Nivea maker Beiersdorf sees sales growing faster than market

FRANKFURT Wed Aug 7, 2013 7:28am EDT

Nivea products of German company Beiersdorf AG are pictured in Hamburg, October 31, 2012. REUTERS/Fabian Bimmer

Nivea products of German company Beiersdorf AG are pictured in Hamburg, October 31, 2012.

Credit: Reuters/Fabian Bimmer

FRANKFURT (Reuters) - Nivea skin cream maker Beiersdorf AG (BEIG.DE) said it planned to outperform rivals in 2013, predicting sales growth of between 5 and 6 percent as new shower and anti-ageing products help it gain market share.

Under Chief Executive Stefan Heidenreich, the Hamburg, northern German-based company has cut back on some areas like make-up but has brought out new products, such as a moisturizer that can be used in the shower, a stress-busting deodorant and an anti-ageing skincare range.

Beiersdorf said these products helped it gain market share in its consumer business, which brings together brands like Nivea, La Prairie, Eucerin and Labello, and Heidenreich said on Wednesday more new product launches would follow in 2014.

Still, he said the group was taking a cautious stance on the second half year after rivals spoke of slowing emerging markets and southern Europe remained weak.

In the first half, sales rose 6.6 percent adjusted for currency effects, but Heidenreich saw some clouds ahead. "Markets are still sluggish, we see some risk on the horizon for emerging markets, as indicated by competitors," he told analysts.

Rival Unilever Plc (ULVR.L) last month reported second-quarter results just shy of forecasts and said growth in emerging markets was slowing.

Nevertheless, Heidenreich said Beiersdorf was not yet affected and said hot weather across Europe was helping it sell suntan lotion as well as deodorants and shower gels.

CONSUMER DISAPPOINTS

The outlook for its consumer division, which accounts for 83 percent of sales, disappointed some, however, and its shares, which trade at a premium to rivals, were down 3.4 percent at 68.10 euros by 1030 GMT. The stock has risen steadily through the past two years and recently hit a record 73.45 euros.

For its consumer division, Beiersdorf forecast sales growth of between 5 and 6 percent and said its EBIT margin - earnings before interest and tax (EBIT) as a percentage of sales - should exceed 12 percent. The consensus forecast was for sales growth of above 6 percent and a margin of 13.1 percent.

"Beiersdorf is the most expensive stock in European health and personal care. While (adhesives unit) Tesa pleased, we think the stock performance is likely to be hit by the miss in consumer and the lukewarm outlook for that division," JP Morgan analysts wrote in a note to clients.

The company trades at around 27 times 12-month forward earnings, according to Thomson Reuters StarMine, compared with a multiple of 17 for Henkel (HNKG_p.DE), 17 for Reckitt Benckiser (RB.L) and 24 for L'Oreal (OREP.PA).

For the group as a whole, Beiersdorf also said sales will rise 5 to 6 percent in 2013, adding it was aiming for an EBIT margin of 12 to 13 percent. On average, analysts in a Reuters poll had expected sales growth of just over 4 percent and an EBIT margin of 13.06 percent.

Beiersdorf said second-quarter sales rose 3.7 percent to 1.59 billion euros and earnings before interest and tax (EBIT) before special items reached 219 million, against expectations for 1.63 billion and 218 million respectively in a Reuters poll.

($1 = 0.7513 euros)

(Additional reporting by Sudip Kar-Gupta; Editing by Louise Heavens and David Holmes)

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