Beiersdorf Quarterly Profit Beats Estimates on Emerging Markets
Adjusted earnings before interest and taxes rose to 219 million euros ($291.4 million) from 191 million euros, the Hamburg-based company said in a statement today. That beat the 215.5 million-euro average estimate of 15 analysts surveyed by Bloomberg.
Chief Executive Officer Stefan Heidenreich is investing in China, Brazil, Russia and other emerging economies, where the company now gets almost half of its revenue, as government austerity measures weigh on consumer spending in western Europe. Europe’s economy, which has contracted for six straight quarters, probably had stagnant growth in the three months through June and will return to expansion this quarter, according to a Bloomberg survey of economists last month.
Under Heidenreich, who has been CEO since April 2012, Beiersdorf is focusing on large innovations and its main product lines to drive growth as part of the “Blue Agenda” reorganization, which takes its name from the company’s trademark Nivea packaging.
“The systematic implementation of our Blue Agenda over the last twelve months has given Beiersdorf a clear boost,” said Heidenreich. “We are becoming increasingly better at translating the potential of our brands and our company into economic success.” The company forecast sales growth of between 5 percent and 6 percent this year.
Heidenreich dropped singer Rihanna from Nivea’s advertisements last year as he vowed to return the brand to its roots. This year, the company introduced a skin conditioner across Europe under the Nivea brand to win over women who don’t moisturize daily and redesigned its Nivea Men brand. Nivea’s sales gained 6.8 percent in the first half, Beiersdorf said today.
Beiersdorf’s second-quarter sales increased 3.7 percent to 1.59 billion euros. A revenue decline of 1.6 percent in Europe was offset by a sales jump of 19 percent in Africa, Asia and Australia. Revenue at the consumer unit, which accounted for almost 84 percent of annual revenue last year, gained 3 percent.
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