Year-end report 1 January 31 December 2017 +14% +7% 14.8%be paid in equal quarterly instalments of €0.40 respectively starting in the second quarter 2018, and the extra dividend

1

3 months ended 31 December 2017 • Local currency sales increased by 14%, slightly impacted by positive timing. Euro sales increased by 7% to €380.1m

(€355.1m).

• Number of registered actives increased by 2% to 3.1m.

• EBITDA amounted to €63.5m (€49.0m).

• Operating margin was 14.8% (11.8%), negatively impacted by 210 bps from currencies, and operating profit was €56.3m

(€42.0m).

• Net profit was €35.8m (€25.2m) and diluted EPS €0.62 (€0.44).

• Cash flow from operating activities was €79.0m (€61.7m).

• The first quarter to date sales development is approximately 10% in local currency.

12 months ended 31 December 2017 • Local currency sales increased by 11% and Euro sales increased by 9% to €1,363.1m (€1,249.4m).

• Euro sales in the largest market in each Global Business Area amounted to; Russia €241.5m (€210.7m), China €190.4m

(€139.1m), Mexico €88.5m (€81.2m) and Poland €51.5m (€47.6m).

• EBITDA amounted to €191.8m (€148.2m).

• Operating margin was 11.7% (9.5%), negatively impacted by 60 bps from currencies, and operating profit was €159.0m

(€119.2m).

• Net profit was €92.6m (€66.7m) and diluted EPS €1.62 (€1.18).

• Cash flow from operating activities amounted to €122.7m (€113.1m). • The Board of Directors will propose to the 2018 AGM a total dividend of €2.60 per share for 2017, of which €1.60 (€1.00)

per share is to be considered as ordinary and €1.00 (€0.50) to be considered as extra dividend. The ordinary dividend is to be paid in equal quarterly instalments of €0.40 respectively starting in the second quarter 2018, and the extra dividend is to be paid during the second quarter 2018.

Significant events after the end of the quarter • As a consequence of the strong 2017 year-end results and in accordance with the terms of the Company’s share incentive

and retention plans, the Board has resolved to deliver achievement shares totalling 729,921 shares, out of which 688,401 will be issued as new shares under the Company’s conditional share capital and the rest from the Company’s treasury shares and/or up to 40,000 shares to be repurchased on Nasdaq Stockholm. Following the issuance, the Company’s total number of shares will amount to 56,442,366 shares.

• The Board of Directors has resolved to continue with its long-standing practice of offering key employees of the Oriflame Group to annually invest in a share incentive plan, and has resolved to during the first quarter 2018 implement a share incentive plan for the investment year 2018. The main terms and conditions of the new share incentive plan are consistent with those of the current share incentive plan.

• Co-founder and Board member Jonas af Jochnick has informed the Nomination and Governance Committee and the Board that he will not be available for re-election to the Board.

• As of January 1 2018, the Group is introducing IFRS 15 and is making an early adoption of IFRS 16. This is expected to impact the income statement and balance sheet at different levels. High-level pro-forma figures are available in the report.

Year-end report 1 January – 31 December 2017

+14% LC SALES

+7% EURO SALES

14.8% OPERATING MARGIN

“2017 was another year of healthy Euro growth and double-digit local currency growth, also reflected in the fourth quarter.

We stay committed to our long-term financial targets – we have a more balanced geographical footprint with growth opportunities and the right people to make it happen.”

CEO Magnus Brännström

Oriflame Year-end report 1 January – 31 December 2017

2

“

CEO Magnus Brännström comments

“2017 was another year of healthy Euro growth and double-digit local currency growth, also reflected in the fourth quarter. We delivered very

strong profitability improvements this year, above our expectations. Our strategic categories – Skin Care and Wellness sets and routines –

served as significant drivers of growth and price mix development, with further results achieved by the efficiency measures in manufacturing and

supply chain. We have now spent over 50 years of constantly adopting to changing and challenging environments, a reality we will continue to

be faced with. Looking ahead, I believe our social direct selling business model, online positioning and asset-light company structure make

Oriflame more relevant than ever. We stay committed to our long-term financial targets – we have a more balanced geographical footprint with

growth opportunities and the right people to make it happen.”

Key financial data 3 months ended 31 December

Sales

Registered actives

Operating profit

Net Sales LTM

Adj. operating margin % LTM

Financial summary (€m)

3 months ended

31 December

12 months ended

31 December

2017 2016 Change % % 2017 2016 Change %

Sales 380.1 355.1 7% 1,363.1 1,249.4 9%

Gross margin, % 73.7 71.2 73.0 70.7

EBITDA 63.5 49.0 29% 191.8 148.2 29%

Operating profit 56.3 42.0 34% 159.0 119.2 33%

Operating margin, % 14.8 11.8 11.7 9.5

Net profit before tax 51.3 37.3 37% 133.2 100.5 32%

Net profit 35.8 25.2 42% 92.6 66.7 39%

Diluted EPS, € 0.62 0.44 40% 1.62 1.18 37%

Cash flow from operating activities 79.0 61.7 28% 122.7 113.1 8%

Net interest-bearing debt 23.5 82.3 (71%) 23.5 82.3 (71%)

Net interest-bearing debt at hedged values (4.3) 13.2 N/A (4.3) 13.2 N/A

Registered actives, ‘000 3,067 3,006 2% 3,067 3,006 2%

Sales per registered actives, € 123.2 117.2 5% 439.9 411.9 7%

11%

(11%)

24%

(27%)

25%

(27%)

40%

(35%)

9%

(10%)

26%

(27%)

28%

(31%)

37%

(32%)

7%

(9%)

20%

(26%)

20%

(22%)

53%

(43%)

0%

5%

10%

15%

0

500

1000

1500

Q4

15

Q1

16

Q2

16

Q3

16

Q4

16

Q1

17

Q2

17

Q3

17

Q4

17

Net Sales LTM

Adj. Op Margin % LTM

Asia & Turkey Europe & Africa Latin America CIS


3

+300 bps OPERATING

MARGIN

INNOAGE LIFT

DEFINE LAUNCHED

IN CHINA

Three months ended 31 December 2017

Sales in local currencies increased by 14%, slightly impacted by positive timing. Euro sales increased

by 7% to €380.1m compared to €355.1m in the same period prior year. Sales development in local

currencies was impacted by a 12% increase in productivity and the number of registered actives in

the quarter increased by 2% to 3.1m (3.0m).

Unit sales increased by 4% and the price/mix effect was up by 10%, driven by both price and

mix. The positive mix effect is a combination of geographic and product mix, mainly driven by Skin

Care and Wellness.

Local currency sales increased by 8% in Latin America, by 5% in CIS, by 34% in Asia & Turkey

and was stable in Europe & Africa.

The gross margin at 73.7% (71.2%), was positively impacted by price/mix effects, partly offset by

currency movements. The operating margin amounted to 14.8% (11.8%), where last year was

favourably impacted by a VAT income related to the Russian tax case, fully offset by Ukrainian and

other one-off restructuring costs as well as costs linked to the outsourcing of financial and IT

operations to IBM. The operating margin for the fourth quarter 2017 was favourably impacted by

lower share of administrative costs and lower distribution and infrastructure expenses, partly offset

by currency movements of 210 bps and higher selling and marketing expenses.

Net profit increased to €35.8m (€25.2m) and diluted earnings per share amounted to €0.62

(€0.44).

Cash flow from operating activities amounted to €79.0m (€61.7m).

The average number of full-time equivalent employees was 6,186 (6,189).

Twelve months ended 31 December 2017

Sales in local currencies increased by 11% and Euro sales increased by 9% to €1,363.1m compared

to €1,249.4m in the same period prior year. Sales development in local currencies was impacted by

a 9% increase in productivity and the number of registered actives increased by 2%.

The gross margin amounted to 73.0% (70.7%) and the operating margin to 11.7% (9.5%). The

operating margin was favourably impacted by price/mix effects, supply chain efficiency measures,

lower share of administrative costs and lower share of distribution and infrastructure expenses,

partly offset by currency movements of 60 bps, higher selling and marketing expenses and higher

costs for the share incentive plan and bonuses.

Net profit amounted to €92.6m (€66.7m) and diluted earnings per share was €1.62 (€1.18).

Cash flow from operating activities increased to €122.7m (€113.1m).

Operational highlights

Brand and Innovation

The strategic categories Skin Care and Wellness continued to record double-digit sales growth

during the quarter. The Skin Care growth was driven by set sales and supported by a successful

launch of Innoage Lift Define in China. Within Wellness, the Fiber and Beauty drink was introduced.

In Colour Cosmetics, a special 50th year Anniversary edition of the top seller Wonderlash

Mascara was launched.

Key launches within the Fragrance category during the quarter were Sublime Nature Tuberose

and Sublime Nature Tonka Bean. The ONE introduced its first Eau de Parfum.

The growth in Personal and Hair Care was driven by the launch of Loving Care as well as the

continued success from Love Nature.

Total net sales split among categories for the full year 2017:

Product Category

12 months ended 31 December

2017 2016

Skin Care 28% 27%

Colour Cosmetics 21% 23%

Fragrances 19% 20%

Personal and Hair Care 16% 16%

Accessories

Wellness

5%

11%

6%

8%


4

MEMBER OF THE

RESPONSIBLE MICA

INITIATIVE

700,000 MONTHLY

USERS OF THE

ORIFLAME APP

Five year development 2017

Sustainability

Oriflame’s sustainability strategy focuses on the three areas People, Products and Planet and where

initiatives can have the greatest impact. For each of the key areas, Oriflame has set a range of

commitments and time-bound targets designed to improve performance and move the Company

closer to its long-term vision of becoming sustainable.

During 2017, Oriflame’s sustainability initiatives continued to progress. The sustainability

communication concept Beautiful Change was launched to Oriflame’s top leaders during the Global

Anniversary Rally in Athens, with the aim to educate the Consultants about sustainability and show

that even small changes together can contribute positively to the world. In India, the launch of

Beautiful Change was made in collaboration with the actress Kalki Koechlin, and a video on the

importance of young girls receiving education reached more than 2 million views during the first

months.

During the year, Oriflame became a member of the Responsible Mica Initiative, a cross-sector

association which aims to eradicate child labour and unacceptable working conditions in the Mica

supply chain by joining forces across industries and civil society organisations.

Online

Usage of Oriflame’s online services remained high, with nearly two thirds of visits to websites

coming from mobile devices. The increase in mobile app usage continued with more than 700,000

monthly active users of the Oriflame app. 94% of the Company’s global orders were placed online,

of which nearly 20% came from the Oriflame app. Focus areas throughout the quarter were

continued development and rollout of the new e-commerce engine and further enhancements of

the Oriflame App suite. Furthermore, new online training courses were introduced in selected

markets to support the on-boarding of new Consultants. During the quarter, efforts were also

spent on extending the variety of online payment methods as well as developing enhanced analytical

capabilities.

The Oriflame app The Oriflame Business app

Service, Manufacturing and Other

Service levels remained healthy. The number of inventory days increased compared to the same

period last year.

The capacity utilisation in manufacturing was on par with the same quarter previous year,

where improvements were made.

The implementation of the outsourcing of IT and financial operational services to IBM

continued and is developing well.

24% 28%

21%21%

20%19%

20% 16%

10%5%

5% 11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2016 2017

Skin Care Colour Cosmetics

Fragrances Personal and Hair Care

Accessories Wellness

28% (27%)

21% (23%)19% (20%)

16%

(16%)

5% (6%)

11% (8%)

-

100

200

300

400

500

600

700

800

Q1 2017 Q2 2017 Q3 2017 Q4 2017

Monthly active users (thousands)

-

50

100

150

200

250

300

350

Q1 2017 Q2 2017 Q3 2017 Q4 2017

Monthly active users (thousands)


5

POSITIVELY

IMPACTED BY

TIMING

16.5% OPERATING

MARGIN

Latin America

Key figures

Q4’16 Q1’17 Q2’17 Q3’17 Q4’17

Sales, €m 39.8 35.3 40.9 40.4 41.0

Sales growth in € 12% 20% 6% (1%) 3%

Sales growth in lc 21% 21% 4% 1% 8%

Op profit, €m1 5.8 3.3 6.0 5.9 5.5

Op margin 14.5% 9.5% 14.8% 14.6% 13.5%

Registered actives, ‘000 288 266 284 299 280

Sales /registered actives, € 138.5 132.6 143.8 135.1 146.3

¹Excludes costs accounted for in the segments Manufacturing and Other such as financial expenses, gain/loss on exchange rates,

market support and manufacturing overheads. This is in line with prior years.

Countries

Chile, Colombia, Ecuador, Mexico, Peru.

Development

Local currency sales in the fourth quarter increased by 8% as a result of an 11% increase in

productivity, partly offset by a 3% decrease in the number of registered actives. The sales

development was impacted by positive timing of catalogues. Euro sales increased by 3% to €41.0m

(€39.8m). Healthy development in Mexico, although affected by lower consumer confidence.

Ecuador recorded another quarter of strong growth while the performance in Colombia remained

weak. The solid productivity level in the region was a result of favourable product mix, primarily

driven by Wellness sales.

Operating profit amounted to €5.5m (€5.8m) and operating margin to 13.5% (14.5%). The

operating margin was negatively impacted by exchange rates, partly offset by price increases and

favourable product mix.

Europe & Africa

Key figures

Q4’16 Q1’17 Q2’17 Q3’17 Q4’17

Sales, €m 95.3 81.3 80.3 70.7 92.4

Sales growth in € (2%) (1%) (1%) 0% (3%)

Sales growth in lc 5% 6% 4% 6% (0%)

Op profit, €m1 16.8 10.4 10.4 9.2 15.2

Op margin 17.7% 12.8% 12.9% 13.0% 16.5%



1Excludes costs accounted for in the segments Manufacturing and Other such as financial expenses, gain/loss on exchange rates,

market support and manufacturing overheads. This is in line with prior years.

Countries

Algeria, Bosnia, Bulgaria, Croatia, Czech Rep., Denmark, Egypt, Estonia, Finland, Greece, Holland, Hungary, Kenya, Kosovo, Latvia, Lithuania, Macedonia, Montenegro, Morocco, Nigeria, Norway,

Poland, Portugal, Romania, Tanzania, Tunisia, Serbia, Slovakia, Slovenia, Spain, Sweden, Uganda,

UK/Ireland.

Development

Local currency sales in the fourth quarter was stable, as a result of a 4% increase in productivity

and a 4% decrease in the number of registered actives. Euro sales decreased by 3% to €92.4m

(€95.3m). Stable sales in Central Europe during the quarter, with continued healthy development in

the main markets Poland and Romania. Weaker performance in Western Europe as a result of

poor leadership development. Africa recorded modest growth with price increases being

implemented to balance the macroeconomic challenges. The solid development in Egypt and

Nigeria continued.

Operating profit amounted to €15.2m (€16.8m) and operating margin decreased to 16.5%

(17.7%), negatively impacted by currency movements, partly offset by price increases.


6

+34% LC SALES

15.5% OPERATING

MARGIN

CIS

Key figures

Q4’16 Q1’17 Q2’17 Q3’17 Q4’17

Sales, €m 93.9 99.5 92.9 69.9 94.5

Sales growth in € (10%) 15% 19% 4% 1%

Sales growth in lc (10%) (6%) 6% 4% 5%

Op profit, €m1 14.0 11.1 9.7 9.9 14.6

Op margin 14.9% 11.2% 10.5% 14.2% 15.5%



¹Excludes costs accounted for in the segments Manufacturing and Other such as financial expenses, gain/loss on exchange rates, market support and manufacturing

overheads. This is in line with prior years.

Countries

Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Mongolia, Russia, Ukraine.

Development

Local currency sales in the fourth quarter increased by 5%, as a result of an increase in productivity

of 13%, partly offset by a 7% decrease in the number of registered actives. Euro sales were up by

1% to €94.5m (€93.9m). Local currency sales in Russia decreased by 2%, although the online

activity and leadership development remained on high levels. Further improvements could be seen

in Ukraine and Kazakhstan during the quarter. The strategic product categories in the region

performed well.

Operating profit amounted to €14.6m (€14.0m), where last year had a one-off positive net

impact of around €5m. The operating margin increased to 15.5% (14.9%), favourably impacted by

exchange rates, realised price increases and product mix.

Asia & Turkey

Key figures

Q4’16 Q1’17 Q2’17 Q3’17 Q4’17

Sales, €m 123.3 118.2 130.3 111.7 150.0

Sales growth in € 23% 14% 19% 15% 22%

Sales growth in lc 25% 16% 21% 23% 34%

Op profit, €m1 27.6 21.1 28.0 22.1 39.1

Op margin 22.4% 17.8% 21.5% 19.8% 26.0%

Registered actives, ‘000 980 1,034 994 975 1,145


¹Excludes costs accounted for in the segments Manufacturing and Other such as financial expenses, gain/loss on exchange rates, market support and manufacturing

overheads. This is in line with prior years.

Countries

China, India, Indonesia, Myanmar, Pakistan, Sri Lanka, Thailand, Turkey, Vietnam.

Development

Fourth quarter sales growth in local currencies was 34% as a result of a 17% increase in the number

of registered actives and a 15% increase in productivity. Euro sales were up by 22% to €150.0m

(€123.3m). Most markets performed well with solid performance in China, Indonesia, Turkey and in

particular Vietnam. The development in India remained weak and measures continue to be taken to

return to sustainable growth. A combination of solid leadership, online activity and a clear focus on

Skin Care and Wellness sets and routines continues to drive the strong performance in the region.

Operating profit was €39.1m (€27.6m) and operating margin increased to 26.0% (22.4%). The

margin was positively impacted by a favourable geographical mix, sales leverage and one-off effect

related to the Goods and Services Tax in India.


7

The Company’s three largest markets per Global Business Area as per the 2017 year-end sales results are presented below.

Latin America

Market Sales 2017

(2016) in €m

Change in

Euro

Change in

lc

% of Business

Area Sales

% of Group

sales

1. Mexico 88.5 (81.2) 9% 12% 56% 6%

2. Colombia 3. Peru

Europe & Africa

Market Sales 2017 (2016) in €m

Change in Euro

Change in lc

% of Business Area Sales

% of Group sales

1. Poland 51.5 (47.6) 8% 5% 16% 4%

2. Romania

3. Morocco

CIS

Market Sales 2017 (2016) in €m

Change in Euro

Change in lc

% of Business Area Sales

% of Group sales

1. Russia 241.5 (210.7) 15% 1% 68% 18%

2. Ukraine

3. Kazakhstan

Asia & Turkey

Sales 2017

(2016) in €m

Change in

Euro

Change in

lc

% of Business

Area Sales

% of Group

sales

1. China 190.4 (139.1) 37% 42% 37% 14%

2. Indonesia

3. India


8

Sales, operating profit and registered actives by Global Business Area

Sales (€m)


2017 2016 Change in Euro

Change in lc

Latin America 41.0 39.8 3% 8%

Europe & Africa 92.4 95.3 (3%) (0%)

CIS 94.5 93.9 1% 5%

Asia & Turkey 150.0 123.3 22% 34%

Manufacturing 0.3 0.6 (45%) (46%)

Other 1.9 2.2 (13%) (16%)

Total sales 380.1 355.1 7% 14%

Sales (€m)


2017 2016 Change in Euro

Change in lc

Latin America 157.5 148.6 6% 8%

Europe & Africa 324.7 329.4 (1%) 4%

CIS 356.8 325.7 10% 2%

Asia & Turkey 510.2 434.3 17% 24%

Manufacturing 6.9 3.8 83% 81%

Other 7.0 7.6 (8%) (9%)

Total sales 1,363.1 1,249.4 9% 11%

Operating profit

(€m)



Change

2017 2016 Change 2017 2016

Latin America 5.5 5.8 (5%) 20.8 21.7 (4%)

Europe & Africa 15.2 16.8 (10%) 45.2 49.9 (9%)

CIS 14.6 14.0 5% 45.4 31.9 42%

Asia & Turkey 39.1 27.6 41% 110.3 83.1 33%

Manufacturing (1.5) 1.6 N/A 9.2 9.1 1%

Other (16.6) (23.8) 30% (71.9) (76.5) 6%

Total operating profit 56.3 42.0 34% 159.0 119.2 33%

Registered actives (´000)

31 December

Change

2017 2016

Latin America 280 288 (3%)

Europe & Africa 783 812 (4%)

CIS 859 926 (7%)

Asia & Turkey 1,145 980 17%

Total 3,067 3,006 2%


9

(0.02) NET DEBT AT

HEDGED VALUES

/EBITDA

Cash flow & investments

Cash flow from operating activities in the fourth quarter amounted to €79.0m (€61.7m), driven by

higher EBITDA and favourable comparisons on income taxes paid.

Cash flow used in investing activities amounted to €-6.1m (€-4.6m).

The full-year cash flow from operating activities increased to €122.7m (€113.1m), driven by

higher EBITDA and unrealised profit on exchange rates, partly offset by movements in working

capital.

Financial position

Net interest-bearing debt at hedged values amounted to €4.3m net cash (€13.2m net debt). The

net debt at hedged values/EBITDA ratio was negative at 0.02 (positive 0.1).

Net interest-bearing debt amounted to €23.5m (€82.3m). The net debt/EBITDA ratio was 0.1

(0.6). Interest cover amounted to 20.0 (6.9) in the quarter and to 11.5 (6.6) during the last twelve

months.

Covenant disclosure

As per the end of the fourth quarter 2017, the financial measures as defined in the Agreements

relating to the existing Private Placement Notes were as follows:

Consolidated Net Debt to Consolidated EBITDA: 0.1 (covenant at ≤ 3.0 times)

Consolidated EBITDA to Consolidated Finance costs: 19.2 (covenant at ≥ 5.0 times)

Consolidated Net Worth: €221.6m (covenant at ≥ €120m)

As per the end of the fourth quarter 2017, the financial measures as defined in the Agreements

relating to the existing Revolving Credit Facility were as follows:

Consolidated Net Debt to Consolidated EBITDA: 0.1 (covenant at ≤ 3.0 times)

Consolidated EBITDA to Consolidated Finance costs: 19.2 (covenant at ≥ 4.0 times)

Note that the definition of these measures differ from the definitions of the Net Debt to EBITDA

and Interest cover disclosed in the other sections of the report, primarily related to gains from

sales of assets and cash in non-OECD markets.

Related parties

There have been no significant changes in the relationships or transactions with related parties

compared with the information given in the Annual Report 2016.

Dividend

The AGM held on 9 May 2017 resolved that a dividend of €1.50 per share, of which €1.00 (€0.40)

per share is to be considered as ordinary and €0.50 to be considered as extra dividend, be

distributed out of the capital contribution reserve and paid in four instalments as follows: €0.75 to

the shareholders of record on 15 May 2017, €0.25 to the shareholders of record on 15 August

2017, €0.25 to the shareholders of record on 15 November 2017 and €0.25 to the shareholders of

record on 15 February 2018.

The fourth instalment of €0.25 per share (record date 15 February 2018) will have expected

payment date 23 February 2018. The last day of trading the share including dividend right was on 13

February 2018 (Ex-Date 14 February).

Dividend proposal to the 2018 AGM The Board of Directors will propose to the 2018 AGM a total dividend of €2.60 per share for

2017, given the Company’s strong financial position and with the Net Debt/EBITDA below the

target range of 0.5 to 1.5, of which €1.60 (€1.00) per share is to be considered as ordinary and

€1.00 (€0.50) to be considered as extra dividend. The ordinary dividend is to be paid in equal

quarterly instalments of €0.40 respectively starting in the second quarter 2018, and the extra


10

dividend is to be paid during the second quarter 2018. The dividend instalments will be distributed

out of the Company’s Capital Contribution Reserve and are thereby not subject to any Swiss

withholding tax.

Outcome of Oriflame’s 2014 and 2015 Share Incentive plans and related issuance of new shares under the conditional share capital As a consequence of the strong 2017 year-end results, and in accordance with the terms of

Oriflame’s share incentive plans (the SIPs), the Board of the Company has resolved to allocate a

total of 729,921 shares as achievement shares to participants of the 2014 and 2015 SIP investment

schemes. Participants will receive the achievement shares free of charge. For further information

about the Company’s share incentive programs, please see the corporate governance section on

the Company’s website.

The Board has resolved that out of the total number of shares to be delivered, 688,401 shares will

be issued as new shares under the Company’s conditional share capital. Following the issuance, the

Company’s total number of shares will amount to 56,442,366 shares, with a total nominal value of

CHF 84,663,549. The share capital increase is expected to be resolved on the 19th of February

2018 and recorded with the commercial register as soon as practicable thereafter. The remaining

achievement shares will be delivered from the Company’s treasury shares and/or shares to be

repurchased by the Company and for such purpose, the Board has resolved to repurchase up to

40,000 shares, as applicable. The Company currently holds 13,160 treasury shares. Any repurchases

of shares shall be made on one or several occasions during the period from 19th February 2018 up

until 30 June 2018. Any repurchases of shares shall be made in cash and take place on Nasdaq

Stockholm and be made at price within the price interval prevailing at any given time.

Implementation of new Share Incentive plan

The Board of Directors has resolved to continue with its long-standing practice of offering key

employees of the Oriflame group to annually invest in a Share Incentive Plan, and has resolved to

implement a new share incentive plan during the first quarter 2018 for approximately 50 key

employees of the Oriflame group (the “Participants”) for the investment year 2018 (the "2018 SIP").

The 2018 SIP main terms and conditions are consistent with those of the previous 2015-2017 share

incentive plan. The 2018 SIP will offer Participants to designate Oriflame shares they own or

purchase as investment shares (the “Investment Shares”) during 2018. The number of Investment

Shares to be offered under the 2018 Plan has been determined by the Board of Directors to up to 71,000 Investment Shares. Up to 8 times the shares designated as Investment Shares will be

available to be allocated to the Participants as free shares (the “Achievement Shares”) at the end of

the 3-5 year investment period as follows: The allotment of Achievement Shares to each Participant

will be between 0 and 8 Achievement Shares for each Investment Share, depending on the

development of the year-end operating profit of the Oriflame Group as from the start of the

investment year until the start of the 5th anniversary year of the dedication of each Investment

Share, with a potential partial or full vesting after 3 and 4 years respectively should any of the

operating profit thresholds have been met already at such point. The levels of operating profit

development required for each Achievement Share level will be determined by the Board of

Directors to provide a fair balance between performance and reward. The potential share capital

dilution resulting from the 2018 Plan amounts to maximum 1 percent of the Companys current

share capital. Under IFRS 2 the cost of the 2018 Plan is expensed over the vesting period. The

maximum cost, based on current value of the investment shares, to be expensed over the period

2018-2023 is estimated to amount to approximately EUR 18,000,000. In addition to this amount,

costs in the form of social charges will arise. However, as the social charges will depend on the

value of the Achievement Shares at the time of issuance and furthermore on where the Participants

are resident at the time of allotment of the Achievement Shares, they cannot be estimated at this

stage. The reason for continuing with the practice of an annual share incentive plan is that a long-

term ownership interest of the Participants is likely to increase their interest in the business and

the results of the Oriflame group and that it will increase the motivation and mutual interests of the

Participants and the Company. The proposal is therefore deemed to be beneficial for the Company

and its shareholders. For the purpose of future awards of Achievement Shares under the 2018 Plan,

the Board of Directors intends to either issue new shares under the existing conditional share

capital mandate (including seeking any further conditional share capital mandate from the general

meeting if and when deemed appropriate by the Board of Directors), and/or repurchase existing


11

10% YEAR TO DATE LC

SALES

shares at market value. For further information about the terms of the active current share

incentive plans of the Company, reference is made to note 21 of the 2016 Annual Report for the

Oriflame group as well as the subsection “share incentive schemes” in our corporate governance

section on the corporate website oriflame.com.

Other significant events after the end of the quarter After 50 years as Board member, Jonas af Jochnick (co-founder of Oriflame) has informed the

Nomination and Governance Committee and the Board that he will not be available for re-election

to the Board. The Nomination and Governance Committee will revert with their Board

composition proposals well in advance of the 2018 AGM.

Personnel The average number of full-time equivalent employees was 6,186 (6,189).

First quarter update The quarter/year to date sales development is approximately 10% in local currency.

Long term targets

Oriflame aims to achieve local currency sales growth of approximately 10 percent per annum and an operating margin of 15 percent.

The business of the Group presents cyclical evolutions and is driven by a number of factors:

• Effectiveness of individual catalogues and product introductions

• Effectiveness and timing of recruitment programmes

• Timing of sales and marketing activities

• The number of effective sales days per quarter

• Currency effect on sales and results

Financial Calendar for 2018 The Annual Report will be published during April 2018, no later than 3 weeks prior to the Annual

General Meeting

The 2018 Annual General Meeting will be held on 4 May 2018

The first quarter 2018 report will be published on 4 May 2018

The second quarter 2018 report will be published on 7 August 2018

The third quarter 2018 report will be published on 7 November 2018

The fourth quarter 2018 report will be published on 14 February 2019


12

Upcoming IFRS standards

The Group is introducing IFRS 15 Revenue from Contracts with Customers from January 1 2018. An

early adoption of IFRS 16 Leases will be made to allow for all changes being implemented at the same

time.

The application of IFRS 15 is expected to impact the income statement at different levels. The

following estimates apply for the full year. Sales will be negatively impacted by a low-single

percentage digit in absolute terms due to the initial implementation of IFRS 15. This is as the

Company will apply a control approach with regards to when sales are recognised instead of the

risk and reward approach as used in the past. In addition, all performance obligations within a

contract have to be considered and will result in deferred recognition of revenue.

Sales and the gross margin will be impacted by reclassifications of costs, currently presented in

“selling and marketing expenses”, where applicable under the new IFRS 15 treatment. This is

expected to result in a total negative gross margin impact of a mid single percentage digit. The

above mentioned ongoing reclassification of costs (i.e. incentives to registered actives) will have a

corresponding positive impact on the operating margin. However, the operating margin will for the

first year be negatively impacted by a minor single digit percentage (around or below 100 bps) due

to the one-off effect in Sales, arising from the initial implementation of IFRS 15.

The implementation of IFRS 16 will positively impact the operating margin with a minor single digit

percentage (around or below 100 bps) due to the elimination of operation leasing expenses which

will be mainly compensated by depreciation of the lease assets. In addition, the finance costs will

increase due to the recognition of interest expenses on the finance lease liabilities. During the first

year, it will result in a net negative impact on the net profit margin before tax of a minor single

percentage digit (around or below 100 bps). The new standard will also impact the deferred tax

calculation for which the impact has not yet been assessed.

In summary, excluding the one-off effects of IFRS 15, the combined effect of the new

standards is expected to have a negligible impact on the full year operating margin.

The Company will implement IFRS 16 based on the modified retrospective approach (including

retrospective with using the incremental borrowing option) which allows for the transfer of all

operational leases from 2017 into financial leases in 2018. This will result in the creation of Right-of-

Use Assets, new lease liabilities as well as have an impact on the retained earnings (due to the

incremental borrowing option).

The Company has prepared high level pro-forma figures of the consolidated financial statements 2017

to facilitate the comparables with the upcoming 2018 figures. The application of the standards on the

2018 numbers depends on the performance of the Group and the impact may as a consequence differ

from the impact on the 2017 numbers.

Pro forma numbers consolidated income statements 2017

Q1 2017

€’000 Reported IFRS 15 one-off

IFRS 15 ongoing

Pro forma

IFRS 16 ongoing

Pro forma

Sales 340,134 (19,200) (10,900) 310,034 - 310,034

Gross profit 243,404 (16,900) (21,000) 205,504 - 205,504

71.6% 66.3% 66.3%

Operating profit 29,769 (21,400)

- 8,369 1,150 9,519

8.8% 2.7% 3.1%

Net profit before

income tax 27,419 (21,400)

- 6,019 (350) 5,669

8.1% 1.9% 1.8%


13

Year-end 2017

STATEMENT OF FINANCIAL POSITION AS OF DECEMBER 31, 2017

€’000 Reported IFRS 16 Pro forma

Assets

ROU (Right-of-Use) Assets - 85,000 85,000

Total assets 732,463 85,000 817,463

Equity

Retained earnings adjustment - (5,000) (5,000)

Total equity attributable to the owners of the company

221,596 (5,000) 216,596

Liabilities

Lease liabilities - 70,000 70,000

Total non-current liabilities 206,845 70,000 276,845

Lease liabilities - 20,000 20,000

Total current liabilities 304,022 20,000 322,022

Total equity and liabilities 732,463 85,000 817,463

€’000 Reported IFRS 15 one-off

IFRS 15 ongoing Pro forma

IFRS 16 ongoing Pro forma

Sales 1,363,111 (21,400) (43,700) 1,298,011 - 1,298,011

Gross profit 994,564 (18,900) (84,200) 891,464 - 891,464

73.0% 68.7% 68.7%

Operating profit 159,030 (23,400)

- 135,630 4,800 140,430

11.7% 10.4% 10.8%

Net profit before income tax

133,180 (23,400) - 109,780 (1,200) 108,580

9.8% 8.5% 8.4%


14

Other A Swedish translation is available on www.oriflame.com.

Conference call for the financial community

The Company will host a conference call on Thursday, 15 February 2018 at 9.30 CET.

Participant access numbers:

SE: +46856642664

DK: +4535445575

FI: +358981710491

UK: +442030089809

NO: +4723500265

US: +18558315945

The conference call will also be audio web cast in “listen-only” mode through Oriflame’s website:

www.oriflame.com or through http://oriflame-ir.creo.se/180215

This report has not been audited by the Company’s auditors.

February 15, 2018

Magnus Brännström

Chief Executive Officer

For further information, please contact:

Magnus Brännström, Chief Executive Officer Tel: +41 798 263 754

Gabriel Bennet, Chief Financial Officer Tel: +41 798 263 769

Nathalie Redmo, Sr. Manager IR Tel: +41 799 220 173

This information is information that Oriflame Holding AG is obliged to make public pursuant to the

EU Market Abuse Regulation. The information was submitted for publication, through the agency of

the contact person set out above, at 07:15 CET on February 15, 2018.

Oriflame Holding AG

Bleicheplatz 3, CH-8200 Schaffhausen, Switzerland

www.oriflame.com Company registration no CHE-134.446.883

http://www.oriflame.com/


15

Consolidated key figures 3 months ended

31 December

12 months ended

31 December

2017 2016 2017 2016

Gross margin, % 73.7 71.2 73.0 70.7

EBITDA margin, % 16.7 13.8 14.1 11.9

Operating margin, % 14.8 11.8 11.7 9.5

Return on:

- operating capital, % - - 57.7 38.0

- capital employed, % - - 34.7 26.7

Net debt at hedged values / EBITDA (LTM) (0.02) 0.1 (0.02) 0.1

Net debt / EBITDA (LTM) 0.1 0.6 0.1 0.6

Interest cover 20.0 6.9 11.5 6.6

Average no. of full-time equivalent employees 6,186 6,189 6,230 6,233

Definitions Operating capital

Total assets less cash and cash equivalents and non interest-bearing liabilities, including deferred tax liabilities.

Return on operating capital

Operating profit divided by average operating capital.

Capital employed

Total assets less non interest-bearing liabilities, including deferred tax liabilities.

Return on capital employed

Operating profit plus interest income divided by average capital employed.

Net interest-bearing debt

Interest-bearing debt excluding front fees less cash and cash equivalents.

Interest cover

Operating profit plus interest income divided by interest expenses and charges.

Net interest-bearing debt to EBITDA

Net interest-bearing debt divided by EBITDA.

EBITDA

Operating profit before financial items, taxes, depreciation, amortisation and share incentive plan.


16

Quarterly Figures

Financial summary Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Q4’17

Sales, €m 278.9 355.1 340.1 347.6 295.3 380.1

Gross margin, % 70.4 71.2 71.6 72.9 73.8 73.7

EBITDA, €m 30.8 49.0 40.4 47.9 40.0 63.5

Operating profit, €m 25.2 42.0 29.8 40.5 32.5 56.3

Operating margin, % 9.0 11.8 8.8 11.7 11.0 14.8

Net profit before income tax, €m 20.4 37.3 27.4 29.7 24.8 51.3

Net profit, €m 12.7 25.2 19.5 19.9 17.4 35.8

EPS, diluted € 0.23 0.44 0.34 0.35 0.30 0.62

Cash flow from op. activities, €m (5.8) 61.7 (1.5) 33.9 11.2 79.0

Net interest-bearing debt, €m 111.8 82.3 92.7 82.4 85.4 23.5

Registered actives, ‘000 2,648 3,006 2,991 2,806 2,646 3,067

Sales, €m Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Q4’17

Latin America 40.9 39.8 35.3 40.9 40.4 41.0

Europe & Africa 70.4 95.3 81.3 80.3 70.7 92.4

CIS 67.2 93.9 99.5 92.9 69.9 94.5

Asia & Turkey 97.5 123.3 118.2 130.3 111.7 150.0

Manufacturing 0.7 0.6 4.5 1.4 0.8 0.3

Other 2.2 2.2 1.3 1.8 1.8 1.9

Oriflame 278.9 355.1 340.1 347.6 295.3 380.1

Operating Profit, €m Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Q4’17

Latin America 7.2 5.8 3.3 6.0 5.9 5.5

Europe & Africa 8.9 16.8 10.4 10.4 9.2 15.2

CIS 5.5 14.0 11.1 9.7 9.9 14.6

Asia & Turkey 17.7 27.6 21.1 28.0 22.1 39.1

Manufacturing 2.5 1.6 4.9 4.4 1.3 (1.5)

Other (16.6) (23.8) (21.0) (18.0) (15.9) (16.6)

Oriflame 25.2 42.0 29.8 40.5 32.5 56.3

Registered actives, ‘000 Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Q4’17

Latin America 314 288 266 284 299 280

Europe & Africa 655 812 802 734 674 783

CIS 784 926 889 794 698 859

Asia & Turkey 895 980 1,034 994 975 1,145

Oriflame 2,648 3,006 2,991 2,806 2,646 3,067

Operating Margin, % Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Q4’17

Latin America 17.6 14.5 9.5 14.8 14.6 13.5

Europe & Africa 12.7 17.7 12.8 12.9 13.0 16.5

CIS 8.1 14.9 11.2 10.5 14.2 15.5

Asia & Turkey 18.1 22.4 17.8 21.5 19.8 26.0

Oriflame 9.0 11.8 8.8 11.7 11.0 14.8

€ Sales Growth in % Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Q4’17

Latin America 16 12 20 6 (1) 3

Europa & Africa (1) (2) (1) (1) 0 (3)

CIS (13) (10) 15 19 4 1

Asia & Turkey 26 23 14 19 15 22

Oriflame 6 5 11 12 6 7

Cash Flow, €m Q3’16 Q4’16 Q1’17 Q2’17 Q3’17 Q4’17

Operating cash flow (5.8) 61.7 (1.5) 33.9 11.2 79.0

Cash flow used in investing activities (2.3) (4.6) (3.0) (3.0) (3.8) (6.1)


17

Condensed consolidated income statements

Earnings per share

€



2017 2016 2017 2016

EPS:

- basic 0.64 0.45 1.66 1.20

- diluted 0.62 0.44 1.62 1.18

Weighted avg. number of shares outstanding:

- basic 55,740,805 55,741,062 55,740,805 55,691,352

- diluted 57,217,925 56,587,350 57,217,925 56,537,639

Total number of shares outstanding (excluding treasury shares)

55,740,805 55,740,805 55,740,805 55,740,805



€’000 2017 2016 2017 2016

Sales 380,085 355,107 1,363,111 1,249,382

Cost of sales (100,079) (102,382) (368,547) (366,467)

Gross profit 280,006 252,725 994,564 882,915

Other income 11,591 12,002 45,311 44,331

Selling and marketing expenses (137,017) (126,378) (500,577) (449,516)

Distribution and infrastructure (25,187) (26,027) (95,384) (94,056)

Administrative expenses (73,120) (70,315) (284,884) (264,490)

Operating profit 56,273 42,007 159,030 119,184

Financial income 6,983 13,740 47,338 21,858

Financial expenses (11,971) (18,400) (73,188) (40,512)

Net financing costs (4,988) (4,660) (25,850) (18,654)

Net profit before income tax 51,285 37,347 133,180 100,530

Total income tax expense (15,535) (12,168) (40,626) (33,816)

Profit attributable to owners of the Company

35,750 25,179 92,554 66,714


18

Condensed consolidated statements of comprehensive income

€’000



2017 2016 2017 2016

Profit attributable to owners of the Company

35,750 25,179 92,554 66,714

Other comprehensive income

Items that will not be reclassified subsequently to profit or loss:

Remeasurements of net defined liability, net

of tax (1,466) 520 (1,356) (316)

Revaluation reserve for property, plant & equipment

- (149) - (230)

Total items that will not be reclassified subsequently to profit or loss

(1,466) 371 (1,356) (546)

Items that are or may be reclassified subsequently to profit or loss:

Foreign currency translation differences for

foreign operations (1,384) 10,930 (13,964) 12,299

Effective portion of changes in fair value of cash flow hedges, net of tax

369 (328) 3,145 (2,719)

Total items that are or may be reclassified subsequently to profit or loss

(1,015) 10,602 (10,819) 9,580

Other comprehensive income for the period, net of tax

(2,481) 10,973 (12,175) 9,034

Total comprehensive income for the period attributable to owners of the Company

33,269 36,152 80,379 75,748


19

Condensed consolidated statements of financial position

€’000

31 December, 2017

31 December, 2016

Assets

Property, plant and equipment 152,919 164,831

Intangible assets 14,595 13,849

Investment property 542 542

Deferred tax assets 31,136 25,702

Other long-term receivables 105 948

Total non-current assets 199,297 205,872

Inventories 165,509 166,833

Trade and other receivables 79,812 71,352

Tax receivables 8,810 7,647

Prepaid expenses 27,954 36,283

Derivative financial assets 29,682 72,338

Cash and cash equivalents 221,399 185,469

Total current assets 533,166 539,922

Total assets 732,463 745,794

Equity

Share capital 79,850 79,850

Treasury shares (90) (90)

Share premium 548,474 632,085

Reserves (164,732) (167,017)

Retained earnings (241,906) (333,104)

Total equity attributable to the owners of the company

221,596 211,724

Liabilities

Interest-bearing loans 195,113 199,713

Other long-term liabilities 3,983 3,691

Net defined benefit liability 4,938 3,859

Deferred income 309 296

Deferred tax liabilities 2,502 2,869

Total non-current liabilities 206,845 210,428

Current portion of interest-bearing loans 48,477 66,836

Trade and other payables 91,746 95,292

Dividend payables 14,049 11,167

Deferred Income 311 421

Tax payables 15,669 17,032

Accrued expenses 127,811 122,208

Derivative financial liabilities 2,392 5,458

Provisions 3,567 5,228

Total current liabilities 304,022 323,642

Total liabilities 510,867 534,070

Total equity and liabilities 732,463 745,794


20

Condensed consolidated statements of changes in equity

€’000

Share capital

Treasury shares

Share premium

Reserves

Retained earnings

Total equity

At 1 January 2016 79,788 (621) 654,381 (178,675) (401,416) 153,457

Net profit - - - - 66,714 66,714

Other comprehensive income, net of tax

- - - 9,350 (316) 9,034

Total comprehensive income for the period

- - - 9,350 66,398 75,748

Issue of ordinary shares in

relation to share incentive plan

62 - - (862) 800 -

Treasury shares used in relation to share incentive plan

- 541 - (1,655) 1,114 -

Purchase of treasury shares - (10) - - - (10)

Share incentive plan - - - 4,825 - 4,825

Dividends - - (22,296) - - (22,296)

Total contributions and distributions

62 531 (22,296) 2,308 1,914 (17,481)

At 31 December 2016 79,850 (90) 632,085 (167,017) (333,104) 211,724

At 1 January 2017 79,850 (90) 632,085 (167,017) (333,104) 211,724

Net profit - - - - 92,554 92,554

Other comprehensive income, net of tax

- - - (10,819) (1,356) (12,175)

Total comprehensive

income for the period - - - (10,819) 91,198 80,379

Share incentive plan - - - 13,104 - 13,104

Dividends - - (83,611) - - (83,611)

Total contributions and distributions

- - (83,611) 13,104 - (70,507)

At 31 December 2017 79,850 (90) 548,474 (164,732) (241,906) 221,596


21

Condensed consolidated statements of cash flows

€’000

3 months ended

31 December

12 months ended

31 December

Note 2017 2016 2017 2016

Operating activities

Net profit before income tax 51,285 37,347 133,180 100,530

Adjustments for:

Depreciation of property, plant and equipment 4,258 4,662 17,657 18,260

Amortisation of intangible assets 376 446 1,600 2,883

Change in fair value of borrowings and derivatives financial instruments (36) 719 (142) 3,580

Deferred income (16) (125) (91) (482)

Impairment 68 541 415 3,013

Share incentive plan 2,516 1,390 13,104 4,825

Unrealised exchange rate differences (232) (5,602) 5,896 (16,000)

Profit on disposal of property, plant and equipment, intangible assets (20) (67) (920) (847)

Financial income (3,092) (6,874) (13,268) (19,870)

Financial expenses 4,360 8,578 20,509 27,067

Operating profit before changes in working capital and provisions 59,467 41,015 177,940 122,959

(Increase)/decrease in trade and other receivables, prepaid expenses and derivative financial assets 4,895 (3,593) (989) (9,076)

(Increase)/decrease in inventories 8,076 4,918 (6,319) 16,363

Increase in trade and other payables, accrued expenses and derivatives financial

liabilities 16,818 37,324 9,313 38,487

Increase/(decrease) in provisions 672 2,310 (1,934) (3,185)

Cash generated from operations 89,928 81,974 178,011 165,548

Interest received 2,651 4,476 14,528 18,497

Interest and bank charges paid (4,590) (6,994) (21,689) (26,533)

Income taxes paid (8,978) (17,755) (48,175) (44,388)

Cash flow from operating activities 79,011 61,701 122,675 113,124

Investing activities

Proceeds on sale of property, plant and equipment, intangible assets 4 209 1,998 1,305

Purchases of property, plant, equipment (5,538) (4,582) (15,560) (11,288)

Purchases of intangible assets (570) (247) (2,254) (1,877)

Cash flow used in investing activities (6,104) (4,620) (15,816) (11,860)

Financing activities

Proceeds from borrowings - - 105,000 -

Repayments of borrowings - - (86,471) (72,013)

Acquisition of own shares - (10) - (10)

Decrease of finance lease liabilities - - - (4)

Dividends paid (13,922) (11,130) (80,760) (11,130)

Cash flow used in financing activities (13,922) (11,140) (62,231) (83,157)

Change in cash and cash equivalents 58,985 45,941 44,628 18,107

Cash and cash equivalents at the beginning of the period net of bank overdrafts 163,449 144,774 185,365 176,384

Effect of exchange rate fluctuations on cash held (1,089) (5,350) (8,648) (9,126)

Cash and cash equivalents at the end of the period net of bank overdrafts 221,345 185,365 221,345 185,365


22

Notes to the condensed consolidated financial statements of Oriflame Holding AG

Note 1 • Status and principal activity

Oriflame Holding AG (“OHAG” or the “Company”) is a holding company incorporated in Switzerland and registered at Bleicheplatz 3, CH-8200 Schaffhausen. The principal activity of the Company’s subsidiaries is the direct sale of cosmetics. The condensed consolidated financial statements of the Company as at and for the twelve months ended 31 December 2017 comprise the Company and its subsidiaries (together referred to as the

“Group”).

Note 2 • Basis of preparation and summary of significant accounting policies

Statement of compliance The condensed consolidated financial statements for the twelve months period ended 31 December 2017 have been prepared by management in accordance with the measurement and recognition principles of IFRS and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2016. The condensed consolidated financial statements were authorised for issue by the Directors

on 14 February 2018.

Significant accounting policies, use of judgements and estimates The accounting policies, significant judgements and key sources of estimation uncertainty applied by the Group in these interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2016.

New or amended IFRS standards

The new or amended IFRS standards, which became effective 1 January 2017, have had no material effect on the interim financial statements.

Documents

Year-end report 1 January 31 December 2017 +14% +7% 14.8%be paid in equal quarterly instalments of €0.40 respectively starting in the second quarter 2018, and the extra dividend