Beiersdorf expects consumer demand to increase in final quarter

In a tough economic climate that has affected all of the industry’s big players, Nivea skin care maker Beiersdorf expects consumer demand to return having posted its third quarter results.

Europe, which contributes to more than 55% of the group's sales, has been tough for most manufacturers, with the likes of L'Oreal and Unilever also finding it tough because economic growth is weak in the region, and weakness is also now evident in emerging markets such as China, which had been more buoyant.

"The economic slowdown does not take us by surprise," Chief Executive Stefan Heidenreich said on a conference call.

Organic Group sales for Beiersdorf climbed 4.3%. In nominal terms, sales increased by 0.9%, from €4.674 billion to €4.716 billion; with both the Consumer Business Segment and tesa contributing to this achievement.

Strategy

The Consumer Business Segment generated organic sales growth of 4.2% in the reporting period. Nivea achieved growth of 5.7%, Eucerin delivered 6.7% growth and La Prairie 4.0%.

"Our results for the first nine months show that Beiersdorf is well positioned and 'weatherproofed' even for stormier periods,” adds Heidenreich.

“Our business strategy, the Blue Agenda, is working - even in a more difficult market environment. This applies to the continuous strengthening of our brands, our focus on expanding our presence in the emerging markets, and above all to our investments in innovative products.”

Beiersdorf also says it still expects its full-year margin - operating profit as a percentage of sales - above 13%, partly on the back of expectations for an increase in consumer spending in its home market Germany.

"In Germany, we are assuming higher growth than in the rest of Europe in the current year, driven by consumer spending and capital expenditure," Beiersdorf said, referring to macroeconomic developments.

Global

In Europe, sales grew by 1.8%. The growth rate in Western Europe was 1.0%. In Eastern Europe, Beiersdorf generated sales growth of 5.1%.

Sales in the Americas region also performed well, with growth amounting to 5.4%. Latin America saw a 6.5% increase in sales. In North America sales growth of 3.6% was achieved.

Beiersdorf further increased sales in the Africa/Asia/Australia region, which saw a rise of 8.5% despite a slowdown in economic growth in some markets in the past few months.

As such, the company is expecting sales growth in the Consumer Business Segment to outperform the market in financial year 2014, at 4-6%.