Three months ended 30 September 2024
- Euro sales decreased by 19% to €130.8m (€161.7m) and local currency sales decreased by 16%.
- The adjusted EBITDA amounted to €5.4m (€4.1m) and the adjusted EBITDA margin was 4.2% (2.5%).
- The currency impact on the adjusted EBITDA was 170 bps negative.
- The adjusted operating profit was €0.2m (€-1.7m) and the adjusted operating margin was 0.2% (-1.1%).
- The adjusted net profit was €6.9m (€-54.2m).
- The adjusted cash flow from operating activities was €-10.9m (€-6.9m) and adjusted cash flow before financing activities was €-13.0m (€-13.9m).
- Additional non-recurring costs amounting to €1.5m (€20.3m) were recorded during the quarter and excluded from the operating profit (adjusted operating profit).
Nine months ended 30 September 2024
- Euro sales decreased by 21% to €435.5m (€551.9m) and local currency sales decreased by 17%.
The adjusted EBITDA amounted to €18.1m (€32.8m) and the adjusted EBITDA margin was 4.1% (5.9%). The currency impact on the adjusted EBITDA was 190 bps negative.
The adjusted operating profit was €1.5m (€14.5m) and the adjusted operating margin was 0.4% (2.6%).
The adjusted net profit was €-36.5m (€-62.2m).
The adjusted cash flow from operating activities was €-9.8m (€-12.2m) and the adjusted cash flow before financing activities was €-21.7m (€-31.7m).
Non-recurring costs amounting to €4.0m (€25.2m) were recorded during the year and excluded from the operating profit (adjusted operating profit).
Strategic progress
- Sales remained challenging during the quarter and ended at -19% in Euro, which was similar to the previous quarter.
- The uncertain macroeconomic and geopolitical situation and adverse foreign exchange (FX) movements in several markets had a continued negative impact on the performance of the group in the third quarter.
- Adjusted EBITDA ended higher both in absolute and relative terms compared to the same quarter previous year, despite lower sales, where important savings from restructuring continues to support the results.
- The Beauty Community Model (BCM) was at the end of the quarter implemented in 36 markets showing continued satisfactory results. Sales in implemented BCM markets accounted for 60% of the Group’s sales during the quarter.
- The quarter ended with a cash balance of €57.0m compared to €78.3m at the start of the quarter and €80.6m at year-end 2023. The Revolving Credit Facility (RCF) remained unchanged at a €15.5m drawdown throughout the quarter.
Operational highlights
- Sales in Euro decreased by 19% and by 16% in local currencies with some sequential improvements in the total registered active members. The Euro sales decline was seen in all regions due to less members, while Türkiye and Africa was the only region showing a growth increase of 5% in local currency sales.
- Gross margin remained largely in line with the same quarter prior year, where negative FX and product cost inflation impacts were offset by positive price increases and mix impacts.
- Management’s cost reduction programme, implemented in the third quarter 2023, led to €10.2m reduction in adjusted administrative expenses costs year on year, partially supported by certain accrual reversals during the quarter.
- Adjusted EBITDA margin increased from 2.5% to 4.2% where continued negative FX impacts were more than offset by savings in overhead expenses.
- Adjusted cash flow before financing activities was €-13.0m versus €-13.9m in the same quarter last year where seasonal build-up of inventory and lower payables impacted the cash flow.
Significant events during and after the quarter
- The Board of directors of Oriflame Holding Limited, the Company and its advisers are proactively exploring options to address its capital structure and are evaluating potential recapitalisation opportunities. In connection with such efforts, the Company is in constructive and active discussions with a group of investors who are majority holders of the Company’s Euro and USD senior secured notes. No assurance can be given with respect to the outcome of any such negotiations.
- During the quarter the land and property of Cetes Hungary, reported as “assets held for sale” in the balance sheet since year end 2023, was sold for €3.5m and generated a cash inflow of the same amount. It did not generate a profit as the carrying amount was adjusted to this value as of 30 June 2024.
- Oriflame incorporated a subsidiary in South Africa during the quarter with sales expected to start in the second quarter of 2025.
“Adjusted” figures exclude non-recurring and purchase price allocation (PPA) related items. For additional information refer to the condensed consolidated income statements in the full Interim Management Statement 1 January – 30 September 2024.
Other
The report in full together with a presentation of the third quarter result by Anna Malmhake, CEO and President, and Carl Rogberg, CFO, are available on Oriflame’s investor website: https://investors.oriflame.com/en/interim-reports
The full report has not been audited by the company’s auditors.
For further information, please contact:
Janice Wood, IR@oriflame.com
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