Nivea maker Beiersdorf boosted by Asian skin care growth
By Kirsti Knolle
FRANKFURT (Reuters) - Nivea skin cream maker Beiersdorf AG reported a forecast-beating 9 percent rise in first-quarter operating profit on Thursday, helped by strong demand for its skin care products in Asia and its industrial adhesives.
In the three months through March, earnings before interest and tax (EBIT) increased to 235 million euros (193 million pounds), ahead of the average forecast of 224 million in a Reuters poll of analysts.
Beiersdorf has stripped out underperforming lines to focus on its main skin care brands, which also include Eucerin and La Prairie, as well as focusing on new products at its glues division. The strategy has helped it gain market share and boost sales growth.
The German company's consumer division, which accounts for about 80 percent of group sales and includes its skin and hair-care brands, saw 17.5 percent sales growth in the combined Africa, Asia and Australia region.
In China, a market where Beiersdorf lost millions in recent years, the group broke even in the first quarter, Chief Executive Stefan Heidenreich said.
Group quarterly sales were curbed by the strong euro, edging 1.2 percent higher to 1.60 billion euros, the company said, but excluding currency effects, sales increased 6.7 percent.
In consumer products, currency-adjusted sales grew 6.3 percent to 1.32 billion euros.
That was higher than growth rates posted by rivals Unilever, L'Oreal and Henkel, said UBS analyst Eva Quiroga.
"What is not quite that good is its (regional) composition, as Europe remains a drag at a time when L'Oreal's momentum is improving," Quiroga wrote in a note to clients, referring to just 0.9 percent sales growth in western Europe.
Beiersdorf forecast an improvement in the second quarter. "Western Europe will come back to strength very shortly," Heidenreich said on a conference call.
Consumer sales in North America increased 7.5 percent as Beiersdorf benefited from a strategy change towards more skin products designed to ease the effect of cold weather, Heidenreich said.
At the company's Tesa unit, which makes industrial adhesives used in cars, smartphones and tablet computers, adjusted sales increased 8.7 percent to 273 million euros.
Beiersdorf maintained its forecast for full-year sales to rise by between 4 and 6 percent from last year's 6.14 billion euros and for its EBIT profit margin to be slightly above the 2013 level of 13.2 percent.
The shares initially spiked to a two-month high of 72.91 euros but backtracked to be down 1.1 percent at 71.87 euros by 1314 BST, with traders saying the market had already priced in the company's brighter prospects.
($1=0.7183 euros)
(Reporting by Kirsti Knolle; Editing by Greg Mahlich and David Holmes)
