Beiersdorf AG (BEI), the maker of Nivea skin creams, said third-quarter profit fell 25 percent as costs rose and Europeans bought fewer personal-care products.
Net income declined to 76 million euros ($104.8 million) from 101 million euros a year earlier, the Hamburg-based company said today in a statement. That trailed the 78.2 million-euro average estimate of eight analysts surveyed by Bloomberg. Revenue fell 0.6 percent to 1.37 billion euros.
Revenue in Europe, Beiersdorf’s biggest market, declined 3 percent during the quarter. The company expects the economic situation in the region to remain “extremely mixed” and growth in countries hardest hit by the financial crisis to be below average. Beiersdorf is reducing its range of beauty products to focus on skincare, including sun-protection creams. The company is also spending more on marketing.
“The long wait for a recovery, hopefully in 2012, continues,” wrote Andrew Wood, an analyst at Sanford C. Bernstein, in a research note.
Beiersdorf shares rose 1.7 percent to 40.96 euros at the close of Frankfurt trading.
The company reiterated its guidance for the year, saying revenue will show a “slight” increase and operating profit before interest and taxes will amount to 10 percent to 11 percent of sales. The company said in August a return to “noticeable” growth would take until next year.
No 2012 Guidance
Beiersdorf won’t provide guidance for 2012 until March because of the “considerable uncertainty” over next year, outgoing Chief Executive Officer Thomas Quaas said on a conference call. Stefan Heidenreich will replace him next year.
Sales in the Americas rose to 251 million euros during the third quarter, while revenue from Africa, Asia and Australia increased to 319 million euros. Beiersdorf is betting on faster- growing economies such as China where rising incomes fuel demand for personal-care products.
Revenue at Beiersdorf’s consumer business fell to 1.14 billion euros during the third quarter from 1.16 billion euros a year earlier. Beiersdorf said in August it plans to scale back the 500 Nivea products offered in Europe by 19 percent. The company said today it had completed 90 percent of planned product trimming by the end of September. Revenue at Beiersdorf’s Tesa consumer- and industrial-adhesives division increased to 235 million euros.
The company has said it anticipates reorganization costs of about 270 million euros in the two years through 2012 related to advertising spending and a reduced value of a hair-care business in China.
Maxingvest AG, the Herz family investment vehicle that controls the Tchibo coffee retailer, said in January that it considers Beiersdorf a “long-term investment.” The company has roots going back to an 1882 bandage patent and has used the blue-and-white packaging for which Nivea is known since 1925.
To contact the reporter on this story: Dermot Doherty in Geneva at firstname.lastname@example.org
To contact the editor responsible for this story: Celeste Perri at email@example.com