Beiersdorf: Profit forecasts raised as third-quarter earnings beat expectations

Beiersdorf: Profit forecasts raised as third-quarter earnings beat expectations

The Nivea skin care brand has long been a successful brand under the Beiersdorf portfolio, and it has once again helped the company, which has raised its full year profit guidance after third-quarter earnings beat analyst’ estimates due to strong sales of the skincare brand.

Beiersdorf has announced that profitability will be ‘significantly’ above last year’s level, with shares rising as much as 3.1 per cent to 87.76 Euros in Frankfurt – a record for the company. Sales rose 6.8 percent to 5.04 billion in the first nine months of the year.

The German-based company has significantly ramped up its marketing for the Nivea brand and has used social media campaigns on Facebook and Twitter to target men and younger consumers, and as a result has gained market share in a difficult environment.

Chief Executive Officer for the company Stefan Heidenreich said, “We are growing against the market trend and are advancing our position even under challenging conditions. We are getting better at managing the balance of sales and profit as we are working hard on efficiency with our people and on cost structures, not by laying off people.”

It was mainly positive in most countries, with sales in Russia, Eastern Europe, Japan and India growing. However, while sales in Western Europe declined slightly, the growth of e-commerce in China has stabilized that market for the company, with its skincare unit already getting more than 20 percent of sales online there.

“If we are able to pick up that new trend in China, maybe we will have a big opportunity after all. We don’t have a problem in China anymore,” said Heidenreich.

The company’s earnings before interest and taxes rose 11 percent to 242 million euros, beating analyst expectations of 240 million euros. Meanwhile Beiersdorf widened its profit margin by lowering sales and marketing costs and also benefitted from consumer products in Latin America.