Net profit increased by 3% to €93.5m (adj €90.5m

(1)

YEAR END REPORT 2006 Three months ended 31 December 2006

• Local currency sales increased by 16% and Euro sales increased by 14%, to €279.5m (€244.7m).

• Average size of the Sales Force increased by 16%, to 1,896,200 Consultants and closing Sales Force was up by 15%.

• EBITDA increased by 11%, to €47.6m (€43.0m).

• The operating margin amounted to 15.4% (16.0%) resulting in an operating profit of €43.0m (€39.1m).

• Net profit amounted to €31.1m (adj €32.0m).

Twelve months ended 31 December 2006

• Local currency sales increased by 18% and Euro sales increased by 20%, to €917.9m (€765.7m).

• EBITDA increased by 20%, to €144.6m (€120.3m).

• The operating margin amounted to 13.8% (13.9%) resulting in an operating profit of €127.1m (€106.7m).

• Net profit increased by 3% to €93.5m (adj €90.5m).

• EPS after dilution increased by 6% to €1.61 (adj €1.52).

• Cash flow from operating activities amounted to €121.6m (€63.4m).

• Oriflame’s Board of Directors will propose to the AGM a dividend of €1.01 (€0.90) per share, amounting to €56.2m in total.

• New operational platform proposed, resulting in restructuring charges of €25-30m, to be spent over the next two years.

3 months ended 31 December

12 months ended 31 December FINANCIAL

SUMMARY (€ Million)

2006 2005 Change 2006 2005 Change

Sales 279.5 244.7 14% 917.9 765.7 20%

Gross margin, % 68.2 67.8 - 69.1 68.3 -

EBITDA 47.6 43.0 11% 144.6 120.3 20%

Operating profit 43.0 39.1 10% 127.1 106.7 19%

Operating margin, % 15.4 16.0 - 13.8 13.9 -

Profit before tax 37.0 35.6¹ 4% 108.3 101.7¹ 6%

Net profit 31.1 32.0¹ (3%) 93.5 90.5¹ 3%

EPS, diluted, € 0.55 0.54¹ 2% 1.61 1.52¹ 6%

Cash flow from operating activities 65.4 53.7 22% 121.6 63.4 92%

Net interest-bearing debt 193.5 73.5 163% 193.5 73.5 163%

Sales force, average, ‘000 1,896 1,634 16% 1,808 1,597 13%

1) Excluding loss on disposal of €4.2m related to the UK business

(2)

SALES AND EARNINGS

Three months ended 31 December 2006

Sales in local currencies increased by 16% and by 14% in Euro to €279.5m compared to €244.7m in the same period last year. Unit sales were up by 15%.

Sales growth in local currencies was driven by a 16% increase in the average size of the Sales Force and a constant productivity. Closing Sales Force increased by 15% or 253,300 to 1,976,500 Consultants.

Local currency sales in Asia, CIS & Baltics, Latin America, Central Europe & Mediterranean and Western Europe & Africa increased by 54%, 21%, 8%, 7% and 3% respectively.

Gross margins improved to 68.2% (67.8%) as a result of a positive mix effect, pricing and sourcing gains, but partly offset by a negative currency effect.

Operating profit increased by 10% to €43.0m (€39.1m) reflecting increased sales . Operating margins decreased to 15.4% (16.0%) partly as a result of currency movements affecting margins negatively by 0.4 percentage points and partly due to higher administrative expenses. Costs for the management bonus and share plans affected results negatively by €2.7m (€0.9m).

Profit before tax (the comparable period adjusted for restructuring charges) was up by 4%. Profits were negatively affected by €2.0m in higher interest costs and charges as a result of higher borrowings following the company’s dividend and redemption offer to shareholders.

Net profit decreased by 3% to €31.1m (adj. €32.0m) and fully diluted earnings per share increased by 2% to €0.55 (adj. €0.54).

Twelve months ended 31 December 2006

Sales increased by 18% in local currenc y and by 20% in Euro, to €917.9m (€765.7m). Unit sales were up by 16%.

Sales growth in local currency was driven by a 13% increase in the size of the Sales Force and a 4% productivity improvement.

Gross margins increased to 69.1% (68.3%). Operating margins decreased by 0.1 percentage points to 13.8% (13.9%) resulting in an operating profit of €127.1m (€106.7m).

Net profit increased by 3% to €93.5m (adj. €90.5m) and fully diluted earnings per share increased by 6% to €1.61 (adj. €1.52).

(3)

OPERATING HIGHLIGHTS Marketing and Products

In 2006, the split in sales of the five product categories were:

Skin care 26% (25%)

Colour Cosmetics 26% (28%)

Toiletries 19% (20%)

Fragrances 17% (17%)

Accessories 11% (11%)

In line with Oriflame’s efforts during the year to further strengthen its position within skin care, this category showed a strong sales increase, growing by 25% both in the fourth quarter as well as in the full year period. Successful product introductions during the autumn, such as Skindividual and Optimals, contributed to this.

Colour Cosmetics grew by only 2% in the fourth quarter, partly due to very strong product introductions in prior year, and by 13% in the full year. Although this category showed sales that were below expectations, Oriflame has successfully re-launched its luxury colour and fragrance brand, Giordani Gold, with higher quality packaging, enhanced formula and a wider range of colour shades . In addition to the normal sales support, the re-launch was communicated in print and TV.

Global Supply

The Product Fulfilment Project, Oriflame’s review of its entire supply chain, is now in the implementation phas e and is showing some promising early results. During the quarter Oriflame has shown improvements in inventory efficiency and management is continuously working hard to improve responsiveness to consultants. Oriflame has completed the review of its logistical foot print and is now starting the restructuring of this new footprint with more Group distribution centres planned for Eastern Europe.

The CIS Supply Centre has commenced test activities and a new picking system has been installed in the warehouse and is showing good potential. Due to certain delays in the implementation of lipstick manufacturing, Oriflame is expecting that production will commence during the latter part of the year. This is expected to lead to reduced gains in 2007 compared to previ ous expectations.

(4)

REGIONAL HIGHLIGHTS CIS & Baltics

Local currency sales in the fourth quarter increased by 21% as a result of a 22% increase in the average size of the Sales Force and a constant productivity compared to previous year.

Euro sales increased by 19% to €159.1m (€133.9m) and closing Sales Force was up 20% year over year. All main markets performed well and sales growth was particularly strong in Kazakhstan, Belarus and Mongolia. Sales in Russia increased by 13% in local currency.

Demand and sales of fragrances and in Men’s fragrances in particular have been very strong during the fourth quarter partly as a result of some competitors still lacking their license to sell fragrances. Unfortunately the service levels have not been satisfactory, which has led to some out of stocks due to the higher than expected demand, not only due to fragrances but also due to high demand of limited life accessories.

Operating margins amounted to 22.0% (22.6%) resulting in an operating profit of €34.9m (€30.3m).

Central Europe & Mediterranean

Local currency sales in the fourth quarter increased by 7% driven by a productivity increase of 12% partly offset by a 4% decrease in the average size of the Sales Force. Productivity increased mainly as a result of the launch of an additional catalogue during the period.

Euro sales increased by 9% to €66.4m (€61.0m) while the closing Sales Force was down 4% year over year. Sales growth was particularly strong in Romania, Serbia & Montenegro and Bosnia- Herzegovina, while Greece and Hungary were below expectations.

Operating profit increased by 3% to €14.4m (€14.0m). Operating margins decreased to 21.7%

(23.0%) mainly as a result of lower gross margins and higher costs for sales and marketing.

Western Europe & Africa

Sales increased by 3% both in local currency and in Euro to €25.4m (€24.8m) as a result of a 14%

increase in the average size of the Sales Force partly offset by a 9% decrease in productivity.

Growth was strong in Portugal, Spain and Egypt while Sweden and Norway were weaker than expected. Closing Sales Force was up by 14%.

Operating margins decreased to 12. 7% (13.1%) resulting in a constant operating profit at €3.2m (€3.2m). Margins were lower as a result of a less favourable product mix in the period.

Comparable figures for last year have been adjusted for Oriflame’s UK operations which were disposed of in the fourth quarter 2005. Figures have also been adjusted for the addition of Egypt and Morocco to the region. These two countries were previously in the Central Europe &

Mediterranean region.

(5)

Latin America

Local currency sales increased by 8% driven by a 20% increase in the average size of the Sales Force partly offset by a 10% decrease in productivity. Colombia and Mexico had strong sales growth while Peru and Chile were more disappointing, declining in the quarter. The main reasons for the slow down in sales growth during the fourth quarter were less successful product launches and service level issues in certain countries. Euro sales was constant at €10.5m (€10.5m) negatively affected by currency movements. Closing Sales Force was up by 15%.

Operating profit increased to €0.7m (€0.6m).

Asia

Local currency sales increased by 54% as a result of a 63% increase in the size of the Sales Force and a 6% decrease in productivity. Euro sales increased by 48% to €12.4m (€8.4m). All countries showed a strong growth during the quarter and particularly Indonesia, India and Vietnam. 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.

Oriflame commenced sales activities in China in November 2006.

Operating profit amounted to €0.2m (€-0.4m).

(6)

CASH FLOW & INVESTMENTS

Cash flow from operating activities amounted to €65.4m (€53.7m) during the fourth quarter and

€121.6m (€63.4m) for the full year. Operating cash flow for the full year increased partly as a result of €24.3m in higher EBITDA. In addition, inventories in 2006 decreased by €2.8m while in 2005, the inventory build-up amounted to €32.0m. This was partly offset by €6.5m in higher interest and charges paid and €1.9m in higher taxes paid.

Cash flow from investing activities during 2006 amounted to €-39.5m (€-39.5m).

FINANCIAL POSITION

Net interest-bearing debt amounted to €193.5m compared to €73.5m at year-end 2005. Interest- bearing debt increased mainly as a result of €53.5m in dividend paid in the second quarter of 2006 and €153.4m in redemption payments during the third quarter 2006.

ORIFLAME TO EXPLORE NEW OPERATIONAL PLATFORM

The proposed platform principally would entail co-locating the Groups’ product development and catalogue functions to Stockholm, Sweden where the company was founded 40 years ago. The proposal would also entail expanding central logistic hubs in Warsaw, Poland and Moscow, Russia. As a consequence, the proposal would lead to the closure of the offices in Waterloo, Belgium and Malmö, Sweden. In addition, the proposal includes investment in R&D capabilities with the establishment of a skin care research centre in Stockholm to further enhance the development of skin care products based on Swedish science and ingredients. The proposal also includes a further investment of €1.5m in Oriflame’s R&D centre in Dublin.

The proposal would constitute a next strategic step towards creating a more effective platform for future growth, and an investment in Oriflame’s brand image and unique selling point – Natural Swedish Cosmetics.

The cost of the proposal is expected to be in the range of €25-30m to be spent over the next two years. A separate press release about this initiative has been issued and is available on www.oriflame.com.

DIVIDEND

Oriflame’s Board of Directors will propose to the AGM a dividend of €1.01 (€0.90) per share, or 60% of net profit and €56.2m in total. The dividend will be paid after the AGM in May 2007.

MANAGEMENT

Oriflame’s Chief Financ ial Officer, Kevin Kenny has decided to leave the Company in August 2007 after 27 years with the Company. During the next six months, Kevin will hand over his responsibilities to Gabriel Bennet, currently Oriflame’s Group Controller. Gabriel has then been with the Company for two years.

(7)

OUTLOOK AND LONG TERM FINANCIAL TARGETS

Oriflame’s long term financial targets are to achieve local currency sales growth of 5-10% 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

The outlook for 2007 remains as previously communicated. Oriflame expects 2007 to be within the sales target. As a consequence of projects initiated during 2006 as well as investments in infrastructure, fixed overhead growth has been increasing. Oriflame expects this growth to continue, but at a slower pace in 2007, while the benefits from the various projects will only start to come through during the latter part of the year. Overall, Oriflame expects the operating margin for 2007, excluding the effects of the restructuring, will be in line with 2006.

PERSONNEL

The average number of employees during the fourth quarter 2006 was 5,842 (5,283).

ANNUAL GENERAL MEETING AND SHAREHOLDERS’ DAY

Oriflame’s forthcoming Annual General Meeting will be held in Luxembourg on 21 May 2007.

Oriflame will also host a Shareholders’ Day in Stockholm on 25 April 2007 where shareholders will have the opportunity to meet with members of the Board of Directors and management.

Oriflame’s annual report 2006 will be published on Oriflame’s website on or about 13 April.

FINANCIAL CALENDAR FOR 2007

Interim reports and other shareholder activities are planned as follows:

• First quarter 2007 and Shareholders’ Day on 25 April, 2007

• Annual General meeting on 21 May, 2007

• Second quarter 2007 on 1 August, 2007

• Third quarter 2007 on 24 October, 2007

(8)

OTHER

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

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

Oriflame will present its full year 2006 results at 15.00 CET on Tuesday 13 February. The presentation will be live web cast and accessed through Oriflame's website: www.oriflame.com

To listen to the call and participate in the question and answer session, you are kindly requested to call +32 (0)2290 1407. A replay of the conference will be available on the company website.

13 February 2007

Magnus Brännström Chief Executive Officer

For further information, please contact:

Magnus Brännström, Chief Executive Officer Telephone: +32 2 357 5524 Kevin Kenny, Chief Financial Officer Telephone: +32 2 357 5544 Patrik Linzenbold, Investor Relations Telephone: +35 2 26 203 232

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 59 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.

(9)

SALES, OPERATING PROFIT AND CONSULTANTS BY REGION

3 months ended 31 Dec

12 months ended 31 Dec Sales

(€ Million)

2006 2005

Change in Euro

Change in local

currency 2006 2005

Change in Euro

Change in local currency

CIS & Baltics 159.1 133.9 19% 21% 496.5 382.9 30% 25%

Central Europe & Med.¹ 66.4 61.0 9% 7% 223.8 209.9 7% 5%

Western Europe & Africa¹ 25.4 24.8 3% 3% 90.3 84.4 7% 7%

Latin America 10.5 10.5 - 8% 40.0 33.3 20% 20%

Asia 12.4 8.4 48% 54% 43.7 30.6 43% 41%

Other 5.6 6.1 (7%) (7%) 23.7 24.7 (12%) (5%)

Total sales 279.5 244.7 14% 16% 917.9 765.7 20% 18%

3 months ended 31 Dec

12 months ended 31 Dec Operating profit

(€ Million)

2006 2005 Change 2006 2005 Change

CIS & Baltics 34.9 30.3 15% 99.3 72.7 36%

Central Europe & Med.¹ 14.4 14.0 3% 45.4 43.2 5%

Western Europe & Africa¹ 3.2 3.2 - 11.3 10.7 6%

Latin America 0.7 0.6 1% 4.4 2.1 116%

Asia 0.2 (0.4) n.m - (1.1) n.m

Group overhead & Other (10.5) (8.8) n.m (33.3) (20.8) n.m

Total 43.0 39.1 10% 127.1 106.7 19%

Average in the 3 months ended

31 December

Average in the 12 months ended

31 December Sales Force

(´000)

2006 2005 Change 2006 2005 Change

CIS & Baltics 994.2 816.5 22% 932.6 780.4 20%

Central E. & Med.¹ 495.8 518.2 (4%) 512.9 522.5 (2%) Western E. & Africa¹ 127.6 112.3 14% 125.1 118.0 6%

Latin America 74.7 62.2 20% 69.2 55.5 25%

Asia 203.9 125.0 63% 167.9 120.6 39%

Total 1,896.2 1,634.1 16% 1,807.7 1,597.2 13%

Closing at 31 December Sales Force

(´000) 2006 2005 Change

CIS & Baltics 1,041.7 871.5 20%

Central E. & Med.¹ 519.8 539.0 (4%) Western E. & Africa¹ 135.2 118.5 14%

Latin America 73.5 64.1 15%

Asia 205.9 130.2 59%

Total 1,976.5 1,723.2 15%

(10)

CONSOLIDATED INCOME STATEMENT

€ ‘000

2006 2005 2006 2005

Sales 2 279,500 244,683 917,945 765,690

Cost of sales (88,993) (78,722) (283,283) (242,961)

Gross profit 190.507 165,961 634,662 522,729

Selling and marketing

expenses (98,286) (85,719) (334,871) (277,803)

Administrative expenses (49.242) (41,156) (172,736) (138,180) Operating profit before

restructuring 2 42,979 39,086 127,055 106,746

Restructuring - (4,201) - (4,201)

Operating profit after

restructuring 42,979 34,885 127,055 102,545

Financial income 211 111 579 465

Financial expenses (6,228) (3,623) (19,306) (5,527)

Profit before tax 36,963 31,375 108,328 97,483

Current tax (8,730) (3,491) (18,700) (9,919)

Deferred tax 2,898 (43) 3,871 (1,283)

Net profit 31,131 27,841 93,499 86,281

€

2006 2005 2006 2005

EPS:

- basic 0.56 0.47 1.62 1.45

- diluted 0.55 0.47 1.61 1.45

Weighted avg. number of shares outstanding:

- basic 55,632,852 59,483,190 57,674,309 59,412,892

- diluted 56,088,491 59,653,424 58,073,828 59,499,159 Total number of shares

outstanding:

- basic 55,669,886 59,483,190 55,669,886 59,483,190

- diluted 56,125,525 59,653,424 56,069,405 59,569,456

(11)

CONSOLIDATED BALANCE SHEET

€’000 31 December

2006

31 December 2005 Assets

Intangible assets 11,393 11,152

Property, plant and equipment 124,593 102,581

Deferred tax assets 12,446 7,110

Other long term receivables 6,534 3,768

Total non-current assets 154,966 124,611

Inventories 140,940 144,196

Trade and other receivables 78,328 69,670

Cash and cash equivalents 62,000 50,907

Total current assets 281,268 264,773

Total assets 436,234 389,384

Equity and liabilities

Share capital 69,588 74,354

Reserves (34,680) 25,941

Retained earnings 66,509 103,980

Dividends (53,535) (44,506)

Total capital and reserves 47,882 159,769

Liabilities

Interest bearing loans 235,668 1,083

Other long term non interest-bearing liabilities 292 259

Deferred tax liabilities 4,977 2,557

Total non-current liabilities 240,937 3,899

Current portion of interest-bearing loans 19,823 123,316

Taxes payable 7,629 5,638

Trade and other payables 103,443 87,410

Provisions 16,519 9,352

Total current liabilities 147,414 225,716

Total equity and liabilities 436,234 389,384

(12)

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

€’000 Share

capital

Total reserves

Retained

earnings Total equity As at 31 December 2004 74,177 18,294 18,397 110,828 Increase on issuance of new

shares 177 2,178 - 2,355

Cash flow hedging reserve - (451) - (451)

Translation gain for the period - 4,770 - 4,770

Movement in legal reserve - 670 (698) (28)

Other movements - 520 - 520

Dividend - - (44,506) (44,506)

Profit for the period - - 86,281 86,281

As at 31 December 2005 74,354 25,941 59,474 159,769

As at 31 December 2005 74,354 25,941 59,474 159,769 Cancellation of redeemed

shares (4,766) (59,709) (86,231) (150,706)

Cash flow hedging reserve - 857 - 857

Translation gain for the period - (4,835) - (4,835)

Release of translation reserve - 217 (217) -

Movement in legal reserve - 16 (16) -

Share incentive plan - 2,832 - 2,832

Dividend - - (53,535) (53,535)

Profit for the period - - 93,499 93,499

As at 31 December 2006 69,588 (34,681) 12,975 47,882

(13)

CONSOLIDATED CASH FLOW STATEMENT

€’000

2006 2005 2006 2005

Operating activities

Operating profit 42,979 39,086 127,055 106,746

Adjustments for:

Depreciation and amortisation 3,725 3,743 14,732 13,062

Share incentive plan 937 127 2,832 520

Foreign exchange gain/(loss) (1,138) (2,261) (4,732) (2,817) Profit (loss) on disposal of property, plant and

equipment (79) (2) (218) (1,045)

Operating profit before changes in working cap. 46,414 40,693 139,669 116,466 Decrease / (increase) in trade and other receivables 744 1,729 (12,694) (16,586)

Decrease / (increase) in inventory 7,021 4,694 2,827 (31,976)

Increase / (decrease) in trade and other payables 18,352 11,374 19,789 15,098

Cash generated from operations 72,531 58,489 149,591 83,001

Interest and bank charges paid (4,921) (2,093) (16,137) (9,611)

Income taxes paid (2,217) (2,676) (11,872) (9,950)

Cash flow from operating activities 65,393 53,720 121,582 63,440

Investing activities

Proceeds on sale of property, plant and equipment 213 (18) 443 1,630

Interest received 212 111 579 465

Purchase of property, plant and equipment (8,613) (20,083) (37,914) (37,815)

Purchase of intangible assets (836) (1,516) (2,592) (3,827)

Cash flow from investing activities (9,024) (21,506) (39,484) (39,547)

Financing activities

Funds received from refinancing and movement in

loans (25,884) (4,726) 133,169 41,088

Redemption of shares (2) - (153,434) -

Proceeds from issuance of share capital, exercised

options - - 2,729 2,355

Dividend paid, net (30) - (53,502) (44,460)

Cash flow from financing activities (25,915) (4,726) (71,037) (1,017)

Increase in cash and cash equivalents 30,454 27,488 11,061 22,876

Cash and cash equivalents at the beginning of the

period 31,464 22,645 50,895 26,814

Effect of exchange rate fluctuations on cash held (151) 762 (189) 1,205 Cash and cash equivalents at the end of the

period 61,767 50,895 61,767 50,895

(14)

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF ORIFLAME COSMETICS S.A.

1. Basis of preparation

The year-end consolidated financial statements of Oriflame Cosmetics S.A. have been prepared by

management in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union and the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC). The year-end consolidated financial statements have been prepared using the same accounting policies and accounting estimates as the consolidated financial statements for the year ended 31 December 2005, and should be read in conjunction with these statements.

2. Segment information

The primary and only segmentation of the business is cosmetics sales by geographical regions based on the Group's management and internal reporting structure. See tables on page 9.

(15)

CONSOLIDATED KEY FIGURES

2006 2005 2006 2005

Gross margin, % 68.2 67.8 69.1 68.3

EBITDA margin, % 17.0 17.6 15.8 15.7

Operating margin, % 15.4 16.0 13.8 13.9

Return on:

- operating capital, % - - 43.4 53.2

- capital employed, % - - 53.5 44.7

Net debt / equity 4.0 0.5 4.0 0.5

Net debt / EBITDA (LTM) 1.34 0.61 1.34 0.61

Interest cover¹ 8.8 18.7 7.9 11.2

Average no. of employees 5,842 5,283 5,610 4,961

1) Excluding exceptional items

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 minus cash and cash equivalents.

Interest cover

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

Net debt to equity

Net interest-bearing debt divided by equity.