Oriflame sees emerging market sales climb but Europe falls short of expectations

By Andrew McDougall

- Last updated on GMT

Related tags Local currency sales United states United states dollar

Oriflame sees emerging market sales climb but Europe falls short of expectations
Swedish cosmetics maker Oriflame saw strong sales growth in Asia, Africa and Latin America once again for the second three months of the year, although admits that figures in Europe and CIS fell just short of expectations.

Overall, local currency sales increased marginally by one per cent and Euro sales were up by two per cent to €373.6m (€366.7m).

The direct seller saw profitability boosted for the three months ended 30 June 2012, and also saw expansion into East Africa via acquisition of former franchisee businesses in Kenya, Uganda and Tanzania.

Improved efficiency and profitability

“A clearly improved operational efficiency and profitability give us a stable foundation to address the challenges ahead,”​ said company CEO Magnus Brännström.

“I am very pleased to see another quarter of strong growth in Asia, Africa and Latin America with further margin expansion, while sales in the CIS and Europe are slightly lower than expected.”

For the quarter, the average size of the sales force decreased by five per cent to 3.6m Oriflame Consultants and the closing sales force was down by six per cent.

“The decline in the group sales force is fully compensated by strong productivity. Going forward, we are confident in our ambitions to strengthen the income opportunity for our Oriflame Consultants through innovation and brand building thereby securing a long term sales force increase,”​ added Brännström.

Upward trend

For the first half 2012, Oriflame is reporting local currency sales increased have by two per cent and Euro sales are up by one per cent to €769.3m (€763.5m).

According to market researcher yStats.com, the direct selling industry is one of the sectors going against the trend and beating the recession as products are not routed through retail stores.

It claims that overall, a slight upward trend can be seen in European direct selling, which is expected to remain stable in the future.

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