Beiersdorf Proves Resilient to German Economy

Consumer goods maker Beiersdorf AG, Frankfurt reported higher sales and record earnings for 2002 as German consumers continued to buy quality branded products despite the bad economic climate. The owner of the Nivea brand kept its earnings target for 2003 when it released preliminary figures Wednesday.

The results indicate that sales held up even in the slumping German economy where Beiersdorf derives 28% of its sales, analysts said. Beiersdorf saw earnings before interest and taxes of $496 million for 2002, up 9.8% over the previous year and a new record. Net profit rose 2.5% to $302 million, Beiersdorf said, with a 4.4% increase in full year sales to $5.0 billion.

Beiersdorf sees sales growth of 5% for 2003 and an increase in earnings.

The Nivea brand alone accounted for $2.7 billion in sales during 2002. Beiersdorf’s cosmetics and medical goods sector grew 7.2%, or $3.3 billion in 2002, helped by the launch of several new Nivea products including Nivea for Men, Nivea Deo, Nivea Hair Care and Nivea Lip Care. In the past six months Nivea launched Nivea Visage in Korea, Nivea for Men in Japan, Nivea Baby in Hungary, and Nivea Hand in Spain.

Beiersdorf continues to invest in its Nivea range, starting 2003 with the launch of a raft of new products including Nivea Bath Care, Nivea Body Firming lotion, Nivea Beaute, and Nivea Hair Gel.

Beiersdorf’s results, and the success of its brands which also include Elastoplast, Florena, Hansaplast, Juvena and la prarie, are likely to catch the eye of U.S. rival Procter & Gamble Co. The company is said to be interested in acquiring a stake in the German consumer goods maker, although Procter has in the past declined to comment.

Procter would need to buy the 31% Beiersdorf stake owned by Tchibo Holding AG (G.TBH) in order to gain control of the company. Sources close to Tchibo say the company isn’t prepared to reduce its stake.