A rebound in demand for its adhesives and its dermatological brands helped Nivea maker Beiersdorf to report sales that were higher than before the pandemic with the stocks of the company rising by more than 5 per cent during early hours of trading in Europe on Thursday.
For its latest completed second quarter, the company reported a 28.3 per cent jump in its organic sales which helped the company to record a 16.2 per cent growth in sale revenues for the first half of the current year. The total revenues of the company for the first half of the current year came in at 3.87 billion euros which was slightly higher than the consensus estimate of 3.82 billion according to Refinitiv IBES data. It was more than the 3.84 billion euros that the company had reported in the first half of 2019 before the pandemic hit.
The latest figures of the company “handsomely” beat their forecasts because of growth in the Nivea, La Prairie and Derma brands, said analysts at Jefferies.
Beiersdorf’s shares were up 5.5% at 0735 GMT, having earlier hit their highest level since early 2020.
It expects there would be a rise by a high single-digit percentage for its 2021 group sales, forecast the Hamburg-based firm, even as the company had previously estimated that it expected to report positive sales growth for 2021.
“This is the momentum we want to use going forward,” Beiersdorf’s new Chief Executive Vincent Warnery said in a statement.
More focus and investments had been made by the company in its consumer business to revive slowing sales growth under the leadership of Warnery’s predecessor Stefan de Loecker. At that point in time, the company had also acquired the US sun care brand Coppertone from Bayer for $550 million to better its position in the North American market.
The company reported widening of its margin on EBIT (earnings before interest and tax) for the first half to 15.3 per cent from 13.7 per cent.
For the full year, however, the company expects the margin to remain flat around 2020’s level of 12.9 per cent because of rising material prices and investments in digitisation and innovation.
The forecast for the entire year by Beiersdorf implied that the company is expecting a slowdown in the recovery in the second half of the year coupled with an “almighty reduction” in profitability, warned Bernstein analyst Bruno Monteyne.
(Adapted from Investing.com)