Swedish cosmetics firm Oriflame Cosmetics has revealed that its earnings have been hit by the deprecation of some of its main trading currencies, such as the Russian rouble.
The company, which sells cosmetics in more than 60 countries, said sales converted into euros decreased by 10% in 2014 and by 5% in the fourth quarter alone, due to currency losses. In local currencies, sales grew 1% for the group in 2014 and increased by 5% in the fourth quarter, the company revealed in a recent statement.
Russia is the largest market for the group and represents around 30 percent of total sales. As a result, the firm has been hit hard by the devaluation of the rouble and rising inflation. Yet despite poor market conditions, the company reported that its sales in Russia grew by 7% during the fourth quarter.
The brand has a track record of increasing product prices above the rate of inflation and plans to increase its revenue from Russia by steadily raising prices during 2015.
Magnus Brännström, CEO commented, “With a large part of our sales generated in Russia, we are clearly impacted by the recent additional devaluation of the Rouble. We will continue to carry out our strategy and sequentially implement price increases at levels required to enable a healthy business development.”
The company identified high growth regions such as Turkey and Asia and expects these regions to drive sales.