Beiersdorf outlook positive as earnings beat estimates thanks to new products

By Andrew MCDOUGALL

- Last updated on GMT

Beiersdorf outlook positive as earnings beat estimates thanks to new products

Related tags Marketing

Beiersdorf posted earnings that beat estimates thanks to new products and higher prices, leading to the Hamburg-headquartered firm raising its profit guidance for 2015.

The Nivea skin care maker increased both its sales and earnings, and gained further market share in the third quarter, with sales rising by 6.8% in nominal terms, from €4.716 billion to €5.035 billion, and earnings before tax and interest increasing by 11.9%, from €671 million to €750 million; a 14.9% margin improvement.

Innovations drive growth

Much of the Group’s improvement was driven by its consumer division, which accounts for about 80% of sales, and Nivea skin care once again proving to be a highlight.

"We have gained significant momentum over the past few months and delivered further increases in sales and earnings. That was our aim and we achieved it,”​ says Stefan F. Heidenreich, CEO of Beiersdorf AG.

“At the same time, we made Beiersdorf more resilient, putting it on a sustainable, profitable growth path. We are growing against the market trend and are advancing our position even under challenging conditions,” ​adds the man who has overseen many product innovations in his time at the company, particularly for the Nivea brand.

One such innovation was the launch of a disposable razor to rival Procter & Gamble and Energizer in this space.

The product was launched in Austria and later Germany this year, impressing Heidenreich with its performance as it attempts to chip away at a market dominated by Gillette and Wilkinson Sword, and leading Beiersdorf to consider expanding beyond disposables.

Elsewhere in the Consumer business segment, the upward trend continued with sales growth of 3.2% at the end of the third quarter, after being at 1.6% growth at the mid-year stage.

In nominal terms, sales rose by 6.8% to €4.172 billion, with EBIT increasing by 13.8%, to €602 million.

Russia strength

In Europe sales were up 1.1% despite challenging market conditions, with Western Europe sales down 0.4%; but business in Eastern Europe expanded sharply, with sales growing by 7.3%, with Russia the standout performer.

Elsewhere, big Latin America increases (13%) helped the Group post a significant increase in sales in the Americas region, at 9.9%.

Following its third quarter results, Beiersdorf has raised its 2015 forecast and expects sales to increase by 3-4% for the rest of the year and for its EBIT margin from operations to significantly exceed last year.

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