Beiersdorf says acquisitions are still possible as results defy downturn

By Simon Pitman

- Last updated on GMT

Related tags: Organic sales growth, Organic growth, Recession

Beiersdorf announces strong sales growth and beats earning forecasts, adding that it will remain acquisitive in 2009 if the right opportunities arise.

The company announced that in 2008 group sales rose from €5.50bn in 2007 to €5.97bn, which represented an organic sales growth of 7.5 per cent.

Including a number of acquisitions at the end of 2007, which included China-based hair care specialist C-Bons, the company said that organic sales growth in 2008 actually came in at 10.8 per cent.

Consumer sales were up 12.3 per cent to €5.12bn – 8.6 when adjusted for currency, whereas its adhesives business, tesa, saw sales rise 1.3 per cent to €846m – a performance that was flat at current exchange rates.

Interestingly the company have reiterated that they are still not interested in selling the tesa business, despite not being a clear fit with beauty and the fact that the performance has been lack lustre.

Profits remain undented by downturn

Likewise, despite the high price of raw materials in 2008, operating profit nudged up 1.75 per cent to €696m, which helped to raise profit after tax by 28.2 per cent to €567m.

The earnings figure beat the company's own preliminary estimates, which had been issued last month.

However, like all businesses in the current climate, CEO Thomas Quaas did indicate that the economic downturn had made an impact on the results during 2008, making predictions for 2009 difficult to make.

“We recognise the global dimension of the current economic crisis. It is not possible to make reliable forecasts in the present economic environment. Nevertheless, Beiersdorf will again outperform the market this year, and we remain committed to our goal of achieving a global market share of 5.5 per cent,”​ Quaas said.

The company has not acknowledged how trading has progressed in the first two months of 2009 and would not give any more specific predictions for the full year peformance.

Focus on developing markets pays off

In the past few years the company’s growth strategy has been focused on the area of beauty and in particular the Nivea brand.

To that end the company has concentrated on developing markets to increase its footprint, more specifically in regions where growth potential is deemed to be particularly high.

The company says it still remains committed to further acquisitions, and during the official presentation of the results yesterday, Quaas made specific reference to the fact that, despite the economic downturn, the company would still be looking for appropriate acquisitions in the beauty arena.

To this end the company said that it would be able to side-step the problem of getting credit from banks because it has the ability to fund such projects from its own resources.

Related topics: Business & Financial

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