- Group Organic Sales Growth: 7.1% in the first half of 2024.
- Consumer Business Organic Sales Growth: 8.0%.
- tesa Business Organic Sales Growth: 2.9%.
- EBIT Margin (excluding special factors): 16.2%.
- Profit After Tax Margin: 11.4%.
- Earnings Per Share: EUR2.57.
- Gross Margin Improvement: 110 basis points.
- eCommerce Growth: 16%.
- Revenue from NIVEA: 11.1% organic sales growth.
- Revenue from Derma Brands: 8.3% organic sales growth.
- Revenue from Healthcare Business: 4.0% sales growth.
- Revenue from La Prairie: 7.0% decline in organic sales.
- Revenue from Chantecaille: 4.8% organic sales growth in Q2.
- Revenue from NIVEA Face Care: 49% organic growth.
- Revenue from NIVEA Body Care: Double-digit growth.
- Revenue from NIVEA Deo: 19% organic sales growth.
- Revenue from NIVEA Lip Care: 17% organic sales growth.
- Revenue from Derma Face Care: 11% organic sales growth.
- Revenue from Eucerin in China: 15% growth.
- Revenue from Emerging Markets: 18% organic sales growth.
- Revenue from La Prairie in China: 6% decline, outperforming the market.
- Revenue from La Prairie on TikTok: 17% growth.
- Revenue from La Prairie in Hainan: 20% market outperformance.
- Revenue from La Prairie excluding Greater China: Over 20% growth in Q2.
- Revenue from tesa Electronics Business: 11.4% organic sales growth in Q2.
- Revenue from Europe: 6.8% like-for-like growth.
- Revenue from Eastern Europe: 13.8% organic sales growth.
- Revenue from Africa/Asia/Australia: 13.9% organic sales growth.
- Revenue from Latin America: 9.3% organic sales growth.
- Revenue from North America: 1.8% decline in organic sales.
- Working Capital Ratio: 5.6% of net sales.
Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Beiersdorf AG (BDRFF, Financial) reported strong organic sales growth of 7.1% in the first half of 2024.
- The Consumer business grew organically by 8%, driven by double-digit growth in NIVEA and strong performance in the Derma brands.
- The tesa business saw a significant pickup in the second quarter with double-digit organic sales growth, resulting in overall growth of 2.9% for the first six months.
- The company achieved a gross margin expansion of 110 basis points compared to the first half of 2023.
- Beiersdorf AG (BDRFF) continues to expand its e-commerce business, which grew by 16% in the first six months of 2024.
Negative Points
- The economic situation in China remains highly volatile, leading to a 7.0% decline in organic sales at La Prairie for the first six months of 2024.
- North America faced a challenging market environment, resulting in a 1.8% decline in organic sales growth for the first half of the year.
- The company experienced a slowdown in the Derma segment from 10.3% growth in Q1 to around 6.5% in Q2.
- The EBIT margin excluding special factors decreased compared to the first half of 2023 due to a more balanced investment phasing.
- The tax rate in the first half was higher at 32%, impacting the profit after tax margin.
Q & A Highlights
Q: Could you provide more details on the slowdown in Western Europe in Q2 compared to Q1?
A: Western Europe was impacted by La Prairie retail, which showed strong negatives in double digits. Excluding La Prairie, we are growing high single digits in Western Europe, driven by NIVEA and derma care. For La Prairie, we are doing well outside Greater China, growing retail sales by 20%. The evolution of the Chinese market remains a big question, but we expect better performance in the second half compared to Q1 and Q2.
Q: Can you explain the slowdown in the derma segment from Q1 to Q2 and the outlook for the second half?
A: The derma segment's growth slowed from 10.3% in Q1 to around 6.5% in Q2. This is partly due to the high comparison base from last year. We just introduced Eucerin Face Care in the US, and the big rollout is happening now, including the launch of Luminous630 at Target. We are optimistic about derma growth in the second half, driven by new product launches and strong performance in key markets.
Q: What is driving the margin weakness in the first half, and how do you see it evolving?
A: The margin weakness is due to a significant step-up in investments behind the brands. We have a more balanced investment phasing this year, with strong support for the US face care launch and sun care business. We remain confident about our margin performance for the full year, supported by strong gross margin improvements.
Q: How do you expect the market performance in Europe to evolve in the second half?
A: We expect continued growth in Europe, driven by strong performances in derma and NIVEA. We are growing market share in all skin care categories except lip care. The second half will benefit from new product launches and a more normalized relationship with key customers.
Q: Can you provide more details on the impact of Argentina on your Latin America performance?
A: The impact of Argentina on our Latin America performance is significant, with strong declines in organic sales. Excluding Argentina, our derma business continues to grow double digits. The performance in other Latin American countries like Brazil and Mexico remains strong.
Q: How do you see the performance of La Prairie evolving in the second half?
A: La Prairie outperformed the market in China, declining less than the overall market. Outside Greater China, La Prairie is growing, particularly in Japan, France, Germany, the UK, and the US. We expect better performance in the second half, driven by new product launches and improved market conditions.
Q: What is your strategy for the Coppertone brand in the US?
A: We are refocusing Coppertone on face care and innovation. The brand needs to move away from its traditional image and emphasize technology and innovation. We have launched new face care products with strong performance and will continue to invest in new initiatives and advertising campaigns to transform the brand.
Q: How do you see the global skin care market evolving in the second half of 2024?
A: We expect improvement in the global skin care market, driven by innovation and new product launches. The US market is showing signs of recovery, and we are optimistic about the performance of our key brands. The situation in China remains a question mark, but we are confident in our overall growth prospects.
Q: Can you provide more details on the launch of Epicelline and its expected impact?
A: Epicelline is a game-changing innovation in the anti-aging market. We expect it to outperform Thiamidol, given the larger market size and strong purchase intent. The launch is well-coordinated globally, and early results in the UK are very promising. We anticipate significant sales contributions from Epicelline in the coming years.
Q: Are you facing any pushback from retailers on pricing in Western Europe?
A: We are experiencing normal negotiations with retailers on pricing, with no major issues. The situation is much better than last year when we faced significant pushback due to a double-digit price increase. We are confident in our ability to manage pricing negotiations in the coming months.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
