Oriflame Holding AG FIRST QUARTER 2018 INVESTOR PRESENTATION

Transcription

1 Oriflame Holding AG FIRST QUARTER 2018 INVESTOR PRESENTATION Magnus Brännström, CEO Gabriel Bennet, CFO Nathalie Redmo, Sr. Manager IR May 4, CET

2 IMPORTANT CLARIFYING INFORMATION IFRS Oriflame has implemented IFRS 15 Revenue from Contracts with Customers from 1st January 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, excluding the impact of IFRS 15, IFRS 16 and related accounting alignments. The fully adjusted figures are comparable with the already reported 2017 figures. Where not stated differently, the figures, graphs and comments in this presentation are based on the fully adjusted 2018 figures, to facilitate the comparison with the 2017 figures. Oriflame Cosmetics AG,

3 FIRST QUARTER HIGHLIGHTS Oriflame Cosmetics AG,

4 Q1 HIGHLIGHTS Sales 334.1m (340.1m) -2% in, +8% in lc Strong performance in Asia & Turkey Notable slowdown in Russia Stable development in Latin America Q2 update: -2% QTD lc sales, negative timing Operating margin 9.2% (8.8%) Currency impact -320 bps Net profit 18.7m ( 19.5m) Strong net financial position 50m issue of Euro denominated US private placement notes Oriflame Cosmetics AG,

5 OPERATIONAL HIGHLIGHTS Price/mix +14% Unit decline -6% Registered actives +1% Lc productivity +7% Double-digit growth in Skin Care and Wellness: Introduction of NovAge Men Innoage Youth Preserve launched in China Continued progress of sustainability initiatives: Micro plastics no longer produced Strong online development 960,000 active users of the Oriflame app Oriflame Cosmetics AG,

6 REGIONS Europe & Africa CIS Latin America Asia &Turkey Q1 Regional Split 40% (35%) 10% (11%) 26% (30%) 24% (24%) 38% (34%) 9% (9%) SALES REGISTERED ACTIVES OPERATING PROFIT 25% (27%) 28% (30%) 54% (46%) 8% (7%) 17% (23%) 21% (24%) Oriflame Cosmetics AG,

7 LATIN AMERICA Sales force and productivity Registered actives -1% Lc productivity +1% productivity -7% Stable development in Mexico Lower consumer confidence Solid growth in Ecuador, weak in Colombia Q1 18* Q1 18 Q1 17 Change LTM, April 17 - March 18 LTM, April 16 - March 17 Change YE 17 Sales, m (8%) % Lc sales % - - 4% - Operating profit, m Operating margin Registered actives 000 m % (4%) % 12.3% 9.5% % 14.5% % (1%) (1%) 280 *Figures following the adoption of IFRS 15 and IFRS Net Sales LTM Op Margin % LTM 25% Operating margin +280 bps Price increases Lower selling and marketing expenses Negative currency movements % 15% 10% % 0 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 0% Oriflame Cosmetics AG,

8 EUROPE & AFRICA Sales force and productivity Registered actives -6% Lc productivity +4% productivity +3% Stable sales in Central Europe Healthy development in Poland and Romania Performance in Western Europe remained weak Challenging quarter for Africa Macroeconomic difficulties *Figures following the adoption of IFRS 15 and IFRS 16 m Q1 18* Q1 18 Q1 17 Change Net Sales LTM LTM, April 17 - March 18 LTM, April 16 - March 17 Adj. Op Margin % LTM Change YE 17 Sales, m (3%) (2%) Lc sales (2%) - - 2% - Operating profit, m Operating margin Registered actives (19%) (11%) % 10.8% 12.8% % 14.8% % (6%) (6%) % 20% 15% Operating margin -200 bps Negative currency movements % Sales deleverage 150 5% Price increases 100 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 0% Oriflame Cosmetics AG,

9 CIS Sales force and productivity Registered actives -6% Lc productivity +1% productivity -10% Positive timing of catalogues Russia lc sales -14% Weak catalogues, high prices in some categories External price pressure Measures are being taken Continued improvements in Ukraine and Kazakhstan Operating margin +130 bps Lower distribution and infrastructure expense Positive timing of selling and marketing expense Negative exchange rates *Figures following the adoption of IFRS 15 and IFRS 16 m Q1 18* Q1 18 Q1 17 Change Net Sales LTM Adj. Op Margin % LTM Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Oriflame Cosmetics AG, LTM, April 17 - March 18 LTM, April 16 - March 17 Change YE 17 Sales, m (15%) % Lc sales (5%) - - 2% - Operating profit, m Operating margin Registered actives (5%) % % 12.5% 11.2% % 10.6% % (6%) (6%) % 20% 15% 10% 5% 0%

10 ASIA & TURKEY Sales force and productivity Registered actives +15% Lc productivity +9% productivity -3% Solid performance in China, Indonesia, Turkey and Vietnam Leadership Online activity Skin Care and Wellness Operating margin +330 bps Favourable geographical mix Sales leverage m Q1 18* Q1 18 Q1 17 Change LTM, April 17 - March 18 LTM, April 16 - March 17 Change YE 17 Sales, m % % Lc sales % % - Operating profit, m Operating margin Registered actives % % % 21.1% 17.8% % 19.9% % 1,184 1,184 1,034 15% 1,184 1,034 15% 1,145 *Figures following the adoption of IFRS 15 and IFRS Net Sales LTM Op Margin % LTM Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q % 20% 15% 10% 5% 0% Oriflame Cosmetics AG,

11 FINANCIALS Oriflame Cosmetics AG,

12 Q1 INCOME STATEMENT Sales mix Unit sales -6% Price/mix +14% Gross margin 72.5% (71.6%) Negative currency movements Positive price/mix effect *Figures following the adoption of IFRS 15 and IFRS 16 m Q1 18* Q1 18 Q1 17 Change Net Sales LTM LTM, April 17 - March 18 Op Margin % LTM LTM, April 16 - March 17 Change YE 17 Sales, m (2%) 1, , % 1,363.1 Lc sales % % - Operating profit, m Operating margin Registered actives % % % 9.2% 8.8% 11.8% 10.0% 11.7% 3,034 3,034 2,991 1% 3,034 2,991 1% 3,067 Operating margin +40 bps Negative currency impact 320 bps Lower selling and marketing expenses Lower distribution and infrastructure expenses Net profit 18.7m ( 19.5m) Diluted EPS 0.32 ( 0.34) 350 bps withholding tax on intra group dividends Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q % 20% 15% 10% 5% 0% Oriflame Cosmetics AG,

13 GROUP CURRENCY IMPACT ON SALES SINCE 2010 Oriflame Cosmetics AG,

14 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 PRICE/MIX IMPACT ON SALES 18% 16% 16% 14% 14% 14% 15% 14% 12% 12% 12% 10% 11% 11% 10% 8% 9% 9% 9% 9% 6% 7% 7% 7% 7% Average 9% 4% 4% 5% 5% 4% 2% 3% 3% 0% 0% Oriflame Cosmetics AG,

15 OM Q FX Price / mix Product cost Other income Selling & Marketing Distrib. & Infra. Admin. OM Q Q1 SALES AND OPERATING MARGIN ANALYSIS Sales vs. PY OP Margin vs. PY % 8 6 LC Sales 8% Sales (2%) % % 9.2% 8.8% 2.9% 0.6% (0.1%) 8 (0.2%) (0.4%) (16%) (6%) 14% (10%) (3.2%) -6 Units Price / mix FX Oriflame has made certain assumptions to make/calculate an estimate of the effects of currency, price/mix, etc. on the operating margin. Oriflame Cosmetics AG,

16 m Net Debt at hedged values* Net Debt at hedged values* / EBITDA LTM FINANCIAL POSITION Net debt at hedged values -5.4m ( 28.0m) Net debt 16.3m ( 92.7m) Net debt at hedged values/ EBITDA (LTM) (0.2) Net debt/ebitda (LTM) 0.1 (0.6) Interest cover (Q1): 7.5 (8.2) 20 0 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q Interest cover (LTM): 11.2 (7.5) * Adjusted for fair value movements of the USD private placement notes Interest cover (LTM) COVENANT DISCLOSURE Consolidated Net Debt to Consolidated EBITDA: 0.1 (covenant at 3.0 times) Consolidated EBITDA to Consolidated Finance costs: 18.3 (covenant at 5.0 times / 4.0 times for RCF) Consolidated Net Worth: 221.6m (covenant at 120m / N/A for RCF or in 2017 and 2018 Euro denominated private placement notes ) Oriflame Cosmetics AG, Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18

17 CASH FLOW m 150 Operating cash flow LTM Capex LTM Q1 18* Q1 18 Q1 17 LTM 18 YE Net profit before income tax, m Op. profit before changes in wc, m Change in working cap. and provisions, m (3.1) 2.9 (23.4) Operating CF, m (1.5) CF Investing Activities, m (3.1) (3.1) (3.0) (15.9) (15.8) Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 *Figures calculated as per the new IFRS 15 and 16 standards Q1 operating cash flow 24.9m ( -1.5m) Net profit before tax -0.1m Non-cash items in net profit before tax +7.2m Impact from changes in working capital and provisions +26.3m Inventories +1.9m Receivables, prepaid exp., asset derivatives +15.4m Payables, accrued exp., liability derivatives +7.8m Provisions +1.2m Interest, charges, taxes -7.0m 0 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Oriflame Cosmetics AG, m Total inventory

18 CONCLUSIONS AND GOING FORWARD Oriflame Cosmetics AG,

19 CONCLUSIONS AND GOING FORWARD Yet another successful quarter: Improved sales and margins Increased number of registered actives Strong growth in Skin Care and Wellness Continuously strong in Asia & Turkey Q2 QTD sales development: Notable slowdown in Russia Negative timing of conferences and catalogues Measures taken where challenges are met Confidence in our long-term strategy Oriflame Cosmetics AG,

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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. Oriflame Cosmetics AG,