Beiersdorf Posts Strongest Annual Sales Growth in Five YearsMatthew Boyle
Beiersdorf AG, the maker of Nivea skin cream and Hansaplast bandages, reported its strongest annual sales growth since 2008, a sign the company’s strategy to focus on its biggest brands is paying off.
Revenue rose 7.2 percent last year, excluding acquisitions, disposals and currency shifts, the Hamburg-based company said today in a statement. That’s the biggest uptick since 2008, when sales on that basis rose 7.5 percent. The median estimate of 13 analysts surveyed by Bloomberg News was for a 7 percent gain.
Chief Executive Officer Stefan Heidenreich’s decision to focus spending on new-product development of the company’s largest brands is starting to show positive results. The CEO, whose contract was extended through 2019 today, has led Beiersdorf to develop items like Nivea in-shower skin conditioner, and he has shifted investment to faster-growing emerging markets as consumer spending remains under pressure in Europe.
The fourth quarter “was a strong close to a good year for Beiersdorf,” Sanford C. Bernstein analyst Andrew Wood said in a note. The consumer unit had “particularly strong growth, with sales in western Europe and North America picking up, although Eastern Europe and Latin America dragged.”
The shares rose 1.4 percent to 76.38 euros at 10 a.m. in Frankfurt, pushing the 12-month gain to 22 percent.
In November, Beiersdorf raised its annual sales forecast because of stronger-than-expected growth at Tesa, which produces adhesive tapes for the electronics and automotive industries. The company generates more than 80 percent of sales from consumer brands including Eucerin and La Prairie, which both posted “strong growth,” the company said.
“2013 was an important and successful year for our group,” the CEO said in the statement, describing last year’s growth as “excellent.”
Organic sales rose 7 percent at the consumer division and 8.4 percent at the Tesa adhesives unit.
Revenue in 2013 rose 1.7 percent to 6.14 billion euros ($8.4 billion), the company said today. That compares with the 6.19 billion-euro median analyst estimate. The company also reiterated its forecast for earnings before interest and taxes of about 13 percent of sales.
The CEO’s contract extension “further emphasizes that the Herz family has no interest in disposing Beiersdorf and is clearly planning many years in advance,” Wood said. “Investors who are hoping that Beiersdorf might eventually be sold could be somewhat disappointed by this announcement.”
The German billionaire Herz family controls about 50 percent of the company.
The company is expected to report more detailed 2013 financial results March 4.