Beauty Sales: $1.9 billion

Major Products: Mass market and premium direct-sell Skin Care, Color Cosmetics, Fragrance, Personal Care, Hair Care, Accessories and Wellness.

New Products: The One by Oriflame makeup, HairX TruColour, Ecollagen, Vivacity Eau de Toilette, Triple Core 3D Lipstick, Giordani Gold Lash Panorama Mascara.

Comments: Globalization has at least prevented companies from “putting all their eggs in one basket,” especially as the Russian market is key to Oriflame, accounting for more than half of its overall business. Weak demand there, as well as in the Ukraine and EMEA countries—as well as a drop in consultants—put a damper on Oriflame sales in 2013. But there were some bright spots, too. Africa and Turkey delivered strong sales growth. Sales in Latin America rose 15%. In Asia, sales rose more than 10% due to Indonesia, India and Pakistan. And the Swedish beauty direct seller entered Myanmar, Nigeria and Tunisia during the year. All in all, annual sales hit $1.9 billion.

In 2013, the number of visitors to Oriflame’s websites continued to rise. More than 90% of all orders were placed online, and consultants made good use of supportive online tools.

Personal Care and Hair Care had a challenging year, largely due to competition from low-priced and heavily discounted products in the retail channel. However Fragrances improved from the previous year. Skincare and Color Cosmetics were flat.

By category, color cosmetics accounted for 24% of sales, followed by skincare, 21%; personal and hair care, 20%; fragrances, 20%; accessories 10% and wellness, 5%.

During the year, the company introduced a number of products including its first in the hair colorant market, HairX TruColour, and in anti-aging, Ecollagen, which features advanced plant stem cell technology.

Oriflame also continued to promote its new brand promise—“Your Dreams – Our Inspiration”—with the aim of making the brand stronger by focusing on the beauty offering as well as on the business opportunity for Oriflame consultants. In November, one of the company’s main warehouses for India, located near New Delhi, was destroyed by fire, causing a supply problem in the Indian market.

Plant Stem Cell Technology

In December, Oriflame announced that it had invested in what it calls “pioneering plant stem cell technology,” through the cultivation of its own plant stem cell cultures. The goal is to make “affordable products with pure and highly sustainable anti-aging active ingredients that can boost and rejuvenate aging skin.” The method is also environmentally friendly for a number of reasons, according to Oriflame, including reduced water consumption and increased quality and purity of natural ingredients.

Oriflame also entered into a collaborative partnership with Swedish company In vitro Plant-tech AB, which specializes in bio-manufacturing of cell cultures and explants from medicinal plants.
In January 2014, Oriflame presented its new fashion-inspired makeup brand called The One by Oriflame, which was launched at Mercedes-Benz Fashion Week in Stockholm. In August 2014, Oriflame was hit hard with a Russian tax probe regarding its headquarters and two factories in the Moscow area.

First Half Results

Local currency sales decreased by 2%, and Euro sales decreased by 14% to $870 million. The company still faces extreme challenges in its main markets plagued by tough geopolitical and economic conditions.

Beauty Sales: $1.9 billion

Major Products: Skin care, color cosmetics, fragrance, personal and hair care, accessories and wellness products.

New Products: Tycoon, Silk Beauty Shower Cream, NY Master Curl Mascara, Volume Boost Shampoo and Conditioner, Mirage Daydream EDT, More by Demi.

Direct seller Oriflame launches 300 products a year.

Comments: Although Oriflame had a presence in 60 countries at the end of 2012, the European debt crisis and a decline in active representatives impacted Oriflame’s results. Sales fell 1% last year due to a 5% decline in the number of units sold, partially offset by a 4% gain in price and mix.

What’s more, sales were weakest in Oriflame’s largest market—Eastern Europe and Russia—which accounts for 54% of sales. Sales within the Commonwealth of Independent States and Baltic region declined 4% overall, due to a 6% drop in sales in Russia. The sales force fell 13% to 1.8 million consultants.

Sales in Europe, Middle East and Africa (28% of sales) fell 1%, even as the number of representatives increased 4% to 900,000. Although sales rose in northern Africa, Romania and Hungary, weakness in southern Europe hampered results. During the year, Oriflame acquired franchise businesses in Kenya, Tanzania and Uganda.

Sales in Asia (11% of sales) rose 12%, with the biggest gains in China, India and Indonesia. The sales force rose 5% to 500,000 consultants.

Sales in Latin America (7% of sales) increased 8%, driven by gains in Mexico. The number of Oriflame consultants rose 7% to 200,000.

In its annual report, the company reiterated its long-term financial goal of achieving a 10% gain in local currency a year.

By product category, color cosmetics accounted for 24% of sales, followed by skin care (22%), personal care and hair care (20%), fragrances (20%), accessories (9%) and wellness (5%). The company says it adds 300 products annually.

The biggest initiative of 2012 was a partnership with actress Demi Moore for product development, endorsement and marketing. The More by Demi collection, which included color cosmetics, body care and fragrance products was said to be a popular addition.

For the six months ended June 30, CEO Magnus Brännström commented:

“We ended the second quarter weaker than expected, however we see a sales growth of 3% in the third quarter to date, and higher in Russia. Our key future growth markets are performing very well. Initiatives to increase sales and efficiency within the Group are being intensified.”

In September, Oriflame India launched a daily care baby care range that is free of paraben preservatives and promotes soft and healthy skin.

Oriflame is a sponsor—and the official cosmetics brand—of the Women’s Tennis Association.

Beauty Sales: $2 billion

Major Products/Brands:

Oriflame is taking Eastern Europe—and other regions—by storm.

Color cosmetics, skin care, personal care, hair care, fragrance, wellness supplements, under brands including Tender Care, Essentials, Pure Skin, North For Men, Dare to Be, Discover Bath & Shower, Feet Up and Optimals.

New Products: Glacier Ice fragrance, Hair X, Triple Core Lipstick, Very Me Makeup, Perfect Body Visible Re-Contouring Serum, Voyager Eau de Toilette, Endless Mascara, 2FX Mascara, Midnight Pearl for women, Flamboyant for men, Bioclinic Lifting Super Rich Repair Night.

Comments: Direct seller Oriflame, which is a strong contender in more than 60 countries, says despite economic difficulties, it managed to increase shares in key markets. Sales increased by 15% to $2 billion in 2010.

The company claims that the direct sales channel harnesses more than a fifth of the total cosmetics and toiletry market in Eastern Europe, which is backed up by Oriflame’s sales figures. By region, sales were highest in CIS and Baltics ($1.1 billion, +19%); EMEA ($540,000, +3%); Asia ($190,000, +27%); and Latin America ($111,000, +35%).

For Oriflame as for others in our Top 20, 2010 proved to be a more difficult year than expected. The Swedish direct seller witnessed a slower economic recovery than it had planned for, especially in southern Europe. In Russia and Indonesia, new product registration laws contributed to a short-term setback, and the company exited Iran after local authorities shut down its operations there. By addressing these issues and focusing on its sales consultants, conditions improved in the second half of the year.

Oriflame strives for constant freshness and innovation in its offerings: Customers are offered more than 900 cosmetic products, more than a third of which were launched during the past year. A new Oriflame catalog is distributed every three to four weeks and each edition is published in four regional versions in 40 different languages.

During the year, Oriflame launched a new instantly popular concept called Dare to Be, targeting a younger audience with fun new products and the latest beauty trends.

In general, the Skin Care category, which accounted for 22% of total sales in 2010, proved challenging with consumers who switched their preferences toward lower and mid-priced brands. Hand cream launches proved highly successful, as did lower priced brands.

The Personal and Hair Care category accounted for 20% of Oriflame’s total sales in 2010. There was unprecedented success of Feminelle intimate care products. Discover Bath & Shower brand is also one of the bestsellers in the category, as is Nature Bath & Shower. The relaunch of Hair X strengthened Oriflame’s position in the hair care segment. The 2010 relaunch of Foot Care under the new brand name Feet Up also gave the company a leg up.

Color Cosmetics perked up in the second half and rallied with double-digit growth. The category represented 24% of sales during the year, driven by Triple Core Lipstick with a breakthrough technology exclusive to Oriflame. Very Me, targeted toward a youthful audience, and Pure Colour, an entry-level range of products, were also big hits.

The Fragrance category produced 21% of total sales, recorded strong sales growth in both men’s and women’s, and remains the fastest growing category within Oriflame. Celebrity endorsements played a large role as local stars signed on—for example, as with the fragrance Glacier Ice, promoted by the Russian figure skating star Evgeni Plushenko.

In 2011, Oriflame became the sponsor of the Women’s Tennis Association.

The company continues to have its eye on India, with plans to launch about 350 products there this year and to double the number of service centers it operates in the country to over 500. More than 270 Oriflame products were launched in India last year.

One of the company’s newest—and most talked about—launches is its Perfect Body Visible Re-Contouring Serum—its first slimming solution which it says is clinically proven to reduce cellulite and slim thighs by up to 2.2cm within four weeks.

Looking ahead to 2011, Oriflame expects operating margins to improve compared with 2010, while sales growth expected to reach 5–10% in local currency.

This fall, Oriflame introduced Studio Artist, its new range of professional makeup featuring Swedish-born Hollywood actress Malin Åkerman as the spokeswoman.

Beauty Sales: $1.9 billion

Major Products: Skin care, fragrances, color cosmetics, personal care, hair care, wellness and accessories.

Tender Care remains Oriflame’s No. 1 skin care product in terms of sales and units.

New Products: Ecollagen Energising Cocktail, Triple Core Lipstick, Time Reversing InTense Cream; Grace, Giordani Men and Glacier fragrances; HairX.

Comments: The Swedish naturals direct seller prides itself on introducing 300 new products annually for a total range of about 1,000 cosmetics products; a new catalog is released every 3–4 weeks. Oriflame’s product packaging is recyclable when possible and minimized to reduce waste.

Sales fell less than 1% last year, but net income fell by more than 23%. By region, the Commonwealth of Independent States (CIS) and the Baltics accounted for 56% of sales; followed by Europe, the Middle East and Africa (EMEA), 30%; Asia, 9% and Latin America, 5%.

Despite the economic turmoil in the world, Oriflame retained its spot as the No. 1 cosmetic brand in Russia and the best performing markets in the CIS and Baltics region were Ukraine and Azerbaijan.

In EMEA, the strongest performing markets were Turkey and Morocco, according to the company.

In Asia, the best performing regions were Iran and China, while in Latin America, where sales rose 7%, Mexico and Colombia led the way.

By product category, in 2009, skin care and color cosmetics each represented 25% of sales. Skin care sales fell 2% during the year. Tender Care remains the No. 1 skin care product in terms of sales and units. Time Reversing InTense followed the growing trend of skin care that targets skin needs of women over 55 years old.

Color cosmetics sales fell 6%, but the company maintained that sales of Powershine lipstick and Wonderlash mascara held up well in the mid-price range, as did the premium-priced Giordani Gold. Oriflame introduced Hydra Colour—its first lipstick to contain water, for extra hydration and Pro-C, which acts as an antioxidant, neutralizing free radicals and helping to prevent damage to lips as well as delay early signs of aging.

Personal care and hair care (20% of sales) fell 1%. The company credited the launch of HairX hair care range for boosting sales in all regions.

Fragrance sales (19%) were flat. In 2009, Oriflame rolled out Grace featuring Eva Herzigova and the men’s fragrances Giordani Men and Glacier.

The company boasts 3.2 million sales consultants around the world—a 21% increase over 2008 numbers.

For the first quarter of 2010, sales rose 6% to $501 million. Sales in the CIS and Baltics rose 4% due to strong growth in Ukraine and Moldova. Sales in EMEA rose 1%, while sales in Latin America jumped 19% on strength in Mexico and Colombia. Sales in Asia surged 38% to due to strong sales gains in most markets.

For the six months ended June 30, 2010, local currency sales increased by 6% and Euro sales increased by 12% to $902 million.

This year, Oriflame introduced what it claims to be the world’s first triple core lipstick, with a core that hydrates and protects; a color core that delivers long-lasting color; and a layer of high-gloss ingredients for sheen and sparkle.

Sales growth for 2010 is expected to be in line with Oriflame’s long-term target of around 10% in local currency. Things changed a bit in October, when authorities in Iran closed Oriflame’s operation in Tehran. Iran represents about 20% of Oriflame’s sales in the Asia region. Despite the loss of sales in Iran, Oriflame confirms its outlook for 2010 in regard to sales, although a permanent closure of the company’s operations in Iran could cost more than $12 million.

Beauty Sales: $1.7 billion

New Products: Optimals BioMaximum +TM, Hair X hair care, Discover bath and shower collection, Perfect Body Advanced Anti- Cellulite and Slimming Gel, Sol sun protection and after sun care, North for Men skin care.

Comments: Oriflame belongs to an elite few in its view of 2008. The Swedish direct-seller, which operates in more than 60 countries, reported that 2008 was its best year ever— sales rose 20% to $1.95 billion. Of that, 91%, or $1.7 billion, came from sales of skin care, fragrances, color cosmetics and personal care. The remainder is attributed to Oriflame’s accessories line. In fact, Oriflame has doubled in size in the past four years, and has a goal of becoming the world’s No. 1 direct seller. The year was spent creating a new corporate platform to ensure future success.

Oriflame’s Diamond Cellular Anti-Ageing Cream sparkled on the company’s 2008 bestseller list.

With sales on the rise, so too were the number of Oriflame sales consultants. By the end of 2008, the Swedish direct seller boasted 2.9 million consultants, an increase of 19% over 2007. The biggest recruitment area was Asia, where consultants rose 39% to more than 391,000.

In 2008, Oriflame focused on strengthening its position in the Commonwealth of Independent States (CIS), as well as key regions such as Asia and Latin America, achieving good results in countries such as Mexico, Colombia, Latin America and Brazil. It also entered Kenya, expanding its presence in Africa. Sales remained strongest in CIS and the Baltics (59%).

Product-wise, skin care sales rose 14% with units up 13% in 2008, thanks to anti-aging and anti-cellulite products. Color cosmetics units were up 17% in sales and increased 15% in units, due in part to the overwhelming success of Wonderlash Mascara, which rose a whopping 130% to become Oriflame’s No.1 selling product. Fragrance sales soared an impressive 30% with units up 19%, due to the launches of several new scents. Color cosmetics and skin care accounted for about a quarter each of sales (26% and 25% respectively); personal and hair care, and fragrance each accounted for about 20%; the remainder was in sales of accessories.

Top-selling products in 2008 included Diamond Cellular Anti-Ageing Cream, Silky Kiss Lipstick, Enigma Eau de Toilette and Milk & Honey Body Care.

Oriflame focused on promoting value-formoney products during the second quarter following a disappointing spring. Oriflame also increased prices by approximately 5% on average in the group in second quarter 2009. Further price increases are expected. The strongest performing categories during the second quarter were Personal & Hair Care, boosted by the launch of Hair X, and Fragrances and Accessories. Male Fragrance sales got a shot in the arm with the launch of Excite by Dima Bilan, a new male fragrance, endorsed by the Russian winner of the Eurovision Song Contest 2008.

For the six months ended June 30, local currency sales increased by 18% and sales increased by 4% to $961 million over the previous year, but continued to be negatively affected by currency fluctuations. CEO Magnus Brännström reported that business was progressing in a difficult environment, according to plan, and the company remains confident for the full-year outlook. The company’s sales force continued to grow in all regions—reaching a record 3.4 million consultants, although lower productivity levels were recorded.