Beiersdorf FY18 Profit Up; Launches C.A.R.E.+ Program, Sees Weak Margin In FY19

(RTTNews) - Nivea maker Beiersdorf AG (BDRFY.PK, BDRFF.PK) Wednesday reported its fiscal 2018 profit after tax excluding special factors of 756 million euros, compared to 689 million euros last year. Earnings per share excluding special factors were 3.26 euros, compared to 2.96 euros last year.

Earnings before interest and taxes or EBIT and special factors increased 2.3% to 1.113 billion euros from 1.088 billion euros last year. The EBIT margin remained stable at 15.4%.

Beiersdorf continued on its growth path in the 2018 financial year despite increasingly difficult conditions over the course of the year. Group sales improved 5.4% in organic terms and by 2.5% in nominal terms to 7.233 billion euros from 7.056 billion euros in the previous year.

The Consumer Business Segment increased sales by 5.0% in organic terms and by 1.6% in nominal terms to 5.890 billion euros. NIVEA increased organic sales by 2.8%.

Looking ahead, the company said it expects organic group sales in 2019 to increase by 3 to 5 percent, above market growth, despite an increasingly uncertain economic environment overall. Consumer Business Segment will also expand by 3 to 5 percent, while tesa segment sales are planned to be up by 3 to 4%.

Further, the company announced the launch of new strategy C.A.R.E.+ with a multi-year investment program to realign its Consumer Business Segment.

Beiersdorf expects that investments in C.A.R.E.+ will lead to the decline of EBIT margin to 14.0-14.5% in 2019 in the Consumer Business Segment. The EBIT margin of tesa is forecast slightly below the prior-year level. EBIT margin of the Beiersdorf Group is expected to be around 14.5%.

Under the C.A.R.E.+ program, the company projects 70 million euros to 80 million euros additional investments starting 2019 to boost the opening of new markets, innovations, digitalization and up-skilling of workforce. This means to increase the organic growth in the Consumer business segment to 4-6% and to develop EBIT margin to 16-17% by the year 2023.
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