Beiersdorf profits up but European consumer sales fall

By Simon Pitman

- Last updated on GMT

Related tags Eastern europe Europe

Beiersdorf first half results reveal that while industrial sales and growth in the Americas are on track, consumer sales in Europe remain hard hit by the tough retail environment.

The company said that group sales for the first half of 2010 jumped by 7.8 per cent at current exchange rates to €3.17bn, compared to €2.94bn in the corresponding period last year.

This figure represented a gain of 4.5 per cent after the sales figure was adjusted for currency translation, and the same increase for organic sales.

For the period the operating profit rose from €291m to €385m, increasing the EBIT margin from 9.9 per cent to 12.2 per cent.

Adhesive looks good, consumer division is mixed

The latest quarterly and first half figures compared favourably against a difficult first half of 2009, when all the company’s business divisions showed declining sales, with its industrial adhesives business particularly hard hit.

This year's gains in the Tesa industrial adhesives business reflected well on the low comparisons for last year, with sales increasing just over 18 per cent to €429m, but the comparisons for the personal care-focused consumer segment revealed a big division in global markets.

Most worrying was a drop of 2.3 per cent in sales for the domestic Germany market, although the company pointed to difficult comparisons, as sales had risen significantly in the first half of 2009.

Eastern European sales showed mixed picture

In the rest of Europe, first half sales remained stagnant at €975m, while in Eastern Europe, sales fell by 3.4 per cent in organic terms to €301m.

The figure reflected a weak economy in the region, despite the fact that in Russia sales growth registered double-digit figures.

Elsewhere, the Latin and North American markets boosted the consumer division significantly, with both markets registering organic sales growth in excess of 15 per cent.

“The performance of our Consumer business in the individual regions was mixed,” ​said Beiersdorf CEO Thomas Quaas in a statement. “Overall, they are not yet back on the dynamic growth path of recent years.”

Looking ahead to the full year, the company said that it was sticking to its aims to achieve sales growth ahead of average market growth and to increase the EBIT margin above 11 per cent.

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