Oriflame initiates cost and efficiency program – aiming for annual cost savings of €45m

2023-08-15 15:00

Oriflame today announced the intention to implement a comprehensive cost and efficiency program to increase profitability and secure long term growth, while at the same time ensuring continued strategic investments in product and market development. The program aims to deliver annual cost savings of approximately €45m once fully completed and will affect around 20 percent of the number of positions in the company across all levels and geographies.

After a period of disappointing development and lower profitability, mainly due to continued challenging macroeconomic environment and weaker sales, the need for efficiency measures within the company has become evident.

The program, that has been initiated by the new management team, is intended to improve processes and reduce costs by approximately €45m on a yearly basis, and includes a combination of substantial organizational efficiency changes, other cost savings as well as initiatives to improve working capital including inventory management.

Organizational changes
The number of positions in the company will potentially decrease by approximately 20 percent, and the total number of employees across all levels and geographies will go from approximately 4,450 to 3,600. The proposed staff reductions are subject to negotiations with the trade unions and are scheduled to be completed in September 2023.

Chief Operating Officer, COO, and deputy CEO, Jesper Martinsson has announced his intention to leave his position within Oriflame and pursue his career outside the company. Niclas Palmquist will be promoted to Chief Commercial Officer, CCO. Niclas has long experience from various leadership positions in Oriflame. Most recently he has been Vice President of Business Technology and Digital Experience, where he has ensured rapid and significant business technology improvements for the company.

Comment from Anna Malmhake, CEO of Oriflame:
"We have made a tough - but necessary - decision, and the announcement today will affect many of our employees. The environment is increasingly challenging and after a period of weaker sales and lower profitability there is a need for a comprehensive efficiency program to secure the continued progress of our company. This program will create room for continued investments in product and market development as well as improved processes. We will continue to build on our fantastic business model. Thanks to a leaner and more agile setup, we will be able to strengthen the support to our Brand Partners pursuing their entrepreneurial dreams in partnership with Oriflame.
On behalf of the Board, I would also like to wish Niclas well in his expanded role and thank Jesper for his service and wish him well in his future career."

The program is expected to start to generate cost savings as of the fourth quarter 2023 and is expected to be fully implemented as of the third quarter 2024.

The company will provide more detailed information on one-off costs related to the program in the coming quarterly report and will continue to provide further information in conjunction with its normal reporting process. The third quarter report will be announced on 24 October 2023.

For additional information, please contact:
Carl Rogberg, Chief Financial Officer Tel: +44 773 899 8737
Vanessa Wendle,[email protected] Tel: +41 799 220173

We are Oriflame
Founded in 1967, Oriflame is a social selling beauty company with sales in more than 60 countries. Its portfolio of Swedish, nature-inspired, innovative beauty products is marketed through more than two million members, generating annual sales of almost one billion Euro (2022). Respect for people and nature underlies Oriflame's operating principles and is reflected in its social and environmental policies. Oriflame supports numerous charities worldwide and is a Co-founder of the World Childhood Foundation.