Beiersdorf maintains outlook despite 'challenging' Q1

(Sharecast News) - Germany's Beiersdorf reiterated annual guidance on Tuesday despite the year getting off to a "challenging" start, including a sharp slide in sales of its flagship Nivea brand. Updating on first-quarter trading, the Hamburg-based skincare specialist - which also owns Elastoplast, Eucerin, La Prairie and Chantecaille - posted a 4.6% decline in organic sales in the three months to 31 March, to €2.69bn.

Within that derma sales jumped 8.2% to €443m, but revenues at Nivea, Beiersdorf's largest division by some distance, slid 7% to €1.48bn.

Beiersdorf called it a "challenging" quarter, with "demanding" comparatives, temporary disruptions in key markets and "delayed effects from recent innovations".

However, it reaffirmed full-year guidance for flat-to-slightly growing organic sales and a consolidated operating margin "slightly below" last year's.

Chief executive Vincent Warnery said: "These factors are not expected to persist throughout the year, and the first quarter should not be seen as an indicator for the full-year performance."

He added: "Beiersdorf's priorities are clear, especially in a challenging environment. We believe in our company's long-term strength and resilience. With Nivea, we are executing our rebalancing strategy with a clear focus on what drives relevance and growth."

As at noon BST, the Frankfurt-listed stock was down 3%. Germany's Tchibo Holding is Beiersdorf's controlling shareholder, with a 49.9% stake.

Jefferies, which has a 'hold' recommendation, said: "Sales growth is below an already-contracted expectation.

"Reiteration of guidance for sales and operating margin looks hopeful. We continue to see operating margin needing a reset, to support the weak Nivea momentum. This miss and credibility issues regarding visibility on performance and guide should be tempered by the stock's 10-year low level, we think."