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Rainy summer clouds Beiersdorf's performance
October 10, 2016 / 8:46 AM / a year ago

Rainy summer clouds Beiersdorf's performance

A shareholder of German care cosmetic company Beiersdorf, picks up a Nivea tin before the start of the shareholder meeting in Hamburg, March 31, 2016. REUTERS/Fabian Bimmer

FRANKFURT (Reuters) - Nivea cream maker Beiersdorf (BEIG.DE) faced scepticism on Thursday over how it will meet full-year sales targets after it warned of weakening consumer sentiment and said a wet summer had dented sales of its sunscreens.

The German skin care company said it was “cautiously confident” of reaching its goal of 3-4 percent organic sales growth this year, even as it reported only a 2.8 percent increase in the first half.

Analysts called its results a “mixed bag,” saying earnings were “solid but not really exciting.” Several also said management failed to provide enough detail on its strategy for accelerating performance in the second half of the year to breed confidence in the target.

“People are very, very frustrated that they don’t get any information on what management is planning to do to achieve its goals,” said Liberum analyst Robert Waldschmidt, who still has a “buy” rating on the share.

The company's shares slid 4 percent after its results, one of the biggest losers on Germany's blue-chip DAX .GDAXI index.

“The market appears uncertain following the restrained comments by the management on H2,” said Baader Bank analyst Christian Weiz.

Chief Executive Stefan Heidenreich said a rainy summer in western Europe had led to “substantial losses in sales” for sun cream products. More broadly, he said sales were hurt by declining consumer sentiment caused by Britain’s decision to leave the European Union and security fears.

Competitors like Anglo-Dutch consumer group Unilever (ULVR.L) and French cosmetic giant L‘Oreal (OREP.PA) have also said they face weak demand due to bad weather and low consumer morale.

Heidenreich said he wasn’t able to pinpoint the impact of declining consumer sentiment, but said Beiersdorf’s outlook already reflected a general uncertainty.

“We stick to our position that things won’t get much better but we’ve already adjusted ourselves to that reality,” Heidenreich told journalists.

The company’s product pipeline was strong, led by a new foam shower gel and anti-aging products, he said.

Reporting by Tina Bellon; Editing by Victoria Bryan and Susan Fenton

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