Beiersdorf outperforms declining skin care market in the first half of 2020

• Group’s organic sales down 10.7% on previous year
  
• Organic sales down 10.9% year on year in Consumer Business Segment
  
• Organic sales at tesa Business Segment fall 10.0% on the prior-year figure
  
• Strong growth in Dermocosmetics
  
• Market share gains in Skin Care
• Group EBIT margin excluding special factors at 13.7% 

Hamburg, August 6, 2020 – Beiersdorf AG, Hamburg, recorded a decline in sales in the first half of 2020 as a result of the continued global spread of the COVID-19 pandemic. Organic Group sales fell by 10.7% in the first six months of the year. At €3,449 million, nominal sales were down 10.1% year on year (previous year: €3,837 million). The Group achieved earnings before interest and taxes (EBIT) and special factors of €472 million (previous year: €593 million). This corresponds to an EBIT margin of 13.7%, compared with 15.4% in the previous year.

“In this extremely turbulent year, our business has been strongly impacted by the COVID-19 pandemic. The entire skin care market significantly declined and, as a consequence, the effect on sales was clearly felt in the first half of 2020. However, Beiersdorf was able to grow shares in this challenging market environment. This demonstrates the strength of our trusted iconic brands, our ability to react to rapidly changing consumer demand and the resilience of our people and the organization. From the very beginning of the crisis, we have focused on ensuring the health and safety of our employees, on continuing to serve our consumers, and on supporting vulnerable communities, for which we continue to deliver on our €50 million international aid program to support society’s long term fight against COVID-19,” says Stefan De Loecker, CEO of Beiersdorf AG. “The COVID-19 pandemic is unfortunately not over yet and the situation remains exceptionally volatile. But as we are determined to emerge stronger from this unparalleled crisis, we are continuing to further invest in the initiatives of our C.A.R.E.+ strategy.” 

Organic Group sales in the first six months of 2020 were down 10.7% on the previous year. Exchange rate changes cut 1.4 percentage points from sales performance. The acquisition of the COPPERTONE brand in the Consumer Business Segment lifted sales figures by 2.0 percentage points. In nominal terms, sales therefore fell by 10.1% to €3,449?million (previous year: €3,837?million). The Group achieved earnings before interest and taxes (EBIT) and special factors of €472 million (previous year: €593 million). This corresponds to an EBIT margin of 13.7%, compared with 15.4% in the previous year. Special factors of €31 million related primarily to the €12 million spent to date on the Beiersdorf international aid program, expenditures of €8 million on the integration of the COPPERTONE brand, and an impairment on the northeast Asian business of €10 million due to general business trends in that region. Group EBIT including special factors declined from €582 million in the previous year to €441 million; the EBIT margin including special factors stood at 12.8%, compared with 15.2% in the previous year.

Organic sales in the Consumer Business Segment fell by 10.9% in the first half of the year. In nominal terms, sales fell by 9.9% to €2,834?million (previous year: €3,146?million). Negative exchange rate effects of 1.5 percentage points were offset by structural effects, which added 2.5 percentage points to growth. EBIT excluding special factors in the Consumer Business Segment fell to €376?million (previous year: €482?million). The EBIT margin was 13.3%, compared with the previous year’s 15.3%. Special factors totaling €29?million had a negative impact on profit. EBIT including special factors thus stood at €347 million (previous year: €471 million), while the EBIT margin including special factors was 12.2% (previous year: 15.0%).

NIVEA sales fell by 8.8%. The Healthcare business unit, mainly comprising the plaster business, recorded a 7.7% fall in sales. Meanwhile, the Derma business unit with the EUCERIN and AQUAPHOR brands achieved very good sales growth of 6.2%. The LA PRAIRIE brand was particularly hit by the drop in international travel and recorded a 41.9% fall in sales.

Organic sales in the Europe region fell by 12.8%. At €1,382?million, nominal sales were 13.0% below the previous year’s figure of €1,588?million.

In Western Europe, sales were down 14.3% on the previous year, affected by countries such as France, Italy, Spain, and the United Kingdom, which have suffered particularly badly from the COVID-19 pandemic, and especially by the sharp fall in sales in the travel retail business at LA PRAIRIE. In Eastern Europe, sales were down 6.3% on the same period of the previous year. The sales trend in key markets such as Poland and Ukraine was only slightly in negative territory.

Organic sales in the Americas region were up 1.5% year on year. The acquisition of the COPPERTONE business lifted growth in the region by 16.9 percentage points. Exchange rate effects reduced sales by 6.6 percentage points. At €593?million, nominal sales were 11.8% higher than in the previous year (€530?million).

In North America, organic sales growth was slightly down on the previous year, even though EUCERIN and AQUAPHOR achieved strong sales growth. Latin America recorded growth of 2.8% despite the ongoing COVID-19 pandemic. This was driven especially by double-digit growth rates in Brazil and Chile. In a difficult market environment, sales in Argentina were considerably down on the same period of the previous year and were additionally affected by negative exchange rate effects.

The Africa/Asia/Australia region reported a 14.4% fall in sales. Nominal sales fell by 16.3% to €859?million (previous year: €1,028?million), partly due to the divestment of the SLEK brand. While sales in India, Turkey, Indonesia, and Japan declined, sales in Australia, Malaysia, and Saudi Arabia developed positively. LA PRAIRIE declined due to the COVID-19 pandemic. EUCERIN, on the other hand, increased its sales. The picture in Africa was mixed.

tesa recorded a considerable fall in sales from January to June compared to the first half of the previous year. Organic sales at tesa declined by 10.0%. Negative exchange rate effects added an extra one percentage point to the decline. In nominal terms, tesa therefore recorded an 11.0% fall in sales to €615?million (previous year: €691?million).

The coronavirus pandemic severely affected the global economy in the second quarter and also had a major impact on tesa’s business. tesa’s sales fell especially in the Direct Industries division, which handles business directly with industrial customers. tesa also saw declining sales in the Trade Markets division. In a difficult global market environment, automotive business in particular showed a clearly negative sales trend. This downward trend was especially evident in the Americas and in Europe. Falling sales in Asia were primarily due to a decline in the electronics business.

EBIT in the tesa Business Segment excluding special factors recorded a year-on-year fall to €96?million (previous year: €111?million). The EBIT margin was 15.6% (previous year: 16.0%). Special factors of €2 million related in particular to the “Care Beyond Skin” donation program. EBIT including special factors therefore stood at €94 million (previous year: €111 million), while the EBIT margin including special factors was 15.3% (previous year: 16.0%).

There were no significant changes in the Group’s net assets and financial position in the first six months of the year compared with December 31, 2019.

2020 sales growth in both business segments and on group level will be negative. Group EBIT margin is expected to be significantly below prior-year level.