Currency translations hit Oriflame’s fourth quarter

By Simon Pitman

- Last updated on GMT

Related tags Local currency sales United states dollar

Swedish direct sales company Oriflame has announced a 14 per cent increase in its fourth quarter local currency sales, but negative currency translations take the shine off.

Sales for the quarter were €382.5m compared to a figure of €391.8m in the corresponding quarter last year, a figure that translated into a decrease of 2 per cent in Euro sales.

The company said that its results for the last quarter of the year were driven by a particularly strong performance in the CIS and Baltic countries, which was counterbalanced by negative currency translations into Euros.

Sales in Asia increase 49 per cent

Likewise sales in Asia increased by 49 per cent on a local currency basis, but remain relatively small at €32.8m for the quarter.

The company said that the increase in local currency sales was largely attributable to an 18 percent rise in its sales force, which was partly offset by a 4 percent decrease in productivity.

Net profit for the fourth quarter was up 6 per cent to €41.5m, compared to €39.5m for the corresponding period in 2008, a figure that was positively impacted by a currency translation gain of just over €2m.

Sales stagnant and profit down in 2009

For the full year 2009 results, sales were stagnant at €1.316bn, compared to €1.319bn in 2008, while net profit before restructuring fell by 21 per cent to €101.7m, compared to €133.1m in 2008.

In 2009 colour cosmetics remained the company’s leading category, accounting for 25 per cent of total sales, while skin accounted for 24 per cent, personal care and hair care 20 per cent, fragrance also 20 per cent and accessories and wellness 11 per cent.

For the rest of 2010, the company said that it maintains that sales growth should be in line with its long term plans of achieving 10 per cent growth in local currency term, whilst operating margins are expected to be above 12 per cent.

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