Beiersdorf gives cautious outlook after weak earnings

Beiersdorf, the maker of Nivea and other skin care products, gave a cautious outlook for 2018 on Thursday, forecasting sales growth of around 4 percent and its operating profit margin to stay at a similar level to last year.

Beiersdorf, which had already reported that it beat its 2017 forecast with a 5.7 percent rise in organic group sales, said its operating profit margin for 2017 rose to 15.4 percent from 15 percent in 2016, slightly below average analyst forecasts.

Earnings per share of 2.96 euros missed the 3.15 euros forecast by analysts, according to Thomson Reuters Eikon, which the company blamed on one-off gains in 2016, negative exchange rate effects and losses from financial investments.

Beiersdorf shares were down 2.8 percent by 0817 GMT, the biggest decliner on the German blue-chip index.
“We read this guidance as disappointing considering the strong momentum relative to peers in 2017 and generally positive sentiment on the stock,” said Investec analysts, who rate the stock “hold”.

However, some analysts were reassured by Beiersdorf saying it expected its consumer business to outperform the market in 2018 with sales growth of 4 to 5 percent and a slight increase in the EBIT margin from operations.

Rival Unilever, which reported a bigger-than-expected acceleration in fourth-quarter sales growth, helped by the launch of new brands, has forecast underlying sales growth of 3 to 5 percent for 2018.