Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Beiersdorf AG (BDRFF, Financial) achieved an organic sales increase of 6.5% at the group level in the first nine months of 2024, aligning with their full-year guidance.
- The consumer sales grew by 7.3%, with NIVEA showing impressive growth of 9.4%, outperforming key competitors.
- Derma brands Eucerin and Aquaphor achieved strong organic sales growth of 8.8%, driven by double-digit growth in North America.
- The healthcare business, including Hansaplast and Elastoplast, reported substantial sales growth of 5.1%.
- The company is optimistic about its innovation pipeline, particularly with the upcoming launch of Eucerin Thiamidol in North America, which is expected to drive future growth.
Negative Points
- La Prairie experienced a decline of 7.3% in organic sales, primarily due to the continued weakness in the greater China ecosystem and its impact on the travel retail market.
- The luxury market in China remains challenging, affecting La Prairie's performance, with the market down significantly in the third quarter.
- The automotive industry, particularly in Europe, is facing challenges, impacting the Tesa business segment.
- The sun care segment underperformed in the third quarter, despite a positive start to the year.
- Beiersdorf AG (BDRFF) remains cautious about the short-term outlook for La Prairie, given the ongoing difficulties in the Chinese luxury market.
Q & A Highlights
Q: Can you provide more details on the performance of sun care products in Q3 and how it impacted NIVEA and Derma? Additionally, how should we view the growth phasing into Q4?
A: Sun care had a positive evolution in the first half with double-digit growth, but Q3 was below expectations due to a poor sun season. Despite this, Eucerin Sun grew double-digit and NIVEA Sun high single digits over nine months. Regarding growth phasing, Q3 had tough comparatives due to last year's price increases, but Q4 is expected to be more favorable, making us optimistic for the fourth quarter.
Q: What drove the strong double-digit growth in the US Derma market, and how do you view inventory levels and future growth?
A: The US Derma market saw 19.6% growth, driven by Aquaphor's 60% growth and Eucerin's 26% growth, with market share gains in body care. The success of Eucerin Sun and the launch of Eucerin Face also contributed. We are optimistic about continued growth in Q4 and globally in 2025, supported by the Epicelline launch.
Q: Can you provide insights into the La Prairie business and its innovations at different price points? How do you plan to support the innovation agenda for NIVEA and Eucerin in 2025?
A: La Prairie is launching high-end products like the EUR2,000 Life Matrix cream, attracting new and returning consumers, and entry-level products like the EUR170 Mist, recruiting new customers. For 2025, we have a robust innovation pipeline for NIVEA and Eucerin, focusing on both new launches and core business revitalization, supported by digital and influencer marketing.
Q: How are you managing the margin impact from La Prairie's performance in China, and what is your view on the Derma market's growth?
A: Despite La Prairie's challenges, strong performance in Europe and cost management have offset the impact. The Derma market is normalizing, with growth at 3% in North America and 7% in Europe. Innovation is key, with products like Thiamidol and Epicelline driving growth, and we see Derma as a growth driver for 2025.
Q: How is Beiersdorf planning to outperform the market in 2025, and which brands will be the major growth drivers?
A: We expect to outperform the market with NIVEA and Eucerin leading growth, supported by a strong innovation pipeline and digital marketing. Derma will also be a key driver, with new country launches and product expansions. We are optimistic about continued growth across our portfolio in 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
