by China, India and Indonesia..

Oriflame foresees major potential for promoting the brand through well-matched partnerships with celebrities, specialists and organizations. In 2011, the company started working with the Women’s Tennis Association, and was highly successful during its initial year, attracting a great deal of attention and media coverage around the world, helping to strengthen both the brand and the businesses of Oriflame consultants.

Going forward, more focus will be given to capitalizing further on this partnership in social media and other digital channels. The largest branding initiative in 2012 was Oriflame’s teaming up with global movie star and icon Demi Moore for product development, endorsement and marketing. The partnership was launched at the Gold Conference for Oriflame consultants in Stockholm in August 2012, and Demi Moore presented her Oriflame collection of fragrances, More by Demi, which has been followed by additional products. This is the company’s single largest partnership ever, and, according to the company, is receiving notable interest globally.

The full report is available here.

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