Beiersdorf steadily navigates headwinds as dermocosmetics and Nivea remain strong

28 Oct 2022 --- German personal care giant Beiersdorf has shown particular resilience, amid a complex economic environment, in its flagship Nivea cream and with its dermocosmetics brands Eucerin and Aquaphor – the derma brands are growing organically at a 25.3% annual rate.

The company has achieved an 11.1% growth in the first nine months of the year, reaching US$6.7 billion in sales, despite “macroeconomic and geopolitical challenges as well as ongoing price negotiation with retailers,” according to the business.

Despite the overall robustness, Nivea, Derma and the healthcare brands Hansaplast and Elastoplast slowed down their growth during Q3, compared to the first half of the year. La Prairie being an outlier, seeing nearly tripled gains during the quarter.

Optimistic outlook
Based on the solid results, the company is raising its full-year sales estimates for the consumer and tesa business segments. The business flagged that playing with costs has aided the solid corporate financial results.

Vincent Warnery, CEO at Beiersdorf affirms that price increases have been “well-received during the first half of the year,” with revenue growth coming from pricing while volume has also increased despite macroeconomic trouble across countries.

“A quick glance at the competition shows that we are in line with the market when it comes to pricing, but our volume performance remains better than most of our competitors. This is a clear indication that we are finding the right balance between pricing and volume growth and that our brands are highly resilient in terms of price sensitivity,” says Warnery, explaining how consumers are still buying its products at increased prices.

Nivea grew at a 9.9% rate during the Q3, almost at double digits.Strong core, strong financials
Nivea grew at a 9.9% rate during the Q3, almost at double digits, however decelerating almost a full percentage point given its 10.8% expansion rate during the first nine months of the year.

The brand has outperformed significantly in China, with a 24% growth in Q3.

“We are increasingly reaping the rewards of our actions to make NIVEA an even more global and digital brand. For the first time, our brand icon has succeeded in gaining market share in all categories and regions,” highlights Warnery.

Nivea is popular among the youngest consumers in France, ranking as the second top care brand for Gen Z consumers and as third for Millenials, according to a French-based study.

No skin challenges: Red-hot dermacosmetics
The company spotlights how products using Thiamidol – the patented ingredient against hyperpigmentation – remained a major growth driver, growing 22.6% in Q3 and 25.3% on a year-to-date basis.

Beiersdorf’s dermacosmetics business is growing double digits across its biggest markets – US, Germany and Thailand – but also in smaller ones such as China and Latin America ones, such as Brazil, Mexico or Chile.

“Derma brands are also seeing further strong growth in online business and remain the brands with the highest online share in the portfolio,” notes the business.

Warnery underscores the strong demand in region Americas, signaling the US as a key market where the company has gained market share.

“In the US sun market this year, we leveraged our existing know-how and added local expertise from the Coppertone R&D team to launch Eucerin Sun, thereby transforming our already very successful Body brand into a full dermocosmetic brand,” explains Warnery.

Meanwhile, the company re-entered the Polish market during Q3, trying to expand into East Europe.

Pricing strategies, premiumizationThe company has achieved an 11.1% growth in the first nine months of the year, reaching US$6.7 billion in sales.
The company flags that since its valorization strategy began in 2020, they have increased the average selling price in its online business by 32% across its brand portfolio.

The company is also pressing ahead with its premiumization strategy in China, driving premium development and high-margin products. Flagging skyrocketing growth for its La Praire brand in the country as lockdowns ended in the country – posting a 41% growth rate in Q3 compared to the meager 1.8% in the year’s first half.

“Additionally, we have a clear focus on e-commerce activities. We are relying on ‘online first’ product launches. Our online share of business increased significantly from 46% in 2019 to around 60% expected for the full year 2022,” flags the company.

“At the same time, we are upgrading our lower-price categories. Our focus is on premiumization drivers in our current categories Men, Face Cleansing and Body and especially in the strong growing online business,” Beiersdorf notes.

The company also highlights the strong performance in region Americas, with dermacosmetics and Nivea being the motor that has driven organic growth to 22.5% – outperforming the 6.6% organic growth in Europe and 10.6% across Africa, Asia and Australia.

By Marc Cervera

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