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Beiersdorf announces strong results for 2006

By Louise Prance , 11-Jan-2007

The Beiersdorf Group, makers of Nivea skin creams, has announced preliminary high sales growth lead by sales in the group category.

Overall operating earnings rose to €590 million in 2006, an 11 per cent increase from the like for like period in 2005, with group sales up 7.2 per cent to a record €5.1 billion from €4.7 billion last year.

The figures exclude implementation expenses for the realignment of the consumer chain supply, which reached €120 million, and income before tax from the sale of BNI Medical that totaled €371 million.

Consumer sales increased by 7.1 per cent to reach €4.33 billion, from €4.04 billion last year, with adjustments for currency translation effects creating an increase of 7.2 per cent.

The German based company has stated that it has enjoyed high sales growth in the consumer segment due to interest for its own brand anti-aging creams from outside Western Europe, including Eastern Europe, Latin America, Africa, Asia and Australia.

The company implemented many cost saving strategies last year, including the announcement in In July 2006 that it was putting up for sale a soap production facility in Hirtler, Germany. The move put 93 jobs in the balance but the company said that it was hoping another personal care company would buy up the facility and retain the staff.

This followed news in March this year that the company was considering the possible closure of manufacturing facilities in Sweden, Belgium and the Netherlands, with the potential loss of 400 jobs.

The company suggested that these savings would then be channeled into investing in the company's core brands, particularly in developing markets. Its ultimate aim to achieve a 5.5 per cent slice of the global market for personal care products by the year 2010, with growth particularly focusing on the markets of China, India, Brazil and Eastern Europe.

Thomas Quaas, executive board chairman, said that the company is looking to build on both its sales and EBIT margins during the course of the coming financial year.

As a result he has underlined three core areas that will be given special attention in the future, including increasing critical consumers, competing against an increasingly aggressive competition and the area of private labels.

The recent results will be fully audited and approved by the company's supervisory board by the end of February.

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