March 3, 2020 / 7:19 AM / a month ago

UPDATE 2-Nivea-maker Beiersdorf gives solid outlook despite virus hit

* 2019 EPS up 5% to 3.42 euros

* 2020 organic sales growth forecast at 3-5%

* 2020 underlying EBIT margin seen at 14-14.5%

* Coronavirus hit consumer and adhesives unit in Jan/Feb

* Shares up (Adds CEO, CFO comments)

By Emma Thomasson

BERLIN, March 3 (Reuters) - Nivea-maker Beiersdorf said on Tuesday it expected similar sales growth and profitability in 2020 compared with 2019 and that a strategy of investing in new business should mitigate the impact of the coronavirus.

Chief Executive Stefan de Loecker told analysts the consumer business and was “considerably below plan” for January and February because of the coronavirus.

The outbreak has also affected its adhesives unit, as has weakened demand from the auto sector.

De Loecker said Beiersdorf was well placed to ride out the impact of the coronavirus because of the strategy he launched last year of investing in new business areas, strengthening the existing skin care portfolio, and increasing digitalisation.

The German company forecast organic sales growth of 3%-5% for 2020 after 4.1% in 2019. Its consumer unit is expected to grow at the same level, while the Tesa adhesives unit would probably only manage slightly positive growth.

Shares in Beiersdorf were up 1.9% at 0936 GMT, while Germany’s bluechip index DAX was up 2.6%.

Almost a third of sales are in the Africa/Asia/Australia region, where sales for its consumer unit jumped 8.4% in 2019.

A quarter of sales of its premium La Prairie skin cream are usually made in travel retail, particularly among Chinese tourists. De Loecker said it was impossible to predict the impact the coronavirus will have on travel.

The Tesa business has been suffering from a downturn in the automotive industry, while the electronics business held up well in 2019. Finance chief Dessi Temperley said she assumed the negative trend in the auto industry would continue in 2020.

Beiersdorf reported its underlying earnings before interest and taxation (EBIT) margin fell to 14.5% in 2019 from 15.4% as it invested more in reviving its business. It expects the metric to come in at 14-14.5% in 2020.

Rival Procter & Gamble Co said last month its current-quarter revenue and profit would be hit by supply chain disruptions and weak demand following the coronavirus outbreak in China, the company’s second-biggest market.

Beiersdorf has suffered as consumers move away from big brands such as Nivea towards niche labels and organic products, prompting the company to launch a Nivea line with natural ingredients and a new brand for tattooed skin.

De Loecker said Beiersdorf would add deodorants to its “Nivea - Naturally Good” line in the coming months and said the new Florena fermented skincare it has launched in Italy and France has showed promising results. ($1 = 0.8973 euros) (Reporting by Emma Thomasson Editing by Michelle Martin and Barbara Lewis)

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