Solid results prompt Beiersdorf to up full year expectations

By Simon Pitman

- Last updated on GMT

Related tags: Cent, United states, Nivea

Despite the lull in its domestic market, German personal care
player Beiersdorf has revealed steady results for the first nine
months of the year, prompting the company to increase its
expectations for full year sales.

In the nine months up to September, the company revealed that its sales grew 3.3 per cent to reach €3.45 billion compared to the same period, while net income increased 12.1 per cent to reach €263 million.

The company said that they were encouraged by the results, prompting it to state that it now expected the increase in turnover to exceed the 7 per cent figure it had predicted at the start of the financial year. This means that turnover should exceed €2.5 billion in 2005.

Beiersdrof​ said that its European sales for the period had increased by 2.8 per cent to €2.25 billion, reflecting the sluggish nature of leading retail markets such as France and Switzerland.

In Germany sales increases by 1.3 per cent, despite challenging retail conditions there. The company said that here Nivea For Men, Nivea Sun and Nivea Deo all did particularly well, however exports from the German market dropped by 2.3 per cent.

Elsewhere, results in Europe were said to be 'very mixed'. In the Eastern European regions sales grew by 11.6 per cent, reflecting particularly strong results in Russia.

A strong result was also posted in Spain, where the Nivea body and Nivea For Men ranges proved popular, and in Portugal where Nivea Visage and Nivea Vital ranges proved successful.

However, both the Switzerland and France proved to be disappointing, with results down on last year. In particular the company said that highly competitive retail conditions in Switzerland has squeezed margins.

In the Americas sales grew by 2.4 per cent to reach €423 million, again reflecting a mixed market that highlights a divide between the ultra-competitive retail conditions in the North American market and the tremendous growth being experienced in the South American market.

Sales in North America fell by 2.2 per cent because of the tough competition, but in Latin America sales were up 9.9 per, reflecting particularly strong performances in Brazil, Chile, Venezuela and Argentina.

The strong performance in the developing markets continued into the Africa, Asia and Australasia region, where sales were up 9.8 per cent. This mainly reflected a tear away performance in the China market where sales grew by 50 per cent, mainly due to the success of the Nivea For Men and Nivea Sun ranges.

Considering its steady performance and the increase in projected sales for the full year, the company says it is also expecting its EBIT margin to increase to 11 per cent, while the return on sales after tax should come in at 7 per cent.

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