US and emerging markets boost Beiersdorf's first half

Strong showing for Nivea

German producer of Nivea products, Beiersdorf has reported organic sales growth in first half 2010 of 4.5% while at current exchange rates group sales increased by some 7.8% to €3.17bn. Operating earnings went from €291m to €385m, a rise of 32.5%. Worldwide Nivea sales went up 2.5% with strong results from Nivea for Men, Nivea Deodorant and Nivea Bath Care.

The La Prairie range achieved a sales increase of 8.7% while Eucerin posted 9.5% growth. Nivea Hair Care and Nivea Make-up remained below the levels reported in the same period of 2009.

The German domestic market reported a downturn of 2.3% against a first half 2009 sales figure boosted by a highly successful Nivea marketing campaign. Sales in the rest of western Europe remained at the same levels as in 2009. East European sales of €301m were 3.4% below the year earlier levels in organic growth terms. Sales in North America increased by 15.6% to €176m – above market average – and in Latin America organic sales growth reached 18.2%. Growth in the Africa-Asia-Australia region in the first half was 5.8%.

The company has said that growth for the full year is now set to exceed that of the market as a whole with a return on sales of over 11%. The Russian, Chinese and Brazilian markets are seen as especially significant in achieving high growth rates.

Despite the strong performance by the German group worldwide, the weak performance in Germany and other European countries influenced market sentiment and Beiersdorf's share price fell 5.3% on the Frankfurt exchange. Industry analyst for the LBBW bank, Iris Schaefer, said the company's figures were largely positive but the poor performance in Europe had overshadowed the good results elsewhere.

One of the reasons for the morose assessments is that Beiersdorf is seen as more dependent on its European operations than its main competitors, including Procter & Gamble. The company's general assessment of its prospects is also viewed as rather less optimistic than those of Henkel or L'Oréal.

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