Beiersdorf profits tumble but results beat expectations

By Simon Pitman

- Last updated on GMT

Related tags Marketing

Beiersdorf is still reeling from the downturn in its non-personal care operations, but the improvement in the group’s business operations overall is quicker than expected.

The company’s third quarter group sales fell by 3.4 per cent to €1.41bn, but this represented a positive trend compared to the first two quarters of the year, when sales were hit hard by the economic downturn and resulting slowdown in retail sales.

The underlying improved performance in the last quarter has been driven by improved results in the domestic market in Germany, together with double digit growth in China, Brazil and the rest of Latin America.

Net profit falls, but beats expectations

Net profit for the period fell by 10 per cent to €98m, but this figure was above market expectations, with the average of five analysts polled by Bloomberg expecting a figure of €89.2m.

The investment world reacted positively to the results, with share prices rising over 3 per cent on the Frankfurt Stock Exchange yesterday, to €42.77.

Encouraged by the results, CEO Thomas Quaas said that he was raising the outlook for both its consumer and tesa adhesives businesses.

Company raises full year outlook

“Despite the ongoing, but different difficulties in their respective market environments, both Consumer and tesa will grow faster than the market, as planned, and will gain market share,”​ Quaas said.

The company is now expecting that the EBIT margin for the consumer business will grow by 11 per cent this year, while the margin for the tesa business is expected to grow by 2 per cent.

In the first nine months of the year, group sales fell by 4.3 per cent to €4.35bn, a figure that represented a decline of 1.7 per cent in organic sales.

Organic sales increase for consumers business

However, the nine month results for the company’s mainstay personal care operations, which account for around 90 per cent of total sales, represented organic sales growth of 0.9 per cent compared the corresponding quarter last year.

For the full year 2009 the company expects that sales in its consumer business will continue to grow ahead of the market, and that sales will be slightly ahead of those last year.

This performance will not be mirrored by the tesa business division, which has been hard hit by reduced demand from manufacturers, particularly as sales are already down by 16.9 percent for the first nine months.

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