Oriflame Cosmetics reports adjusted net profit of €12M for three-month period ending March 31, compared to year-ago profit of €28M, as European sales fall 14% to €327.2M
May 7, 2014
– Oriflame Cosmetics (STO:ORISDB):
3 months ended 31 March 2014
· Local currency sales decreased by 2% and Euro sales decreased by 14% to €327.2m (€381.3m).
· Number of active consultants decreased by 5% to 3.5m.
· EBITDA amounted to €29.4m (€45.2m).
· Adjusted* operating margin was 7.0% (10.0%), negatively impacted by approximately 450 bps from currency volatility, partly offset by hedging and positive price / mix effects, resulting in an adjusted* operating profit of €23.1m (€38.0m).
· Adjusted* net profit amounted to €12.0m (€28.0m) and adjusted* EPS amounted to €0.22 (€0.50).
· Cash flow from operating activities amounted to €16.9m (€28.4m).
· Second quarter update: The underlying sales development in the second quarter to date is approximately -2% in local currency, and the year to date development is approximately -2% in local currency.
· New structure of segment reporting reflecting the new Global Business Areas.
* Adjusted for restructuring costs during the quarter €0.4m.
Significant events during and after the end of the quarter
· In line with the adjusted dividend proposal announced in April, the Board proposes Q2 dividend payment of €0.25 per share following the AGM on 19 May 2014.
· Based on the proposed mandate to the Board (subject to approval by the AGM) and given the exceptional geopolitical events in Russia and Ukraine, impacting currencies and economic climate, the Board does not intend to make any dividend payment in Q3. Subsequent dividend payments will be announced in upcoming quarterly reports.
· Planned alignment of legal structure continues.
CEO Magnus Brännström comments
“With sharply devaluating currencies and challenges of exceptional nature in our two largest markets Russia and Ukraine, there is no doubt the company is facing very tough conditions. As a measure of prudence, the Board is of the opinion that there should be no dividend payment in Q3. Our new split of Global Business Areas clearly illustrates the situation: we need to return the momentum and improve profitability in CIS and Europe while we continue to see a very positive development in Latin America, Turkey, Africa & Asia.
During the end of the first quarter, additional improvements to the CIS Success Plan were launched and I am pleased to see the drive among our Leaders despite the current challenges. There is an undivided focus on restoring growth and mitigating the negative impact on profitability from the geopolitical situation, currency headwind and lack of leverage through margin improvements and reduced cost levels.”
Conference call for the financial community
The company will host a conference call on Wednesday, 7 May at 15.30 CET.
Participant access numbers:
Luxembourg: +352 2 786 0202
Sweden: +46 (0)8 506 443 86
Switzerland: +41 44 580 65 22
UK: +44 20 7153 9154
US: +1 877 423 0830
Confirmation code: 865360#
The conference call will also be audio web cast in “listen-only” mode through Oriflame’s website: www.oriflame.com or through http://www.media-server.com/m/p/oe7aw57i
7 May 2014
Chief Executive Officer
Oriflame Cosmetics S.A.
24 Avenue Emile Reuter, L-2420, Luxembourg
Company registration no B.8835
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