* Beiersdorf to re-invest its money, incl in M&A - chairman
* Chairman says purchases would cost "very, very much"
* CEO says first few months of 2017 affirm guidance
* CEO says doesn't underestimate risks for the year
(Recasts, adds chairman's comments on acquisitions, background)
HAMBURG, April 20 Germany's Beiersdorf
, the maker of Nivea skin cream, still prefers hoarding
cash to fund possible acquisitions over raising its dividend,
supervisory board Chairman Reinhard Poellath told shareholders.
The money "has to go back into the business, where it came
from, including via acquisitions," he said at Beiersdorf's
annual general meeting on Thursday.
Those acquisitions would "cost very, very much money," he
added, without naming any possible targets.
Beiersdorf has around 3.7 billion euros ($4 billion) of
cash. It has said in the past it could spend up to 10 billion
euros on purchases if it used treasury shares and a capital
increase to raise funds.
In 2008, its attempt to buy into China with a nearly $400
million acquisition of the C-Bons Hair Care company - the
largest domestic player in the hair care sector at the time -
failed to meet Beiersdorf's hopes for growth.
Beiersdorf has been earning margins that are lower than
those of competitors such as Unilever, Procter & Gamble
and L'Oreal, which have been snapping up
smaller companies and niche brands to build scale and enter new
Chief Executive Stefan Heidenreich has said Beiersdorf's
main priority remained organic growth, signalling the company
would not be pressured into making acquisitions hastily.
He said on Thursday that business in the first few months of
2017 had affirmed the group's cautious optimism for the full
year, sticking with guidance for 3 to 4 percent sales growth and
a slight improvement in the operating margin from 15 percent in
Last year, demand for the group's Nivea, Eucerin and La
Prairie skincare products helped Beiersdorf overcome a
"difficult market" and increase annual sales and profit.
"We do not underestimate the continuing economic and
political risks... neither their number nor their intensity is
likely to decline this year," Heidenreich said at the
Hamburg-based company's annual general meeting on Thursday.
"We do not expect any decisive positive impulses for our
business from the environment in 2017. But we rely on our own
strength," he added.
($1 = 0.9296 euros)
(Reporting by Jan Schwartz; Writing by Maria Sheahan; Editing
by Adrian Croft)