Beiersdorf, which is a manufacturer and developer of leading cosmetic and toiletry brands such as Nivea, Atrix, Eucerin and Juvena is due to reveal the third quarter results tomorrow, 10 November, at a conference in Hamburg. The event will be followed by an analysts' meeting in which the group's performance will be discussed in greater detail.
However UK-based analysts Goldman Sachs has already said that, on top of a slack German market, the general situation for personal care products in Europe as whole does not look terribly positive, adding further cause for caution.
"At the group level, we expect declared sales to increase by 2.8 per cent to €1,099 million (from restated numbers), an increase of 3.2 per cent on a like-for-like basis," a Goldman Sachs statement said. "We forecast group EBIT to increase by only 2.9 per cent to €120 million in the quarter, partly to reflect the likely higher investment to support sales in this tough environment."
The analyst group also said that the company's net profit were expected to grow 14.2 per cent to $74 million, helped by a lower tax rate.
Referring specifically to the European results, Goldman Sachs said that it anticipated a 5 per cent drop in sales growth for the region as it sees no improvement in the trading conditions. Conversely, a 6 per cent growth in sales was forecast in the Asian, Australian and Africa markets, while a more steady 2 per cent growth was forecast for the US market.
The predictions buck the recent trends of many leading players in the global personal care market. Only last week, company's such as Avon, Unilever, and P&G were reporting relatively stable conditions in their European market and earmarking the US market as being particularly slow.
Looking to the future Goldman Sachs said that Beierdorf's performance in the European market is likely to be affected by many of its leading brands coming under fierce competition from rival US companies. If Beierdorf joins in with the discounting it will undercut sales margins. If it does not discount, sales are likely to be impacted.
On top of this Goldman Sachs also said that the company's decision whether or not to make future acquisitions in the US market is also likely to impact future results.