Beiersdorf cosmetic sales stagnate, but Latin America continues to shine

By Simon Pitman

- Last updated on GMT

Related tags Business Marketing

Beiersdorf has announced preliminary full year sales showing a steady increase in group sales, driven by a strong performance in developing markets, but held back by a sluggish performance from the consumer division led by the Nivea brand.

Full year sales were up 2.1 percent on a like-for-like basis to reach €5.63bn ($7.30bn)compared to the figure for 2010, while the group’s nominal sales showed a slower rate of increase, up 1.1 percent.

The EBIT result was slightly down on the previous year, coming in at €646m, compared to €699m for 2010, while the EBIT margin was 11.5 percent, compared to 12.5 percent.

The results were boosted by efficiencies from a restructuring program that was implemented throughout the financial year, but impacted by slower sales results in the developed markets.

Restructuring Nivea brand takes effect

“We realigned and strengthened our Consumer business in 2011 by comprehensively streamlining our product assortment and thanks to the global marketing measures relating to the 100th anniversary of our Nivea brand,”​ said CEO Thomas Quaas.

The company said that sales for its all-important consumer products division were up by 1.1 percent to €4.69bn, a performance that reflected great disparity in its international markets.

Growth was headed up by the Latin American market, which the company described as ‘particularly strong’, while the performance in the United Kingdom and Russia were described as ‘extremely positive’.

Consumer sales take a dive in Europe

However, consumer sales in the other European markets showed a decline, while in the Africa/Asia/Australia market sales were said to be slightly up, mainly due to the re-organization of the business structure in China.

What boosted the slow performance on the consumer side was the continued growth of its tesa division, which produced industrial adhesives. Here sales were up by 7.9 percent for the year, to €937m.

Towards the end of 2011, Beiersdorf decided to build on the plan to streamline the Nivea brand, announced at the beginning of the year, by taking the step to restructure the company’s regional operations for the consumer business in an effort to increase margins.

Geographic restructuring of consumer division

“Optimally aligning our structures with the regions and markets will significantly increase our competitiveness in the future,” ​said Quaas.