Sequential financial improvement continues as Group recapitalisation agreed
Three months ended 31 December 2024
Euro sales decreased by 15% to €168.7m (€199.1m) and local currency sales decreased by 12%.
The adjusted EBITDA amounted to €5.3m (€6.2m) and the adjusted EBITDA margin was 3.1% (3.1%). The currency impact on the adjusted EBITDA was 120 bps negative.
The adjusted operating profit was €0.1m (€0.3m) and the adjusted operating margin was 0.1% (0.1%).
The adjusted net profit was €-54.0m (€-19.6m).
The adjusted cash flow from operating activities was €5.6m (€47.9m) and the adjusted cash flow before financing activities was €0.0m (€43.3m).
Additional non-recurring costs amounting to €9.6m (€8.7m) were recorded during the quarter and excluded from the EBITDA (adjusted EBITDA).
Twelve months ended 31 December 2024
Euro sales decreased by 20% to €604.2m (€750.9m) and local currency sales decreased by 16%.
The adjusted EBITDA amounted to €23.3m (€39.0m) and the adjusted EBITDA margin was 3.9% (5.2%). The currency impact on the adjusted EBITDA was 160 bps negative.
The adjusted operating profit was €1.7m (€14.8m) and the adjusted operating margin was 0.3% (2%).
The adjusted net profit was €-90.5m (€-81.8m).
The adjusted cash flow from operating activities was €-4.2m (€35.7m) and the adjusted cash flow before financing activities was €-21.7m (€11.6m).
Non-recurring costs amounting to €12.2m (€33.2m) were recorded during the year and excluded from the EBITDA (adjusted EBITDA).
Strategic progress
Sales remained below prior year, however with continued improvement in year-on-year sales progression, and ended -15% in Euro versus the same quarter previous year.
Adjusted EBITDA ended at similar level as in previous year both in absolute terms and as % of sales, despite lower sales, where gross margin improvements as well as important savings from restructuring continue to support the results.
The Beauty Community Model (BCM) was at the end of the quarter implemented in 42 markets representing more than 75% of the sales of the Group. The BCM is now considered to be an integrated and fully established setup within Oriflame and continues to show good results.
As a consequence of the BCM progress, total members continue to show an encouraging trend and ended at -5% versus previous year-end.
Launch of a new strategic initiative to transition European production from the Group’s current factory in Poland to a network of carefully selected, high-end European manufacturers.
The cost reduction programme, implemented in the third quarter 2023, led to a 14% (€7.4m) reduction in adjusted administrative expenses costs year-on-year.
The quarter ended with a cash balance of €62.0m compared to €57.0m at the start of the quarter and €80.6m at year-end 2023. The Revolving Credit Facility (RCF) was drawn at €45.0m at the end of the quarter (€4.0m drawn at end of 2023).
Financial highlights
Sales in Euro decreased by 15% and by 12% in local currencies. While the reduction in members led to a Euro sales decline in all regions, local currency sales increased 3% in the Türkiye & Africa region.
Gross margin showed a solid improvement of 510 bps versus last year, where positive effects from price/mix and lower inventory provisions were partially offset by continued negative FX impacts.
Adjusted EBITDA margin remained unchanged at 3.1% as a percentage of sales where higher gross margins were offset by higher selling and marketing expenses.
Adjusted cash flow before financing activities was €0.0m for the quarter versus an inflow of €43.3m in the same quarter last year when a strong inventory reduction programme supported positive working capital development.
Significant events during and after the quarter
The Company, the shareholders and a consortium of bondholders representing more than 80% of the outstanding Notes reached an agreement in March 2025, which will significantly reduce the Group’s existing debt and interest costs, as well as inject additional capital into the Group (the “Recapitalisation”). The Recapitalisation is conditional on extending the existing Revolving Credit Facility (RCF). Please refer to the separate announcement published on 18 March 2025 for more details on the Recapitalisation.
Although the Company is facing uncertainties as to its ability to continue as a going concern due to the Company’s challenging results during the past couple years and current liquidity, management believes that such uncertainties will be significantly reduced by the Recapitalisation and by the measures taken to drive positive business performance. Please refer to note 2 in the unaudited condensed consolidated financial statements for more information on going concern.On 9 January 2025, Oriflame announced a new strategic initiative which will transition European production from its current factory in Poland to a network of carefully selected, high-end European manufacturers. The closure of the current Polish facility over the coming two years will be carefully managed, with existing committed orders fulfilled or transferred seamlessly to the new partners. Throughout this transition, Oriflame will uphold its existing terms and conditions with suppliers and customers, ensuring business continuity for stakeholders.
The Board of Directors have resolved not to pay any dividends in 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 – 31 December 2024.
Other
The full report is available on Oriflame’s investor website: https://corporate.oriflame.com/investors/financial-reports/.
Conference call for the financial community
The company will host a conference call on the fourth quarter results and on the Recapitalisation update on Tuesday 18 March 2025 at 15.30 CET.
The presentation of the fourth quarter results by Anna Malmhake, CEO and President, and Carl Rogberg, CFO will be available on the website after the conference call.
Participant access numbers:
Sweden: +46 (0)8 5051 0031
United Kingdom: +44 (0) 207 107 06 13
United States: +1 (1) 631 570 56 13
Denmark: +45 3 272 7526
Finland: +358 94 245 0051
The conference call will also be audio web cast in “listen-only” mode through Oriflame’s website: www.oriflame.com or through the following link https://creo-live.creomediamanager.com/34eafe08-b10c-483a-9a0d-01d9b4577844
The full report has not been audited by the company’s auditors.
For further information, please contact:
Janice Wood, IR@oriflame.com
