October 26, 2017 / 6:21 AM / 10 months ago

Nivea maker Beiersdorf outshines rivals with sales surge

FRANKFURT (Reuters) - Long-lasting Nivea body milk and other new products helped Beiersdorf (BEIG.DE) beat quarterly sales forecasts and raise its full-year target on Thursday, boosting its shares.

FILE PHOTO - Nivea tins are seen in a production line at the plant of German personal-care company Beiersdorf in Hamburg, Germany March 3, 2017. REUTERS/Fabian Bimmer/File Photo

Third quarter figures from the German consumer goods company contrasted with weaker-than-expected quarterly sales at Unilever, whose Dove products compete with Nivea, as well as Britain’s Reckitt Benckiser.

“After being off the radar for most of the year, we believe these strong numbers will make the market sit up and take notice,” Morgan Stanley analysts said.

Beiersdorf’s organic sales, excluding exchange rate effects as well as the impact of acquisitions and divestments, jumped 8.6 percent in the third quarter, according to analysts’ calculations based on nine-month data.

That was well above analysts’ average forecast of 5.4 percent, helped by successful new products and growth in Asia, especially China.

The Hamburg-based company said it now expected sales to grow 4-5 percent this year, up from 3-4 percent previously and compared with analysts’ estimate of 4 percent in a Reuters poll.

Beiersdorf shares jumped as much as 6.3 percent to a four month high of 96.66 euros, and were the highest risers on Germany's blue-chip DAX index .GDAXI.

Bernstein Research analyst Andrew Wood said an acceleration of Beiersdorf’s consumer sales “puts Unilever’s insipid (personal care) growth into perspective”.


Beiersdorf Chief Executive Stefan Heidenreich said investments in new products, which also include Hansaplast plasters, were now filtering through to revenues.

The group has also just launched a skin care line targeting young, urban consumers.

“We are launching many more things in the coming months ... And you will see in the coming years more bigger hits from us,” Heidenreich told analysts during a conference call.

Heidenreich took over as CEO in April 2012, at a time when the group was losing market share to rivals such as L’Oreal and profit margins were falling. Under his leadership, Beiersdorf introduced a new Nivea logo, focused on emerging markets, stripped out underperforming lines, and regained market share.

Third quarter sales were helped by double-digit growth in the Africa/Asia/Australia region, which accounts for nearly a third of group revenue.

“Business is good in India, China, Japan. It seems we have planted some good roots in the past that are now more and more paying off,” Heidenreich said.

In China, Beiersdorf has focused on boosting online sales, which Heidenreich said had lifted revenues there, without providing details.

Beiersdorf reiterated its full-year guidance for a slight rise in its operating profit (EBIT) margin.

Editing by Jason Neely and Mark Potter

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