Oriflame Cosmetics: YEAR END REPORT 2007

Three months ended 31 December 2007

  * Local currency sales increased by 26% and Euro sales increased by
    22%, to ¤341.6m (¤279.5m).

  * Average size of the sales force increased by 21%, to 2,298,800
    consultants and closing sales force was up by 25%.

  * EBITDA increased by 37%, to ¤65.3m (¤47.6m).

  * Operating margin before restructuring costs, due to the new
    operational platform, was 16.6% (15.4%) resulting in a 32%
    increase in operating profit to ¤56.7m (¤43.0m).

  * Net profit before restructuring costs increased by 40% to ¤43.6m
    (¤31.1m).

Twelve months ended 31 December 2007

  * Local currency sales increased by 24% and Euro sales increased by
    21%, to ¤1,109.4m (¤917.9m).

  * Operating margin before restructuring costs amounted to 14.0%
    (13.8%) resulting in an operating profit of ¤155.4m (¤127.1m).

  * Net profit before restructuring costs and related deferred income
    tax increased by 24% to ¤116.0m (¤93.5m). Net profit after
    restructuring costs amounted to ¤92.0m (¤93.5m).

  * EPS after dilution and before restructuring costs and related
    deferred income tax increased by 27% to ¤2.05 (¤1.61). EPS after
    restructuring costs amounted to ¤1.63 (¤1.61).

  * Cash flow from operating activities amounted to ¤102.2m
    (¤121.6m).

  * Establishment of new operational platform ahead of plan with
    larger share of costs, ¤25.8m, taken in 2007. Total restructuring
    charges expected to amount to ¤30-35m as previously communicated.

  * Oriflame's Board of Directors will propose to the AGM a dividend
    of ¤1.25 (¤1.01) per share, amounting to ¤69.7m, corresponding to
    60% of net profit before restructuring costs and related deferred
    income tax.

  * Outlook for 2008: Sales growth in line with the long term target
    and improved operating margins compared to 2007.

+-------------------------------------------------------------------------+
|                            |              |      |               |      |
|FINANCIAL                   |3 months ended|      |12 months ended|      |
|SUMMARY                     |31 December   |      |31 December    |      |
|(¤  Million)                |--------------|      |---------------|      |
|                            |    2007| 2006|Change|     2007| 2006|Change|
|----------------------------+--------+-----+------+---------+-----+------|
|Sales                       |   341.6|279.5|   22%|  1,109.4|917.9|   21%|
|----------------------------+--------+-----+------+---------+-----+------|
|Gross margin, %             |    69.9| 68.2|     -|     70.1| 69.1|     -|
|----------------------------+--------+-----+------+---------+-----+------|
|EBITDA                      | 65.3[1]| 47.6|   37%| 182.3[2]|144.6|   26%|
|----------------------------+--------+-----+------+---------+-----+------|
|Operating profit            | 56.7[1]| 43.0|   32%| 155.4[2]|127.1|   22%|
|----------------------------+--------+-----+------+---------+-----+------|
|Operating margin, %         | 16.6[1]| 15.4|     -|  14.0[2]| 13.8|     -|
|----------------------------+--------+-----+------+---------+-----+------|
|Profit before tax           | 48.8[1]| 37.0|   32%| 131.7[2]|108.3|   22%|
|----------------------------+--------+-----+------+---------+-----+------|
|Net profit                  | 43.6[3]| 31.1|   40%| 116.0[4]| 93.5|   24%|
|----------------------------+--------+-----+------+---------+-----+------|
|EPS, diluted, ¤             | 0.77[3]| 0.55|   40%|  2.05[4]| 1.61|   27%|
|----------------------------+--------+-----+------+---------+-----+------|
|Cash flow from operating    |    62.0| 65.4|  (5%)|    102.2|121.6| (16%)|
|activities                  |        |     |      |         |     |      |
|----------------------------+--------+-----+------+---------+-----+------|
|Net interest-bearing debt   |   182.0|193.5|  (6%)|    182.0|193.5|  (6%)|
|----------------------------+--------+-----+------+---------+-----+------|
|Sales force, average, '000  |   2,299|1,896|   21%|    2,204|1,808|   22%|
+-------------------------------------------------------------------------+

[1] Before restructuring costs due to the new operational platform of
¤14.0m. [2] Before restructuring costs due to the new operational
platform of ¤25.8m. [3] Before restructuring costs of ¤14.0m due to
the new operational platform and related deferred income tax of
¤1.8m. [4] Before restructuring costs of ¤25.8m due to the new
operational platform and related deferred income tax of ¤1.8m.

SALES AND EARNINGS

Three months ended 31 December 2007

Sales in local currencies increased by 26% and by 22% in Euro to
¤341.6m compared to ¤279.5m in the same period last year. Unit sales
were up by 16%. Sales were helped by a favourable product mix as well
as price increases in all regions.

Sales growth in local currencies was driven by a 21% increase in the
average size of the sales force and a 4% productivity improvement.
Closing sales force increased by 25% or 488,600 to 2,465,100
consultants.

Local currency sales in Latin America increased by 44%, Asia 37%, CIS
& Baltics 31%, Central Europe & Mediterranean 16% and Western Europe
& Africa 14%.

Gross margins improved to 69.9% (68.2%) as a result of a positive
product mix effect, price increases and sourcing gains, partly offset
by negative currency effects.

The operating profit before restructuring costs due to the new
operational platform increased by 32% to ¤56.7m (¤43.0m) reflecting
higher sales and improved margins. Operating margins before
restructuring costs improved to 16.6% (15.4%) as a result of higher
gross margins and leverage on fixed overheads. This was partly offset
by higher selling expenses. Currency movements had a 0.5 percentage
point negative effect on operating margins.

Profit before tax amounted to ¤34.8m (¤37.0m). Restructuring charges,
related to the creation of a new operational platform affected profit
before tax by ¤14.0m during the quarter. Results were also negatively
affected by ¤1.9m (¤1.0m) in foreign exchange losses and ¤0.9m in
higher interest costs compared to the same period last year.

Net profit amounted to ¤31.4m (¤31.1m) and fully diluted earnings per
share amounted to ¤0.55 (¤0.55). Diluted EPS excluding restructuring
costs and related deferred income tax increased by 40% to ¤0.77
(¤0.55).

Twelve months ended 31 December 2007

Sales increased by 24% in local currency and by 21% in Euro, to
¤1,109.4m (¤917.9m). Unit sales were up by 20%.

Sales growth in local currency was driven by a 22% increase in the
size of the sales force and a 2% productivity improvement.

Gross margins increased to 70.1% (69.1%) and operating margins
improved to 14.0% (13.8%) resulting in an operating profit before
restructuring costs of ¤155.4m (¤127.1m). Currency movements had a
0.6 percentage point negative effect on operating margins during the
year.

Net profit decreased by 2% to ¤92.0m (¤93.5m) and fully diluted
earnings per share amounted to ¤1.63 (¤1.61).

Cash flow from operating activities decreased to ¤102.2m (¤121.6m)
mainly due to a build up of inventories compared to the same period
last year.

OPERATING HIGHLIGHTS

Marketing and Products

Sales in the fourth quarter were helped by a favourable product mix
compared to last year. In the fourth quarter 2007, sales of obsolete
stock and accessories were much lower than last year. Christmas
offers this year, to a large extent consisted of higher priced
products.

In 2007, sales were split as follows between the five categories:

Colour cosmetics             27% (26%)
Skin care                    26% (26%)
Toiletries                   19% (19%)
Fragrances                   18% (17%)
Accessories                  9% (11%)


The colour cosmetics category showed record growth in the fourth
quarter, resulting in a full year growth of 25%. Oriflame Beauty, the
company's new colour range was introduced during the year with the
successful launches of Wonderlash Mascara and Powershine Lipstick.

Continued focus on strengthening Oriflame's position in skin care led
to a 22% growth of the category during the year. The launch of
breakthrough anti-wrinkle brand Ecollagen highly contributed to the
growth, especially the growth of the upper mass market skin care
segment.

Fragrances were the fastest growing category during the year, up by
29%. Oriflame's Gem Scent Collection was introduced; with the first
scent Amethyste Fatale achieving good results. The category best
seller during fourth quarter was Ascendent, a male fragrance launched
in the third quarter. The men range as a whole grew by 25%, led by
the fragrance category.

Global Supply

A main focus in the fourth quarter was to establish the new supply
chain organisation in Stockholm and the logistics centre in Warsaw.
During the period, Oriflame prepared for the move of the Nordic Hub
from Malmö, Sweden to Warsaw and - after the close of the period - to
expand the distribution hub in Warsaw further with pick & pack
capabilities.

The Product Fulfilment Project, Oriflame's review of its entire
supply chain, is proceeding according to plan. The project is
expected to generate long term benefits in the form of improved
service levels in the company's main markets. During Christmas, the
highest selling period of the year, Oriflame saw service level
improvements. Service levels are expected to improve as the new
distribution network is rolled out throughout the company during 2008
and 2009 with an established new level of inventory.

Another focus of the supply organisation is to cope with the strong
growth of the company and to address the capacity issues in internal
as well as external factories. The company is intensifying its
efforts of looking at sourcing opportunities closer to its main
markets.

New Operational Platform

The overall project is ahead of time and the new operational platform
will be fully up and running in the first quarter 2008. The
recruitment activities have proceeded better than expected and the
Group Support Offices are almost fully staffed. The Warsaw
distribution centre is now also functioning as the main group
warehouse.

The restructuring charges are expected to amount to ¤30-35m over two
years as previously communicated, with a larger share, ¤25.8m, taken
in 2007.

REGIONAL HIGHLIGHTS

CIS & Baltics

Local currency sales in the fourth quarter 2007 increased by 31% as a
result of a 27% increase in the average size of the sales force and a
3% productivity improvement compared to last year. Euro sales
increased by 23% to ¤196.4m (¤159.1m) and closing sales force was up
by 32% year over year. All main markets performed well and sales
growth was particularly strong in Mongolia, Azerbaijan and Armenia.
Sales in Russia increased by 25% in local currency.

Sales increase was strong due to a higher sales force, the result of
successful recruitment campaigns and catalogue promotions as well as
price increases with a beneficial impact on productivity.

Operating margins improved to 22.2% (22.0%) resulting in a 25%
improvement in operating profit to ¤43.6m (¤34.9m). A positive
product mix and price increases affected gross margins positively.
This was partly offset by negative currency effects and higher sales
and marketing costs.

Central Europe & Mediterranean

Local currency sales increased by 16% driven by a 6% increase in the
size of the sales force and a 9% productivity improvement. Closing
sales force was up by 7%.

Euro sales increased by 20% to ¤79.6m (¤66.4m) helped by stronger
currencies in many key markets. Sales growth was particularly strong
in Slovakia and Czech Republic due to a good implementation of
marketing activities as well as strong leadership development and
recruitment. Sales growth in Poland continued to be strong due to a
well executed pricing strategy and attractive customer offers.

Operating margins strengthened to 22.7% (21.7%) resulting in a 25%
increase in operating profit to ¤18.1m (¤14.4m). Margins improved
mainly as a result of a positive product mix and positive currency
effects.

Western Europe & Africa

Sales increased by 14% in local currency and in Euro to ¤28.9m
(¤25.4m) as a result of a 7% increase in the size of the sales force
and a 6% increase in productivity. Sales were positively affected by
a timing effect in the Nordic countries in the closing schedules of
the catalogues compared to last year. Closing sales force was up by
9% driven by a strong development in Africa.

Operating margins increased to 16.9% (12.7%) as a result of higher
prices in the region and lower selling costs due to fewer consultant
activities and a timing effect of the conferences. Oriflame also saw
a positive margin development in Egypt and Morocco due to higher
volumes and lower duties.

Latin America

Local currency sales increased by 44% driven by a 34% increase in the
size of the sales force and a 7% increase in productivity. Euro sales
increased by 34% to ¤14.0m (¤10.5m). Sales growth was strong in all
five markets and particularly in Colombia and Peru. Closing sales
force was up by 44%.

Operating margins improved to 7.5% (7.0%) despite negative currency
effects. This resulted in an operating profit of ¤1.0m (¤0.7m).

Asia

Local currency sales increased by 37% as a result of a 33% increase
in the sales force and a 4% productivity improvement. Euro sales
increased by 28% to ¤16.0m (¤12.4m). Oriflame showed particularly
strong growth in Thailand, Sri Lanka and India during the quarter.
Closing sales force was up by 36%.

The strong sales trend is to a high degree attributed to Oriflame's
focus on sales and recruitment processes which has led to many new
Leaders in the region taking more responsibility for the training and
recruitment of the sales force.

Operating losses during the fourth quarter amounted to ¤0.1m compared
to an operating profit of ¤0.2m in the same period last year.

CASH FLOW & INVESTMENTS

Cash flow from operating activities amounted to ¤62.0m (¤65.4m)
during the fourth quarter and ¤102.2m (¤121.6m) for the full year. A
¤37.7m increase in EBITDA excluding restructuring costs was partly
offset by ¤16.3m in higher working capital requirements compared to
¤9.9m in lower working capital requirements last year. The increase
in working capital was principally due to a ¤46.1m build-up of
inventories while inventories last year decreased by ¤2.8m.

Cash flow used in investing activities during 2007 amounted to
¤-36.8m (¤-39.5m).

FINANCIAL POSITION

Net interest-bearing debt amounted to ¤182.0m compared to ¤193.5m at
year-end 2006.

DIVIDEND

Oriflame's Board of Directors will propose to the AGM a dividend of
¤1.25 (¤1.01) per share, or 60 percent of net profit before
restructuring costs and related deferred income tax. The total amount
corresponds to ¤69.7m. The dividend will be paid after the AGM in
May.

LONG TERM FINANCIAL TARGETS

Oriflame's long term financial targets are to achieve local currency
sales growth of around 10% per annum and to reach an operating margin
of 15% in 2009.

A number of factors impact sales and margins in-between quarters:

  * 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

OUTLOOK

Sales growth for 2008 is expected to be in line with the long term
target and the operating margin is expected to improve despite the
prevailing exchange rate environment.

PERSONNEL

The average number of employees during the fourth quarter 2007 was
6,729 (5,842).

ANNUAL GENERAL MEETING AND SHAREHOLDER'S DAY

Oriflame's Annual General Meeting will be held in Luxembourg on 19
May 2008. Oriflame will also host a shareholders' day in Stockholm on
24 April where shareholders will have the opportunity to meet with
members of the Board of Directors and management.

The annual report 2007 will be published on Oriflame's website on or
about 14 April.

FINANCIAL CALENDAR FOR 2008

  * Interim report for the first quarter 2008 will be released on 24
    April.
  * Annual General meeting on 19 May.
  * Capital Market Day in Stockholm on 21 May.
  * Interim report for the second quarter 2008 will be released on 13
    August.
  * Interim report for the third quarter 2008 will be released on 22
    October.


OTHER

This report has been reviewed by the Company's auditors.

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

Conference call for the financial community

The company will host two conference calls on Wednesday 20 February.

First conference call starts at 09.30 CET
Participant access numbers:
Sweden [phone]
UK [phone]
Confirmation code: 406 4759 / Oriflame

Second conference call starts at 18.30 CET (12.30 EST)
Participant access numbers:
US [phone]
UK [phone]
Sweden [phone]
Confirmation code: 798 1249 / Oriflame

The conference calls will be audio web cast in "listen-only" mode
through Oriflame's website: www.oriflame.com.


20 February 2008


Magnus Brännström
Chief Executive Officer


For further information, please contact:

Magnus Brännström, Chief Executive Officer     Telephone: [phone]
                                               754
Gabriel Bennet, Chief Financial Officer        Telephone: [phone]
                                               713
Patrik Linzenbold, Investor Relations          Telephone: [phone]
Manager                                        709



Oriflame Cosmetics S.A.
20 rue Philippe II
L-2340
Luxembourg
www.oriflame.com
Company registration no B.8835


Oriflame is an international cosmetics company selling direct, with
sales in 60 countries. Oriflame offers a complete range of high
quality skincare, fragrances, colour cosmetics, toiletries and
accessories, marketed through a sales force of independent sales
consultants. Although the company has grown rapidly it has never lost
sight of its original business concept - natural Swedish cosmetics,
sold from friend to friend. Oriflame is a co-founder of World
Childhood Foundation. Oriflame Cosmetics is listed on the Nordic
Exchange.


The full report including tables can be downloaded from the following
link: