Beiersdorf Jumps as Earnings Beat Estimates: Frankfurt Mover

Beiersdorf AG (BEI), the German maker of Nivea skin creams, rose to the highest in more than seven months in Frankfurt trading after earnings beat estimates, helped by growth in sales and profitability at the Tesa adhesives unit.

The shares gained 3.4 percent to 45.44 euros at the close of trading, the highest price since June 9. The stock’s advance was the steepest since November.

Adjusted earnings before interest and tax fell 7.6 percent in 2011 to 646 million euros ($842 million), the Hamburg-based company said today, beating the 624.1 million-euro average estimate of 24 analysts surveyed by Bloomberg.

Tesa’s like-for-like sales rose 7.9 percent, boosted by the provision of products for the Asian electronics industry and U.S. carmakers. The unit accounted for 17 percent of revenue, with the remainder coming from the consumer-products division, where the Ebit margin shrank to 11.4 percent from 12.7 percent.

A “regional realignment” of the consumer division will boost future profitability “considerably,” Chairman Thomas Quaas said in the statement. Quaas is due to be succeeded as chief executive officer in April by Stefan Heidenreich, who was hired by Beiersdorf from Swiss food company Hero AG.

The Nivea maker said in November that it would cut as many as 1,000 jobs over the next three years as it seeks to reduce expenses by 90 million euros annually by 2014.

The restructuring plan “is right on track,” said Klaus Kraenzle, an analyst at Silvia Quandt & Cie. in Frankfurt.

‘Bid Premium’

The shares trade at a multiple of 22.1 times estimated 2012 earnings, 29 percent more than the personal-care peer group, according to Simon Marshall-Lockyer, an analyst at Jefferies International with an “underperform” recommendation.

The share price “substantially reflects” a “bid premium given the very public overtures made to Beiersdorf by the likes of Procter & Gamble Co. over the past year and the continued conjecture in the financial press about possible interest from Colgate and Unilever,” Marshall-Lockyer wrote in a note.

Robert McDonald, CEO of Cincinnati-based P&G, said in September 2010 that Beiersdorf has a “terrific global brand” in Nivea. Maxingvest AG, which owns 50.5 percent of Beiersdorf’s shares, last year described speculation that it will sell the holding as “unfounded.”

Net income at Beiersdorf declined to 259 million euros in 2011 from 326 million euros a year earlier.

Revenue rose to 5.63 billion euros from 5.57 billion euros. Sales in the U.K. and Russia were “extremely positive, while other European countries did not match prior-year levels due to the streamlining of the product range,” the company said.

To contact the reporters on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net

To contact the editor responsible for this story: Sara Marley at smarley1@bloomberg.net

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