Beiersdorf posts positive results despite Western Europe dip
The German company increased both its sales and earnings, and gained market share in what it said was its ‘best-ever result for the first six months of a year’, with organic Group sales climbing 1.4% to €3.402 billion.
“Beiersdorf has continuously increased its effectiveness over the past months. At mid-year, we have exceeded last year’s excellent results,” says Stefan F. Heidenreich, CEO of Beiersdorf AG.
“Our business strategy has proven itself in a challenging market environment. We are expecting further accelerating growth in the second half of the year.”
Europe a ‘mixed bag’
Consumer division sales in Western Europe, which accounts for more than a third of group sales and comprises of the cosmetics businesses such as Nivea, La Prairie, and Eucerin, were down on last year slightly, most notably in Germany, Switzerland and Italy.
However this was offset by strong sales in Russia as well as Eastern Europe and the Americas. Demand for skin and hair care products in Russia is soaring, according to the cosmetics manufacturer, which says that a similar thing is happening in the US.
While Eastern Europe delivered sales growth of 6.4%, sales in Western Europe were down 1.4% on the previous year.
Beiersdorf recorded a significant increase in sales in the Americas region, at 8.3%, with sales rising by 4.5% in North America and by 10.7% in Latin America.
Sales in the Africa, Asia, and Australia region grew by 0.6% at the end of the first half of the year, following a decline in sales in the first quarter, as India performed well and business in China stabilized.
Another factor which has been hindering some, but certainly benefitting Beiersdorf is the weaker euro, which has lifted its results.
The Hamburg-based company sees a lot of its sales come from outside the euro zone while its production costs are mostly in euros, which has had a positive effect on results.
Beiersdorf has also been pushing its suppliers to cut prices, an activity which it says “are progressing well and are continuing in 2015," in a statement.
The company says it expects sales to increase by 3–5% in financial year 2015 and the Group’s EBIT margin from operations to slightly exceed last year.