THE WHAT? Direct sales company Oriflame has reported a 12 percent sales decline in FY2021, to €1,016.5 million.
THE DETAILS All business areas experienced a decline in Euro sales, with Latin America, CIS, Europe, Turkey & Africa and Asia down 4, 10, 5, 25 and 21 percent respectively.
Selling and marketing expenses decreased by 18 percent, or €65.1m, to €293.4m for the twelve months ended December 31, 2021 from €358.6m in 2020.
Adjusted net profit was €71.5m.
In the three months ending 31 December, 2021, (Q4), Euro sales decreased by 10 percent to €277.3m (€307.5m).
COVID-19 was said to have continued influencing Oriflame’s markets and negatively affected the top line mainly in Asia, Turkey & Africa and Latin America.
Q4 ended with 98 percent of total order volume placed online, and 36 percent of all orders placed using the Oriflame app.
THE WHY? CEO Magnus Brännström said, “The pandemic continued to impact our possibility to fully exploit our social business model, where gatherings to train, motivate and celebrate our brand partners are important factors to drive a growing business. This affected the activity levels and recruitment numbers in the quarter and for the year. The actions taken to improve sales have rendered sequential improvement in the quarter, although we have a gap to close to get back to growth.”
Brännström continued, “Under these circumstances it is indeed encouraging to see the fast technological development ofall modern online tools that continuously are being launched and used within our community. The successful product launches during the year have set a good foundation for future growth.
“We have healthy margins supported by lower incentive plans cost, although weakened in the quarter due to comparable numbers, cost inflation combined with price adjustments in some geographies and one-off inventory provisions. Our key focus ahead is on regaining the sales momentum and continuously drive an efficient, profitable and cash generative business.”
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