Aug 4, 2011
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Beiersdorf sees 2011 sales up as Nivea revamp works

Aug 4, 2011

August 4 - Beiersdorf reported a return to growth at its core consumer division in the second quarter as a massive marketing drive to entice customers back to its Nivea skincare brand took effect.

Beiersdorf, Nivea
The "Nivea-House" in Hamburg

Beiersdorf, which has launched a 100th anniversary campaign for Nivea featuring singer Rihanna, said sales at the consumer division rose 1.6 percent after having fallen by the same percentage in the first quarter.

Shares in the group jumped 5.6 percent to head the Dax blue-chip index , trading at 45.01 euros at 0918 GMT.

The group, whose other brands include luxury skincare line La Prairie and Labello lip balm, also tweaked its sales guidance for the year, saying it now expects slight sales growth, compared to a previous guidance for flat revenues.

"The Nivea turn-around story (is) clearly on track," said Nomura analyst Guillaume Delmas, adding that the group's 2011 guidance now looks conservative as it implies a fall in second-half organic sales of 1.4 percent.

The company said higher-margin suncare products and good deodorant sales also helped to make up for its decision to stop selling Nivea make-up as part of plans to rejuvenate sales and profits.

Chief Executive Thomas Quaas said he had not noticed any significant impact on the company's sales in those European countries that are struggling with debt crises.

"Of course business is not exactly amazing, but we are not seeing any massive slumps either," he told journalists, referring to Greece and Italy.

Beiersdorf was losing market share last year and has set aside 270 million euros ($384.8 million) in a turnaround package to invest in skincare and strip out unprofitable make-up and haircare lines, plus a 1 billion euro marketing budget for Nivea in 2011.

In the second-quarter, sales rose to 1.495 billion euros, while comparable earnings before interest and tax (EBIT) fell 8 percent to 183 million euros.

Analysts were expecting second-quarter sales of 1.48 billion euros and comparable EBIT of 172 million, according to a Reuters poll.

At adhesives business Tesa, which accounts for 15 percent of revenue, underlying earnings fell to 27 million euros from 33 million, hit by strong rises in input materials such as oil and plastic, as well as supply chain bottlenecks.

Quaas said he was seeing no easing in the pressure on Tesa.

(Reporting by Victoria Bryan; editing by Sophie Walker)

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