New products drive profits at upbeat Nivea maker Beiersdorf
FRANKFURT (Reuters) - Beiersdorf (BEIG.DE), the maker of Nivea creams and lotions, said it was gaining market share from rivals as new products at its consumer and adhesives divisions boosted profits and prompted it to increase its outlook for the year.
Beiersdorf reported a 17 percent jump in third-quarter operating profit on Tuesday, year-on-year, after it said late on Monday that it was upgrading its sales and profit outlook for 2013.
"We increased market share in many countries, driven by successful product innovations in both divisions," Chief Executive Stefan Heidenreich said.
"In short, our brands are back."
Heidenreich said the Nivea in-shower moisturizer, a new range of anti-ageing creams and its deodorants had been standout sellers over the last few months.
While the consumer business, which includes the La Prairie skin care and Labello lip balm brands, accounts for 82 percent of sales, Beiersdorf also makes industrial adhesives used in cars, smartphones and tablet computers.
Heidenreich said a recovery in the automotive industry, especially in Germany and North America, and new consumer electronics products by Asian manufacturers had boosted business at the adhesives unit.
Beiersdorf's shares were up 5.5 percent at 73.52 euros ($99.33) at 1137 GMT, just off a record high hit earlier of 73.69 euros. They were the biggest gainer on the DAX index .GDAXI, which was down 0.4 percent. Shares in local rival Henkel (HNKG_p.DE), which reports next week, gained 1.5 percent.
Overall, Beiersdorf reported third-quarter earnings before interest and tax (EBIT), excluding one-off costs, of 216 million euros, exceeding the average forecast of 195 million by analysts in a Reuters poll.
"The results are good. They've caught the market on the back foot," said analyst Heino Ruland of Ruland Research.
Before Heidenreich took over in 2012, Beiersdorf had been losing market share to rivals in its home market of Europe and had failed to gain a foothold in China and the United States.
Under Heidenreich's restructuring plan, Beiersdorf has cut back on unprofitable consumer ranges, closed lower-margin adhesives businesses and introduced innovative new products.
The main rivals to the firm's consumer business also include L'Oreal (OREP.PA) and Unilever (ULVR.L). Beiersdorf expects the division's global sales to rise by 6-7 percent this year - which it said would take market share off rivals given that the market is expected to expand by 3-4 percent.
It said sales at its Tesa adhesives division were also expected to rise 6-7 percent this year, against market growth of 2-3 percent
Heidenreich said the group had gained around 3-4 market share percentage points at the consumer business in China this year and that in the United States, new product launches should drive growth next year.
Heidenreich left the door open for further possible increases in the firm's 2013 guidance. Beiersdorf increased its sales outlook twice in the last few months of 2012
"We are having a good run, but we try to be on the cautious side," he said. He said the group was also confident of a good end to the year in Europe.
At the adhesives division, core profit jumped to 57 million euros and sales rose to 269 million euros in the three months to end-September, against expectations for 35.7 million and 253 million in a Reuters poll.
Its consumer division reported sales of 1.24 billion euros in the quarter, just below the average forecast for 1.28 billion and in-line profit of 159 million.
($1 = 0.7402 euros)
(Reporting by Victoria Bryan; Additional reporting by Hakan Ersen; Editing by Maria Sheahan and Pravin Char)
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