Beiersdorf AG (BEI), the maker of Nivea skin cream, reported first-quarter profit that beat analysts’ predictions as sales rose in emerging markets, countering a decline in western Europe.
Adjusted earnings before interest and tax rose 8.3 percent to 215 million euros ($283 million) from 198 million euros a year earlier, the Hamburg-based company said in a statement today. The average estimate of 11 analysts surveyed by Bloomberg was 210 million euros.
“We have made further progress in implementing our Blue Agenda” earnings-growth project, “in particular in the areas of brands and innovation,” Chief Executive Officer Stefan Heidenreich said in the statement. “We expanded our position and increased our market share in emerging markets.”
Heidenreich is investing in growing economies, where the company now gets almost 50 percent of revenue, to generate business as European customers rein in spending amid the region’s sovereign-debt crisis. The euro-area jobless rate rose to a record in March and the region’s economy has contracted for five quarters. Countries where Beiersdorf is focusing expansion include China, Brazil and Russia.
Sales in the quarter increased 5.4 percent to 1.58 billion euros from 1.53 billion euros a year earlier on a like-for-like basis, Beiersdorf said. Revenue matched the average of 11 analyst estimates. Sales on that basis at the consumer unit, which accounted for almost 84 percent of annual revenue last year, increased 5.7 percent. Organic revenue declines at the division of 1.8 percent in Germany and 0.7 percent in the rest of western Europe were offset by jumps of 22 percent in Latin America and 16 percent in Africa, Asia and Australia.
Beiersdorf reiterated that Ebit as a proportion of sales will improve this year as revenue increases faster than at competitors. The first-quarter Ebit margin widened to 13.6 percent from 12.9 percent a year earlier, Beiersdorf said.
Under Heidenreich, who has been CEO for just over a year, Beiersdorf is focusing on large innovations and its main product lines to drive growth as part of the Blue Agenda reorganization, which takes its name from the company’s trademark Nivea packaging.
Heidenreich dropped singer Rihanna from Nivea’s advertisements last year as he vowed to return the brand to its roots, which include values such as trust and care. Nivea’s sales gained 5.7 percent in the quarter, Beiersdorf said today.
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