Beiersdorf upgrades sales outlook and confirms acquisition trail

By Simon Pitman

- Last updated on GMT

Related tags: Personal care, Sales growth, Bric

The global personal care player released audited figures that
confirm a strong performance during 2006, giving the company reason
to upgrade its outlook for 2007 and reconfirming that it is on the
acquisition trail.

Beiersdorf said that it was expecting sales to grow for 2007 at between 7 – 8 per cent, in line with sales growth for 2006, but also said that net income was likely to be impacted by $100m in charges relating to the restructuring programme it instigated in 2005. But given the relatively strong sales growth and the expected gains from the restructuring, company CEO Thomas Quaas said he believed that the company was in good shape and was in a strong position to grow further. Indeed, speaking on the sidelines of the company's news conference, Quaas told Reuters that he wanted to buy 'quality' cosmetic and beauty companies in an effort to further strengthen the company's business portfolio. The CEO's comments back up previous claims that the company wants to make further acquisitions and it is believed that that it has approximately €2 billion set aside for this purpose. However, Quaas was not specific about what type of company he was aiming to buy. Given the intense consolidation that has been undertaken in the more developed sectors of the personal care industry, experts believe that opportunities for the company will be few and far between. In its audited results the company confirmed that sales increased by 7.3 per cent in 2006 to reach €5.12bn, while net profits rose from $335m in 2005 to reach $387m. Again the company also confirmed that the BRIC countries – Brazil Russia, India and China – have given rise to significant growth during 2006, with sales for the four countries as a whole up 25.3 per cent. In particular China has shown phenomenal growth. Currently Euromonitor estimates that the personal care sector is growing at 15 per cent per annum, a figure that Beiersdorf managed to shatter with growth of 47 per cent in 2006, thanks mainly to a major deal in the hair care segment. These results from the developing markets cushioned a more subdued growth in western Europe. The company's mainstay market recorded sales growth of 6 per cent.

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