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Nov 8, 2010
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Nivea maker Beiersdorf disappoints with Q3

By
Reuters
Published
Nov 8, 2010

FRANKFURT (Reuters) - Roaring demand for adhesives failed to make up for a disappointing consumer products performance at Beiersdorf (BEIG.DE), the German maker of Nivea skin care, as Europeans stuck to cheaper beauty products.

Beiersdorf, Nivea
Beiersdorf.com

"Business in the United Kingdom and Russia was very positive. In the other European countries we were not satisfied with our performance," chief executive Thomas Quaas said on Thursday.

Beiersdorf, which gets over 60 percent of its sales from Europe, lowered its guidance for sales growth in the consumer division to 2 percent and its EBIT margin to 11 percent.

It had previously said it wanted to grow faster than the market, which is set to grow by about 3 percent this year, according to analysts.

Its shares, which have already underpeformed rivals Henkel (HNKG_p.DE) and L'Oreal (OREP.PA) over the past month, were down 2.7 percent at 44.53 euros at 0849 GMT, one of the top German blue-chip fallers .GDAXI.

"Overall Q3 performance was, once again, disappointing ... with Beiersdorf missing expectations on most important metrics," Bernstein analysts wrote in a note.

Beiersdorf, which also makes the luxury La Prairie skincare range, reported earnings before interest and tax (EBIT) of 167 million euros ($236.2 million), missing expectations. Third-quarter sales matched expectations at 1.53 billion euros.

The group also set an organic sales growth target of 3 percent in 2010, the first time it has given clear guidance for the year.

The Tesa adhesives business, which accounts for about 15 percent of sales, saw strong demand from the automotive and electronics sectors and reported third-quarter sales up 15 percent at 225 million euros. Analysts had been expecting EBIT of 173 million euros on sales up 8 percent at 1.5 billion, a Reuters poll found.

Beiersdorf is controlled by the billionaire Herz family, which bought just over half of the company in 2003 to warn off U.S. consumer goods giant Procter & Gamble (PG.N), which has regularly expressed admiration for the group.

(Reporting by Victoria Bryan; Editing by Will Waterman) ($1 = 0.7071 euro)

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