Beiersdorf reports sales up but profits down for first half

The owner of the global Nivea brand said that sales rose by 2.6 per cent, up from €2.90bn in the corresponding quarter last year to €3.06bn, a figure that represented a 5.5 per cent in nominal terms.

The company said that the driving force behind the gains in revenue were primarily down to its performance in emerging markets, particularly in Eastern Europe, Latin America, whereas the Africa, Asia and Australia market saw the biggest gains, mainly down to recovery in the China market.

Russia, China and Brazil lead the way​

In Eastern Europe sales were up by 8.1 per cent mainly driven by increases in Russia, whereas as sales rose by 14.3 per cent in Latin America, driven by a robust performance in Brazil, and by 9.6 per cent in the Africa, Asia and Australian market.

These results helped to counterbalance significant sales declines in the mainstay Western European market, together with a smaller decline in the North American market.

In Western Europe sales were down by 4.0 per cent and 2.2 per cent in the domestic market of Germany, whereas sales fell by 2.0 per cent in North America.

Focus on core brands Eucerin, Nivea and La Prairie pays dividends​

The company reported a significant increase in its core brands, which were the subject of a significant restructuring programme implemented last year, aimed at re-aligning the portfolio and making it more profitable.

Reflecting the success of this strategy, the company reported that global sales for the Nivea brand were up 4.4 per cent, the Eucerin skin care brand up 3.1 per cent and La Prairie up 2.7 per cent

While the operating profit (EBIT) rose by 11.6 per cent to €390m, the company said that its profit after tax was down slightly, from €258m in the corresponding period last year, to €256m.

Steady progress was also reported for the company’s adhesives business, Tesa, with sales up 3.5 per cent to €501m, an increase of 6.5 per cent in nominal terms.

Full year results remain on track​

“The numbers reflect the first fruits of Beiersdorf’s strategic realignment,”​ said Stefan Heidenreich, company Chairman of the Executive Board.

“They show that we can generate profitable growth even under difficult macroeconomic conditions. We are on the right track with our moves to strengthen our brands and innovative capabilities, as well as expanding our presence and impact on the emerging markets.”​

Looking ahead to the full year 2012, the company says that it expects both group and consumer division sales for the year to grow by 3 per cent, whereas the group’s EBIT margin should be around 12 per cent.