Interim report 1 January - 30 September 2010

Three months ended 30 September 2010

• Local currency sales increased by 10% and Euro sales increased by 21% to EUR336.6m (EUR277.3m).
• Average size of the sales force increased by 12% to 3.4m consultants and closing sales force was up by 8%.
• EBITDA before restructuring costs and impairment Iran amounted to EUR33.4m (EUR27.2m).
• The operating margin before restructuring costs and impairment Iran was 8.0% (7.8%) resulting in an operating profit of EUR27.1m (EUR21.6m).
• Net profit before restructuring costs and impairment Iran amounted to EUR7.1m (EUR13.4m).
• EPS after dilution and before restructuring costs and impairment Iran amounted to EUR0.12 (EUR0.24).
• Cash flow from operating activities amounted to EUR-11.7m (-11.7m).
• Operations in Iran were closed down in August and have not yet reopened. The company is fully focused on resolving the present situation in Iran. An impairment of all balance sheet positions of EUR11.4m has been carried out.

Nine months ended 30 September 2010

• Local currency sales increased by 7% and Euro sales increased by 15% to EUR1,073.5m (EUR934.1m).
• Net profit before restructuring costs and impairment Iran amounted to EUR73.8m (EUR60.2m).
• EPS after dilution and before restructuring costs and impairment Iran amounted to EUR1.29 (EUR1.06).
• Cash flow from operating activities amounted to EUR31.7m (EUR30.8).
• New outlook: Sales growth for 2010 is expected to be around 9% in local currency and operating margins are expected to be approximately 11% at current exchange rates.

"During the third quarter, we have seen positive effects on sales force and volume growth moving us closer to a stronger sales momentum quarter by quarter - even though we are cautious and lower our sales outlook in a tougher market. Recent negative currency development in combination with continued investment in top line growth activities leads us to lower the outlook for operating margin for the full year." CEO Magnus Brännström comments.

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Source: Oriflame Cosmetics via Thomson Reuters ONE